As filed with the Securities and Exchange Commission on February 28, 2003
File No. 333- _________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
Registration Statement
Under the Securities Act of 1933
SCIENTIFIC INDUSTRIES, INC.
(Name of Registrant in its charter)
DELAWARE 04-2217279
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
70 ORVILLE DRIVE
BOHEMIA, NEW YORK 11716
(631) 567-4700
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
2002 Stock Option Plan
(Full Title of the Plan)
MS. HELENA R. SANTOS
SCIENTIFIC INDUSTRIES, INC.
70 ORVILLE DRIVE
BOHEMIA, NEW YORK 11716
(631) 567-4700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copies to:
Leo Silverstein, Esq.
Reitler Brown LLC
800 Third Avenue, 21st Floor
New York, New York 10022
(212) 209-3050
(212) 371-5500 Fax
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Securities To be Price per Offering Registration
to be Registered Registered Share Price Fee
______________________________________________________________________
Common Stock, par value 261,000 $1.35 $352,350 $32.42(1)
$.05 per share (1)
(1) Includes 161,000 shares as to which options may be granted to the
extent outstanding options under the 2000 Stock Option Plan expire or
terminate without being exercised.
(2) The proposed maximum offering price per share has been estimated/
determined pursuant to Rule 457(h), and is based on the average of the
bid and ask price of the Company's Common Stock on the OTCBB market on
February 14, 2003.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
The documents containing the information specified in this Item will be
sent or given free of charge to employees, directors or consultants who
have been awarded options under the Scientific Industries, Inc. 2002
Stock Option Plan (the "Plan"), and are not being filed with, or
included in, this Registration Statement on Form S-8 (this
"Registration Statement"), in accordance with the rules and regulations
of the Securities and Exchange Commission (the "Commission").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The documents containing the information specified in this Item will
be sent or given free of charge to employees, directors or consultants
who have been awarded options under the Plan and are not being filed
with, or included in, this Registration Statement, in accordance with
the rules and regulations of the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which heretofore have been filed with the
Commission by Scientific Industries, Inc., a Delaware corporation
(the 'Company" or "Registrant"), are incorporated by reference in
this Registration Statement:
(a) the Registrant's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 2002;
(b) the Registrant's Quarterly Report on Form 10-QSB for the fiscal
quarter ended September 30, 2002;
(c) the description of the Company's Common Stock, par value $.05
per share (the "Common Stock"), which is contained in the Company's
Registration Statement filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including any amendment or
report filed with the Commission for the purpose of updating such
description of Common Stock.
All documents filed by the Registrant with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), subsequent to the
date hereof and prior to the filing of a post-effective amendment,
which indicates that all securities offered have been sold or which
deregisters all such securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Delaware General Corporation Law (the "DGCL"),
the Company's Certificate of Incorporation, as amended, and the
Amended and Restated Bylaws (collectively, the "Charter") provides
that no director shall be personally liable to the Company or any
stockholder for monetary damages for breach of fiduciary duty as a
director. While the Charter provides protection from awards for
monetary damages for breaches of the duty of care, it does not
eliminate the director's duty of care. Accordingly, the Charter
will not affect the availability of equitable remedies, such as an
injunction, based on a director's breach of the duty of care. The
provisions of the Charter described above apply to officers of the
Company only if they are directors of the Company and are acting
in their capacity as directors, and does not apply to officers of
the Company who are not directors.
In addition, the Charter provides that the Company shall indemnify
its officers and directors, and any employee who serves as an
officer or director of any corporation at the Company's request,
to the fullest extent permitted under and in accordance with the
DGCL. Under the DGCL, directors and officers as well as employees
and individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
in connection with specified actions, suits or proceedings, whether
civil, criminal, administrative or investigative (other than an
action by or in a the right of the corporation as a derivative action)
if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, had no reasonable
cause to believe their conduct was unlawful.
The Company has obtained a director and officer liability insurance
policy, under which each director and certain officers of the
Company would be insured against certain liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
Exhibit
4 2002 Stock Option Plan.
5 Opinion of Reitler Brown LLC regarding the legality of
the securities being registered.
23.1 Consent of Nussbaum Yates & Wolpow, P.C., independent
auditors of Registrant.
23.2 Consent of Reitler Brown LLC (included in Exhibit 5 hereto).
24 Power of Attorney (included on signature page).
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any action, suit, or proceeding)
is asserted by such director, officer, or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York,
on February 28, 2003.
SCIENTIFIC INDUSTRIES, INC.
By: /s/ Helena R. Santos
_____________________________________
Helena R. Santos, President, Chief Executive Officer and Chief
Financial Officer
SIGNATURE PAGE
AND
POWER OF ATTORNEY
The undersigned directors of Scientific Industries, Inc. by their
execution of this signature page hereby constitute and appoint
Ms. Helena R. Santos with power to act one without the other,
as our true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution, for us and in our stead, in any and
all capacities to sign any and all amendments (including post-effective
amendments) to this Registration Statement and all documents relating
thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing necessary
or advisable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or
his or her substitutes, may lawfully do or cause to be done by virtue
hereof.
Signatures Title Date
/s/ Joseph I. Kesselman Chairman of the Board and Director February 28, 2003
___________________
Joseph I. Kesselman
/s/ Arthur M. Borden Director February 28, 2003
___________________
Arhur M. Borden
/s/ Roger. B. Knowles Director February 28, 2003
___________________
Roger B. Knowles
/s/ James S. Segasture Director February 28, 2003
____________________
James S. Segasture
/s/ Joseph G. Cremonese Director February 28, 2003
____________________
Joseph G. Cremonese
_____________________________________________________________________________
Exhibit 4
SCIENTIFIC INDUSTRIES, INC.
2002 STOCK OPTION PLAN
(Effective as of February 11, 2002)
1. Purpose.
The purposes of this 2002 Stock Option Plan (the "Plan") are to induce
certain individuals to remain in the employ or service of Scientific
Industries, Inc. (the "Company") and its present and future subsidiary
corporations (each a "Subsidiary"), as defined in Section 425(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), to attract new
individuals to enter into such employment and service and to encourage
such individuals to secure or increase on reasonable terms their stock
ownership in the Company. The Board of Directors of the Company
(the "Board") believes that the granting of stock options (the "Options")
under the Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company and aid
in securing its continued growth and financial success. Options will
be either (a) "incentive stock options" (which term, when used herein,
shall have the meaning ascribed thereto by the provisions of Section
422 (b) of the Code) or (b) options which are not incentive stock
options ("non-incentive stock options"), as determined at the time
of the grant thereof by the Administrator referred to in Section 3(A)
hereof.
2. Shares Subject to Plan.
Options may be granted to purchase up to one hundred thousand (100,000)
shares of the common stock, par value $0.05 per share (the "Common Stock")
of the Company. To the extent that options previously granted under the
1992 Stock Option Plan of the Company (the "Prior Plan") expire or
terminate for any reason without having been exercised, then options
exercisable for that same number of shares of Common Stock, up to a
maximum of one hundred sixty one thousand (161,000) shares, may be
granted pursuant to the Plan. For the purpose of this section 2,
the number of shares purchased upon the exercise of an Option shall
be determined without giving effect to the use by a Participant of
the right set forth in Section 8(C) hereof to deliver shares of the
Common Stock in payment of all or a portion of the option price or
the use by a Participant of the right set forth in Section 12(C)
hereof to cause the Company to withhold from the shares of the Common
Stock otherwise deliverable to him upon the exercise of an Option
shares of the Common Stock in payment of all or a portion of his
withholding obligation arising from such exercise. If any Options
expire or terminate for any reason without having been exercised
in full, new Options may thereafter be granted to purchase the
unpurchased shares subject to such expired or terminated Options.
Subject to the provisions of Section 11, the maximum number of
shares of Common Stock which may be issued in accordance with
the provisions of this Section 2 shall be two hundred sixty one
thousand (261,000) shares.
3. Administration.
(A) The Plan shall be administered by either the Board or, at the
option of the Board, a Committee which shall consist of two or more
members of the Board, both or all of whom shall be "disinterested
persons" within the meaning of Rule 16b-3(c)(2)(i) promulgated under
Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange
Act"). The Committee, if appointed, shall be appointed annually by
the Board, which may at any time and from time to time remove any
member or members of the Committee, with or without cause, appoint
additional members to the Committee and fill vacancies, however
caused, in the Committee. A majority of the members of the Committee
shall constitute a quorum. All determinations of the Committee shall
be made by a majority of its members present at a meeting duly called
and held. Any decision or determination of the Committee reduced to
writing and signed by all of the members of the Committee shall be
fully as effective as if it had been made at a meeting duly called
and held. The Committee, or if a Committee has not been appointed,
the Board, in its capacity as administrator of the Plan, is
hereinafter referred to as the "Administrator".
(B) Subject to the express provisions of the Plan, the Administrator
shall have complete authority, in its discretion, to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating
to it, to determine the terms and provisions of the respective option
agreements or certificates (which need not be identical), to determine
the individuals (each a "Participant") to whom and the times and the
prices at which Options shall be granted, the periods during which
each Option shall be exercisable, the number of shares of the Common
Stock to be subject to each Option and whether such Option shall be an
incentive stock option or a non-incentive stock option and to make all
other determinations necessary or advisable for the administration of
the Plan. In making such determinations, the Administrator may take
into account the nature of the services rendered by the respective
Participants, their present and potential contributions to the success
of the Company and the Subsidiaries and such other factors as the
Administrator in its discretion shall deem relevant. The Administrator's
determination on the matters referred to in this section 3(B) shall be
conclusive. Any dispute or disagreement which may arise under or as a
result of or with respect to any Option shall be determined by the
Administrator, in its sole discretion, and any interpretations by
the Administrator of the terms of any Option shall be final, binding
and conclusive.
4. Eligibility.
An Option may be granted only to (1) employees and key consultants of
the Company or a Subsidiary, (2) directors of the Company or a Subsidiary
who are not employees of the Company or a Subsidiary ("Outside Directors"),
and (3) employees and key consultants of a corporation which has been
acquired by the Company or a Subsidiary, whether by way of exchange or
purchase of stock, purchase of assets, merger or reverse merger, or
otherwise, who hold options with respect to the stock of such corporation
which the Company has agreed to assume. The foregoing notwithstanding,
none of Messrs. Joseph I. Kesselman, Arthur M. Borden, Roger B. Knowles,
Lowell A. Kleiman and James S. Segasture shall be eligible to receive
Option grants under the Plan.
5. Option Prices.
(A) Except as otherwise provided in Sections 5(C) and 17 hereof, the
initial per share option price of any Option which is an incentive stock
option shall not be less than the fair market value of a share of the
Common Stock on the date of grant; provided, however, that, in the case
of a Participant who owns more than 10% of the total combined voting power
of the Common Stock at the time an Option which is an incentive stock
option is granted to him, the initial per share option price shall not
be less than 110% of the fair market value of a share of the Common
Stock on the date of grant.
(B) Except as otherwise provided in Sections 5(C) and 17 hereof, the
initial per share option price of any Option which is a non-incentive
stock option shall not be less than 85 % of the fair market value of a
share of the Common Stock on the date of grant.
(C) The initial per share option price of any Option which is granted
to an Outside Director shall be equal to the fair market value of a
share of the Common Stock on the date of grant.
(D) For all purposes of this Plan, the fair market value of a share of
the Common Stock on any date shall be equal to, if the Common Stock is
listed on a national securities exchange or traded on the NASDAQ
National Market System, the closing sale price of a share of the
Common Stock on such date or, if there is no sale of the Common Stock
on such date, the average of the bid and asked prices on such exchange
or system at the close of trading on such date or, if the shares of the
Common Stock are not listed on a national securities exchange or such
system on such date, the last per share sales price of Common Stock
on the market or system of the NASD on which the Common Stock is then
traded or listed (the "Relevant Market System") during the three
business days ending on the date of grant or exercise as reported in
the market report for the Relevant Market System or if no sale has
been reported for such period, the higher of the (i) closing bid price
on the Relevant Market System on the date of grant or exercise or (ii)
the average of the closing bid prices on the Relevant Market System for
the three business days immediately preceding the date of grant or
exercise, in each case as reported in the Market Report for the Relevant
Market System or, if the shares of the Common Stock are not traded or
listed on a market or system of the NASD, as shall be determined in good
faith by the Administrator.
6. Option Term.
Options shall be granted for such term as the Administrator shall
determine, not in excess of ten years from the date of the granting
thereof; provided, however, that, except as otherwise provided in
Section 17 hereof, in the case of a Participant who owns more than
10% of the total combined voting power of the Common Stock at the
time an Option which is an incentive stock option is granted to him,
the term with respect to such Option shall not be in excess of five
years from the date of the granting thereof; and provided, further,
however, that the term of an Option granted to an Outside Director
shall be ten years form the date of the granting thereof.
7. Limitation on Amount of Incentive Stock Options Granted.
Except as otherwise provided in Section 17 hereof, the aggregate fair
market value of the shares of the Common Stock for which any Participant
may be granted incentive stock options which are exercisable for the
first time in any calendar year (whether under the terms of the Plan
or any other stock option plan of the Company) shall not exceed $100,000.
8. Exercise of Options.
(A) Except as otherwise provided in Section 17 hereof and, in the case
of an Option granted to an employee or key consultant, except as
otherwise determined by the Administrator at the time of the grant
thereof, a Participant may (i) during the period commencing on the
first anniversary of the date of the granting of an Option to him and
ending on the day preceding the second anniversary of such date,
exercise such Option with respect to one-third of the shares granted
thereby, (ii) during the period commencing on such second anniversary
and ending on the day preceding the third anniversary of the date of
the granting of such Option, exercise such Option with respect to such
number of shares as when added to the number of shares previously
purchased under the Option does not exceed two-thirds of the shares
granted thereby, and (iii) during the period commencing on such third
anniversary, exercise such Option with respect to all of the shares
granted thereby.
(B) To the extent exercisable, an Option may be exercised either in
whole at any time or in part form time to time.
(C) An Option may be exercised only by a written notice of intent to
exercise such Option with respect to a specific number of shares of
Common Stock and payment to the Company of the amount of the option
price for the number of shares of the Common Stock so specified;
provided, however, that all or any portion of such payment may be
made in kind by the delivery of shares of the Common Stock having
a fair market value on the date of delivery equal to the portion of
the option price so paid; provided, further, however, that, subject
to the requirements of Regulation T promulgated under the Exchange
Act, the Administrator may implement procedures to allow a broker
chosen by a Participant to make payment of all or any portion of the
option price payable upon the exercise of an Option and receive, on
behalf of such Participant, all or any portion of the shares of the
Common Stock issuable upon such exercise.
(D) Except in the case of an Option granted to an Outside Director,
the Administrator may, in its discretion, permit any Option to be
exercised, in whole or in part, prior to the time when it would
otherwise be exercisable.
9. Transferability.
No Option shall be assignable or transferable except by will and/or
by the laws of descent and distribution and, during the life of any
Participant, each Option granted to him may be exercised only by him.
10. Termination of Service.
(A) In the event that prior to his 65th birthday, other than by
reason of death, a Participant leaves the employ or service of the
Company and the Subsidiaries or, in the case of an Outside Director,
does not stand for re-election or is not reelected, whether
voluntarily or otherwise, each Option theretofore granted to him
shall be exercisable to the extent exercisable immediately prior
to the date of termination of employment or service (or the date
the Director does not stand for reelection or is not reelected)
within the period ending the earlier to occur of (i) the
expiration of the period of three months after the date of such
termination of services or failure to stand for or be reelected a
Director and (ii) the date specified in such Option.
(B) In the event a Participant's employment or service (including
the service of an Outside Director) with the Company and the
Subsidiaries terminates by reason of his death, each Option
theretofore granted to him shall become immediately exercisable
in full and shall terminate upon the earlier to occur of (i) the
expiration of the period of one year after the date of such
Participant's death and (ii) the date specified in such Option.
(C) In the event that on or after his 65th birthday, a Participant
leaves the employ or service of the Company and the Subsidiaries
by reason of his or her disability (as such term is defined in
Section 22(e)(3) of the Code) leaves the employ or service of
the Company and the Subsidiaries or, in the case of an Outside
Director, resigns or does not stand for re-election or is not
reelected, each Option theretofore granted to him shall become
immediately exercisable in full and shall terminate upon the
earlier to occur of (i) the expiration of the period of three
months after the date of such termination, resignation or
failure to stand for election or to be reelected and (ii)
the date specified in such Option.
11. Adjustment of Number of Shares.
(A) In the event that a dividend shall be declared upon the Common
Stock payable in shares of the Common Stock, the number of shares
of the Common Stock then subject to any Option and the number of
shares of the Common Stock which may be purchased upon the
exercise of Options granted under the Plan but not yet covered by
an Option shall be adjusted by adding to each share the number of
shares which would be distributable thereon if such shares had been
outstanding on the date fixed for determining the stockholders
entitled to receive such stock dividend. In the event that the
outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation,
whether through reorganization, recapitalization, stock split-up,
combination of shares, sale of assets, merger or consolidation in
which the Company is the surviving corporation, then, there shall
be substituted for each share of the Common Stock then subject to
any Option and for each share of the Common Stock which may be
purchased upon the exercise of Options granted under the Plan but
not yet covered by an Option, the number and kind of shares of
stock or other securities into which each outstanding share of
the Common Stock shall be so changed or for which each such share
shall be exchanged.
(B) In the event that there shall be any change, other than as
specified in Section 11(A) hereof, in the number or kind of
outstanding shares of the Common Stock, or of any stock or other
securities into which the Common Stock, shall have been changed,
or for which it shall have been exchanged, then, if the
Administrator shall, in its sole discretion, determine that
such change equitably requires an adjustment in the number or
kind of shares then subject to any Option and the number or
kind of shares available for issuance in accordance with the
provisions of the Plan but not yet covered by an Option, such
adjustment shall be made by the Administrator and shall be
effective and binding for all purposes of the Plan and of each
Option.
(C) In the case or any substitution or adjustment in accordance
with the provisions of this Section 11, the option price in each
Option for each share covered thereby prior to such substitution
or adjustment shall be the option price for all shares of stock
or other securities which shall have been substituted for such
share or to which such share shall have been adjusted in
accordance with the provisions of this Section 11.
(D) No adjustment or substitution provided for in this Section 11
shall require the Company to sell a fractional share under any Option.
(E) In the event of the dissolution or liquidation of the Company,
the Board, in its discretion, may accelerate the exercisability of
each Option and/or terminate the same within a reasonable time
thereafter.
12. Purchase for Investment, Withholding and Waivers.
(A) Unless the delivery of the shares upon the exercise of an Option
by a Participant shall be registered under the Securities Act of 1933,
such Participant shall, as a condition of the Company's obligation to
deliver such shares, be required to give a representation in writing
that he is acquiring such shares for his own account as an investment
and not with a view to, or for sale in connection with, the distribution
of any thereof.
(B) In the event of the death of a Participant, an additional condition
of exercising any Option shall be the delivery to the Company of such
tax waivers and other documents as the Administrator shall determine.
(C) An additional condition of exercising any non-incentive stock
option shall be the entry by the Participant into such arrangements
with the Company with respect to withholding as the Administrator
shall determine; provided, however, that such Participant may
direct the Company to satisfy all or a portion of such withholding
obligation by withholding from the shares of the Common Stock
issuable to him on such exercise shares of the Common Stock having
a fair market value equal to the portion of the withholding obligation
so satisfied.
13. Declining Market Price.
Except in the case of an Option granted to an Outside Director, in the
event the fair market value of the Common Stock declines below the
option price set forth in any Option, the Administrator may, subject
to the approval of the Board, at any time, adjust, reduce, cancel and
re-grant any unexercised Option or take any similar action it deems
to be for the benefit of the Participant in light of the declining
fair market value of the Common Stock.
14. No Stockholder Status; No Restrictions on Corporate Acts; No
Employment Right.
(A) Neither any Participant nor his legal representatives, legatees
or distributees shall be or be deemed to be the holder of any share
of the Common Stock covered by an Option unless and until a certificate
for such share has been issued. Upon payment of the purchase price
therefore, a share issued upon exercise of an Option shall be fully
paid and non-assessable.
(B) Neither the existence of the Plan nor any Option shall in any
way affect the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure
or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock
ahead of or affecting the Common Stock or the rights thereof, or
dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate
act or proceeding whether of a similar character or otherwise.
(C) Neither the existence of the Plan nor the grant of any Option
shall require the Company or any Subsidiary to continue any
Participant in the employ or service of the Company or such Subsidiary.
15. Termination and Amendment of the Plan.
(A) The Board may at any time terminate the Plan or make such
modifications of the Plan as it shall deem advisable; provided,
however, that the Board may not, without further approval of the
holders of the shares of the Common Stock, increase the number of
shares of the Common Stock as to which Options may be granted under
the Plan (as adjusted in accordance with the provisions of Section 11
hereof), or change the class of persons eligible to participate in the
Plan, or change the manner of determining the Option prices, or extend
the period during which an Option may be granted or exercised. Except
as otherwise provided in Section 16 hereof, no termination or
amendment of the Plan may, without the consent of the Participant to
whom any Option shall theretofore have been granted, adversely affect
the rights of such Participant under such Option.
(B) The provisions of Section 5(C) hereof may not be amended except
by the vote of the majority of the members of the Board and by the
vote of the majority of the members of the Board who are not Outside
Directors, and the provisions of said Section 5(C) shall not be
amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of
1974 or the Rules and Regulations thereunder.
16. Expiration and Termination of the Plan.
The Plan shall terminate on February 10, 2012 or at such earlier
time as the Board may determine. Options may be granted under the
Plan at any time and from time to time prior to its termination. Any
Option outstanding under the Plan at the time of termination of the
Plan shall remain in effect until such Option shall have been
exercised or shall have expired in accordance with its terms.
17. Options Granted in Connection With Acquisitions.
The Administrator may determine, in connection with the acquisition
by the Company or a Subsidiary of another corporation which will
become a Subsidiary or division of the Company (such corporation
being hereafter referred to as an "Acquired Subsidiary"), that
Options may be granted hereunder to employees and other personnel
of an Acquired Subsidiary in exchange for then outstanding options
to purchase securities of the Acquired Subsidiary. The Administrator,
at its discretion shall determine as to such Options, the option
prices, may be exercisable immediately or at any time or times
either in whole or in part, and such other provisions not
inconsistent with the Plan, or the requirements set forth in
Section 15 hereof that certain amendments to the Plan be
approved by the stockholders of the Company.
___________________________________________________________________
Exhibit 5
Reitler Brown LLC
800 Third Avenue, 21st floor
New York, NY 10022
February 12, 2003
Scientific Industries, Inc.
70 Orville Drive
Bohemia, NY 11716
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Scientific Industries, Inc., a
Delaware corporation (the "Company"), in connection with the
preparation and filing of a registration statement on Form S-8 for
the Company's 2002 Stock Option Plan (the "Registration Statement").
Pursuant to the Registration Statement, the Company may issue up
to 261,000 shares of its Common Stock, par value $0.05 per share
(the "Common Stock"), equal to 100,000 shares plus up to an
additional 161,000 shares to the extent shares subject to
outstanding options previously granted under the Company's 1992
Stock Option Plan expire or terminate for any reason without
having been exercised (collectively, the "Shares").
In this connection we have been provided by the Company and
examined copies of (i) the Certificate of Incorporation of the
Company certified by the Secretary of State of the State of
Delaware; (ii) the Amended and Restated By-laws of the Company;
and (iii) resolutions of the Board of Directors of the Company
(the "Board") adopting, and of the stockholders of the Company
approving, the 2002 Stock Option Plan (the "Plan").
In rendering the opinion herein expressed we have assumed the
genuineness of all signatures, the authenticity of all original
documents, instruments and certificates examined by us, the
conformity with the original documents, instruments and
certificates of all copies of documents, instruments and
certificates examined by us and the legal capacity to sign of
all individuals executing documents. We have relied upon the
representations of the Company as to the accuracy and completeness
of the foregoing and that none of this has been rescinded,
modified or revoked.
We are not admitted to the practice of law in any jurisdiction
other than the State of New York, and we do not express any opinion
as to the laws of other states or jurisdictions other than the laws
of the State of New York, the federal law of the United States and
the General Corporation Law of the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that
the Shares when issued in accordance with the Plan will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Reitler Brown LLC
___________________
Reitler Brown, LLC
_____________________________________________________________________
Exhibit 23.1
NUSSBAUM YATES & WOLPOW, P.C.
Certified Public Accountants 445 BROAD HOLLOW ROAD,
MELVILLE, NY 11747
(631)845-5252
FAX (631)845-5279
CONSENT OF INDEPENDENT AUDITORS
_____________________________________
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated August 26, 2002, which
appears on page F-1 of the annual report on Form 10-KSB of
Scientific Industries, Inc. for the year ended June 30, 2002.
/s/ Nussbaum Yates & Wolpow, P.C.
_________________________________
Nussbaum Yates & Wolpow, P.C.
Melville, New York
February 4, 2003