Nevada
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0-30379
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88-0425691
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(State or Other Jurisdiction of Incorporation or Organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $0.01 par value
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CEMI
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The NASDAQ Stock Market LLC
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Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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14,678 restricted stock units, each to acquire one share of common stock; and
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nonqualified stock options to acquire 23,781 shares of common stock, each with an exercise price of $5.45 per share, which equals the fair market value of a
share of common stock on December 17, 2020 (defined under the 2019 Omnibus Incentive Plan to be the last reported sale price of a share of the common stock on the Nasdaq Capital Market on December 17, 2020).
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Cash Compensation. Each outside director will be entitled to a cash retainer of $35,000 for service on the board of directors for 2021, except that the Chair of
the Board will instead receive a cash retainer of $75,000. In addition, an outside director serving on the board’s Audit Committee, Compensation Committee, or Nominating and Corporate Governance Committee in a non-Chair capacity will be
entitled to a cash retainer of $7,500, $5,000 or $3,750, respectively, for services on those committees for the year. The Chair of one of those committees will be entitled to a cash retainer twice the amount payable to other members of
that committee. Directors are not entitled to receive attendance fees for any meetings of the board or its committees.
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Equity Awards. Each outside director who is elected (or re-elected) to the board at our 2021 annual meeting of stockholders will receive annual equity-based
awards under our 2019 Omnibus Incentive Plan having an aggregate value of $80,000, based upon the fair market value of common stock on the grant date and consisting of $40,000 in value of restricted stock units and $40,000 in value of
nonqualified stock options. These awards will be, subject to certain timing exceptions, granted as of the date of the 2021 annual meeting. They will vest immediately prior to our 2022 annual meeting of stockholders (or, if earlier, upon
a Change in Control as defined in the 2019 Omnibus Incentive Plan).
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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits
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Exhibit No.
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Description
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Outside Director Compensation Policy of Chembio Diagnostics, Inc.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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*
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Indicates management contract or compensatory plan.
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Chembio Diagnostics, Inc.
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Dated: December 17, 2020
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By:
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/s/ Richard L. Eberly
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Chief Executive Officer and President
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Annual Cash Compensation
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From January 1, 2020 through December 31, 2020, each Outside Director shall be paid annual cash retainers as follows:
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Board
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Chair
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$
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70,000
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Other Directors
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35,000
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Audit Committee
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Committee Chair
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$
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15,000
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Other Committee Members
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7,500
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Compensation Committee
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Committee Chair
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$
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10,000
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Other Committee Members
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5,000
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Nominating and Governance Committee
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Committee Chair
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$
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7,500
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Other Committee Members
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3,750
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Types of Awards
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Each Outside Director receiving Annual Director Awards shall receive grants having a total value of $80,000, which shall consist of $40,000 in value of
nonqualified stock options and $40,000 in value of restricted stock units.
• Nonqualified stock options included in Annual Director Awards (a) shall have an exercise price equal to the Fair Market Value (as defined in the 2019 Plan) of a share of common
stock of Chembio (“Common Stock”) on the grant date and (b) subject to continued service on the Board, shall vest in full immediately prior to the
2022 annual meeting of stockholders (or, if earlier, upon a Change in Control, as defined in the 2019 Plan). The number of shares of Common Stock subject to such nonqualified stock options shall be determined using the Black-Scholes model
applied by Chembio in preparing option-related calculations for purposes of its consolidated financial statements.
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• The number of shares of Common
Stock subject to restricted stock units included in an Outside Director’s Annual Director Awards shall equal the quotient of $80,000 divided by the
Fair Market Value of a share of Common Stock on the Grant Date. Such restricted stock units shall vest in full immediately prior to the 2022 annual meeting of stockholders (or, if earlier, upon a Change in Control, as defined in the 2019
Plan).
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Initial Election Compensation
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Each Outside Director who is initially elected to the Board on or after December 17, 2020, shall receive equity or equity‑based awards (“Initial Election Awards”) under the 2019 Plan as set forth below.
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Timing of Grant
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Initial Election Awards shall be granted to an Outside Director as of the date of the in person or telephonic meeting of the Board at which the Outside Director
is initially elected or, if later, as of the effective date of the election. If, however, such proposed grant date occurs during a quarter- or year-end trading blackout period under Chembio’s Insider Trading Policy or the Board otherwise
determines (after consultation with Chembio’s legal counsel to the extent the Committee deems appropriate) that potential market timing or other legal or accounting issues make it inappropriate or undesirable to grant the Initial Election
Awards as of such proposed grant date, then the grant date instead shall be the first Monday that follows the date on which Chembio next files an Annual Report on Form 10‑K or Quarterly Report on Form 10‑Q with the SEC (or, if such Monday is
not a trading day, the next succeeding trading day).
For clarity, if an Outside Director is initially elected to the Board as of the Annual Meeting, the Outside Director shall be granted both Initial Election
Awards and Annual Director Awards.
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Type of Awards
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Each Outside Director receiving Initial Election Awards shall receive grants
having a total value of $160,000, which shall, unless otherwise determined by the Compensation Committee of the Board with respect to the Outside Director, be comprised of $80,000 in value of nonqualified stock options and $80,000 in
value of restricted stock units.
• Nonqualified stock options included in Initial Election Awards (a) shall have an exercise price equal to the Fair Market Value of a share of Common Stock on the grant date and
(b) subject to continued service on the Board, shall vest in full immediately prior to the 2022 annual meeting of stockholders (or, if earlier, upon a Change in Control, as defined in the 2019 Plan). The number of shares of Common Stock
subject to such nonqualified stock options shall be determined using the Black-Scholes model applied by Chembio in preparing option-related calculations for purposes of its consolidated financial statements.
• The number
of shares of Common Stock subject to restricted stock units included in an Outside Director’s Annual Director Awards shall equal the quotient of $80,000 divided by the Fair Market Value of a share of Common Stock on the Grant Date. Such
restricted stock units shall vest one-third on the first, second and third anniversaries of the grant date (or, if earlier, upon a Change in Control).
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Reimbursement of Expenses
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The foregoing compensation will be in addition to reimbursement of all out-of-pocket expenses incurred by all directors in attending meetings of the Board and
its committees.
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General
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Administration
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This Policy shall be administered and interpreted by the Compensation Committee of the Board and may be amended or repealed by the Board.
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Dissemination
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This Policy shall be distributed to each Outside Director of Chembio upon its adoption by the Board and to each subsequently elected Outside Director upon
commencement of his or her directorship.
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