UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 under Rule 14a-12
CHEMBIO DIAGNOSTICS, INC.
----------------------------------------------
(Name of Registrant as Specified in Its Charter)
Not Applicable
-----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
| 1. | Title of each class of securities to which transaction applies: |
| 2. | Aggregate number of securities to which transaction applies: |
| 3. | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| 4. | Proposed maximum aggregate value of transaction: |
| 5. | Total fee paid: |
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
| 1. | Amount Previously Paid: |
| 2. | Form, Schedule or Registration Statement No.: |
| 3. | Filing Party: |
| 4. | Date Filed: |
CHEMBIO DIAGNOSTICS, INC.
3661 Horseblock Road
Medford, NY 11763
(631) 924-1135
NOTICE OF ANNUAL MEETING OF SHAREHOLDERSSTOCKHOLDERS
To be held October 31, 2013June 9, 2016
The Annual Meeting of ShareholdersStockholders of Chembio Diagnostics, Inc. will be held on October 31, 2013June 9, 2016 at 10:3000 am (local time) at Chembio, 3661 Horseblock Road, Medford, New York 11763, for the following purposes:
| 1. | To elect |
| 3. | To consider and vote on a proposal to approve, on an advisory basis, the compensation paid to our named executive officers (as that term is defined in this Proxy Statement for the |
| 4. |
| To, in their discretion, vote upon an adjournment or postponement of the meeting; and |
5. To transact any other business that properly may come before the Annual Meeting.
Only the
All shareholders,stockholders, regardless of whether they expect to attend the meeting in person, are requested to complete, date, sign and return promptly the enclosed form of proxy via the Internet or in the accompanying envelope (which requires no postage if mailed in the United States), as applicable. The person executing the proxy may revoke it by filing with our Secretary an instrument of revocation or a duly executed proxy bearing a later date, or by electing to vote in person at the Annual Meeting.
Important Notice regarding the Availability of Proxy Materials for the ShareholderStockholder Meeting to Be Held on October 31, 2013:June 9, 2016:
The Proxy Statement, form of Proxy, and Annual Report to ShareholdersStockholders for the fiscal year ended December 31, 20122015 are available free of charge at http://www.chembio.com/investors/proxy/. The Notice of Internet Availability of Proxy Materials waswill be mailed to beneficial owners beginning on or about September 27, 2013.April 29, 2016. Paper copies of the Proxy Materials werewill be mailed to shareholdersstockholders of record beginning on or about September 27, 2013.April 29, 2016.
All shareholdersstockholders are extended a cordial invitation to attend the Annual Meeting. If you would like to obtain directions to be able to attend the Annual Meeting in person, please contact Ms. Bobbie Coco at (631) 924-1135 or bcoco@chembio.com.
On Behalf of the Board of Directors
Medford, New York Lawrence A. SiebertJohn J. Sperzel III
PROXY STATEMENT
CHEMBIO DIAGNOSTICS, INC.
3661 Horseblock Road
Medford, NY 11763
(631) 924-1135
ANNUAL MEETING OF SHAREHOLDERSSTOCKHOLDERS
To be held October 31, 2013June 9, 2016
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is provided in connection with the solicitation of proxies by and on behalf of the Board of Directors of Chembio Diagnostics, Inc., a Nevada corporation (referred to as the "Company" or "Chembio" or "we" or "us"), to be voted at the Annual Meeting of ShareholdersStockholders to be held at 10:3000 am (local time) on October 31, 2013June 9, 2016 at Chembio, 3661 Horseblock Road, Medford, New York 11763, or at any adjournment or postponement of the Annual Meeting. We anticipate that this Proxy Statement and the accompanying form of proxy will be first made available to shareholdersstockholders on or about September 27, 2013.April 29, 2016.
In accordance with rules and regulations adopted by the SEC, we are furnishing proxy materials to our shareholdersstockholders of record by (i) mailing a printed copy of the proxy materials, and (ii) providing Internet access to the proxy materials at http://www.chembio.com/investors/proxy/. Both shareholdersStockholders of record who receive a printed copy of proxy materials and shareholdersas well as stockholders of record who receive a Notice of Internet Availability of Proxy Materials each will be permitted to access our proxy materials on the Internet. In addition, shareholdersstockholders of record who receive a Notice of Internet Availability of Proxy Materials can receive a printed copy of the proxy materials by requesting this information from the Company. The Notice of Internet Availability of Proxy Materials will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Notice of Internet Availability of Proxy Materials also instructs you as to how you may submit your proxy on the Internet.
A shareholderstockholder giving a proxy may revoke it at any time before it is exercised by delivering written notice of revocation to our Secretary prior to the start of the Annual Meeting, by substituting a new proxy executed at a later date prior to the start of the Annual Meeting, or by requesting, in person at the Annual Meeting, that the proxy be returned.
The solicitation of proxies is to be made on the Internet and through mailings. However, following the initial solicitation, further solicitations may be made by telephone or oral communication with shareholders.stockholders. Our officers, directors and employees may solicit proxies, but these persons will not receive compensation for that solicitation other than their regular compensation as employees. Arrangements also will be made with brokerage houses and other custodians, nominees and fiduciaries to provide access to the solicitation materials to beneficial owners of the shares held of record by those persons. We may reimburse those persons for reasonable out-of-pocket expenses incurred by them in so doing. We will pay all expenses involved in preparing, assembling and mailing this Proxy Statement and the enclosed material.
VOTING SECURITIES
The close of business on September 11, 2013April 18, 2016 has been fixed as the record date for the determination of holders of record of the Company's common stock, $0.01 par value per share, entitled to notice of and to vote at the Annual Meeting. Each stockholder of record as of the close of business on the record date is entitled to one vote on each matter to be voted on at the Annual Meeting for each share of common stock held by suchthat stockholder on the record date. On the record date, 9,324,7839,650,707 shares of common stock were outstanding and eligible to be voted at the Annual Meeting. A majority of the issued and outstanding shares of common stock entitled to vote, represented either in person or by proxy, constitutes a quorum at any meeting of the shareholders.stockholders. If sufficient votes for approval of the matters to be considered at the Annual Meeting have not been received prior to the meeting date, we intend to postpone or adjourn the Annual Meeting in order to solicit additional votes. The form of proxy we are soliciting requests authority for the proxies, in their discretion, to vote the shareholders'stockholders' shares with respect to a postponement or adjournment of the Annual Meeting. At any postponed or adjourned meeting, we will vote any proxies received in the same manner described in this Proxy Statement with respect to the original meeting.
VOTING PROCEDURES
Votes at the Annual Meeting are counted by an inspector of election appointed by the Chairman of the meeting. You can ensure that your shares are voted at the meeting by submitting your proxy card on the Internet, or by completing, signing, dating and returning the enclosed proxy form in the envelope provided, such that they are received no later than the day before the Annual Meeting. Abstentions by those present at the Annual Meeting are tabulated separately from affirmative and negative votes and do not constitute affirmative votes.votes. If a shareholderstockholder submits his or her proxy card and withholds authority to vote for any or all of the items, the votes represented by the proxy card will be deemed to be present at the meeting for purposes of determining the presence of a quorum but will not be counted as affirmative votes. Rule 452 of the New York Stock Exchange (NYSE), which governs all brokers, permits brokers to vote their customers' stock held in street name on routine matters when the brokers have not received voting instructions from their customers. The NYSE does not, however, allow brokers to vote their customers' stock held in street name on non-routine matters unless they have received voting instructions from their customers. In such cases, the uninstructed shares for which the broker is unable to vote are called broker non-votes. The ratification of the independent auditor is a routine matter on which brokers may vote in their discretion on behalf of customers who have not provided voting instructions. While the advisory vote on the compensation of our named executive officers and the advisory vote on the frequency of such votes on compensation are routine matters, brokers are not allowed to vote on these matters unless they have received voting instructions from their customers. The election of directors is a non-routine matter on which brokers are not allowed to vote unless they have received voting instructions from their customers. Due to recent rule changes by the NYSE, your broker will no longer be allowed to vote your shares on the election of our directors without your specific instructions. Shares in the names of brokers that are not voted on a particular matter are treated as not present with respect to that matter.
We will announce voting results at the meeting, and we will publish the final results within four business days following the meeting on a Current Report on Form 8-K.8-K that will be filed with the SEC.
FORWARD-LOOKING STATEMENTS
This Proxy Statement includes "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this Proxy Statement regarding our financial position, business strategy and plans and objectives of management for future operations and capital expenditures are forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements and the assumptions upon which the forward-looking statements are based are reasonable, we can give no assurance that such expectations and assumptions will prove to have been correct.
On September 11, 2013,April 18, 2016, there were 9,324,783 9,650,707 shares of common stock issued and outstanding and eligible to be voted at the Annual Meeting. The following table sets forth certain information regarding the beneficial ownership of our common stock on September 11, 2013April 18, 2016 by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and nominees for director, each of our "named executive officers"officers," and all of our directors.directors and executive officers as a group.
In this Proxy Statement, the term "named executive officer" refers to our principal executive officer and our two most highly compensated executive officers, other than the principal executive officer, who were serving as executive officers at the end of 2012.2015. The term "named executive officer" also refers to up to two additional individuals for whom disclosure would have been provided but for the fact that the individuals were not serving as executive officers of the Company at the end of 2012.2015. There currently are no such additional individuals for the Company.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||
Siebert, Lawrence (1) 3661 Horseblock Road Medford, NY 11763 | 883,789 | 9.41 | % | |||||
Esfandiari, Javan (2) 3661 Horseblock Road Medford, NY 11763 | 156,235 | 1.66 | % | |||||
Larkin, Richard (3) 3661 Horseblock Road Medford, NY 11763 | 78,620 | .84 | % | |||||
Ippolito, Tom (4) 3661 Horseblock Road Medford, NY 11763 | 46,799 | .50 | % | |||||
Steele, Michael (5) 3661 Horseblock Road Medford, NY 11763 | 12,785 | .14 | % | |||||
Klugewicz, Sharon (6) 3661 Horseblock Road Medford, NY 11763 | 12,630 | .14 | % | |||||
Meller, Gary (7) 3661 Horseblock Road Medford, NY 11763 | 105,000 | 1.12 | % | |||||
Davis, Katherine L. (8) 3661 Horseblock Road Medford, NY 11763 | 58,297 | .62 | % | |||||
DeBuono, Barbara (9) 3661 Horseblock Road Medford, NY 11763 | 30,297 | .32 | % | |||||
Kissinger, Peter (10) 3661 Horseblock Road Medford, NY 11763 | 30,297 | .32 | % | |||||
GROUP (11) | 1,414,313 | 14.55 | % | |||||
Wellington Management Company, LLP 280 Congress Street Boston, MA 02210 | 670,980 | 7.20 | % | |||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(12)(13) | Percent of Class(13) | |
John J. Sperzel (1) 3661 Horseblock Road Medford, NY 11763 | 100,000 | 1.03% | |
Esfandiari, Javan (2) 3661 Horseblock Road Medford, NY 11763 | 134,844 | 1.39% | |
Larkin, Richard (3) 3661 Horseblock Road Medford, NY 11763 | 66,514 | .69% | |
Ippolito, Tom (4) 3661 Horseblock Road Medford, NY 11763 | 38,916 | .40% | |
Steele, Michael (5) 3661 Horseblock Road Medford, NY 11763 | 36,785 | .38% | |
Lambotte, Paul (6) 3661 Horseblock Road Medford, NY 11763 | 51,630 | .53% | |
Klugewicz, Sharon (7) 3661 Horseblock Road Medford, NY 11763 | 12,000 | .12% | |
Meller, Gary (8) 3661 Horseblock Road Medford, NY 11763 | 123,750 | 1.28% | |
Davis, Katherine L. (9) 3661 Horseblock Road Medford, NY 11763 | 77,046 | .80% | |
DeBuono, Barbara 3661 Horseblock Road Medford, NY 11763 | 23,314 | .24% | |
Kissinger, Peter (10) 3661 Horseblock Road Medford, NY 11763 | 50,629 | .52% | |
GROUP (11) | 715,428 | 7.14% | |
Wellington Management Company, LLP 280 Congress Street Boston, MA 02210 | 1,092,780 | 11.35% | |
Norman H. Pessin 366 Madison Ave, 14th Floor New York, NY 10017 | 884,087 | 9.18% |
| (1) | Includes |
| Includes |
| (3) | Includes 23,217 shares issuable upon exercise of options |
| (4) | Includes |
| (5) | Includes 36,785 shares issuable upon exercise of options |
| Includes |
| (7) | Includes 12,000 shares issuable upon exercise of options exercisable within 60 days. Does not include 24,000 shares issuable upon exercise of options that are not exercisable within the next 60 days. |
| Includes |
| (9) | Includes |
| (10) | Includes |
| (11) | Includes footnotes (1)-(10). |
| (12) | Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or investment power with respect to securities. Except as subject to community property laws, where applicable, the person named has sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by him. |
| (13) | The beneficial ownership percent in this table is calculated with respect to the number of outstanding shares (9,650,707) of the Company's common stock outstanding as of April 18, 2016. For purposes of the beneficial ownership table, the number of shares owned beneficially by a stockholder is calculated as the number of shares of common stock owned plus the number of shares (the "Conversion Shares") into which any preferred stock, warrants, options or other convertible securities owned by that stockholder can be converted within 60 days of the date of calculation of the ownership number. The beneficial ownership percent for that stockholder is calculated by dividing the number of shares owned beneficially by the sum of the total number of the Company's shares outstanding and the number of Conversion Shares attributable to that stockholder. |
AVAILABLE INFORMATION
Copies of our Annual Report on Form 10-K are being furnished to each shareholderstockholder with this Proxy Statement, and are available on the internet at http://www.chembio.com/investors/proxy/ pursuant to the instructions set forth in the attached "Notice Regarding the Availability of Proxy Materials." Upon written request, we will provide, without charge, a copy of our Annual Report on Form 10K10‑K for the year ended December 31, 2012,2015, to any shareholderstockholder of record, or to any shareholderstockholder who owns common stock listed in the name of a bank or broker as nominee, at the close of business on September 11, 2013.April 18, 2016. Any request for a copy of these reports should be mailed to the Secretary, Chembio Diagnostics, Inc., 3661 Horseblock Road, Medford, NY 11763. ShareholdersStockholders may also receive copies of these reports by accessing the Company's website at www.chembio.com. We file annual, quarterly and current reports, Proxy Statements and other information in accordance with the Securities Exchange Act of 1934, as amended, with the SEC. You may read and copy any reports, Proxy Statements or other information filed by us at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. In addition, the materials we file electronically with the SEC are available at the SEC's website at www.sec.gov. The SEC's website contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Information about the operation of the SEC's public reference facilities may be obtained by calling the SEC at 1-800-SEC-0330.
ITEM 1. ELECTION OF DIRECTORS
At the Annual Meeting, the shareholdersstockholders will elect fivefour directors to serve as our Board of Directors. Each director will be elected to hold office until the next annual meeting of shareholdersstockholders and thereafter until his/her successor is elected and qualified. The affirmative vote of a plurality of the shares voted at the Annual Meeting in person or by proxy is required to elect each director. Cumulative voting is not permitted in the election of directors. In the absence of instructions to the contrary, the person named in the accompanying proxy shall vote the shares represented by that proxy for the persons named below as management's nominees for directors. All fivefour nominees currently serve as directors of the Company.
Dr. Barbara DeBuono, who has served as a director of the Company for five years, since June 2011, has determined not to be considered for another term as a director.
It is not anticipated that any of the nominees will become unable or unwilling to accept nomination or election, but, if that should occur, the persons named in the proxy intend to vote for the election of such other person as the Board of Directors (the "Board") may recommend.
The following table sets forth, with respect to each nominee for director, the nominee's age, positions and offices with the Company, the expiration of the nominee's term as a director, and the year in which the nominee first became a director. Individual background information concerning each of the nominees follows the table. For additional information concerning the nominees, including stock ownership and compensation, see "Executive Compensation," "Beneficial Ownership of the Company's Equity Securities"Securities By Five Percent Beneficial Owners and Management", and "Certain Transactions With Management And Principal Shareholders.""Director Compensation".
| Name | Age | Position(s) and Office(s) with the Company | Expiration of Term of Director | Initial Date as Director | ||||
| Katherine L. Davis | 59 | Director and Chairman of the Board | May 2007 | |||||
| 71 | Director | |||||||
| June 2011 | ||||||||
| Gary Meller | 66 | Director | March 2005 | |||||
| 52 | Chief Executive Officer, President and |
Dr. Peter Kissinger, Ph.D. (71), Director. Dr. Kissinger was elected to the Company's Board of Directors in June 2011, and currently serves on the Company's Audit and Compensation Committees. Dr. Kissinger is a scientist, entrepreneur and academic, with a multi-faceted career in biotechnology and biomedical technologies. He is the founder of Bioanalytical Systems, Inc. (NASDAQ: BASI), which he led from 1974-2007, and is Professor of Chemistry at Purdue University. Dr. Kissinger's academic research has involved the study of modern liquid chromatography techniques, and in vivo methodology for drug metabolism and the neurosciences. Dr. Kissinger has published more than 240 scientific papers and is a Fellow of the American Association of Pharmaceutical Scientists and the American Association for the Advancement of Science. In 2005, he became the Chairman of Prosolia, which markets mass spectrometry innovations for life science, industrial and homeland security applications. In 2007, he and Candice Kissinger founded Phlebotics, Inc., a medical device company focused on diagnostic information for intensive care medicine. He is a columnist for the trade publication Drug Discovery News. Dr. Kissinger received a B.S. in Chemistry from Union College and a Ph.D. in Analytical Chemistry from the University of North Carolina. Dr. Kissinger has knowledge of and experience in biotechnology and biomedical technologies as well as publicly-traded companies, all of which make him an excellent candidate for serving on the board.
Dr. Gary Meller M.D. (66), Director. Dr. Meller was elected to our Board of Directors on March 15, 2005, and currently serves on the Board's Audit, and Nominating And Corporate Governance Committees, including as Chairman of the Audit Committee. Dr. Meller has been the president of CommSense Inc., a healthcare business development company, since 2001. CommSense Inc. works with clients in Europe, Asia, North America, and the Middle East on medical information technology, medical records, pharmaceutical product development and financing, health services operations and strategy, and new product and new market development. From 1999 until 2001 Dr. Meller was the executive vice president, North America, of NextEd Ltd., a leading internet educational services company in the Asia Pacific region. Dr. Meller also was a limited partner and a member of the Advisory Board of Crestview Capital Master LLC, which, at one time, was our largest stockholder. Dr. Meller is a graduate of the University of New Mexico School of Medicine and has an MBA from the Harvard Business School. Dr. Meller's experience in the medical field, both domestic and foreign (especially his experience with CommSense Inc.), as well as his financing experience, made him an excellent candidate for serving on the board.
John J. Sperzel (52), President, Chief Executive Officer and Director. Mr. Sperzel was appointed Chief Executive Officer and President of Chembio Diagnostics, Inc. and a member of our Board in March 2014. Prior to joining the Company, Mr. Sperzel, was the President and CEO of International Technidyne Corporation (ITC) from September 2011 to December 2013. Mr. Sperzel served as President at Axis-Shield from September 2004 to September 2011. He also has held senior leadership positions at Bayer Diagnostics (Siemens Dx), Instrumentation Laboratory, and Boehringer Mannheim Diagnostics (Roche Dx). Mr. Sperzel graduated from Plymouth State College in New Hampshire, with a B.S. in Business Administration/Management. He currently serves on the board of directors of Diadexus, Inc., the common stock of which is registered under the Securities Exchange Act of 1934, and as an advisor to the board of the Diagnostic Marketing Association, and was the president of the board of that Association in 2007. Mr. Sperzel's knowledge of, and experience in, the Company's specific business and its industry sector, together with the continuing current knowledge that he is accumulating about the Company in his position as CEO of the Company, make him an excellent candidate for serving on the Board.
Required Vote; Board Recommendation
The affirmative vote of a plurality of the shares voted at the Annual Meeting in person or by proxy is required to elect each director. The Board of Directors unanimously recommends that the shareholdersstockholders vote FOR the election of the three nominees listed above.
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND EXECUTIVE OFFICERS
AND EXECUTIVE OFFICERS
Board of Directors
Information regarding the Board of Directors is set forth above under "Item 1: Election of Directors".
Executive Officers
The following table sets forth, with respect to each executive officer, the officer's age, the officer's positions and offices with the Company, the expiration of histhe officer's term as an officer and the period during which hethe officer has served either the Company or Chembio Diagnostic Systems Inc. AdditionalIndividual background information concerning each of the executive officers follows the table, except that individual background information concerning Mr. Sperzel is set forth above under "Item 1: Election of Directors". Information regarding employment contracts for Mr. Siebert, whose term as PresidentSperzel, Ms. Klugewicz, and Chief Executive Officer expires on May 11, 2014,Mr. Esfandiari may be found under "Executive Compensation."
| Name | Age | Position With Company | Initial Date as Officer | Expiration of Term | Age | Position With Company | Initial Date as Officer | Expiration of Term | ||||
| Lawrence A. Siebert* | 56 | Chief Executive Officer, President | 2002 | May 11, 2014 | ||||||||
| John J. Sperzel III* | 52 | Chief Executive Officer, President | 2014 | March 13, 2017 | ||||||||
| Richard J. Larkin | 57 | Chief Financial Officer | 2003 | ** | 59 | Chief Financial Officer | 2003 | ** | ||||
| Sharon Klugewicz | 45 | Chief Operating Officer | 2013 | May 22, 2015 | 48 | Chief Operating Officer | 2012 | May 22, 2017 | ||||
| Javan Esfandiari | 47 | Sr. VP. of Research & Development | 2004 | March 5, 2016 | 49 | Chief Scientific and Technology Officer | 2004 | March 5, 2019 | ||||
| Tom Ippolito | 50 | Vice President of Regulatory Affairs, Quality Assurance and Quality Control | 2005 | ** | 53 | Vice President of Regulatory Affairs, Quality Assurance and Quality Control | 2005 | ** | ||||
| Michael Steele | 50 | Vice President of Sales and Marketing | 2012 | ** | ||||||||
| Paul Lambotte | 63 | Vice President of Product Development | 2014 | ** | ||||||||
___________________________
* Information concerning Mr. Siebert'sSperzel's background is included under "Item 1. Election of Directors".
Richard J. Larkin (57)(59), Chief Financial Officer. Mr. Larkin was appointed as Chief Financial Officer of Chembio Diagnostics, Inc. upon consummation of the merger in 2004. Mr. Larkin oversees our financial activities and information systems. Mr. Larkin has been the Chief Financial Officer of Chembio Diagnostic Systems Inc. since September 2003. Prior to joining Chembio Diagnostic Systems Inc., Mr. Larkin served as CFO at Visual Technology Group ("VTG") from May 2000 to September 2003, and also led theirVTG's consultancy program that provided hands-on expertise in all aspects of financial service, including the initial assessment of client financial reporting requirements within an Enterprise Resource Planning (Manufacturing) environment through training and implementation. Prior to joining VTG, he served as CFO at Protex International Corporation from May 1987 to January 2000. Mr. Larkin holds a BBA in Accounting from Dowling College and is a member of the American Institute of Certified Public Accountants.
Javan Esfandiari (47)(49), Executive VP of ResearchChief Science and Development.Technology Officer. Mr. Esfandiari joined Chembio Diagnostic Systems, Inc, in 2000. Mr. Esfandiari co-founded, and became a co-owner of Sinovus Biotech AB where he served as Director of Research and Development concerning lateral flow technology until Chembio Diagnostic Systems Inc. acquired Sinovus Biotech AB in 2000. From 1993 to 1997, Mr. Esfandiari was Director of Research and Development with On-Site Biotech/National Veterinary Institute, Uppsala, Sweden, which was working in collaboration with Sinovus Biotech AB on development of veterinary lateral flow technology. Mr. Esfandiari received his B.Sc. in Clinical Chemistry and his M. Sc. in Molecular Biology from Lund University, Sweden. He has published articles in various veterinary journals and has co-authored articles on tuberculosis serology with Dr. LyashchenkoLyashchenko.
Sharon Klugewicz (48)., Chief Operating Officer. Prior to joining the Company in September 2012, Ms. Klugewicz, served as Senior Vice President, Scientific & Laboratory Services at Pall Corporation (NYSE:PLL), a world leader in filtration, separation and purification technologies. Prior to that, Ms. Klugewicz held a number of positions at Pall Corporation over her 20-year tenure there, including in the Pall Life Sciences Division, in Marketing Product Management, and Field Technical Services, which included a position as Senior Vice President, Global Quality Operations. Ms. Klugewicz holds an M.S. in Biochemistry from Adelphi University and a B.S. in Neurobiology from Stony Brook University.
Tom Ippolito (50)(53), VP of Regulatory Affairs, QA and QC. Mr. Ippolito joined Chembio Diagnostic Systems, Inc. in June 2005. He has over twenty years' experience with in vitro diagnostics for infectious diseases, protein therapeutics, vaccine development, Process Development,2005, and serves as Vice President, Regulatory AffairsAffairs. Prior to joining the Company, Mr. Ippolito served as Vice President, Regulatory and Quality Management. Over the years,at Biospecifics Technologies. He previously held a number of positions with United Biomedical, Biospecifics, Merck, Rhone Merieux, Organon Teknika, Analytab Products Inc., and Olympus. Mr. Ippolito has held Vice President level positions at Biospecific Technologies, Corp. from 2000 - 2005, Director level positions in Quality Assurance, Quality Control, Process Development and Regulatory Affairs at United Biomedical, Inc. from 1987 - 2000. Mr. Ippolito isholds the position of Course Director for "drug development process" and "FDA Regulatory Process" forof the BioScience CertificateFundamentals of Bioscience Program at the New York State University of Stony Brook and is the instructor for clinical development and regulatory affairs.
Michael Steele (50), VP of Sales, Marketing & Business Development. Mr. Steele joined Chembio Diagnostic Systems, Inc. in August 2012, and serves as Vice President, Sales/Marketing/Business Development. Prior to joining the Company, Mr. Steele served as Vice President, Business Development of Seracare Life Sciences, Inc., a program he has beenglobal provider of products and services to in-vitro diagnostic and biopharmaceutical manufacturers. He previously held leadership positions at Serologicals Corporation, Corautus Genetics Inc., and Life Therapeutics Ltd. Mr. Steele received a partB.S. in Psychology and a Master of since its inceptionBusiness Administration from James Madison University.
Paul Lambotte (63), VP Product Development. Mr. Lambotte joined Chembio Diagnostic Systems, Inc. in 2003.December 2014, and serves as Vice President of Product Development. Prior to joining the company, Mr. Lambotte was President of PLC Inc., a point-of-care product development consulting company. He previously served as Chief Science Officer at Axxin Pty Ltd, held positions of VP of R&D and Business Development at Quidel Corporation, and held a number of positions at Beckman Coulter and Hybritech Inc. Mr. Lambotte is the inventor of several patents in the field of rapid, point-of-care diagnostic products. He received a Master in Biochemistry and a PhD in Protein Biochemistry from the University of Mons, Belgium, and did post-doctoral work at the Ludwig Institute for Cancer research in Brussels, Belgium.
Each of our officers serves at the pleasure of the Board of Directors. There are no family relationships among our officers and directors.
Certain Transactions with Management and Principal ShareholdersStockholders
The Company entered into an employment agreement effective March 5, 2013,2016, with Mr. Esfandiari to continue as the Company's Senior Vice President of Research and Development for an additional term of three years through March 5, 2016. Effective April 19, 2013, the employment agreement of Mr. Siebert to serve as Chief Executive Officer was extended for one year, through May 11, 2014. See Item "Executive Compensation" for more details.2019. The Company also entered into an employment agreement, effective May 22, 2013,2015, with Ms. Sharon Klugewicz to serve as Chief Operating Officer for a term of two years. On March 13, 2014, the Company entered into an employment agreement with Mr. John J. Sperzel III to serve as Chief Executive Officer of the Company beginning on March 13, 2014. See "EXECUTIVE COMPENSATION" under Item 1 for more details.
Approval of Transactions with Related Persons
The Board of Directors reviews all transactions involving us in which any of our directors, director nominees, significant shareholdersstockholders and executive officers and their immediate family members are participants to determine whether such person has a direct or indirect material interest in the transaction. All directors, director nominees and executive officers must notify us of any proposed transaction involving us in which such person has a direct or indirect material interest. Such proposed transaction is then reviewed by either the Board as a whole or the Audit Committee, which determines whether or not to approve the transaction. After such review, the reviewing body approves the transaction only if it determines that the transaction is in, or not inconsistent with, the best interests of the Company and its shareholders.stockholders.
Director Independence
Our common stock trades on the NASDAQ. Accordingly, we are subject to the corporate the governance standards of NASDAQ, which require, among other things, that thea majority of the board of directors be independent. We define an "independent" director in accordance with the NASDAQ Global Market's requirements for independent directors. Under this definition, we have determined that each of Katherine Davis, Barbara DeBuono, Peter Kissinger, and Gary Meller currently qualifyqualifies as an independent directors.director. We do not list the "independent" definition we use on our internet website.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Company's directors, executive officers and beneficial owners of more than 10% of the Company's common stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. The Company believes that during the year ended December 31, 2012,2015 each person who was an officer, director and beneficial owner of more than 10% of the Company's common stock complied with all Section 16(a) filing requirements.
Board of Directors and Committees
The Board of Directors held six meetings during the fiscal year ended December 31, 20122015 and each director participated in at least 75% of those meetings and of meetings of the committees on which he/she served. Although the Company does not have a formal policy regarding attendance by members of the Board of Directors at the Company's annual meeting of shareholders,stockholders, the Company encourages each director to attend. Mr. Siebert was the only member of the Board of Directors who was present at last year's annual meeting of shareholders.
Audit Committee
The Company's Audit Committee met four times in 20122015 and currently consistsas of April 21, 2016, consisted of Gary Meller (Chair), Katherine L. Davis, (Chairperson), Dr. Gary Meller and Dr. Peter Kissinger .Kissinger. The Board of Directors has determined that Ms. DavisDr. Meller is an "audit committee financial expert," as defined under the rules of the SEC. Each of the members of the Audit Committee is deemed "independent" in accordance with the NASDAQ Global Market's requirements for independent directors. This committeeThe Audit Committee oversees, reviews, acts on and reports to our Board of Directors on various auditing and accounting matters including:including the selection of our independent accountants, the scope of our annual audits, fees to be paid to the independent accountants, and the performance of our independent accountants. A copy of the committee'sCommittee's charter is available on the Company's website at www.chembio.com.www.chembio.com
Compensation Committee
The Company's Compensation Committee met three timestwice in 20122015 and currently consistsas of Dr. Gary Meller (Chairperson)April 21, 2016, consisted of Barbara DeBuono (Chair), Katherine L. Davis, and Dr. Barbara DeBuono.Peter Kissinger. Each of the Compensation Committee members is deemed "independent" in accordance with the NASDAQ Global Market's requirements for independent directors. The Compensation Committee establishes salaries, incentives and other forms of compensation for executive officers. The Compensation Committee also administers our incentive compensation plan. The Compensation Committee's charter is available on the Company's website at www.chembio.com. The Compensation Committee does not currently delegate its authority to any other party, and does not currently engage any compensation consultants to determine the amount or form of executive and director compensation. Executive officers do not play a role in the determination or recommendation of the form or amount of any executive compensation paid.paid, except that the Compensation Committee may request for the Chief Executive Officer to provide the Committee with oral evaluations of the performance of other executive officers.
Nominating andAnd Corporate Governance Committee
As of April 21, 2016, the Company's Nominating andAnd Corporate Governance Committee currently consistsconsisted of Katherine L. Davis (Chairperson)(Chair), Barbara DeBuono, and Dr. Gary Meller. Each member of the committee is deemed "independent" in accordance with the NASDAQ Global Market's requirements for independent directors. The committeeCommittee (i) identifies individuals qualified to become members of the Board of Directors, (ii) recommends director candidates to the Company's Board of Directors, (iii) reviews, develops, updates as necessary, and recommends to the Company's Board of Directors corporate governance principles and policies, and (iv) monitors compliance with such principles and policies. The committee's charterCommittee's Charter is available on the Company's website at www.chembio.com. All the nominees for director included in this Proxy Statement were recommended by the Nominating And Corporate Governance Committee, which is comprised entirely of non-management directors. The Nominating andAnd Corporate Governance Committee did not meetmet one time in 2012.2015.
To be considered for nomination by the Board at the next annual meeting of shareholders,stockholders, the nominations must be made by shareholdersstockholders of record entitled to vote. ShareholderStockholder nominations must be made by notice in writing, delivered or mailed by first class U.S. mail, postage prepaid, to the Secretary of the Company at the Company's principal business address, not less than 60 days nor more than 90 days prior to any meeting of the shareholdersstockholders at which directors are to be elected. Each notice of nomination of directors by a shareholderstockholder shall set forth the nominee's name, age, business address, if known, residence address of each nominee proposed in that notice, the principal occupation or employment of each nominee for the five years preceding the date of the notice, the number of shares of the Company's common stock beneficially owned by each nominee, and any arrangement, affiliation, association, agreement or other relationship of the nominee with any Company shareholder.stockholder.
Stockholder Communications
Stockholders wishing to send communications to the Board may contact Lawrence Siebert,Katherine L. Davis, our CEO, President and Chairman,Board Chair, at the Company's principal executive office address. All such communications shall be shared with the members of the Board, or if applicable, a specified committee or director.
Leadership Structure of the Board
Previously, our chief executive officer (CEO) is best positioned to serve(the "CEO") served as both the CEO and Chairman due to his ability to provide clear insightof the Board (the "Chairman"). However, when our previous CEO and directionChairman retired in March 2014, the Board re-evaluated the leadership structure of business strategies and plans to both the Board and management. The Board believes Chembio can most effectively execute its business strategies and plans if the Chairman is also a member of the management team. A single person, acting in the capacities of Chairman and CEO, provides unified leadership and focus. Although our Board has historically determined that combiningseparating the rolepositions of CEO and Chairman iswas the most efficientbest structure to fit the Company's then-current needs. It was determined that this structure was preferable at this time given the recent hiring of the new CEO and effective, we do not have formal guidelines that establishthe fact this approach asstructure provides a policy. Therefore, under different circumstances,greater role for the Board does haveindependent directors in the flexibility to separateoversight of the two roles. TheCompany and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of the Board. However, our Board has not appointed a "lead independent director" dueno fixed policy with respect to the small sizeseparation of the Board and because fouroffices of the five directors are independentChairman and thusCEO. Our Board retains the discretion to make this determination on a "lead independent director" would not add significant valuecase-by-case basis from time to time as it deems in the best interests of the Company and our stockholders at thisany given time.
Risk Management
Management is responsible for assessing and managing the Company's exposure to various risks. At least annually, the Company goes throughundertakes its assessment process to identify riskrisks and develop plans to address them. This process is led by the Chief Financial Officer. The Audit Committee has oversight responsibility to review management's risk management process, including the policies and guidelines used by management to identify, assess and manage the Company's exposure to risk. The Chief Financial Officer reports directly to the Audit Committee at least quarterly to provide an update on management's efforts to manage risk. The Audit Committee also has oversight responsibility for financial risks. The Board of Directors has oversight responsibility for all other risks.
Diversity
The Board recognizes the importance of diversity in business experience, education, and professional skills in selecting nominees for director. The Board does not, however, have a formal policy concerning the consideration of diversity.
Audit Committee Report
This report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under either of such Acts.
The Audit Committee oversees the Company's financial reporting process. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 20122015 and the unaudited financial statements included in the Quarterly Reports on Form 10-Q for the first three quarters of the fiscal year ended December 31, 2012.2015.
The Committee discussed with the independent auditors, who are responsible for expressing an opinion on the conformity of audited financial statements with generally accepted accounting principles, the auditors' judgments as to the quality, not just the acceptability, of the Company's accounting principles and such other matters as are required to be discussed by the auditors with the Committee under Statement on Auditing Standard No. 61,No.16, as amended. In addition, the Committee discussed with the independent auditors the auditors' independence from management and the Company, including the matters in the written disclosures and the letter that the Committee received from the auditors that is required by the Independence Standards Board Standard No. 1.PCAOB independence standards. The Committee considered whether the auditors' providing services on behalf of the Company other than audit services is compatible with maintaining the auditors' independence.
The Committee discussed with the Company's independent auditors the overall scope and plans for their respective audits. The Committee meets with the independent auditors, with and without management present, to discuss the results of the auditors' examinations, their evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Committee approved and recommended to the Board inclusion of the audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 20122015 for filing with the SEC.
The Audit Committee
Gary Meller (Chair)
Katherine Davis (Chairperson)
The following table summarizes all compensation recorded by the Company in each of the last two completed fiscal years for our principal executive officer and our threetwo most highly compensated executive officers other than our principal executive officer whose annual compensation exceeded $100,000.officer.
Name / Principal Position | Year | Salary1 ($) | Bonus2 ($) | Stock Awards ($) | Option Awards3 ($) | All Other Compensation5 ($) | Total ($) | ||||||||||||
Lawrence A. Siebert4 | 2012 | $ | 290,000 | $ | 101,500 | $ | $ | $ | 10,400 | $ | 430,1217 | ||||||||
| CEO | 2011 | 281,346 | 101,500 | 12,600 | 395,446 | ||||||||||||||
| Javan Esfandiari | 2012 | $ | 263,077 | $ | 89,250 | $ | $ | $ | 7,608 | 384,746 | |||||||||
| VP-R&D | 2011 | 253,077 | 89,250 | $ | 8,540 | 350,867 | |||||||||||||
| Tom Ippolito | 2012 | $ | 196,187 | $ | 33,600 | $ | $ | $ | 4,367 | $ | 243,494 | ||||||||
| VP-Regulatory | 2011 | 190,702 | 33,600 | 3,958 | 270,257 | ||||||||||||||
| Name / | Salary1 | Bonus2 | Stock | Option Awards3 | All Other Compensation5 | Total | |||||||||||||
| Principal | ($) | ($) | Awards | ($) | ($) | ($) | |||||||||||||
| Position | Year | ($) | |||||||||||||||||
John J. Sperzel4 | 2015 | $ | 375,000 | $ | 70,000 | $ | - | $ | - | $ | - | $ | 445,000 | ||||||
| CEO | 2014 | $ | 298,558 | $ | - | $ | - | $ | 669,625 | $ | - | $ | 968,183 | ||||||
| Javan Esfandiari | 2015 | $ | 304,130 | $ | 60,000 | $ | - | $ | - | $ | 10,520 | $ | 374,650 | ||||||
| CSTO | 2014 | $ | 315,000 | $ | 90,000 | $ | - | $ | - | $ | 9,825 | $ | 414,825 | ||||||
| Sharon Klugewicz | 2015 | $ | 259,000 | $ | 40,000 | $ | - | $ | - | $ | 5,180 | $ | 304,180 | ||||||
| COO | 2014 | $ | 259,616 | $ | 75,000 | $ | - | $ | - | $ | 4,182 | $ | 338,798 | ||||||
3 The estimated fair value of any option or common stock granted was determined in accordance with ASC 718, "Stock-Based Payment".
5 Other compensation includes an employer match to 401(K) contributions and car allowances where applicable.
Employment Agreements
Mr. Siebert.Sperzel. Effective April 19, 2013, the Compensation Committee of the Board of Directors extended the Company's employment agreementMarch 13, 2014 (the "Employment Agreement""Effective Date") with Lawrence A. Siebert, the Company's President and Chief Executive Officer, for an additional one-year term through May 11, 2014, with all other terms and conditions of the Employment Agreement remaining the same. Previously, effective May 11, 2011 and May 11, 2009, the Company's Board of Directors had approved the Company's extension of the June 15, 2006 Employment Agreement for additional terms through May 11, 2013. On June 15, 2006, Mr. Siebert and, the Company entered into an Employment Agreement effective May 10, 2006, which waswith John J. Sperzel III to terminate on May 10, 2008, extended in 2008 to May 10, 2009. Pursuant to the Employment Agreement, Mr. Siebert servesserve as the President and Chief Executive OfficerCompany's CEO for a term of three years. Mr. Sperzel's annual base salary is $375,000, with the Company and received an initial salarypossibility of $240,000 per year, which had been increased to $265,000 per year until Mr. Siebert agreed to a 15 percent reduction, to $225,000, effective January 19, 2009. Mr. Siebert's salary was restored to $265,000 per annum effective in July 2009 and has since been increased to $290,000 effective in May 2011 where it has remained. Mr. Siebert also is eligible for adiscretionary, performance-based annual cash bonus of up to 50%40% of his salary, consistingbase salary. The Employment Agreement also provides for a grant of (i) a bonus250,000 options to purchase shares of up to 25%the Company's common stock, 43,132 of his salary that iswhich will be incentive stock options under the Company's 2008 Stock Incentive Plan (the "Plan"), and 206,868 of which will be non-qualified stock options. The options will become exercisable at the complete discretion and determinationrate of 50,000 shares per year for each of the boardfirst through the fifth anniversary of directors, and (ii) a bonus of up to an additional 25% of his salary that will be determined based upon revenue and earnings performance criteria established each year by the board of directors.Effective Date. In the event Mr. Siebert is eligible to participate in any profit sharing, stock option, retirement plan, medical and/or hospitalization plan, and/or other benefit plans except for disability and life insurance that the Company may from time to time place in effect for the Company's executives during the term of Mr. Siebert'sSperzel's employment agreement. If Mr. Siebert's Employment Agreement is terminated by reason of disability or for "cause," as defined in the Employment Agreement, all compensation, including his base salary, his right to receive a performance bonus, and the vesting of any unvested options, will cease as of his termination date, and Mr. Sperzel will receive no severance benefits. If the Company terminates Mr. Sperzel's employment without cause or if Mr. SiebertSperzel terminates his Employment Agreementemployment for a reasonable basis, as defined in the Employment Agreement including(which includes involuntary termination within 12 monthsa six-month period upon a "Change of a change in control,Control"), then the Company is required towill pay as severance Mr. Siebert'sSperzel his base salary for six months. Mr. Siebert has agreed for a period of two years after the terminationsix months as severance and all of his employment withunvested stock options immediately shall become vested. The Employment Agreement also contains provisions prohibiting Mr. Sperzel from (i) soliciting the Company not to induceCompany's employees for a period of 24 months following his termination, (ii) soliciting the Company's customers, agents, or other sources of distribution of the Company's business under contractfor a period of twelve months following his termination, and (iii) except where termination is involuntary upon a "Change in Control," engaging or doingparticipating in any business that directly competes with the Company to terminate, reduce, alter, or divert business with or from the Company. The termsactivities of the extended April 19, 2013, May 11, 2011, May 11, 2009 and May 11, 2008Company in any market in which the Company is in business or plans to do business during the period in which he is entitled to severance, or for a period of six months if he is not entitled to severance payments under the Employment Agreements are identicalAgreement. The foregoing description of the Employment Agreement is qualified in its entirety by reference to the June 15, 2006 Employment Agreement, except that under the May 11, 2008 extended Employment Agreement, Mr. Siebert received additional consideration in the form of incentive stock options to purchase 31,250 sharesfull text of the Company's common stock exercisable at $1.04 per share, which was the closing price of the Company's common stock on June 3, 2008. The incentive stock options are immediately exercisable and they expire on the June 3, 2013.Employment Agreement.
Mr. Esfandiari. The Company entered into an employment agreementEmployment Agreement effective March 5, 2013 (the "Employment Agreement"),2016 with Mr. Esfandiari to continue as the Company's Senior Vice President of ResearchChief Scientific and DevelopmentTechnology Officer for an additional term of three years through March 5, 2016.2019. Mr. Esfandiari'sEsfandiaris's salary under the Employment Agreement is $300,000$335,000 for the first year with possible increases for the second yearended March 5, 2017, and /or for the third year. Mr. Esfandiarihe is eligible for a performance-based bonus of up to 50% of his base salary for each respective year, which is in the same proportions as described below under "Executive Bonus Plan". The Company also granted Mr. Esfandiari, pursuant to the Company's 2008 Stock Incentive Plan, incentive stock options to purchase 30,00060,000 shares of the Company's common stock. The price per share of these options is equal to the fair market value of the Company's common stock as of the close of the market on March 5, 2013,2016, which is the trading date on which the Agreement was effective.entered into. Of these stock options, options to purchase 10,00020,000 shares vest on each of the first three anniversaries of the effective date of the Employment Agreement. Mr. Esfandiari is eligible to participate in any profit sharing, stock option, retirement plan, medical and/or hospitalization plan, and/or other benefit plans except for disability and life insurance that the Company may from time to time place in effect for the Company's executives during the term of Mr. Esfandiari's employment agreement. If Mr. Esfandiari's employment agreement is terminated by the Company without cause, or if Mr. Esfandiari terminates his employment agreement for a reasonable basis, as defined in the Employment Agreement, including within 12 months of a change in control, the Company is required to pay as severance Mr. Esfandiari's salary for twelve months.
None of the other officers of the Company has an employment contract with the Company.
Executive Bonus Plan
The Company has established a bonus plan for its executives who do not have a contract. For the fiscal year ended December 31, 2012,2015, there were fivefour executives eligible for this bonus plan. Each executive can earn up to 25% of that executive's salary in the form of a cash bonus. For 2012, theThe Compensation Committee determined that 60%80% of the executive's bonus will be quantitative factors, based on the budget. 40%budget, and the other 20%, which will be based on other factors, and will be discretionary. In addition they are eligible for stock options based on a percentageFor 2015, the quantitative 80% portion of the total potential bonus earned. The plan during 2012 for the 60%, called for a sliding percentage of the executive's salary, from zero to 7.5% for attaining 85% to 100% ofcertain revenue goals, and from zero to 7.5% of the executive's salary for attaining 70% to 100% of the designatedcertain operating profit goals. The Company achieved approximately 94% of its revenue goals for 2012, which would result in a bonus of 4.5% of each executive's salary, and did not achieve 70% of its operating profit goal, which would result in a bonus of 0% of salary, for a total of 4.5% of salary. The Compensation Committee determined that the target goals were aggressive and considering the greater than 30% increase in revenues along with an increase in operating income it approved approximately 17% of salary in bonuses for the subject executives.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 20122015
| Option Awards | Stock Awards | ||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Option Vesting Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($) | Foot- note | |||||||||
| Lawrence A. Siebert | 9,063 | $ | 4.00 | 2/16/2017 | 2/16/2012 | 5 | |||||||||||
| 16,667 | 1.04 | 5/6/2014 | 5/6/2012 | 3 | |||||||||||||
| 16,667 | 1.04 | 5/6/2014 | 5/7/2011 | 3 | |||||||||||||
| 16,667 | 1.04 | 5/6/2014 | 5/6/2010 | 3 | |||||||||||||
| 31,250 | 1.04 | 6/3/2013 | 6/3/2008 | 2 | |||||||||||||
| 9,375 | 1.76 | 2/15/2013 | 2/15/2008 | 1 | |||||||||||||
| Javan Esfandiari | 7,969 | 4.00 | 2/16/2017 | 2/16/2012 | 5 | ||||||||||||
| 12,500 | 2.16 | 3/4/2015 | 3/5/2013 | 2 | |||||||||||||
| 12,500 | 2.16 | 3/4/2015 | 3/5/2012 | 2 | |||||||||||||
| 12,500 | 2.16 | 3/4/2015 | 3/5/2010 | 2 | |||||||||||||
| 12,500 | 1.04 | 5/6/2014 | 5/6/2012 | 3 | |||||||||||||
| 7,500 | 1.04 | 2/15/2013 | 2/15/2008 | 1 | |||||||||||||
| Tom Ippolito | 3,000 | 4.00 | 2/16/2017 | 2/16/2012 | 5 | ||||||||||||
| 7,812 | 4.32 | 5/9/2016 | 5/9/2014 | 4 | |||||||||||||
| 7,812 | 4.32 | 5/9/2016 | 5/9/2013 | 4 | |||||||||||||
| 9,375 | 1.04 | 5/6/2014 | 5/6/2012 | 3 | |||||||||||||
| 9,375 | 1.04 | 5/6/2014 | 5/7/2011 | 3 | |||||||||||||
| 9,375 | 1.04 | 5/6/2014 | 5/6/2010 | 3 | |||||||||||||
| 6,250 | 1.76 | 2/15/2013 | 2/15/2008 | 1 | |||||||||||||
| Option Awards | Stock Awards | |||||||||||||
| Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Option Vesting Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($) | Foot- note | ||||||
| John J. Sperzel | 25,000 | $ | 3.4163 | 3/21/2021 | 3/13/2015 | 5 | ||||||||
| 25,000 | 3.4163 | 3/21/2021 | 3/13/2015 | 2 | ||||||||||
| 18,132 | 3.4163 | 3/21/2021 | 3/13/2016 | 5 | ||||||||||
| 31,868 | 3.4163 | 3/21/2021 | 3/13/2016 | 2 | ||||||||||
| 50,000 | 3.4163 | 3/21/2021 | 3/13/2017 | 2 | ||||||||||
| 50,000 | 3.4163 | 3/21/2021 | 3/13/2018 | 2 | ||||||||||
| 50,000 | 3.4163 | 3/21/2021 | 3/13/2019 | 2 | ||||||||||
| Javan Esfandiari | 10,000 | 5.44 | 3/5/2018 | 3/5/2014 | 1 | |||||||||
| 10,000 | 5.44 | 3/5/2018 | 3/5/2015 | 1 | ||||||||||
| 10,000 | 5.44 | 3/5/2018 | 3/5/2016 | 1 | ||||||||||
| 4,765 | 5.56 | 2/26/2018 | 2/26/2013 | 4 | ||||||||||
| 7,969 | 4.00 | 2/16/2017 | 2/16/2012 | 3 | ||||||||||
| 12,500 | 2.16 | 3/4/2015 | 3/5/2013 | 1 | ||||||||||
| 12,500 | 2.16 | 3/4/2015 | 3/5/2012 | 1 | ||||||||||
| 12,500 | 2.16 | 3/4/2015 | 3/5/2010 | 1 | ||||||||||
| Sharon Klugewicz | 2,500 | 4.50 | 5/22/2018 | 5/22/2014 | 1 | |||||||||
| 2,500 | 4.50 | 5/22/2018 | 5/22/2015 | 1 | ||||||||||
| 630 | 5.56 | 2/26/2018 | 2/26/2013 | 4 | ||||||||||
| 12,000 | 4.45 | 9/4/2017 | 9/4/2013 | 5 | ||||||||||
| 12,000 | 4.45 | 9/4/2017 | 9/4/2014 | 5 | ||||||||||
| 12,000 | 4.45 | 9/4/2017 | 9/4/2015 | 5 | ||||||||||
1 Options issued in connection with an employment contract and under the 2008 Stock Incentive Plan. |
2 Options issued in connection with the start of employment with the Company and not under a Plan. |
3 On February 16, 2012, the Company determined to grant on February 16, 2012, to certain employees of the Company, options to purchase an aggregate of 203,125 shares of the Company's common stock. The exercise price for these options was the last traded market price for the Company's common stock on February 16, 2012, which was $4.00 per share. The options become exercisable on the effective date of the grant. Each option granted will expire and terminate, if not exercised sooner, upon the earlier to occur of (a) 30 days after termination of the employee's employment with the Company or (b) the fifth anniversary of the effective date of grant. |
4 On February 26, 2013, the Company determined to grant on February 26, 2013 to certain employees of the Company, options to purchase an aggregate of 16,360 shares of the Company's common stock. The exercise price for these options was the last traded market price for the Company's common stock on February 26, 2013, which was $5.56 per share. The options become exercisable on the effective date of the grant. Each option granted will expire and terminate, if not exercised sooner, upon the earlier to occur of (a) 30 days after termination of the employee's employment with the Company or (b) the fifth anniversary of the effective date of grant. |
5 Options issued in connection with the start of employment with the Company and under the 2008 Stock Incentive Plan. |
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) 1 | Option Awards ($) 2 | Total ($) | |||||||||
| Katherine L. Davis | $ | 30,250 | $ | - | $ | 30,250 | ||||||
| Barbara DeBuono | 24,500 | - | 24,500 | |||||||||
| Pete Kissinger | 25,500 | - | 25,500 | |||||||||
| Gary Meller | 27,500 | - | 27,500 | |||||||||
Beginning in April 2014, the non-employee Board Chair was paid a monthly fee of $6,500, and as of January 1, 2015, this monthly fee was adjusted to $4,167. The audit committee chairmanAudit Committee Chair is paid an annual retainerfee of $2,500, paid semi-annually. In addition, the non-employee directors are paid $1,000 in cash for each boardBoard of directors'Directors' meeting attended, and paid $500 in cash for each telephonic boardBoard of directorsDirectors meeting. The non-employee directors who are members of a committee of the boardBoard of directorsDirectors are paid $500 in cash for each committee meeting attended, or $750 in cash for each committee meeting attended if that non-employee director is the committee chairman.chair. Directors also may be paid for serving on ad hoc committees of the Board. In fact, when
| Name | Fees Earned or Paid in Cash ($) 1 | Option Awards ($) 2 | Total ($) | |||||||||
| Katherine L. Davis | $ | 82,500 | $ | - | $ | 82,500 | ||||||
| Barbara DeBuono | 30,250 | - | 30,250 | |||||||||
| Pete Kissinger | 48,500 | - | 48,500 | |||||||||
| Gary Meller | 58,500 | - | 58,500 | |||||||||
1 Fees earned or paid in cash represents a yearly fee and fees for meeting expenses: (a) Ms. Davis received a $25,000 annual fee as a member of the Board established itsof Directors, a $4,167 monthly fee as chair aggregating $50,000 and $7,500 in meeting fees earned during 2015; (b) Dr. DeBuono received a $25,000 annual fee as a member of the Board of Directors and $5,250 in meeting fees; (c) Dr. Kissinger received a $25,000 annual fee as a member of the Board of Directors, $18,000 in fees as a member of a Special Committee, and $5,500 in 2010 to handle the possible salemeeting fees; (d) Dr. Meller received a $25,000 annual fee as a member of the Company, the ChairmanBoard of Directors, $2,500 in fees as Chairperson of the Audit Committee, was paid $12,000 per month,$24,000 in fees as a member of a Special Committee, and the other director-member$7,000 in meeting fees.
2 Each non-employee member of the CommitteeBoard of Directors is granted, once every five years, options to purchase 46,875 shares of the Company's common stock with an exercise price equal to the market price on the date of the grant as part of annual non-employee Board compensation. One-fifth of these options are exercisable on the date of grant, and an additional one-fifths become exercisable on the first through fourth anniversaries of the date of grant. The fair value of options at the date of grant was paid $8,000 per month.estimated using the Black-Scholes option pricing model.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Company served as a member of the Board of any other public company during the year ended December 31, 2012.2015. No member of the Compensation Committee servesserved as an executive officer of any other public company during the year ended December 31, 2012.2015. No interlocking relationship exists between the members of our Compensation Committee and the Board or compensation committee of any other company. As of March 1, 2013,April 21, 2016, the members of the Compensation Committee were Gary Meller (Chairman)Barbara DeBuono (Chair), Katherine Davis, and Barbara DeBuono, allPeter Kissinger, each of whom areis deemed by the Board of Directors to be independent.
ITEM 2. PROPOSAL TO RATIFY THE SELECTION OF BDO USA, L.L.P.LLP
AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANT
AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANT
On May 25, 2011, the Company, through and with the approval of the Audit Committee of the Company's Board of Directors engaged BDO USA, LLP ("BDO") as its independent registered public accounting firm.firm, and BDO washas served the Company in that capacity in each succeeding year. For the fiscal year ending December 31, 2016, BDO has been engaged to be the Company's principal auditor for the fiscal year ended December 31, 2012 as well as for reviewing the quarterly financial reports for the three months ended March 31, 2013, June 30, 2013 and September 30, 2013.
It is expected that one or more representatives of BDO will be present, or available by phone, at the Annual Meeting and will be given the opportunity to make a statement andif they desire to do so. They also will be available to respond to appropriate questions from stockholders.
Principal Accountant Fees and Services
Audit Fees
For the years ended December 31, 20122015 and 2011,2014 the Company engaged BDO USA, LLP as its independent accounting firm to perform an audit of the Company's annual financial statements included on Form 10-K, including reviews of the quarterly financial statements and assistance with and review of financial statements included indocuments filed with the Company's Forms 10-QSEC, for $161,000 and 10-K for the years ended December 31, 2012 and 2011, for $109,000 and $110,000,$128,000 respectively in fees.
Audit-Related Fees
For the years ended December 31, 20122015 and 2011,2014, the Company's independent accounting firm, BDO USA, LLP, did not provide the Company with any assurance and related services reasonably related to the performance of the audit or review of the Company's financial statements that are not reported above under "Audit Fees."
Tax Fees
For the years ended December 31, 20122015 and 2011,2014, the Company's independent accounting firm, BDO USA, LLP, billed the Company $30,000$23,600 and $44,000,$18,350, respectively for professional services for tax compliance, tax advice and tax planning.
All Other Fees
For the yearsyear ended December 31, 2012 and 2011,2015, the Company's independent accounting firm, BDO USA, LLP, billed the Company $69,600 for services in connection with other matters. For the year ended December 31, 2014, the Company's independent accounting firm, BDO USA, LLP, did not provide the Company with any services for other matters.
Audit Committee Pre-Approval Policies
The Audit Committee approves in advance all audit and non-audit services performed by the independent accounting firm. There are no other specific policies or procedures relating to the pre-approval of services performed by the independent accounting firm.
Required Vote; Board Recommendation
In order to ratify the selection of auditors, the number of votes cast in favor of ratification must exceed the number of votes cast in opposition to ratification. There is no legal requirement for submitting this proposal to the shareholders;stockholders; however, the Board of Directors believes that it is of sufficient importance to seek ratification. WhetherRegardless of whether the proposal is approved or defeated, the Board may reconsider its selection of BDO.
The Board of Directors unanimously recommends that the shareholdersstockholders vote FOR ratifying the selection of the certified public accounting firm of BDO USA, L.L.P.LLP to serve as the Company's independent public accountants for the fiscal year ending December 31, 20122016 or until the Board of Directors, in its discretion, replaces them.
ITEM 3. ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
We are providing our shareholdersstockholders with an opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our "named executive officers". As stated in the Proxy Statement, based on 2015 compensation, our "named executive officers" are Lawrence A. Siebert, CEO and President,John J. Sperzel III Chief Executive Officer, Javan Esfandiari, Executive VP of R&D,Chief Scientific and Tom Ippolito, VP of Regulatory Affairs.Technology Officer, and Sharon Klugewicz, Chief Operating Officer. This proposal, which is often referred to as a "say-on-pay" proposal, is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Board of Directors is providing shareholdersstockholders with the opportunity to cast an advisory vote on the compensation of our "named executive officers." This proposal gives you, as a shareholder,stockholder, the opportunity to endorse or not endorse executive compensation programs and policies and the compensation paid to our named executive officers as disclosed in this Proxy Statement.
The Compensation Committee's compensation objectives are to attract and retain highly qualified individuals with a demonstrated record of achievement, reward past performance, provide incentives for future performance, and align the interests of the executive officers with the interests of our shareholders.stockholders. The Board is asking shareholdersstockholders to support this proposal based on the disclosure set forth in these sections of this Proxy Statement, which, among other things, demonstrates our commitment to ensuring executive compensation is aligned with our corporate strategies and business objectives and is competitive with those of other companies in our industry.
The Board is asking shareholdersstockholders to cast a non-binding, advisory vote "FOR" the compensation paid to our named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the compensation tables and accompanying narrative disclosure under the heading "Executive Compensation" included in this Proxy Statement. Accordingly, we are asking our shareholdersstockholders to approve the following advisory resolution at our 20132016 Annual Meeting:
RESOLVED, that the Company's shareholders,stockholders, hereby approve, on an advisory basis, the compensation paid to the Company's "named executive officers" as set forth pursuant to Item 402 of Regulation S-K, including the compensation tables and accompanying narrative disclosure under the heading "Executive Compensation" all as contained in the Company's 20132016 Proxy Statement for the 20132016 Annual Meeting of Stockholders.
Although the say-on-pay vote we are asking you to cast is non-binding, and the results of this vote will not require the Board or the Compensation Committee to take any action regarding executive compensation, the Board and the Compensation Committee value the views of our shareholdersstockholders and carefully will consider the outcome of the vote when determining future compensation arrangements for our named executive officers.
The Board of Directors recommends that stockholders vote "FOR" the compensation paid to our named executive officers.
Comments Concerning Advisory Vote on Frequency Of Stockholder Say-On-Pay Voting
ANNUAL REPORT TO SHAREHOLDERSSTOCKHOLDERS
Included with this Proxy Statement is the Company's Annual Report on Form 10K10‑K for the year ended December 31, 2012.2015.
RESOLUTIONS PROPOSED BY INDIVIDUAL STOCKHOLDERS;
Under Rule 14a-8(e) of the Securities Exchange Act of 1934, in order to be considered for inclusion in the Proxy Statement and form of proxy relating to our next annual meeting of stockholders following the end of our 20122016 fiscal year, proposals by individual stockholders must be received by us no later than December 15, 2012.30, 2016, which is 120 calendar days prior to April 29, 2017. However, if the date of our next annual meeting of stockholders is changed by more than 30 days from the date of this year's Annual Meeting, then the deadline will be a reasonable time before we begin to print and send our proxy materials for the next annual meeting of stockholders.
In addition, under Rule 14a-4(c)(1) of the Securities Exchange Act, the proxy solicited by the Board of Directors for the next annual meeting of stockholders following the end of our 20122016 fiscal year will confer discretionary authority on any stockholder proposal presented at that meeting unless we are provided with notice of that proposal no later than March 1, 2013.15, 2017, which is 45 calendar days prior to April 29, 2017.
OTHER BUSINESS
The Board of Directors is not aware of any other matters that are to be presented at the Annual Meeting, and it has not been advised that any other person will present any other matters for consideration at the meeting. Nevertheless, if other matters should properly come before the Annual Meeting, the shareholdersstockholders present, or the persons, if any, authorized by a valid proxy to vote on their behalf, shall vote on such matters in accordance with their judgment.
* * * * *
This Notice and Proxy Statement is sent by order of the Board of Directors.
Dated: September 16, 2013April 21, 2016 /s/ Lawrence A. SiebertJohn J. Sperzel III
| John J. Sperzel III, President, Chief Executive Officer |
* * * * *
PROXY
CHEMBIO DIAGNOSTICS, INC.
For the Annual Meeting of ShareholdersStockholders on October 31, 2013June 9, 2016
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Lawrence A. Siebert,John J. Sperzel III, Richard J. Larkin, or either of them, as proxies with full power of substitution to vote all the shares of the undersigned with all of the powers whichthat the undersigned would possess if personally present at the Annual Meeting of ShareholdersStockholders of Chembio Diagnostics, Inc. (the "Corporation""Company"), to be held at 10:3000 a.m. (local time) on October 31, 2013,June 9, 2016, at of the office of the Corporation,Company, 3661 Horseblock Road, Medford, New York 11763, or any adjournments thereof, on the following matters:
(Continued and to be signed on the reverse side)
p PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED. p
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held June 9, 2016. The 2016 Proxy Statement and our 2015 Annual Report to Shareholders are available at: http://www.chembio.com/investors/proxy/
Please mark votes as in this example.example ☒
1.To elect the following fivefour directors:
FOR WITHHOLD FOR
all nominees AUTHORITY all nominees except
Nominees:
for all nominees as noted below:
for all nominees as noted below:
01 Katherine L. Davis
Barbara DeBuono
02 Peter Kissinger ☐ ☐ ☐
03 Gary Meller
Peter Kissinger
Lawrence A. Siebert
Instruction: To withhold authority to vote for any individual nominee, strike-out suchthe name of that nominee by putting a line through theirthat nominee's name in the above list.
2.To ratify the selection of BDO USA, L.L.P.LLP as the Corporation'sCompany's independent public accountants.
☐FOR☐AGAINST☐ABSTAIN
DO NOT PRINT IN THIS AREA (Shareholder Name & Address Data)
Address Change/Comments: Please indicate if you
(If you noted any Address Changes and/or plan to attend this meeting ☐
CONTROL NUMBER
3. Advisory vote to approve the compensation paid to the Company's named executive officers as described in the Company's 20132016 Proxy Statement for the 20132016 Annual Meeting of Stockholders.[ ] ☐FOR ☐[ ] AGAINST [ ] ☐ABSTAIN
4. Advisory vote on how frequently the Company should seek approval from its shareholders of the compensation paid to Company's named executive officers.
5. In their discretion, to vote upon such other business as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" FOR EACH OF THE PROPOSALS 1 THROUGH 3 AND "2 YEARS" FOR PROPOSAL 4.
PROPOSALS. UNLESS CONTRARY INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED "FOR" EACH DIRECTOR NOMINEE AND VOTED "FOR" PROPOSALS 2 AND 3 AND "2 YEARS" FOR PROPOSAL 4.ALL THE OTHER PROPOSALS. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THE NAMED PROXIES AT THE DIRECTION OF A MAJORITY OF THE BOARD OF DIRECTORS.IN ACCORDANCE WITH THEIR BEST JUDGMENT WITH RESPECT TO THOSE MATTERS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE. YOUR SIGNATURE ACKNOWLEDGES PRIOR RECEIPT OF THE NOTICE OF MEETING, PROXY STATEMENT AND ANNUAL REPORT TO SHAREHOLDERS.STOCKHOLDERS.
Number of voting shares: ��
Signature if held jointly
Signature
(Joint Owners)
(Please sign exactly as shown on your stock certificate and on the envelope in which this proxy was mailed. When signing as partner, corporate officer, attorney, executor, administrator, trustee, guardian, etc., give full title as such and sign your own name as well. If stock is held jointly, each joinjoint owner should sign.)
p PLEASE DETACH ALONG PERFORATED LINE AND NOTE BELOW: [ ]MAIL IN THE ENVELOPE PROVIDED. p
PROXY VOTING INSTRUCTIONS
Please have your 11-digit control number ready when voting by Internet or Telephone
INTERNET
Vote Your Proxy on the Internet: Go to www.cesvote.com
Have your proxy card available when you access the above website. Follow the prompts to vote your shares.
TELEPHONE
Vote Your Proxy by Phone: Call 1 (888) 693-8683
Use any touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares.
MAIL
Vote Your Proxy by Mail:
Mark, sign, and date your proxy card, then detach it, and return it in the postage-paid envelope provided.