☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
(Name of Registrant as Specified In Its Charter) |
(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) | Date Filed: | |
NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS and PROXY STATEMENT | |||
2019 Annual Meeting Tuesday, June 18, 2019 10 a.m., Eastern time 555 Wireless Boulevard | Inside CEO’s letter to stockholders Information on five voting proposals: | ||
Hauppauge, New York | Election of five directors | ||
Approval of 2019 Omnibus Incentive Plan | |||
Ratification of appointment of independent auditor for 2019 | |||
Advisory vote on 2018 executive compensation | |||
Advisory vote on frequency of future advisory votes on executive compensation |
555 Wireless Boulevard | |
Hauppauge, New York 11788 |
April 30, 2019
Dear Fellow Stockholder:
It is my pleasure to invite you to attend the Annual Meeting of Stockholders of Chembio Diagnostics, Inc. willto be held on May 11, 2017Tuesday, June 18, 2019, at 10:0010 a.m. (local time), Eastern time, at Chembio, 3661 Horseblock Road, Medford,555 Wireless Boulevard, Hauppauge, New York 11763,York. Each holder of common stock as of 5 p.m., Eastern time, on the record date of April 26, 2019, will be able to participate in the Annual Meeting.
During the Annual Meeting, stockholders will be asked to elect the entire board of directors, to approve our 2019 Omnibus Incentive Plan and to ratify the appointment of BDO USA, LLP as our independent auditor for 2019. We also will be asking stockholders for approval, by an advisory vote, of our 2018 executive compensation as disclosed in the Proxy Statement for the following purposes:
We are furnishing proxy materials to our stockholders over the closeInternet. This process expedites the delivery of business on March 15, 2017 are entitledproxy materials to noticeour stockholders, lowers our costs and reduces the environmental impact of and to vote at, the Annual Meeting. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 is being providedToday we are sending to each of our stockholders with this Proxy Statement. The Annual Report is not part of the proxy soliciting material.
It is important that you vote your shares of common stock in person or by proxy, regardless of the number of shares you own. You will find the instructions for voting on your Notice of Internet Availability of Proxy Materials. We appreciate your prompt attention.
The board invites you to participate in the Annual Meeting so that management can listen to your suggestions, answer your questions, and discuss business developments and trends with you. Thank you for your support, and we look forward to joining you at the Annual Meeting.
Sincerely,
John J. Sperzel III
Chief Executive Officer and President
NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS |
Secretary | April 30, 2019 |
When Tuesday, June 18, 2019 10 a.m., Eastern time Where 555 Wireless Boulevard Hauppauge, New York 11788 |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 18, 2019: The Notice of 2019 Annual Meeting of Stockholders, the Proxy Statement, the 2018 Annual Report to Stockholders and instructions for voting via the Internet can be accessed at: www.chembio.com/investors/proxy |
How to Vote in Advance Your vote is important. Please vote as soon as possible by one of the methods shown below. Your Notice of Internet Availability, proxy card or voting instruction form should be readily available. Via Internet (Any Web-Enabled Device) Via Internet (Smartphone or Tablet) By Telephone (U.S. or Canada only) By Mail (Pursuant to Printed Materials) |
555 Wireless Boulevard | |
Hauppauge, New York 11788 |
Date | Tuesday, June 18, 2019 |
Time | 10 a.m., Eastern time |
Meeting Address | 555 Wireless Boulevard Hauppauge, New York |
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Chembio Diagnostics, Inc. 2019 Omnibus Incentive Plan | Appendix A |
Time and Date | 10 a.m., Eastern time, on June 18, 2019. |
Meeting Address | 555 Wireless Boulevard, Hauppauge, New York. |
Record Date | 5 p.m., Eastern time, on April 26, 2019. |
Voting | Stockholders will be entitled to one vote for each outstanding share of common stock they hold of record as of the record date. |
Votes Eligible to be Cast | A total of 17,166,459 votes are eligible to be cast on each proposal. |
Proposal | Board Recommendation | |
Election of directors | FOR each nominee | |
Approval of 2019 Omnibus Incentive Plan | FOR | |
Ratification of appointment of independent auditor for 2019 | FOR | |
Advisory vote on 2018 executive compensation | FOR | |
Advisory vote on frequency of future advisory votes on executive compensation | ANNUAL |
Until 11:59 p.m., Eastern time, on May 1, 2019 | At the Annual Meeting on June 18, 2019 | |||||
• Internet: | • | Address: | 555 Wireless Boulevard | |||
4 | From any web-enabled device: www.aalvote.com/CEMI | Hauppauge, New York | ||||
4 | Scan QR code from any smartphone or tablet: |
• | Telephone:+1 (866) 804-9616 |
• | Completed, signed and returned proxy card |
Election of Directors | |
We are asking stockholders to elect the following five director nominees, each of whom currently serves as a member of the board of directors. |
Director Since | Experience/ | Independent | Committee | Other Public | ||||
Name | Age | Occupation | Qualifications | Yes | No | Memberships | Company Boards | |
Katherine L. Davis | 62 | 2007 | Owner of Davis Design Group LLC Financial Advisor to Mayor of Indianapolis | • Leadership • Governance • Policy/ Government | ✔ | • Chair of the Board • Audit • Nominating and Corporate Governance | ||
Gail S. Page | 63 | 2017 | Venture Partner at Turret Capital Management, L.P. | • Industry • Leadership • Finance | ✔ | • Audit • Nominating and Corporate Governance • Compensation (Chair) | ||
Mary Lake Polan | 75 | 2018 | Professor of Clinical Obstetrics, Gynecology and Reproductive Sciences at Yale University School of Medicine Chair of Scientific Advisory Board in Women’s Health for Procter and Gamble Company Managing Director of Golden Seeds angel investing group | • Industry • Leadership • Governance | ✔ | • Nominating and Corporate Governance (Chair) • Compensation | • Motif Bio plc • Quidel Corporation | |
John G. Potthoff | 51 | 2018 | Chief Executive Officer and Co-founder of Elligo Health Research | • Finance • Industry • Leadership | ✔ | | • Audit (Chair) • Compensation | |
John J. Sperzel III | 55 | 2014 | Chief Executive Officer and President of Chembio Diagnostics, Inc. | • Industry • Leadership • Innovation | ✔ |
Additional Board Governance Practices | ||
Elections: | Classified Board | No |
Frequency of Director Elections | Annual | |
In-Person Shareholder Meeting | Yes | |
Voting Standard | Plurality | |
Mandatory Retirement Age or Tenure | No | |
Chair: | Separate Chair of the Board and CEO | Yes |
Independent Chair of the Board | Yes | |
Robust Responsibilities and Duties Assigned to Independent Chair | Yes | |
Meetings: | Number of Board Meetings Held in 2018 | 15 |
Directors Attending Fewer than 75% of Board Meetings in 2018 | None | |
Independent Directors Meet without Management Present | Yes | |
Number of Standing Committee Meetings Held in 2018 | 8 | |
Members Attending Fewer than 75% of Committee Meetings in 2018 | None | |
Director Status: | Directors “Overboarded” per ISS or Glass Lewis Voting Guidelines | None |
Material Related-Party Transactions with Directors | None | |
Family Relationships with Executive Officers or Other Directors | None | |
Shares Pledged by Directors | None |
Approval of 2019 Omnibus Incentive Plan | |
We are asking stockholders to approve our 2019 Omnibus Incentive Plan to, among other things, reserve 2,400,000 shares of common stock for awards under the plan. | |
Ratification of Appointment of Independent Auditor for 2019 | |
We are asking stockholders to ratify the audit committee’s retention of BDO USA, LLP, an independent registered public accounting firm, as our independent auditor to examine and report on our consolidated financial statements for the fiscal year ending December 31, 2019. | |
Advisory Vote on 2018 Executive Compensation | |
In accordance with rules of the Securities and Exchange Commission or SEC, we are asking stockholders for an advisory vote — known as a “say-on-pay” vote — of the 2018 compensation of our “named executive officers” as set forth in the compensation tables, related narrative discussion and other disclosures under “Executive Compensation” in this Proxy Statement. The following table provides information concerning the compensation paid for 2018 and 2017 to our named executive officers during 2018: |
Name and Principal Position | Year | Salary ($) | Bonus($)(1) | Equity Awards ($)(2) | All Other Compensation($)(3) | Total($) |
John J. Sperzel III | 2018 | $416,847 | $89,250 | $950,000 | — | $1,456,097 |
Chief Executive Officer and President | 2017 | 415,137 | 63,750 | 62,998 | — | 541,885 |
Neil A. Goldman | 2018 | 294,231 | 50,400 | 300,000 | $2,769 | 647,400 |
Executive Vice President, Chief Financial Officer | 2017 | 5,769 | — | 423,882 | — | 224,638 |
Javan Esfandiari | 2018 | 357,807 | 72,450 | 375,000 | 7,391 | 812,648 |
Executive Vice President, Chief Science and Technology Officer | 2017 | 342,308 | 51,750 | 9,652 | 5,900 | 347,244 |
(1) | Based on reaching revenue targets, satisfying individual objectives, and, in 2017, reaching an operating income (loss) target and discretionary grants. |
(2) | Determined in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation—Stock Compensation. |
(3) | Comprised of employer matching payments to 401(k) contributions and, in 2017, a car allowance. |
Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation | |
In accordance with rules of the SEC, we are asking stockholders for an advisory vote – known as a “say-on-frequency” vote – on how frequently they would like to cast an advisory “say-on-pay” vote on the compensation of our named executive officers. The board of directors recommends an annual advisory “say-on-pay” vote. SEC rules require that we submit a “say-on-frequency” vote to stockholders every six years |
Q: | When and where will the Annual Meeting be held? |
A: | This year the Annual Meeting of Stockholders of Chembio Diagnostics, Inc., which we refer to as the Annual Meeting, will be held at 555 Wireless Boulevard, Hauppauge, New York beginning at 10 a.m., Eastern time, on Tuesday, June 18, 2019. |
Q: | What materials have been prepared for stockholders in connection with the Annual Meeting? |
A: | We are furnishing you and other stockholders of record with the following proxy materials: |
Q: | Why was I mailed a Notice of Internet Availability rather than a printed set of proxy materials? |
A: | In accordance with rules adopted by the SEC, we are furnishing the proxy materials to stockholders by providing access via the Internet, instead of mailing printed copies. This process expedites the delivery of proxy materials to our stockholders, lowers our costs and reduces the environmental impact of the Annual Meeting. The Notice of Internet Availability tells you how to access and review the proxy materials on the Internet and how to vote on the Internet. It also provides instructions you may follow to request paper or emailed copies of the proxy materials. |
Q: | Are the proxy materials available via the Internet? |
A: | You can access and review the proxy materials for the Annual Meeting at www.chembio.com/investors/proxy. In order to submit your proxies, however, you will need to refer to the Notice of Internet Availability sent to you with this Proxy Statement or a proxy card mailed to you upon your request to obtain your control number and other personal information needed to vote by proxy or in person. |
Q: | What is a proxy? |
A: | The term “proxy,” when used with respect to stockholder, refers to either a person or persons legally authorized to act on the stockholder’s behalf or a format that allows the stockholder to vote without being physically present at the Annual Meeting. |
Q: | What matters will the stockholders vote on at the Annual Meeting? |
A: | Proposal | Election of the following five director nominees: | ||||||
• | Katherine L. Davis | • | Gail S. Page | • | Mary Lake Polan | |||
• | John G. Potthoff | • | John J. Sperzel III |
Proposal | Approval of 2019 Omnibus Incentive Plan | ||
Proposal | Ratification of appointment of our independent auditor for 2019 | ||
Proposal | Approval, as an advisory vote, of 2018 executive compensation as disclosed in this Proxy Statement | ||
Proposal | Approval, as an advisory vote, of the frequency of future advisory votes on executive compensation |
Q: | Who can vote at the Annual Meeting? |
A: | Stockholders of record of common stock at 5 p.m., Eastern time, on April 26, 2019, the record date, will be entitled to vote at the Annual Meeting. As of the record date, there were outstanding a total of 17,166,459 shares of common stock, each of which will be entitled to one vote on each proposal. As a result, up to a total of 17,166,459 votes can be cast on each proposal. |
Q: | What is a stockholder of record? |
A: | A stockholder of record is a stockholder whose ownership of common stock is reflected directly on the books and records of our transfer agent, Broadridge Corporate Issuer Solutions, Inc. |
Q: | What does it mean for a broker or other nominee to hold shares in “street name”? |
A: | If you beneficially own shares held in an account with a broker, bank or similar organization, that organization is the stockholder of record and is considered to hold those shares in “street name.” An organization that holds your beneficially owned shares in street name will vote in accordance with the instructions you provide. If you do not provide the organization with specific voting instructions with respect to a proposal, the organization’s authority to vote your shares will, under the rules of the Nasdaq Global Market or Nasdaq, depend upon whether the proposal is considered a “routine” or a non-routine matter. |
Q: | How do I vote my shares if I do not attend the Annual Meeting? |
A: | If you are a stockholder of record, you may vote prior to the Annual Meeting as follows: |
• | Via the Internet: | You may vote via the Internet by going to www.aalvote.com/CEMIor scanning the QR code on the Notice of Internet Availability, in accordance with the voting instructions on the Notice of Internet Availability and the proxy card. Internet voting is available 24 hours a day until 11:59 p.m., Eastern time, on June 17, 2019. You will be given the opportunity to confirm that your instructions have been recorded properly. |
• | By Telephone: | You may vote by calling +1 (866) 804-9616 and following the instructions provided on the telephone line. Telephone voting is available 24 hours a day until 11:59 p.m., Eastern time, on June 17, 2019. Easy-to-follow voice prompts will allow you to vote your shares and confirm that your instructions have been recorded properly. |
• | By Mail: | If you obtain a proxy card by mail, you may vote by returning the completed and signed proxy card in a postage-paid return envelope that will be provided with the proxy card. |
• | Via the Internet: | You may vote via the Internet by going to www.ProxyVote.comor scanning the QR code on the Notice of Internet Availability, in accordance with the voting instructions on the Notice of Internet Availability and the proxy card. Internet voting is available 24 hours a day until 11:59 p.m., Eastern time, on June 17, 2019. You will be given the opportunity to confirm that your instructions have been recorded properly. |
Q: | Can I vote at the Annual Meeting? |
A: | If you are a stockholder of record, you may vote in person at the Annual Meeting, whether or not you previously voted. If your shares are held in street name, you must obtain a written proxy, executed in your favor, from the stockholder of record to be able to vote at the Annual Meeting. |
Q: | May I change my vote or revoke my proxy? |
A: | If you are a stockholder of record and previously delivered a proxy, you may subsequently change or revoke your proxy at any time before it is exercised by: |
Q: | What happens if I do not give specific voting instructions? |
A: | If you are a stockholder of record and you return a proxy card without giving specific voting instructions, the Proxy Committee will vote your shares in the manner recommended by the board on all five proposals presented in this Proxy Statement and as the Proxy Committee may determine in its discretion on any other matters properly presented for a vote at the Annual Meeting. |
Q: | What if other matters are presented at the Annual Meeting? |
A: | If a stockholder of record provides a proxy by voting in any manner described in this Proxy Statement, the Proxy Committee will have the discretion to vote on any matters, other than the five proposals presented in this Proxy Statement, that are properly presented for consideration at the Annual Meeting. We do not know of any other matters to be presented for consideration at the Annual Meeting. |
Election of Directors | |
The affirmative vote of a plurality of votes cast by shares entitled to vote and present in person or represented by proxy at the Annual Meeting at which a quorum is present is required to elect each director. Votes to “abstain” will not be counted for the purpose of determining whether a director is elected. Similarly, broker non‑votes will not have any effect on the outcome of the election of directors, since broker non-votes are not counted as “votes cast.” | |
Approval of 2019 Omnibus Incentive Plan | |
Our 2019 Omnibus Incentive Plan must be affirmatively approved by a majority of the votes entitled to be cast and present in person or represented by proxy at the Annual Meeting. Abstentions will count as votes against this proposal because shares with respect to which a stockholder abstains will be deemed present and entitled to vote. Broker non-votes will have no effect on the outcome of this proposal because broker non-votes are not counted as “votes cast.” | |
Ratification of Appointment of Independent Auditor for 2019 | |
The ratification of BDO USA, LLP as our independent auditor for the year ending December 31, 2019 must be approved by affirmative votes constituting a majority of the votes entitled to be voted and present in person or represented by proxy at the Annual Meeting. Abstentions will count as votes against this proposal, because shares with respect to which the stockholder abstains will be deemed present and entitled to vote. Because this proposal is considered a routine matter, discretionary votes by brokers will be counted. | |
Approval of 2018 Executive Compensation on an Advisory Basis | |
The advisory “say-on-pay” vote to approve our 2018 executive compensation must be approved by affirmative votes constituting a majority of the votes entitled to be cast and present in person or represented by proxy at the Annual Meeting. Abstentions will count as votes against this proposal, because shares with respect to which the stockholder abstains will be deemed present and entitled to vote. Broker non-votes will have no effect on the outcome of this proposal, because broker non-votes are not counted as “votes cast.” | |
Approval of Frequency of Future Advisory “Say-on-Pay” Votes on an Advisory Basis | |
The advisory “say-on-frequency” vote on the frequency of future advisory “say-in-pay” votes on executive compensation must be approved by affirmative votes constituting a majority of the votes entitled to be voted and present in person or represented by proxy at the Annual Meeting. As a result, any votes not cast, whether by abstention, broker non-votes or otherwise, will not affect the outcome of this proposal, except to the extent that the failure to vote for a particular frequency period may result in another frequency period receiving a larger proportion of the votes cast. |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | |
Sperzel, John J. (1) 3661 Horseblock Road Medford, NY 11763 | 150,000 | 1.20 % | |
Esfandiari, Javan (2) 3661 Horseblock Road Medford, NY 11763 | 124,180 | 1.01 % | |
Larkin, Richard J. (3) 3661 Horseblock Road Medford, NY 11763 | 52,253 | 0.42 % | |
Ippolito, Tom (4) 3661 Horseblock Road Medford, NY 11763 | 27,272 | 0.22 % | |
Steele, Michael (5) 3661 Horseblock Road Medford, NY 11763 | 15,292 | 0.12 % | |
Lambotte, Paul (6) 3661 Horseblock Road Medford, NY 11763 | 24,000 | 0.19 % | |
Klugewicz, Sharon (7) 3661 Horseblock Road Medford, NY 11763 | 48,630 | 0.39 % | |
Meller, Gary (8) 3661 Horseblock Road Medford, NY 11763 | 133,125 | 1.08 % | |
Davis, Katherine L. (9) 3661 Horseblock Road Medford, NY 11763 | 86,421 | 0.70 % | |
Kissinger, Peter (10) 3661 Horseblock Road Medford, NY 11763 | 40,906 | 0.33 % | |
GROUP (all executive officers and directors) (11) | 702,079 | 5.56 % | |
Wellington Management Group LLP (12) 280 Congress Street Boston, MA 02210 | 1,106,880 | 9.00 % | |
Norman H. Pessin (13) 366 Madison Ave, 14th Floor New York, NY 10017 | 1,274,139 | 10.36 % | |
Acuta Capital Partners LLC 1301 Shoreway Rd Belmont, CA 94002 | 1,150,925 | 9.36 % | |
ARS Investment Partners, LLC 500 Fifth Ave, Suite 1440 New York, NY 10110 | 617,686 | 5.02 % |
Combined Equity Compensation Plans - Information as of December 31, 2016 | ||||||||||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders1 | 600,549 | $ | 4.55 | 676,634 | ||||||||
Equity compensation plans not approved by security holders | - | - | - | |||||||||
Total | 600,549 | $ | 4.55 | 676,634 |
Katherine L. Davis | ||||
Chembio Board Service: • Tenure: 12 years • Chair of the Board | • Committees: ○ Audit ○ Nominating and Corporate Governance Age: 62 | |||
Gail S. Page | ||
Chembio Board Service • Tenure: 2 years • Committees: ○ Audit ○ Compensation (Chair) ○ Nominating and Corporate Governance Age: 63 | ||
INDEPENDENT |
Mary Lake Polan | ||
Chembio Board Service: • Tenure: 7 months • Committees: ○ Compensation ○ Nominating and Corporate Governance (Chair) Age: 75 | ||
INDEPENDENT |
John G. Potthoff | ||
Chembio Board Service • Tenure: 10 months • Committees: ○ Audit (Chair) ○ Compensation Age: 51 | ||
INDEPENDENT |
John J. Sperzel III | ||
Chembio Board Service: • Tenure: 5 years Age: 55 |
Resolved: | That the stockholders approve the compensation paid to the “named executive officers” of Chembio Diagnostics, Inc. with respect to the fiscal year ended December 31, 2018, as disclosed, pursuant to Item 402 of Regulation S-K promulgated by the Securities and Exchange Commission, in the Proxy Statement for the 2019 Annual Meeting of Stockholders, including the compensation tables and narrative discussion set forth under “Executive Compensation” therein. |
Resolved: | That the stockholders wish Chembio Diagnostics, Inc. to present an advisory vote on the compensation of named executive officers pursuant to Section 14A of the Securities Exchange Act on an annual basis. |
Name | Age | Position With Company | Initial Date as Officer | Expiration of Term |
John J. Sperzel III* | 53 | Chief Executive Officer, President | 2014 | March 13, 2017 |
Richard J. Larkin | 60 | Chief Financial Officer; Executive Vice President | 2003 | ** |
Javan Esfandiari | 50 | Chief Scientific And Technology Officer; Executive Vice President | 2004 | March 5, 2019 |
Sharon Klugewicz | 49 | President Americas Region | 2012 | May 22, 2017 |
Robert Passas | 63 | President EMEA and APAC | 2016 | ** |
Tom Ippolito | 54 | Vice President of Regulatory Affairs, Quality Assurance and Quality Control | 2005 | ** |
Paul Lambotte | 64 | Vice President of Product Development | 2014 | ** |
David Gyorke | 57 | Vice President of Operations | 2017 | ** |
Common Stock Beneficially Owned | ||
Beneficial Owner | Shares | % |
Named Executive Officers, Directors and Director Nominees | ||
John J. Sperzel III(1) | 353,446 | 2.0% |
Javan Esfandiari(2) | 147,353 | * |
Neil A. Goldman(3) | 87,569 | * |
Katherine L. Davis(4) | 112,943 | * |
John G. Potthoff(5) | 37,147 | * |
Gail S. Page(6) | 26,522 | * |
Mary Lake Polan(7) | 17,147 | * |
All executive officers and directors as a group (9 persons)(8) | 886,577 | 4.9% |
5% Stockholders | ||
Wellington Management Group LLP(9) 280 Congress Street Boston, MA 02210 | 1,506,290 | 8.8% |
Norman H. Pessin(10) c/o Levy, Harkins & Co., Inc. 366 Madison Avenue, 14th Floor New York, NY 10017 | 1,498,659 | 8.7% |
* | Less than 1%. |
(1) | Consist of (a) 98,446 restricted shares, one-third of which will vest on October 8 of 2019, 2020 and 2021, and (b) options to acquire 255,000 shares that are exercisable by June 25, 2019. |
(2) | Include (a) 38,860 restricted shares, one-third of which will vest on October 8 of 2019, 2020 and 2021, and (b) options to acquire 20,000 shares that are exercisable by June 25, 2019. |
(3) | Include (a) 31,088 restricted shares, one-third of which will vest on October 8 of 2019, 2020 and 2021, and (b) options to acquire 41,666 shares that are exercisable by June 25, 2019. |
(4) | Include (a) 7,772 restricted shares, one-third of which will vest on October 8 of 2019, 2020 and 2021, and (b) options to acquire 46,875 shares that are exercisable by June 25, 2019. |
(5) | Include (a) 7,772 restricted shares that will vest on October 8, 2019, and (b) options to acquire 9,375 shares that are exercisable by June 25, 2019. |
(6) | Consist of (a) 7,772 restricted shares that will vest on October 8, 2019, and (b) options to acquire 18,750 shares that are exercisable by June 25, 2019. |
(7) | Consist of (a) 7,772 restricted shares that will vest on October 8, 2019, and (b) options to acquire 9,375 shares that are exercisable by June 25, 2019. |
(8) | Include, in addition to the restricted shares and options in Notes 1 through 7, (a) 20,725 restricted shares, one-third of which will vest on October 8, 2019, 2020, and 2021 and (b) options to acquire 48,000 shares that are exercisable by June 25, 2019. |
(9) | The information is based on amended Schedule 13Gs filed on February 12, 2019. |
(a) | An amended Schedule 13G filed jointly by Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP, and a Schedule 13G filed by Wellington Trust Company NA, as investment adviser, reported holdings of 801,835 shares. These shares are owned of record by clients of the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP. The shares are owned of record by clients of Wellington Trust Company NA. |
(b) | An amended Schedule 13G filed by Wellington Trust Company, National Association Multiple Common Trust Funds Trust, Micro Cap Equity Portfolio reported holdings of 704,455 shares. |
(10) | This information is based on information provided on behalf of Norman Pessin by Brian Pessin, the son of Norman Pessin. The shares include 131,072 shares held by Brian Pessin. |
Position | Annual Cash Retainer | Per Meeting Fee |
Chair of the Board | $50,000 | $1,000 in person / $500 telephonic |
All Independent Directors | $25,000 | $1,000 in person / $500 telephonic |
Audit Committee Chair | $2,500 | $750 |
Other Audit Committee Members | — | $500 |
Compensation Committee Chair | — | $750 |
Other Compensation Committee Members | — | $500 |
Nominating and Governance Committee Chair | — | $750 |
Other Nominating and Governance Committee Members | — | $500 |
Director | Fees Earned or Paid in Cash($)(1) | Option Awards($) | Total($)(2) |
Katherine L. Davis(2) | $75,000 | $— | $150,000 |
Gail S. Page(2) | 25,000 | — | 90,000 |
Mary Lake Polan(2)(3)(4) | 10,417 | 197,165.63 | 622,135.72 |
John G. Potthoff(2)(3)(5) | 12,500 | 155,053.13 | 469,531.25 |
Peter Kissinger(6) | 12,500 | — | 12,500 |
Gary Meller(7) | — | — | — |
(1) | Consist of annual retainer and meeting fees, as described above under “Non-Employee Director Annual Retainer and Meeting Fees.” |
(2) | On October 8, 2018 each non-employee director received 7,772 restricted shares of common stock that will vest in full on October 8, 2019. The amount of each such grant of restricted shares of $75,000, based on a fair market value of $9.65 per share of common stock on October 8, 2018. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. |
(3) | On the date of the annual meeting of stockholders at which a director is initially elected and every fifth year thereafter at which the director is re-elected, the director receives stock options to acquire 46,875 shares of common stock, with an exercise price equal to the market price on the date of the grant. Twenty percent (9,375 shares) of the 46,875 shares become exercisable on the date of the original grant, and an additional twenty percent become exercisable on the date of each of the four succeeding anniversaries of the date of grant if the director is still a director on that date. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. |
(4) | Commenced serving as a director in August 2018. |
(5) | Commenced serving as a director in May 2018. |
(6) | Resigned from the board in May 2018. |
(7) | Resigned from the board in February 2018. |
Name | Age | Positions and Business Experience | |||
John J. Sperzel III | 55 | Please see “Proposal 1. Election of Directors—Information Concerning Nominees for Election as Directors” at page 13. | |||
Neil A. Goldman | 51 | Professional Experience | |||
• | Executive Vice President and Chief Financial Officer since December 2017 | ||||
• | Executive Vice President-Corporate Development and Chief Financial Officer at J.S. Held LLC, a construction consulting firm, from May 2015 to May 2017 | ||||
• | Global Finance Director for the Delphi Data Connectivity division of Delphi Corp. (now Aptiv plc), an automotive supplier, from October 2014 to April 2015 | ||||
• | Executive Vice President-Corporate Development and Chief Financial Officer from 2013 to September 2014, Senior Vice President-Chief Operating and Financial Officer from 2006 to 2013, and Chief Financial Officer from 2005 to 2006 at Unwired Technology LLC, a tier-1 global automotive electronics manufacturer and distributor | ||||
• | Chief Financial Officer at EPPCO Enterprises, Inc., a mechanics tools manufacturer, from 2003 to 2005 | ||||
• | Senior Manager at Ernst & Young LLP and its successor Cap Gemini Ernst & Young LLC, from 1989 to 2002 | ||||
• | Certified Public Accountant | ||||
Education | |||||
• | Bachelor of Science degree in Business-Accountancy from Miami University (Ohio) | ||||
Javan Esfandiari | 52 | Professional Experience | |||
• | Executive Vice President and Chief Scientific and Technology Officer since 2004 and Director of Research and Development, from 2000 to 2004 | ||||
• | Co-founder and Director of Research and Development of Sinovus Biotech AB, a developer of lateral flow technology, from 1997 to 2000 | ||||
• | Director of Research and Development with On-Site Biotech/National Veterinary Institute, a government agency for veterinary medicine, from 1993 to 1997 | ||||
Education | |||||
• | Master of Science degree in Molecular Biology from Lund University, Sweden | ||||
• | Bachelor of Science degree in Clinical Chemistry from Lund University, Sweden | ||||
David Gyorke | 59 | Professional Experience | |||
• | Senior Vice President, Chief Operations Officer since January 2017 | ||||
• | Vice President of Operations at Nanomix, Inc., a developer of analytical detection devices for point-of-care diagnostics, from 2011 to 2016 | ||||
• | Vice President of Operations at NeoVista, Inc., a developer of medical technologies, from 2008 to 2011 | ||||
• | Vice President of Operations at Farallon Medical, Inc., a developer of point-of-care diagnostic and drug monitoring technologies, from 2004 to 2008 | ||||
• | Vice President of Operations at Cholestech Corporation, a developer of point-of-care diagnostic systems, from 1999 to 2003 | ||||
Education | |||||
• | Bachelor of Engineering (Industrial) degree from California Polytechnic State University |
Robert Passas | 66 | Professional Experience | |||
• | Senior Vice President, Chief Commercial Officer since October 2016 | ||||
• | Director and the Group Commercial Director for Worldwide Sales, Marketing, and Technical and Customer Support at The Binding Site Group Ltd, a supplier of clinical diagnostic tools, from 2011 to 2016 | ||||
• | Senior Director-International at Quidel Corporation, a manufacturer of diagnostic healthcare products, from 2010 to 2011 | ||||
• | Executive Vice President for Global Sales and Marketing, from 2007 to 2010 and Vice President of Sales and Marketing, from 2006 to 2007 at Trinity Biotech plc, a developer, manufacturer and marketer of diagnostic test kits | ||||
• | Regional Director at Abbott Diabetes Care, a manufacturer of blood glucose monitors and meters, from 2003 to 2006 | ||||
Education | |||||
• | Doctor of Philosophy degree in Analytical Chemistry from the University of Surrey | ||||
• | Bachelor of Science degree in Medical Biochemistry from the University of Surrey |
Name and Principal Position | Year | Salary ($) | Bonus($)(1) | Equity Awards ($)(2) | All Other Compensation($)(3) | Total($) | ||||||
John J. Sperzel III | 2018 | $416,847 | $89,250 | $950,000 | — | $1,430,597 | ||||||
Chief Executive Officer and President | 2017 | 415,137 | 63,750 | 62,998 | — | 541,885 | ||||||
Neil A. Goldman | 2018 | 294,231 | $50,400 | 300,000 | $2,769 | 597,000 | ||||||
Executive Vice President, Chief Financial Officer | 2017 | 5,769 | — | 423,882 | — | 224,638 | ||||||
Javan Esfandiari | 2018 | 357,807 | $72,450 | 375,000 | 7,391 | 791,948 | ||||||
Executive Vice President, Chief Science and Technology Officer | 2017 | 342,308 | 51,750 | 9,652 | 5,900 | 347,244 |
(1) | Bonuses earned in 2018 and 2017 were based in part on reaching certain objectives, which included revenue dollar levels and operating profit levels. Additional amounts earned were discretionary. |
(2) | The estimated fair value of any option or common stock granted was determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation. In addition to the awards included in the table, the compensation committee conditionally granted to Mr. Sperzel on November 11, 2018 restricted stock units for 375,000 shares of common stock, subject to the approval of a new equity incentive plan by the stockholders. If Proposal 2 is approved, these additional restricted stock units will be granted to Mr. Sperzel immediately after the Annual Meeting. |
(3) | Other compensation includes, where applicable, an employer match to 401(k) contributions and car allowances. |
Option Awards | Stock Awards | ||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price($) | Option Expiration Date | Number of Shares that have not Vested(#) | Market Value of Shares that have not Vested($) | |||||
John J. Sperzel III | 200,000 | 50,000 | $3.4163 | 3/21/21 | 98,446(1) | 950,000 | |||||
5,000 | — | 5.25 | 3/15/22 | — | — | ||||||
— | 20,000 | 5.3666 | 3/31/24 | — | — | ||||||
Neil A. Goldman | 41,666 | 83,334 | 7.04 | 12/18/24 | 31,088(2) | 300,000 | |||||
Javan Esfandiari | 40,000 | 20,000 | 5.64 | 3/11/21 | 38,860(2) | 375,000 | |||||
5,000 | — | 5.25 | 3/15/22 | — | — |
(1) | One-third of the 98,446 shares of common stock will vest on October 8 of each of 2019, 2020 and 2021. Mr. Sperzel will receive a restricted stock award for 375,000 shares of common stock that would be subject to time vesting in full on November 11, 2022 if the 2019 Plan is approved at the Annual Meeting. See “Proposal 2—Approval of 2019 Omnibus Incentive Plan—Background”. |
(2) | One-third of the shares of common stock will vest on October 8 of each of 2019, 2020 and 2021. |
Name / | Salary1 | Bonus2 | Stock | Option Awards3 | All Other Compensation5 | Total | |||||||||||||
Principal | ($) | ($) | Awards | ($) | ($) | ($) | |||||||||||||
Position | Year | ($) | |||||||||||||||||
John J. Sperzel4 | 2016 | $ | 375,000 | $ | 100,000 | $ | - | $ | - | $ | - | $ | 475,000 | ||||||
CEO | 2015 | $ | 375,000 | $ | 70,000 | $ | - | $ | - | $ | - | $ | 445,000 | ||||||
2014 | $ | 298,558 | $ | - | $ | - | $ | 669,625 | $ | - | $ | 968,183 | |||||||
Javan Esfandiari | 2016 | $ | 329,135 | $ | 82,500 | $ | - | $ | - | $ | 11,001 | $ | 422,636 | ||||||
CSTO and Executive Vice President | 2015 | $ | 304,130 | $ | 60,000 | $ | - | $ | - | $ | 10,520 | $ | 374,650 | ||||||
2014 | $ | 315,000 | $ | 90,000 | $ | - | $ | - | $ | 9,825 | $ | 414,825 | |||||||
Sharon Klugewicz | 2016 | $ | 265,000 | $ | 62,500 | $ | - | $ | - | $ | 5,283 | $ | 332,783 | ||||||
Pres. Americas | 2015 | $ | 259,000 | $ | 40,000 | $ | - | $ | - | $ | 5,180 | $ | 304,180 | ||||||
2014 | $ | 259,616 | $ | 75,000 | $ | - | $ | - | $ | 4,182 | $ | 338,798 | |||||||
Michael Steele | 2016 | $ | 217,413 | $ | 20,000 | $ | - | $ | - | $ | 3,492 | $ | 240,905 | ||||||
VP-Sales & Marketing | 2015 | $ | 217,413 | $ | 25,000 | $ | - | $ | - | $ | 3,010 | $ | 245,423 | ||||||
2014 | $ | 224,910 | $ | 32,130 | $ | - | $ | - | $ | 1,990 | $ | 259,030 | |||||||
Richard J. Larkin | 2016 | $ | 205,000 | $ | 50,000 | $ | - | $ | - | $ | 4,690 | $ | 259,690 | ||||||
CFO and Executive Vice President | 2015 | $ | 202,460 | $ | 20,000 | $ | - | $ | - | $ | 4,094 | $ | 226,554 | ||||||
2014 | $ | 198,403 | $ | 28,343 | $ | - | $ | - | $ | 3,821 | $ | 230,567 |
Option Awards | Stock Awards | |||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($) | Foot- note | |
John J. Sperzel | 25,000 | 3.4163 | 3/21/2021 | 3/13/2015 | 1 | |||||
25,000 | 3.4163 | 3/21/2021 | 3/13/2015 | 2 | ||||||
18,132 | 3.4163 | 3/21/2021 | 3/13/2016 | 1 | ||||||
31,868 | 3.4163 | 3/21/2021 | 3/13/2016 | 2 | ||||||
50,000 | 3.4163 | 3/21/2021 | 3/13/2017 | 2 | ||||||
50,000 | 3.4163 | 3/21/2021 | 3/13/2018 | 2 | ||||||
50,000 | 3.4163 | 3/21/2021 | 3/13/2019 | 2 | ||||||
Javan Esfandiari | 10,000 | 5.44 | 3/5/2018 | 3/5/2014 | 1 | |||||
10,000 | 5.44 | 3/5/2018 | 3/5/2015 | 1 | ||||||
10,000 | 5.44 | 3/5/2018 | 3/5/2016 | 1 | ||||||
4,765 | 5.56 | 2/26/2018 | 2/26/2013 | 4 | ||||||
7,969 | 4.00 | 2/16/2017 | 2/16/2012 | 3 | ||||||
20,000 | 5.64 | 3/11/2016 | 3/11/2017 | 1 | ||||||
20,000 | 5.64 | 3/11/2016 | 3/11/2018 | 1 | ||||||
20,000 | 5.64 | 3/11/2016 | 3/11/2019 | 1 | ||||||
Sharon Klugewicz | 2,500 | 4.50 | 5/22/2018 | 5/22/2014 | 1 | |||||
2,500 | 4.50 | 5/22/2018 | 5/22/2015 | 1 | ||||||
630 | 5.56 | 2/26/2018 | 2/26/2013 | 4 | ||||||
12,000 | 4.45 | 9/4/2017 | 9/4/2013 | 5 | ||||||
12,000 | 4.45 | 9/4/2017 | 9/4/2014 | 5 | ||||||
12,000 | 4.45 | 9/4/2017 | 9/4/2015 | 5 | ||||||
Michael Steele | 785 | 5.56 | 2/26/2013 | 2/26/2018 | 4 | |||||
Richard J. Larkin | NONE |
Name | Fees Earned or Paid in Cash ($) 1 | Stock Awards ($) | Option Awards ($) 2 | Total ($) | |||||||||||
Katherine L. Davis | $ | 85,000 | $ | - | $ | - | $ | 85,000 | |||||||
Barbara DeBuono | $ | 16,500 | $ | - | $ | - | $ | 16,500 | |||||||
Peter Kissinger | $ | 39,500 | $ | - | $ | 151,973 | $ | 191,473 | |||||||
Gary Meller | $ | 44,500 | $ | - | $ | - | 44,500 |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | ||||
Equity compensation plans approved by stockholders(1) | 711,268 | $5.62 | 21,061 | ||||
Equity compensation plans not approved by stockholders | — | — | — | ||||
Totals | 711,268 | 21,061 |
(1) | “Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights” consists of 99,132 shares under the 2008 Stock Incentive Plan, 390,968 shares under the 2014 Stock Incentive Plan, and 206,868 shares issued outside of those plans, and options to purchase 15,000 shares that have since been cancelled or expired. The 2008 Stock Incentive Plan was increased by 125,000 shares at the Annual Stockholder meeting held on September 23, 2011. “Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans” represents zero shares under the 2008 Stock Incentive Plan and 21,061 under the 2014 Stock Incentive Plan. |
2018 | 2017 | |||
Audit Fees(1) | $548,863 | $428,289 | ||
Audit-related Fees(2) | 87,780 | — | ||
Tax Fees(3) | 21,000 | 21,000 | ||
Total Fees | $657,643 | $449,289 |
(1) | Includes services relating to the audit of the annual consolidated financial statements, review of quarterly consolidated financial statements, statutory audits, comfort letters, and consents and review of documentation filed with SEC-registered and other securities offerings. |
(2) | Includes services related to assistance with general accounting matters, work performed on acquisitions and divestitures, employee benefit plan audits and assistance with statutory audit matters. |
(3) | Includes services for tax compliance, tax advice and tax planning. |
Contents |
(Continued and to be signed on the reverse side) |
PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED. |
Nominees: | FOR all nominees | WITHHOLD AUTHORITY for all nominees | FOR all nominees except as noted: |
01 Katherine L. Davis | |||
02 Gail S. Page | ☐ | ☐ | ☐ |
03 Mary Lake Polan | |||
04 John G. Potthoff | |||
05 John J. Sperzel III |
DO NOT PRINT IN THIS AREA (Stockholder Name & Address Data) |
Address Change/Comments: (If you noted any Address Changes and/or Comments above, please mark box.) ☐ | Please indicate if you plan to attend this meeting ☐ |
CONTROL NUMBER | ||
Date |
Signature |
Signature | |
(Joint Owners) |
PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED. |
CONTROL NUMBER | ||
INTERNET Vote Your Proxy on the Internet: Go to www.aalvote.com/CEMI 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 (866) 804-9616 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. |
1. | PURPOSE |
2. | DEFINITIONS |
3. | ADMINISTRATION OF THE PLAN |
4. | STOCK SUBJECT TO THE PLAN |
5. | EFFECTIVE DATE, DURATION, AND AMENDMENTS |
6. | AWARD ELIGIBILITY AND LIMITATIONS |
7. | AWARD AGREEMENT |
8. | TERMS AND CONDITIONS OF OPTIONS |
9. | TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS |
10. | TERMS AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS |
11. | FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK |
12. | OTHER STOCK-BASED AWARDS |
13. | REQUIREMENTS OF LAW |
14. | EFFECT OF CHANGES IN CAPITALIZATION |
15. | NO LIMITATIONS ON COMPANY |
16. | TERMS APPLICABLE GENERALLY TO AWARDS GRANTED UNDER THE PLAN |