☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Subject Company Information. |
Identity and Background of Filing Person. |
Past Contacts, Transactions, Negotiations and Agreements. |
• | the accelerated vesting and cash-out of Company restricted stock units (the “Company RSUs”) held by non-employee directors and executive officers in connection with the Transactions contemplated by the Merger Agreement in accordance with its terms; and |
• | certain contractual severance payments and/or benefits in the event an executive officer experiences a qualifying termination of employment. |
| Name | | | Position | | | Company Shares (#) | | | Consideration Payable in Respect of Company Shares ($) | |
| Richard L. Eberly | | | President, Chief Executive Officer, Director | | | 245,850* | | | 110,633 | |
| Lawrence J. Steenvoorden | | | Executive Vice President, Chief Financial Officer | | | 0 | | | 0 | |
| Javan Esfandiari | | | Executive Vice President, Chief Science and Technology Officer | | | 98,348 | | | 44,257 | |
| Paul J. Angelico | | | Executive Vice President, Chief Operations Officer | | | 46,473 | | | 20,913 | |
| Charles Caso | | | Sr. Vice President, Global Commercial Operations | | | 0 | | | 0 | |
| Katherine L. Davis | | | Director | | | 106,457 | | | 47,906 | |
| John G. Potthoff, Ph.D. | | | Director | | | 54,086 | | | 24,339 | |
| David W.K. Acheson, M.D. | | | Director | | | 14,678 | | | 6,605 | |
| David W. Bespalko | | | Director | | | 5,734 | | | 2,580 | |
| Leslie Teso-Lichtman | | | Director | | | 0 | | | 0 | |
* | Includes 51,415 Shares held indirectly by Mr. Eberly’s spouse. |
• | Each Company Option that is outstanding immediately prior to the effective time of the Merger will automatically terminate for no consideration; and |
• | Each unvested Company RSU that is outstanding immediately prior to the effective time of the Merger (including each unvested Company RSU that becomes vested in connection with the Offer or the Merger) will automatically be canceled and converted into the right to receive an amount of cash equal to the Merger Consideration without any interest thereon (the “Company RSU Merger Consideration”). |
| Name | | | Position | | | Company RSUs (#) | | | Consideration Payable in Respect of Company RSUs ($) | |
| Richard L. Eberly | | | President, Chief Executive Officer, Director | | | 587,283 | | | 264,277 | |
| Lawrence J. Steenvoorden | | | Executive Vice President, Chief Financial Officer | | | 160,714 | | | 72,321 | |
| Javan Esfandiari | | | Executive Vice President, Chief Science and Technology Officer | | | 169,807 | | | 76,413 | |
| Paul J. Angelico | | | Executive Vice President, Chief Operations Officer | | | 114,365 | | | 51,464 | |
| Charles Caso | | | Sr. Vice President, Global Commercial Operations | | | 107,873 | | | 48,543 | |
| Katherine L. Davis | | | Director | | | 32,000 | | | 14,400 | |
| John G. Potthoff, Ph.D. | | | Director | | | 32,000 | | | 14,400 | |
| David W.K. Acheson, M.D. | | | Director | | | 32,000 | | | 14,400 | |
| David W. Bespalko | | | Director | | | 43,470 | | | 19,562 | |
| Leslie Teso-Lichtman | | | Director | | | 96,000 | | | 43,200 | |
• | payment to Mr. Eberly of a lump-sum cash payment equal to one times his base salary (paid within two weeks following the termination); |
• | payment to Mr. Eberly of a prorated a target bonus for the year of termination, prorated for the number of days of Mr. Eberly’s employment during the year of termination. The prorated target bonus is paid only if the Company determines that the applicable performance goals are satisfied, in which case it is paid within thirty days following such determination; |
• | payment to Mr. Eberly, for the two-year period following termination (or, if earlier, until Mr. Eberly becomes eligible for coverage under health care plans of a subsequent employer), monthly cash payments equal to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the highest level of coverage available under the Company’s group health plans, reduced by the monthly amount that Mr. Eberly would pay for such coverage if he was an active employee; and |
• | in the event the termination occurs within the twelve-month period following a change in control (a so-called “double-trigger termination”), Mr. Eberly would become entitled to (a) the payments and benefits described above, except that the lump-sum cash payment referenced in the first bullet would equal two times, instead of one times, Mr. Eberly’s base salary, and (b) accelerated vesting in full of all time-based equity awards. |
• | payment to Mr. Steenvoorden of a lump-sum cash payment equal to one times his base salary (paid within two weeks following the termination); |
• | payment to Mr. Steenvoorden of a prorated a target bonus for the year of termination, prorated for the number of days of Mr. Steenvoorden’s employment during the year of termination. The prorated target bonus is paid only if the Company determines that the applicable performance goals are satisfied, in which case it is paid within thirty days following such determination; |
• | payment to Mr. Steenvoorden, for the one-year period following termination (or, if earlier, until Mr. Steenvoorden becomes eligible for coverage under health care plans of a subsequent employer), monthly cash payments equal to the COBRA premium for the highest level of coverage available under the Company’s group health plans, reduced by the monthly amount that Mr. Steenvoorden would pay for such coverage if he was an active employee; and |
• | in the event the termination occurs within the twelve-month period following a change in control (a so-called “double-trigger termination”), the shares subject to Mr. Steenvoorden’s initial Company Option and Company RSU will accelerate in full. |
• | payment to the executive of a lump-sum cash payment equal to one times his base salary (paid within two weeks following the termination); |
• | if the compensation committee of the Company Board previously established a target annual bonus for the executive with respect to the calendar year in which the termination occurs, a prorated target bonus, |
• | payment to the executive, for the one-year period following termination (or, if earlier, until the executive becomes eligible for coverage under health care plans of a subsequent employer), monthly cash payments equal to the COBRA premium for the highest level of coverage available under the Company’s group health plans, reduced by the monthly amount that the executive would pay for such coverage if he was an active employee; and |
• | accelerated vesting of all time-based equity awards. |
The Solicitation or Recommendation. |
• | Premium to Market Price. The Company Board considered the relationship of the Offer Price to the current and historical market prices of the Shares. The Offer Price to be paid in cash for each Share would provide stockholders with the opportunity to receive a significant premium over recent trading prices. The Company Board reviewed historical market prices, volatility and trading information with respect to the Shares, including the fact that the Offer Price represented a premium of approximately 27% over the closing price per share of the Shares on the Nasdaq Stock Market on January 30, 2023, the last trading day prior to the announcement of the Merger Agreement, and a premium of approximately 42% over the 30-day volume weighted average price per share prior to signing the Merger Agreement. |
• | Certainty of Value. The Company Board considered that the consideration to be received by the Company’s stockholders in the Offer and the Merger will consist entirely of upfront cash, which provides liquidity and certainty of value to the stockholders. Taking into account the various risks the Company would face by remaining independent and pursuing its current plans, including undergoing a shift in business strategy and product focus that will take time and additional capital to implement (which its current lender is unwilling to provide and the Company Board believes is not otherwise available), the Company Board believed that this certainty of value was compelling compared to the expected long-term value creation potential of the Company’s business. |
• | The Company’s Ongoing Operating and Financial Challenges. The Company Board considered the current and historical financial condition, results of operations and business, as well as the prospects and risks, if the Company were to remain independent. In particular, the Company Board considered: |
○ | the Company’s recent operating and financial challenges with a net loss of approximately $22.4 million for the nine months ended September 30, 2022, and a net loss of approximately $33.9 million for the year ended December 31, 2021; |
○ | the Company’s current commercial and product development pipeline and general business and financial plans, including the risks and uncertainties associated with the level of sales of the Company’s products in the United States and Europe, and risks and uncertainties associated with the continued development and regulatory approval of the Company’s products and product candidates; |
○ | the Company’s ability to carry out its current development and regulatory strategy with respect to its products and product candidates, whether on its own or through collaboration with strategic partners; |
○ | the significant capital that would be needed to repay amounts owed under the Credit Agreement, finance the shift in its business strategy, and support its commercialization and product development efforts; and |
○ | the general risks inherent to continued operation as a standalone company, including the competitive nature of the diagnostics industry, the Company’s financial resources relative to those of its competitors, the Company’s ability to maintain patent protection for its approved products and product candidates, the potential impact of government healthcare reform on the Company’s business, and other general risks and market conditions that could reduce the market price of the Shares, including the Company’s non-compliance with the minimum bid price and potential delisting from the Nasdaq Capital Market. |
• | Risks Related to the Credit Agreement and Liquidity; Potential Need to Pursue Bankruptcy or Reorganization Proceeding. The Company Board considered, among other factors, that the Company’s business and its stockholders would continue to be subject to substantial risks and uncertainties related to the Company’s Credit Agreement and ongoing liquidity matters, including that: |
○ | the Company has previously required waivers to the Credit Agreement due to its inability to comply with the minimum total revenue covenant; |
○ | the Company would likely not be able comply with such minimum total revenue covenant through the maturity date under the Credit Agreement; |
○ | Perceptive has communicated to the Company that it would not agree to any restructuring of the Credit Agreement or to any extension or modification of the payments owed under the Credit Agreement; and |
○ | the Company does not believe it will be able to enter into replacement debt or equity financing arrangements before the Credit Agreement matures on September 4, 2023, and consequently could be forced to pursue a bankruptcy or reorganization proceeding. |
• | Other Significant Risks and Uncertainties. The Company Board considered, among other factors, that the Company’s business and its stockholders would continue to be subject to other substantial risks and uncertainties if the Company attempted to remain an independent public company, including that: |
○ | ongoing liquidity concerns have resulted in the Company’s conclusion that there is substantial doubt about its ability to continue as a going concern; |
○ | the Company’s failure to meet the minimum bid price for continued listing on the Nasdaq Capital Market could result in delisting and adversely affect its ability to publicly or privately sell equity securities and the liquidity of its common stock; |
○ | the diagnostic testing market is highly competitive, and many of the Company’s competitors are larger, better established, and have greater technical and marketing capabilities and financial and other resources than the Company; |
○ | the uncertainty of whether future trading values would reach the Offer Price as compared to the certainty of realizing a compelling value for Shares in the Merger; and |
○ | the other risks set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as applicable. |
• | Lack of Other Meaningful Capital-Raising and Restructuring Alternatives. The Company Board considered the possible alternatives to the proposed acquisition of the Company by Parent, including (i) the possibility of continuing to operate the Company as an independent company and executing management’s stand-alone plan, (ii) obtaining financing arrangements to meet the Company’s current and future cash requirements (both through a public offering of equity securities and refinancing of the Company’s existing debt obligations), and (iii) seeking bankruptcy and restructuring protection, the potential benefits and risks of these alternatives to the Company and its stockholders and the timing and likelihood of effecting any such alternatives. In particular, the Company Board considered: |
○ | Perceptive’s unwillingness to refinance the Company’s existing indebtedness; |
○ | the Company’s inability to identify potential alternative financing sources to refinance the Company’s existing indebtedness under the Credit Agreement and provide working capital to the Company; |
○ | the Company’s ability to raise capital off of its existing shelf registration statement on Form S-3 being restricted by the “baby shelf” limitation such that the Company was only able to sell approximately $4.0 million of shares under its ATM Program during the last four months of 2022; and |
○ | the process conducted by the Company, with the assistance of representatives of Craig-Hallum, to undertake a public offering of the Company’s equity securities in September and October 2022, which did not result in the Company being able to sell equity securities on acceptable terms. |
• | Extensive Strategic Process. The Company Board considered the results of Craig-Hallum’s outreach beginning in April 2022 regarding a strategic transaction to a group of approximately 80 potential acquirers determined to be the most likely to have interest in an acquisition. Of those potential acquirers, 20 signed a |
• | Highest Value Reasonably Obtainable. The Company Board believed that the Offer Price of $0.45 per Share represented the highest value reasonably obtainable for the Shares, based on the progress and outcome of the Company’s negotiations with Parent and the fact that a large number of other strategic parties that had been contacted with respect to the acquisition of the Company had not expressed the desire or ability to propose a higher valuation. The Company Board believed, based on the Company’s negotiations with Parent and the advice of management and its advisors, that the Offer Price was the highest amount of consideration per Share that Parent was willing to pay and that the Merger Agreement contained the most favorable terms on significant points to the Company to which Parent was willing to agree. |
• | Speed and Likelihood of Completion. The Company Board considered the anticipated timing of the consummation of the transactions contemplated by the Merger Agreement, including the structure of the transaction as a cash tender offer for all outstanding Shares, with the anticipated result of allowing stockholders to receive the Offer Price in a relatively short time frame, followed by the Merger, in which stockholders who do not tender Shares in the Offer would receive the same consideration received by those stockholders who tender their Shares in the Offer. The Company Board noted that the Merger Agreement does not include a financing condition and that Parent would fund the purchase price from Parent’s available cash on hand and short-term financing. The Company Board considered how the potential for closing within a relatively short time frame could also reduce the amount of time in which the Company’s business would be subject to the potential uncertainty inherent to the pendency of the transaction and related disruption. The Company Board also believes, after consultation with senior management, that there are unlikely to be any significant delays or obstacles to Parent obtaining the necessary regulatory clearances and approvals to complete the Offer and the Merger. |
• | Business Reputation of Parent. The Company Board considered the business reputation, management and financial resources of Parent with respect to the transaction. The Company Board believed that these factors supported the conclusion that a transaction with Parent and Purchaser could be completed relatively quickly and in an orderly manner. |
• | Certain Management Projections. The Company Board considered certain financial projections for the Company prepared by the Company’s management, which reflected certain assumptions of the Company’s management. For further discussion, see the section of this Schedule 14D-9 captioned “Certain Unaudited Prospective Financial Information.” |
• | Fairness Opinion. The Company Board considered the oral opinion of Craig-Hallum, subsequently confirmed in writing, that, as of the date of the Merger Agreement, based on and subject to the assumptions made, procedures followed, matters considered and limitations upon the review undertaken by Craig-Hallum in preparing its written opinion, as set forth in such written opinion, the aggregate consideration (as defined in the written opinion) to be offered to the holders of the Shares pursuant to the Merger Agreement was fair from a financial point of view to such holders, as more fully described below in “—Opinion of the Company’s Financial Advisor.” The Company Board was aware that Craig-Hallum became entitled to a fee of $250,000 upon the issuance of its written opinion and will become entitled to a fee of $1.0 million upon consummation of the Offer and Merger, as more fully described below in “—Opinion of the Company’s Financial Advisor.” The full text of the written opinion of Craig-Hallum is attached hereto as Annex A. |
• | The Merger Agreement. The Company Board considered all of the terms and conditions of the Merger Agreement, including the representations, warranties, covenants and agreements of the parties, the conditions to closing, the form of the consideration and the structure of the termination rights, including: |
○ | that the terms of the Merger Agreement were the product of arms-length negotiations between two sophisticated parties and their respective advisors; |
○ | the Merger Agreement provides for the prompt commencement of the Offer, which may enable holders of Company common stock who tender their Shares into the offer to receive their consideration more quickly than in a transaction structured as a one-step merger; |
○ | the ability to respond to unsolicited Acquisition Proposals (as defined in the Merger Agreement) by the Company Board upon the determination that the failure to take such action would reasonably be expected to constitute a breach of the directors’ fiduciary duties under applicable law and to engage in negotiations or discussions with third parties regarding alternative transactions under certain circumstances; |
○ | the right of the Company Board to change or withdraw its recommendation to holders of Company common stock following receipt of an unsolicited superior proposal or upon the occurrence of certain other intervening events and determination that the failure to take such action would reasonably be expected to constitute a breach of the directors’ fiduciary duties under applicable law; |
○ | the right of the Company Board to terminate the Merger Agreement and to accept a superior proposal if certain conditions are met, subject to the payment of the $850,000 termination fee (approximately 4.9% of the aggregate transaction value and approximately 2.4% of the aggregate enterprise value of the Company) to Purchaser; |
○ | the Company Board’s belief that the $850,000 termination payable by the Company upon its termination of the Merger Agreement to accept a superior proposal and in certain other circumstances (i) is reasonable in light of the overall terms of the Merger Agreement and the benefits of the Offer and the Merger and (ii) would not preclude another party from making a competing proposal; |
○ | the obligations of Purchaser to accept Shares for payment pursuant to the Offer and to close the Merger are subject to a limited number of conditions, and the Company Board’s belief, in consultation with senior management and legal advisors, that the transactions contemplated by the Merger Agreement are reasonably likely to be consummated; |
○ | the provision in the Merger Agreement that various changes, conditions, events, circumstances, effects, occurrences or developments related to the Company or its business are specifically excluded from the determination of whether a material adverse effect has occurred that otherwise would permit Parent and Purchaser to elect not to consummate the Offer; |
○ | the fact that in the event that the conditions of the Offer, with the exception of certain conditions, have not been satisfied or waived at the scheduled expiration of the Offer, the Purchaser must extend the Offer for one or more periods of up to 10 business days until such conditions have been satisfied or waived, subject to the outside date provided in the Merger Agreement and the other terms and conditions of the Merger Agreement; and |
○ | The Company’s ability to enforce any provision of the Merger Agreement by a decree of specific performance if Purchaser fails, or threatens to fail, to satisfy their obligations under the Merger Agreement. |
• | Stockholder Participation in Future Growth or Earnings; Cash Consideration. The nature of the Offer, the Merger and the Offer Price means that the stockholders will not participate in future earnings or growth of the Company and will not benefit from any appreciation in value of the surviving corporation. |
• | Value of Consideration Below 52-Week High of Company Stock Price. The Company Board considered the fact that, while the value of the transaction consideration represented a premium of approximately 27% over the closing price per share of the Shares on the Nasdaq Stock Market on January 30, 2023, the last trading day prior to the announcement of the Merger Agreement, and a premium of |
• | Risk Associated with Failure to Complete the Offer and Consummate the Merger. The possibility that the Transactions contemplated by the Merger Agreement, including the Offer and the Merger, might not be consummated, and the fact that if the Offer and the Merger are not consummated, (i) the Company’s Board, senior management and other employees will have expended extensive time and effort and will have experienced significant distractions from their work during the pendency of the Transactions, (ii) the Company will have incurred significant transaction costs, (iii) the Company’s continuing business relationships with consultants, licensors, business partners and employees may be adversely affected, (iv) the trading price of the Shares could be adversely affected and (v) the market’s perceptions of the Company’s prospects could be adversely affected. |
• | Interim Restrictions on Business Pending the Completion of the Offer and the Merger. Restrictions on the conduct of the Company’s business prior to the effective time of the Merger due to pre-closing covenants in the Merger Agreement, whereby the Company agreed that it will carry on its business in the ordinary course of business consistent with past practice and, subject to specified exceptions, will not take a number of actions related to the conduct of its business without the prior written consent of Parent, which may have a material adverse effect on the Company’s ability to respond to changing market and business conditions in a timely manner or at all. |
• | No Solicitation and Termination Fee. Subject to certain exceptions, the Merger Agreement precludes the Company from soliciting alternative Acquisition Proposals, and requires the Company to pay to Parent a termination fee in certain circumstances as described above, as well as in certain circumstances in which the Merger Agreement is terminated when an alternative proposal became publicly known prior to such termination, and the Company later enters in any agreement with respect to an alternative proposal or consummates an alternative transaction within 12 months of such termination. |
• | Effects of Transaction Announcement. The effect of the public announcement of the Merger Agreement, including the potential impacts on the Company’s ongoing business relationships and the Company’s ability to attract and retain key management and scientific and research personnel during the pendency of the transactions contemplated by the Merger Agreement, as well as the likelihood of litigation in connection with the Merger. |
• | Timing Risks. The amount of time it could take to complete the Offer and the Merger, including the risk that Parent and Purchaser could be subject to regulatory approvals or clearances to complete the Offer or the Merger or the Offer period being extended multiple times. |
• | Taxable Consideration. The gains from the consideration to be received by the stockholders in the Offer and the Merger will generally be taxable to the stockholders for U.S. federal income tax purposes. |
• | The Impact of the Merger on the Company Litigation. The uncertainty and potential impact that may be caused by the Merger Agreement, the Offer and the Merger on the Company’s pending litigation, including the fact that the Merger, if consummated, should deprive the plaintiffs in the Derivative Litigation of standing. In addition, the corporate governance measures agreed to in principle by the parties to the Derivative Litigation would not be adopted in the event of a “Fundamental Transaction” such as the consummation of the Merger. |
• | Other Interests. The possibility that the Company’s officers and directors may have interests in the transactions contemplated by the Merger Agreement that are different from, or in addition to, those of the Company’s other stockholders. |
(i) | reviewed and analyzed the terms of a draft of the Merger Agreement, dated January 28, 2023, provided to Craig-Hallum on January 29, 2023; |
(ii) | reviewed and analyzed certain historical financial, operating, and business information related to the Company; |
(iii) | reviewed and analyzed certain internal financial projections of the Company prepared for financial planning purposes and furnished by management of the Company; |
(iv) | reviewed and analyzed certain publicly available information relative to the Company; |
(v) | reviewed and analyzed certain historical financial, operating, market and securities data of the Company publicly available or furnished by management of the Company; |
(vi) | conducted discussions with members of management of the Company with respect to the business and prospects of the Company; |
(vii) | reviewed and analyzed the reported prices and trading activity of shares of the Company’s common stock; |
(viii) | compared the financial performance of the Company with that of certain other publicly traded companies deemed by us to be comparable to the Company; |
(ix) | to the extent publicly available, reviewed and analyzed financial terms of certain acquisition transactions involving companies operating in businesses and industries deemed similar to that in which the Company operates and selected companies deemed comparable to the Company; and |
(x) | performed a discounted cash flow analysis on the Company on a stand-alone basis incorporating various assumptions provided to us by management of the Company. |
| | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum | | | Offer Price Premium | |
1-Day | | | -31% | | | 27% | | | 49% | | | 84% | | | 660% | | | 29% |
1-Month | | | -35% | | | 30% | | | 62% | | | 105% | | | 475% | | | 114% |
| | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum | | | Offer Price per share | |
1-Day | | | $0.23 | | | $0.43 | | | $0.50 | | | $0.62 | | | $2.55 | | | $0.45 |
1-Month | | | $0.13 | | | $0.26 | | | $0.33 | | | $0.41 | | | $1.16 | | | $0.45 |
| | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum | |
EV / LTM Revenue | | | 0.0x | | | 0.2x | | | 0.2x | | | 0.9x | | | 1.3x |
EV / 2023E Revenue | | | 0.0x | | | 0.4x | | | 0.8x | | | 1.2x | | | 1.2x |
EV / LTM Gross Profit | | | 0.3x | | | 0.5x | | | 1.4x | | | 2.8x | | | 4.3x |
| | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum | | | Offer Price per share | |
EV / LTM Revenue | | | $0.03 | | | $0.29 | | | $0.32 | | | $1.12 | | | $1.69 | | | $0.45 |
EV / 2023E Revenue | | | $0.01 | | | $0.30 | | | $0.69 | | | $1.00 | | | $1.02 | | | $0.45 |
EV / LTM Gross Profit | | | $0.07 | | | $0.12 | | | $0.37 | | | $0.74 | | | $1.16 | | | $0.45 |
Target | | | Acquiror | | | Date Transaction Closed |
Theradiag SA | | | Biosynex SA | | | January 31, 2023* |
Curiosity Diagnostics Sp. z o.o. | | | Bio-Rad Laboratories, Inc. | | | August 3, 2022 |
UrSure, Inc. | | | OraSure Technologies, Inc. | | | July 22, 2020 |
Exalenz Bioscience Ltd. | | | Meridian Bioscience, Inc. | | | April 30, 2020 |
Curetis AG | | | OpGen, Inc. | | | September 4, 2019 |
* | Transaction had not closed at the time Craig-Hallum delivered its opinion |
EV/Revenue | | | Minimum | | | 25th Percentile | | | Median | | | 75th Percentile | | | Maximum |
LTM | | | 2.3x | | | 2.6x | | | 3.0x | | | 3.4x | | | 3.7x |
($ in thousands except as provided below) | | | Forecast 2023 | | | Forecast 2024 | | | Forecast 2025 | | | Forecast 2026 | | | Forecast 2027 |
Total revenues | | | $31,381 | | | $37,717 | | | $54,579 | | | $59,737 | | | $72,521 |
% YoY Growth | | | (37)% | | | 20% | | | 45% | | | 9% | | | 21% |
Cost of goods sold | | | (18,618) | | | (21,127) | | | (26,136) | | | (27,943) | | | (30,840) |
| | | | | | | | | | ||||||
Gross profit | | | 12,763 | | | 16,590 | | | 28,443 | | | 31,794 | | | 41,681 |
Gross margin | | | 41% | | | 44% | | | 52% | | | 53% | | | 57% |
R&D expenses | | | (3,950) | | | (4,068) | | | (4,190) | | | (4,316) | | | (4,446) |
Clinical & regulatory expenses | | | (3,263) | | | (1,791) | | | (4,045) | | | (2,166) | | | (2,231) |
Sales & marketing expenses | | | (3,993) | | | (4,148) | | | (4,273) | | | (4,401) | | | (4,533) |
G&A expenses | | | (12,995) | | | (13,385) | | | (13,787) | | | (14,201) | | | (14,627) |
Total operating expenses | | | (24,202) | | | (23,393) | | | (26,295) | | | (25,084) | | | (25,837) |
| | | | | | | | | | ||||||
Income / (loss) from operations | | | (11,439) | | | (6,803) | | | 2,147 | | | 6,710 | | | 15,844 |
Depreciation and amortization expense | | | 1,996 | | | 1,996 | | | 1,996 | | | 2,055 | | | 2,117 |
Stock-based compensation expense | | | 1,896 | | | 1,896 | | | 1,896 | | | 1,991 | | | 2,091 |
| | | | | | | | | | ||||||
Adjusted EBITDA(1) | | | (7,547) | | | (2,911) | | | 6,039 | | | 10,756 | | | 20,052 |
Adjusted EBITDA margin | | | (24)% | | | (8)% | | | 11% | | | 18% | | | 28% |
Unlevered free cash flow ($ in millions)(2) | | | (9) | | | (5) | | | 2 | | | 6 | | | 13 |
(1) | Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization and stock-based compensation expense. |
(2) | Unlevered free cash flow was calculated by Craig-Hallum in connection with its fairness opinion delivered to the Company Board and is defined as earnings before interest and taxes, less taxes, plus depreciation and amortization, less the amount of any increase or plus the amount of any decrease in net working capital, less capital expenditures and less any acquisition costs, using an assumed tax rate of 30.0%. |
Person/Assets, Retained, Employed, Compensated or Used. |
Interest in Securities of the Subject Company. |
Purposes of the Transaction and Plans or Proposals. |
Additional Information. |
Name(1) | | | Cash ($)(2) | | | Equity ($)(3) | | | Pension/ NQDC ($) | | | Perquisites / Benefits ($)(4) | | | Tax Reimbursement ($) | | | Other ($) | | | Total ($)(5) |
Richard L. Eberly | | | 955,918 | | | 264,277 | | | — | | | 19,728 | | | — | | | — | | | 1,239,923 |
Neil A. Goldman | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Javan Esfandiari | | | 383,000 | | | 76,413 | | | — | | | — | | | — | | | — | | | 459,413 |
1. | Mr. Goldman resigned as the Company’s Executive Vice President and Chief Financial Officer effective as of November 5, 2021, and is not entitled to any compensatory payments or benefits in connection with the Offer or the Merger. |
2. | As described under “Item 3. Past Contacts, Transactions, Negotiations and Agreements—Arrangements with Current Executive Officers and Directors of the Company”, above, the cash payments for Mr. Eberly consist of: (a) payment to Mr. Eberly of a lump-sum cash payment equal to two times his base salary (paid within two weeks following the termination) and (b) payment to Mr. Eberly of a prorated a target bonus for the year of termination, prorated for the number of days of Mr. Eberly’s employment during the year of termination. The prorated target bonus is paid only if the Company determines that the applicable performance goals are satisfied, in which case it is paid within thirty days following such determination. These payments are “double-trigger”, as they will only be payable in the event of a qualifying termination of employment following the effective time of the Merger. The estimates in this disclosure assume that Mr. Eberly receives the prorated target bonus described in clause (b) of this paragraph. |
Name | | | Cash Severance--Base Salary ($) | | | Cash Severance--Prorated Target Annual Bonus ($) |
Richard L. Eberly | | | 920,000 | | | 36,863 |
Javan Esfandiari | | | 383,000 | | | — |
3. | The amounts in this column represent the aggregate amount payable pursuant to the Merger Agreement to each named executive officer in respect of unvested Company RSUs. Each named executive officer’s Company Options, if any, are “out-of-the-money” and will be canceled for no consideration at the effective time of the Merger. Payments in respect of Company RSUs are single-trigger payments because they will accelerate vesting pursuant to the terms of the named executive officer’s Employment Agreement or the Merger Agreement in connection with the transactions contemplated by the Merger Agreement, and do not require a termination of employment. The payments are estimated based on the equity award holdings immediately prior to the filing of this Schedule 14D-9; therefore, if equity awards are granted after the filing of this Schedule 14D-9, actual payments to a named executive officer may be greater than those provided for above. |
4. | The value of the cash payments for continued COBRA coverage were estimated based on the following assumptions: $822 monthly payment for 24 months. These payments are considered “double-trigger” as they will be payable in the event of a termination following a change in control. |
5. | The amounts in this column represent the aggregate total of all compensation described in columns (2) through (6). The “single-trigger” and “double-trigger” components of the aggregate total compensation amounts, respectively, for each named executive officer are as follows: (i) Mr. Eberly—$264,277 and $976,591; (ii) Mr. Goldman—$0 and $0; (iii) Mr. Esfandiari—$76,413 and $383,000. |
• | payment to Mr. Eberly of a lump-sum cash payment equal to one times his base salary (paid within two weeks following the termination); |
• | payment to Mr. Eberly of a prorated a target bonus for the year of termination, prorated for the number of days of Mr. Eberly’s employment during the year of termination. The prorated target bonus is paid only if the Company determines that the applicable performance goals are satisfied, in which case it is paid within thirty days following such determination; |
• | payment to Mr. Eberly, for the two-year period following termination (or, if earlier, until Mr. Eberly becomes eligible for coverage under health care plans of a subsequent employer), monthly cash payments equal to the COBRA premium for the highest level of coverage available under the Company’s group health plans, reduced by the monthly amount that Mr. Eberly would pay for such coverage if he was an active employee; and |
• | in the event the termination occurs within the twelve-month period following a change in control (a so-called “double-trigger termination”), Mr. Eberly would become entitled to (a) the payments and benefits described above, except that the lump-sum cash payment referenced in the first bullet would equal two times, instead of one times, Mr. Eberly’s base salary, and (b) accelerated vesting in full of all time-based equity awards. |
Exhibits. |
Exhibit No. | | | Description |
| | Offer to Purchase, dated February 14, 2023 (incorporated by reference to Exhibit (a)(1)(A) to the Schedule TO filed by Project Merci Merger Sub, Inc. with the SEC on February 14, 2023) | |
| | Letter of Transmittal (incorporated by reference to Exhibit (a)(1)(B) to the Schedule TO) | |
| | Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(C) to the Schedule TO) | |
| | Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit (a)(1)(D) to the Schedule TO) | |
| | Summary Advertisement, as published in the New York Times on February 14, 2023 (incorporated by reference to Exhibit (a)(1)(E) to the Schedule TO) | |
| | Joint Press Release issued by Chembio Diagnostics, Inc. and Biosynex SA, dated January 31, 2023 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on January 31, 2023) | |
| | Chembio Diagnostics, Inc. Commercial Procurement Talking Points, first used on January 31, 2023 (incorporated by reference to Exhibit 99.1 to Chembio Diagnostics, Inc’s Schedule 14D9C, January 31, 2023) | |
| | Chembio Diagnostics, Inc. CEO Email to All Employees, first used on January 31, 2023 (incorporated by reference to Exhibit 99.2 to Chembio Diagnostics, Inc’s Schedule 14D9C, January 31, 2023) |
Exhibit No. | | | Description |
| | Chembio Diagnostics, Inc. Employee FAQs, first used on January 31, 2023 (incorporated by reference to Exhibit 99.3 to Chembio Diagnostics, Inc’s Schedule 14D9C, January 31, 2023) | |
| | Chembio Diagnostics, Inc. Letter to Customers and Vendors, first used on January 31, 2023 (incorporated by reference to Exhibit 99.4 to Chembio Diagnostics, Inc’s Schedule 14D9C, January 31, 2023) | |
| | Opinion of Craig-Hallum Capital Group LLC, dated January 31, 2023 (included as Annex A to this Schedule 14D-9) | |
| | Agreement and Plan of Merger, dated January 31, 2023, among Chembio Diagnostics, Inc., Project Merci Merger Sub, Inc. and Biosynex SA (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on January 31, 2023) | |
| | Confidentiality Agreement, dated May 25, 2022, by and between Chembio Diagnostics, Inc. and Biosynex SA (incorporated by reference to Exhibit (d)(2) to the Schedule TO) | |
| | Chembio Diagnostics, Inc. 2014 Stock Incentive Plan (incorporated by reference to Attachment A to the Proxy Statement on Form DEF 14A filed on April 29, 2014) | |
| | Chembio Diagnostics, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Annual Report on Form 10-K filed on March 13, 2020) | |
| | Restated Annual Incentive Bonus Plan of Chembio Diagnostics, Inc., adopted as of March 15, 2019 (incorporated by reference to Exhibit 10.3 to the Annual Report on Form 10-K filed on March 18, 2019) | |
| | Outside Director Compensation Policy of Chembio Diagnostics, Inc. adopted as of December 15, 2020 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 17, 2020) | |
| | Employment Agreement, dated as of March 4, 2020 and effective as of March 16, 2020 between Chembio Diagnostics, Inc. and Richard L. Eberly (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 20, 2020) | |
| | Amendment No. 1 dated February 9, 2022 between Chembio Diagnostics, Inc. and Richard L. Eberly, amending the Employment Agreement dated March 4, 2020 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 14, 2022) | |
| | Non-Disclosure, Intellectual Property, Non-Competition and Non-Solicitation Agreement, dated as of March 16, 2020, between Chembio Diagnostics, Inc. and Richard L. Eberly | |
| | Employment Agreement dated March 5, 2016 between Chembio Diagnostics, Inc. and Javan Esfandiari (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 14, 2016) | |
| | Amendment No. 1 dated March 20, 2019 between Chembio Diagnostics, Inc. and Javan Esfandiari, amending the Employment Agreement dated March 5, 2016 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 25, 2019) | |
| | Amendment No. 2 dated November 30, 2021 between Chembio Diagnostics, Inc. and Javan Esfandiari, amending the Employment Agreement dated March 5, 2016 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 6, 2021) | |
| | Employment Agreement, dated as of December 30, 2021 and effective as of January 5, 2022, between Chembio Diagnostics, Inc. and Lawrence J. Steenvoorden (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on January 6, 2022) | |
| | Non-Disclosure, Intellectual Property, Non-Competition and Non-Solicitation Agreement, dated as of January 5, 2022, between Chembio Diagnostics, Inc. and Lawrence J. Steenvoorden | |
| | Retention Agreement with Paul Angelico, dated as of February 9, 2022 | |
| | Retention Agreement with Charles Caso, dated as of February 9, 2022 | |
| | Non-Disclosure, Intellectual Property, Non-Competition and Non-Solicitation Agreement, dated as of February 9, 2022, between Chembio Diagnostics, Inc. and Charles Caso |
* | Filed herewith. |
+ | Indicates management contract or compensatory plan |
| | CHEMBIO DIAGNOSTICS, INC. | ||||
| | | | |||
| | By: | | | /s/ Lawrence J. Steenvoorden | |
| | Name: | | | Lawrence J. Steenvoorden | |
| | Title: | | | Chief Financial Officer and Executive Vice President |
(a) | reviewed and analyzed the terms of the Agreement; |
(b) | reviewed and analyzed certain historical financial, operating and business information related to the Company; |
(c) | reviewed and analyzed certain internal financial projections of the Company prepared for financial planning purposes and furnished by management of the Company; |
(d) | reviewed and analyzed certain publicly available information relative to the Company; |
(e) | reviewed and analyzed certain historical financial, operating, market and securities data of the Company publicly available or furnished by management of the Company; |
(f) | conducted discussions with members of management of the Company with respect to the business and prospects of the Company; |
(g) | reviewed and analyzed the reported prices and trading activity of shares of Company Common Stock; |
(h) | compared the financial performance of the Company with that of certain other publicly traded companies deemed by us to be comparable to the Company; |
(i) | to the extent publicly available, reviewed and analyzed financial terms of certain acquisition transactions involving companies operating in businesses and industries deemed similar to that in which the Company operates and selected companies deemed comparable to the Company; and |
(j) | performed a discounted cash flow analysis on the Company on a stand-alone basis incorporating various assumptions provided to us by management of the Company. |
Exhibit (e)(9)
NON-DISCLOSURE, INTELLECTUAL PROPERTY,
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
This Non-Disclosure, Intellectual Property, Non-Competition And Non-Solicitation Agreement (the “Agreement”) is entered into as of March 16, 2020 between Chembio Diagnostics, Inc. (the “Company”) and Richard L. Eberly (the “Executive,” and, together with the Company, the “Parties”).
In consideration of the mutual covenants, promises and agreements herein contained, the receipt and sufficiency of which consideration are hereby acknowledged, the Company and the Executive hereby covenant, promise and agree to and with each other as follows:
1) | Confidentiality. |
a) The Executive hereby warrants, covenants and agrees that, without the prior express written consent of the Company and unless required by law, court order or similar process, the Executive shall hold in the strictest confidence, and shall not disclose to any person, firm, corporation or other entity, any and all of the Company’s information, including, for example, any data related to (i) drawings, sketches, plans or other documents concerning the Company’s strategies, business or development plans, customers or suppliers, and research and development efforts; (ii) the Company’s development, design, construction or sales and marketing methods or techniques; or (iii) the Company’s trade secrets and other “know-how” or information not of a public nature, regardless of how such information came to the custody of the Executive (collectively, subsections (i), (ii) and (iii) of this Section 1)a), “Information”). For purposes of this Agreement, such Information shall include any information regarding a formula, pattern, compilation, program, device, method, technique or process that (A) derives independent economic value, present or potential, not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use and (B) is the subject of Company efforts.
b) In the event the Executive is required by law, court order or similar process to disclose any Information, the Executive shall provide immediate notice of such obligatory disclosure prior to such disclosure, so that the Company, at its sole option, may attempt to seek a protective order or other appropriate remedy to preclude such disclosure.
c) Upon the Executive’s termination, the Executive agrees to return to the Company all Company Information, including documents (and all copies thereof), any other Company property in the Executive’s possession or control, and any materials of any kind that contain or embody any proprietary or confidential material of the Company.
d) The warranties, covenants and agreements set forth in this Section 1) shall not expire, shall survive this Agreement, and shall be binding upon the Executive without regard to the passage of time or any other event.
2) | Company’s Right To Inventions and Discoveries. |
a) “Inventions” means all improvements, discoveries, inventions, works of authorship, mask works, computer programs, source and object codes, writings, formulas, ideas, processes, techniques, know-how and data, made or conceived or reduced to practice or developed by the Executive, either alone or jointly with others as a result of employment at the Company or one of its affiliates. “Proprietary Rights” means all trade secret, patent, copyright, trademark, trade name, service mark, and other intellectual property rights throughout the world. Inventions and Proprietary Rights do not include inventions that the Executive developed entirely on the Executive’s own time without using the Company’s equipment, supplies, facilities, or Information except for those inventions that either relate to the Company’s actual or anticipated business, research or development or that result from work performed by the Executive for the Company.
b) The Executive hereby assigns and agrees to assign in the future to the Company all of the Executive’s right, title and interest in and to any and all Inventions and all Proprietary Rights, whether or not subject to protection under the patent, copyright, trademark or industrial design laws, made or conceived or reduced to practice or learned by the Executive (solely or jointly with others) during the Executive’s employment with the Company and for a one-year period after the Executive’s termination of employment with the Company (collectively “Assigned Intellectual Property”). The Executive further agrees that all Assigned Intellectual Property is the sole property of the Company.
c) The Executive agrees to promptly notify and fully disclose to the Company all Assigned Intellectual Property, and will take such steps as are deemed necessary to maintain complete and current records of same. The Executive will, at the Company’s request and expense, whether during or after employment, take such steps as are reasonably necessary to assist the Company in securing, maintaining, defending or enforcing any title and right to Assigned Intellectual Property.
3) | Non-Compete and Non-Solicit. |
a) The Executive acknowledges and recognizes the highly competitive nature of the Company’s business and that the Executive’s duties hereunder justify restricting the Executive’s further employment following any termination of employment. The Executive further acknowledges and understands that the Company recognizes the Executive’s importance and value to the Company and thus has provided the Executive with the overall compensation package described in his offer letter (or as such compensation may be amended from time to time) to induce the Executive to enter into this Agreement.
b) The Executive agrees that so long as the Executive is employed by the Company, and for a period of one year following the termination of this Agreement, the Executive shall not, directly or indirectly:
i) | induce or attempt to induce any employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any other employee; |
ii) | except when acting at the request of the Company on behalf of or for the benefit of the Company, induce suppliers, subcontractors, customers, agents, or other sources of material, services, or distribution of the Company’s business under contract or doing business with the Company to terminate, reduce, alter or divert business with or from the Company; and |
iii) | either as a principal, agent, employee, employer, consultant, partner, member or manager of a limited liability company, shareholder of a company that does not have securities registered under the Securities Exchange Act of 1934 (the “1934 Act”), or a shareholder in excess of one percent of a company that has securities registered under the 1934 Act, corporate officer or director, or in any other individual or representative capacity, engage or otherwise participate in any manner or fashion in any business that directly competes with the business activities of the Company in or about any market in which the Company is, or has publicly announced a plan for doing business. |
c) The Executive further covenants and agrees that the restrictive covenants set forth in this paragraph are reasonable as to duration, terms, and geographical area and that the same protects the legitimate interests of the Company, imposes no undue hardship on the Executive, and is not injurious to the public.
d) The covenant set forth in Section 3)b)iii) shall not apply if the Executive’s employment is terminated within twelve months of a Change in Control. Ownership by the Executive, for investment purposes only, of less than one percent of any class of securities of a corporation if said securities are listed on a national securities exchange or registered under the 1934 Act shall not constitute a breach of the covenant set forth in Section 3)b)iii).
e) The Executive acknowledges and understands that, by virtue of his position with the Company, he will have exposure to various entities with which the Company does business or is in discussions to do business. Accordingly, the Executive hereby covenants and agrees that, so long as he is employed by the Company, he will not, except with the prior written consent of the Company, solicit or enter into any discussions for a position of employment with any such entities.
f) It is the desire and intent of the Parties that the provisions of this paragraph be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this Section 3) shall be adjudicated to be invalid or enforceable, this Section 3) shall be deemed amended to apply in the broadest allowable manner and to delete therefrom the portion adjudicated to be invalid or unenforceable, such amendment and deletion to apply only with respect to the operation of this Section 3) in the particular jurisdiction in which that adjudication is made.
4) Remedies. If there is a breach or threatened breach of any provision of Section 1), 2) or 3), the Company will suffer irreparable harm and shall be entitled to an injunction restraining the Executive from such breach. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies for such breach or threatened breach.
5) Review by Executive. The Executive represents and agrees that he (a) has been advised by the Company to discuss all aspects of this Agreement with his attorney and, to the extent he desires, has done so, (b) has carefully read and fully understands all of the provisions of this Agreement, and (c) is entering into this Agreement voluntarily.
6) | Miscellaneous. |
a) It is the clear intention of the Parties that no term, provision or clause of this Agreement shall be deemed to be invalid, illegal or unenforceable in any respect, unless such term, provision or clause cannot be otherwise construed, interpreted, or modified to give effect to the intent of the Parties and to be valid, legal or enforceable. The Parties specifically charge the trier of fact to give effect to the intent of the Parties, even if in doing so, invalidation of a specific provision of this Agreement is required to make the Agreement consistent with the foregoing stated intent. In the event that a term, provision, or clause cannot be so construed, interpreted or modified, the validity, legality and enforceability of the remaining provisions contained herein and other application(s) thereof shall not in any way be affected or impaired thereby and shall remain in full force and effect.
b) The waiver by the Company or the Executive of the breach of any provision of this Agreement by the other Party shall not operate or be construed as a waiver of any subsequent breach by that Party.
c) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of laws principles thereof or to those of any other jurisdiction that, in either case, could cause the application of the laws of any jurisdiction other than the State of New York. The Executive hereby expressly consents to personal jurisdiction in the state and federal courts located in Suffolk County, New York for any lawsuit filed there against him by the Company arising from or relating to this Agreement.
d) All notices, requests, consents, claims, demands, waivers and other communications under this Agreement shall be in writing and shall be deemed to have been given: (i) when delivered by hand (with written confirmation of receipt); (ii) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (iii) on the date sent by electronic mail (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next day (other than a Saturday, Sunday or other day on which commercial banks in the New York, New York, are authorized or required to close) if sent after normal business hours of the recipient; or (iv) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 5)d):
If to the Company: | Chembio Diagnostics, Inc. 555 Wireless Boulevard Hauppauge, New York 11788 Attention: Chief Financial Officer Email: [**] |
If to the Executive: | Richard L. Eberly [**] [**] Email: [**] |
e) This Agreement shall be binding upon the Executive and the Company and shall benefit the Company and its successors and assigns. This Agreement shall not be assignable by the Executive.
f) | For purposes of this Agreement: |
i) | headings used in this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement; |
ii) | any references in this Agreement to a Section refer to a Section of this Agreement, unless specified otherwise; |
iii) | the words “include” and “including” shall not be construed so as to exclude any other thing not referred to or described; |
iv) | the word “or” is not exclusive; |
v) | unless the context otherwise requires, (A) references in this Agreement to an agreement, instrument or other document mean such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (B) references in this Agreement to a statute mean such statute as amended from time to time and include any successor legislation thereto and any rules and regulations promulgated thereunder; and |
vi) | this Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. |
* * *
In Witness Whereof, the Parties executed, or caused to be executed, this Agreement as of the date first set forth above.
RICHARD L. EBERLY | CHEMBIO DIAGNOSTICS, INCS. | ||
/s/ Richard L. Eberly | By: | /s/ Gail S. Page | |
Gail S. Page Interim Chief Executive Officer |
Exhibit (e)(14)
NON-DISCLOSURE, INTELLECTUAL PROPERTY,
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
This Non-Disclosure, Intellectual Property, Non-Competition and Non-Solicitation Agreement (the “Agreement”) is entered into on January 5, 2022 between Chembio Diagnostics, Inc., a Nevada corporation (the “Company”), and Lawrence J. Steenvoorden (the “Executive” and, together with the Company, the “Parties”). This Agreement is entered into in accordance with the Employment Agreement entered into by the Parties on December 30, 2021 and effective as of the date hereof (the “Employment Agreement”).
In consideration of the mutual covenants, promises and agreements contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. | Confidentiality. |
(a) | The Executive hereby warrants, covenants and agrees that, without the prior express written consent of the Company and unless required by law, court order or similar process, the Executive shall hold in the strictest confidence, and shall not disclose to any person, firm, corporation or other entity, any and all of the Company’s information, including, for example, any data related to (i) drawings, sketches, plans or other documents concerning the Company’s strategies, business or development plans, customers or suppliers, and research and development efforts, (ii) the Company’s development, design, construction or sales and marketing methods or techniques, or (iii) the Company’s trade secrets and other “know-how” or information not of a public nature, regardless of how such information came to the custody of the Executive (collectively, clauses (i), (ii) and (iii) of this Section (a), “Information”). For purposes of this Agreement, Information shall include any information regarding a formula, pattern, compilation, program, device, method, technique or process that (A) derives independent economic value, present or potential, not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use and (B) is the subject of Company efforts. |
(b) | In the event the Executive is required by law, court order or similar process to disclose any Information, the Executive shall provide immediate notice of such obligatory disclosure prior to such disclosure, so that the Company, at its sole option, may attempt to seek a protective order or other appropriate remedy to preclude such disclosure. |
(c) | Upon the Executive’s termination, the Executive agrees to return to the Company all Company Information, including documents (and all copies thereof), any other Company property in the Executive’s possession or control, and any materials of any kind that contain or embody any proprietary or confidential material of the Company. |
(d) | The warranties, covenants and agreements set forth in this Section 1 shall not expire, shall survive this Agreement, and shall be binding upon the Executive without regard to the passage of time or any other event. |
2. | Company’s Right To Inventions and Discoveries. |
(a) | “Inventions” means all improvements, discoveries, inventions, works of authorship, mask works, computer programs, source and object codes, writings, formulas, ideas, processes, techniques, know-how and data, made or conceived or reduced to practice or developed by the Executive, either alone or jointly with others as a result of employment at the Company or one of its affiliates. “Proprietary Rights” means all trade secret, patent, copyright, trademark, trade name, service mark, and other intellectual property rights throughout the world. Inventions and Proprietary Rights do not include inventions that the Executive developed entirely on the Executive’s own time without using the Company’s equipment, supplies, facilities, or Information except for those inventions that either relate to the Company’s actual or anticipated business, research or development or that result from work performed by the Executive for the Company. |
(b) | The Executive hereby assigns and agrees to assign in the future to the Company all of the Executive’s right, title and interest in and to any and all Inventions and all Proprietary Rights, whether or not subject to protection under the patent, copyright, trademark or industrial design laws, made or conceived or reduced to practice or learned by the Executive (solely or jointly with others) during the Executive’s employment with the Company and for a one-year period after the Executive’s termination of employment with the Company (collectively “Assigned Intellectual Property”). The Executive further agrees that all Assigned Intellectual Property is the sole property of the Company. |
(c) | The Executive agrees to promptly notify and fully disclose to the Company all Assigned Intellectual Property, and will take such steps as are deemed necessary to maintain complete and current records of same. The Executive will, at the Company’s request and expense, whether during or after employment, take such steps as are reasonably necessary to assist the Company in securing, maintaining, defending or enforcing any title and right to Assigned Intellectual Property. |
3. | Non-Compete and Non-Solicit. |
(a) | The Executive acknowledges and recognizes the highly competitive nature of the Company’s business and that the Executive’s duties hereunder justify restricting the Executive’s further employment following any termination of employment. The Executive further acknowledges and understands that the Company recognizes the Executive’s importance and value to the Company and thus has provided the Executive with the overall compensation package described in the Employment Agreement (or as such compensation may be amended from time to time) to induce the Executive to enter into this Agreement. |
(b) | The Executive agrees that so long as the Executive is employed by the Company, and for a period of one year following the termination of this Agreement, the Executive shall not, directly or indirectly: |
(i) | induce or attempt to induce any employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any other employee; |
(ii) | except when acting at the request of the Company on behalf of or for the benefit of the Company, induce suppliers, subcontractors, customers, agents, or other sources of material, services, or distribution of the Company’s business under contract or doing business with the Company to terminate, reduce, alter or divert business with or from the Company; and |
(iii) | either as a principal, agent, employee, employer, consultant, partner, member or manager of a limited liability company, shareholder of a company that does not have securities registered under the Securities Exchange Act of 1934 (the “1934 Act”), or a shareholder in excess of one percent of a company that has securities registered under the 1934 Act, corporate officer or director, or in any other individual or representative capacity, engage or otherwise participate in any manner or fashion in any business that directly competes with the business activities of the Company in or about any market in which the Company is, or has publicly announced a plan for doing business. |
The Executive further covenants and agrees that the restrictive covenants set forth in this Section 3(b) are reasonable as to duration, terms, and geographical area and that the same protects the legitimate interests of the Company, imposes no undue hardship on the Executive, and is not injurious to the public.
(c) | The covenant set forth in Section 3(iii) shall not apply if the Executive’s employment is terminated within twelve months of a Change in Control (as defined in the Employment Agreement, as it may be amended from time to time). Ownership by the Executive, for investment purposes only, of less than one percent of any class of securities of a corporation if said securities are listed on a national securities exchange or registered under the 1934 Act shall not constitute a breach of the covenant set forth in Section 3(iii). |
(d) | The Executive acknowledges and understands that, by virtue of his position with the Company, he will have exposure to various entities with which the Company does business or is in discussions to do business. Accordingly, the Executive hereby covenants and agrees that, so long as he is employed by the Company, he will not, except with the prior written consent of the Company, solicit or enter into any discussions for a position of employment with any such entities. |
(e) | It is the desire and intent of the Parties that the provisions of this paragraph be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this Section 3 shall be adjudicated to be invalid or enforceable, this Section 3 shall be deemed amended to apply in the broadest allowable manner and to delete therefrom the portion adjudicated to be invalid or unenforceable, such amendment and deletion to apply only with respect to the operation of this Section 3 in the particular jurisdiction in which that adjudication is made. |
4. | Remedies. If there is a breach or threatened breach of any provision of Section 1, 2 or 3, the Company will suffer irreparable harm and shall be entitled to an injunction restraining the Executive from such breach. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies for such breach or threatened breach. |
5. | Review by Executive. The Executive represents and agrees that he (a) has been advised by the Company to discuss all aspects of this Agreement with his attorney and, to the extent he desires, has done so, (b) has carefully read and fully understands all of the provisions of this Agreement, and (c) is entering into this Agreement voluntarily. |
6. | Miscellaneous. |
(a) | It is the clear intention of the Parties that no term, provision or clause of this Agreement shall be deemed to be invalid, illegal or unenforceable in any respect, unless such term, provision or clause cannot be otherwise construed, interpreted, or modified to give effect to the intent of the Parties and to be valid, legal or enforceable. The Parties specifically charge the trier of fact to give effect to the intent of the Parties, even if in doing so, invalidation of a specific provision of this Agreement is required to make the Agreement consistent with the foregoing stated intent. In the event that a term, provision, or clause cannot be so construed, interpreted or modified, the validity, legality and enforceability of the remaining provisions contained herein and other application(s) thereof shall not in any way be affected or impaired thereby and shall remain in full force and effect. |
(b) | The waiver by the Company or the Executive of the breach of any provision of this Agreement by the other Party shall not operate or be construed as a waiver of any subsequent breach by that Party. |
(c) | This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of laws principles thereof or to those of any other jurisdiction that, in either case, could cause the application of the laws of any jurisdiction other than the State of New York. The Executive hereby expressly consents to personal jurisdiction in the state and federal courts located in Suffolk County, New York for any lawsuit filed there against him by the Company arising from or relating to this Agreement. |
(d) | All notices, requests, consents, claims, demands, waivers and other communications under this Agreement shall be in writing and shall be deemed to have been given: (i) when delivered by hand (with written confirmation of receipt); (ii) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (iii) on the date sent by electronic mail (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next day (other than a Saturday, Sunday or other day on which commercial banks in the New York, New York, are authorized or required to close) if sent after normal business hours of the recipient; or (iv) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section (d): |
If to the Company: | Chembio Diagnostics, Inc. | |
555 Wireless Boulevard | ||
Hauppauge, New York 11788 | ||
Attention: Chief Executive Officer | ||
Email: [**] | ||
If to the Executive: | Lawrence J. Steenvoorden | |
[**] | ||
[**] | ||
Email: [**] |
(e) | This Agreement shall be binding upon the Executive and the Company and shall benefit the Company and its successors and assigns. This Agreement shall not be assignable by the Executive. |
(f) | For purposes of this Agreement: |
(i) | headings used in this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement; |
(ii) | any references in this Agreement to a Section refer to a Section of this Agreement, unless specified otherwise; |
(iii) | the words “include” and “including” shall not be construed so as to exclude any other thing not referred to or described; |
(iv) | the word “or” is not exclusive; |
(v) | unless the context otherwise requires, (A) references in this Agreement to an agreement, instrument or other document mean such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (B) references in this Agreement to a statute mean such statute as amended from time to time and include any successor legislation thereto and any rules and regulations promulgated thereunder; and |
(vi) | this Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. |
* * *
In Witness Whereof, the Parties have executed, or caused to be executed, this Agreement as of the date first set forth above.
Lawrence J. Steenvoorden | Chembio Diagnostics, Inc. | ||
/s/ Lawrence J. Steenvoorden | By: | /s/ Richard L. Eberly | |
Chief Executive Officer and President |
Exhibit (e)(15)
CHEMBIO DIAGNOSTICS, INC.
Executive Retention Agreement
This Executive Retention Agreement (this “Agreement”) is entered into between Chembio Diagnostics, Inc., a Nevada corporation (the “Company”), and Paul J. Angelico (the “Executive” and, together with the Company, the “Parties”) as of the date set forth on the signature page hereof (the “Effective Date”).
Whereas, the Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its stockholders;
Whereas, the Company recognizes that, as is the case with many publicly-held corporations, the possibility of a change in control of the Company exists and that such possibility, and the uncertainty and questions that it may raise among key personnel, may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders, and
Whereas, the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company that appropriate steps should be taken to reinforce and encourage the continued employment and dedication of the Company’s key personnel without distraction, including distraction from the possibility of a change in control of the Company and related events and circumstances.
Now, Therefore, as an inducement for and in consideration of the Executive remaining in its employ and for other good and valuable consideration, the Parties agree that the Executive shall receive the severance benefits set forth below in the event the Executive’s employment with the Company is terminated.
1. | Key Definitions. As used herein, the following terms shall have the following respective meanings: |
1.1 | “Annual Bonus” shall mean an annual cash bonus for which the Executive may be eligible, in the discretion of the Compensation Committee, with respect to a calendar year in accordance with terms and provisions of the Executive Incentive Plan of the Company or any successor plan thereto, together with any supplemental incentive plan or plans thereunder, as may be established by the Compensation Committee, in its discretion, from time to time. |
1.2 | “Cause” shall mean: |
(a) | the Executive’s willful and continued failure to substantially perform the Executive’s reasonable assigned duties (other than any such failure resulting from incapacity due to physical or mental illness, approved leave of absence or any failure after the Executive gives notice of resignation for Good Reason), where such failure is not cured within thirty days after a written notice and demand for substantial performance is received by the Executive from the Board that specifically identifies the manner in which the Board believes the Executive has not substantially performed the Executive’s duties; |
(b) | the Executive’s willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company’s business or reputation; |
(c) | the Executive material breach of any written policy applicable to the Executive, including the Company’s code of business ethics and conduct or insider trading policy; or |
(d) | the Executive’s conviction of, or plea of guilty or no contest to, a felony under the laws of the United States or any State of the United States. |
For purposes of this Section 1.2, no act or failure to act by the Executive shall be considered “willful” unless it is done, or omitted to be done, in bad faith and without reasonable belief that the Executive’s action or omission was in the best interests of the Company.
1.3 | “Change in Control” shall mean the occurrence of any of the following events: |
(a) | the acquisition, directly or indirectly, by any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (a “Person” for purposes of this Section 1.3) of the beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that, in calculating the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time) of more than fifty percent of the outstanding securities of the Company; |
(b) | a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated; |
(c) | the sale, transfer or other disposition of all or substantially all of the assets of the Company; |
(d) | a complete liquidation or dissolution of the Company; or |
(e) | a reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent of the total combined voting power of the Company’s outstanding securities are transferred to a Person or Persons different from the Persons holding those securities immediately prior to such merger. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur unless one of the foregoing events constitutes a “change in control event” within the meaning of Section 409A.
1.4 | “Change in Control Date” shall mean the first date during the Term (as defined in Section 2) on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if (a) a Change in Control occurs, or shall have been announced or agreed to, (b) the Executive’s employment with the Company is subsequently terminated, and (c) if the date of termination is prior to the date of the actual or scheduled Change of Control and it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably designed to effect a Change in Control or (ii) otherwise arose in connection with or in anticipation of a Change in Control, such as, for example, as a condition thereto or in connection with cost reduction or elimination of duplicate positions, then for all purposes of this Agreement the “Change in Control Date” shall mean the date immediately prior to the date of such termination of employment. |
1.5 | “Good Reason” shall mean: |
(a) | a material diminution in the Executive’s authority, duties, responsibilities or reporting relationship in effect immediately prior to the Effective Date reducing the Executive’s position, duties or authority; |
(b) | a decrease in the annual rate of the Executive’s base salary (“Base Salary”); |
(c) | the Company’s failure to secure the agreement of any successor entity to the Company that the Executive shall continue in the Executive’s position without reduction in position, duties or authority; or |
(d) | the Company’s relocating the Executive’s principal work location beyond a fifty-mile radius of the Executive’s work location as of the Effective Date; |
provided that (i) the occurrence of a Change in Control, following which the Company continues to have its common stock publicly traded and the Executive is offered continued employment with such publicly traded entity as an officer with substantially the same, or greater, duties and authority as the Executive has with the Company immediately prior to the Effective Date, shall not be deemed to give rise to an event or condition constituting Good Reason and (ii) no event or condition shall constitute Good Reason unless (A) the Executive gives the Company a notice of termination specifying the Executive’s objection to such event or condition within ninety days following the occurrence of such event or condition, (B) such event or condition is not corrected, in all material respects, by the Company in a manner that is reasonably satisfactory to the Executive within thirty days following the Company’s receipt of such notice, and (C) the Executive resigns from the Executive’s employment with the Company not more than thirty days following the expiration of the thirty-day period described in the foregoing clause (B).
1.6 | “Permanent Disability” shall mean: |
(a) | the inability of the Executive to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months; or |
(b) | the Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. |
The Executive shall be deemed to have a Permanent Disability if the Executive is determined (i) by the Social Security Administration to have a “total disability” or (ii) in accordance with a disability insurance program to be “disabled,” provided the definition of “disabled” under the program complies with the definition of Permanent Disability hereunder. Otherwise, such Permanent Disability shall be certified by a physician chosen by the Company and reasonably acceptable to the Executive, unless the Executive is then legally incapacitated, in which case such physician shall be reasonably acceptable to the Executive’s authorized legal representative.
1.7 | “Section 409A” shall mean Section 409A of the Internal Revenue Code of 1986. |
1.8 | “Termination Date” shall mean: |
(a) | in the event of a termination of the Executive’s employment by the Company for Cause or by the Executive for Good Reason, the date specified in a notice of termination (or, if not specified therein, the date of delivery of such notice), but in no event earlier than the expiration of the cure period set forth in Section 1.2 or 1.5, respectively; |
(b) | in the event of a termination of the Executive’s employment by the Company without Cause, the date specified in a notice of termination (or if not specified therein, the date of delivery of such notice); |
(c) | in the event of a termination of the Executive’s employment by the Executive without Good Reason, the date specified in a notice of termination, but in no event less than sixty days following the date of delivery of such notice; |
(d) | in the event either Party shall have given to the other Party notice pursuant to Section 2 that the Term shall not be extended, the December 31 that is the final day of the Term; |
(e) | in the event of a termination of the Executive’s employment due to Permanent Disability, the date the Company terminates the Executive’s employment following the certification of the Executive’s Permanent Disability; and |
(f) | in the event of a termination of employment due to the Executive’s death, the date of the Executive’s death. |
2. | Term of Agreement. This Agreement shall take effect upon the Effective Date and shall expire upon the first to occur of (a) the expiration of the Term (as defined below) if a Change in Control Date has not occurred during the Term, (b) the date twelve months after the Change in Control Date, if the Executive is still employed by the Company as of such later date, and (c) the fulfillment by the Company of all of its obligations under Section 3 if the Executive’s employment with the Company terminates during the Term or within twelve months following the Change in Control Date. “Term” shall mean the period commencing as of the Effective Date and continuing in effect through December 31, 2022, provided that, commencing on January 1, 2023 and each January 1 thereafter, the Term shall be automatically extended for one additional calendar year unless, not later than the October 1 immediately preceding the scheduled expiration of the Term (or any extension thereof), either Party shall have given notice to the other Party that the Term shall not be extended. |
3. | Termination; Benefits to Executive. |
3.1 | Generally. In the event of the termination of the Executive’s employment for any reason, the Executive shall receive payment of the following (the “Base Obligations”): |
(a) | any unpaid Base Salary through the Termination Date, in regular payroll installments in accordance with the Company’s payroll practices as then in effect (but no less frequently than monthly); |
(b) | any unpaid vacation through the Termination Date as accrued in accordance with the Company’s then-current vacation policy, to be paid within fourteen days of the Termination Date; and |
(c) | any earned but unpaid Annual Bonus with respect to the calendar year ended prior to the Termination Date, to be paid in accordance with the payment timing and other terms of the Annual Bonus. |
In addition, in the event of the Executive’s termination of employment, the applicable provisions of each outstanding equity award agreement executed by the Parties shall govern the treatment of such equity award.
3.2 | Termination Related to Change in Control. In the event of the termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason or the expiration of the Term upon notice of nonrenewal delivered by the Company in accordance with Section 2, then, in each of the foregoing cases within twelve months following a Change in Control Date, the Executive shall, subject to Section 3.6, be entitled to receive, in addition to the Base Obligations, the following payments and benefits (the “Severance Benefits”): |
(a) | Severance Payment. |
(i) | Amount. The Company shall pay the Executive an amount (the “Severance Payment”) equal to (i) 1.0 multiplied by the Base Salary with respect to the calendar year in which the Termination Date occurs and (ii) if the Compensation Committee has previously established a target Annual Bonus for the Executive with respect to the calendar year in which the Termination Date occurs, a pro rata target bonus (the “Pro-Rata Target Bonus”) determined by multiplying such target Annual Bonus of the Executive for such calendar year by a fraction, the numerator of which is the number of days in the calendar year in which the Termination Date occurs through the Termination Date and the denominator of which is three hundred sixty-five. The Pro-Rata Target Bonus shall be paid only in the event any performance goals established with respect to such target Annual Bonus have been satisfied. Payment of the Pro-Rata Target Bonus shall be delayed until following the date the Compensation Committee determines that such performance goals have been satisfied, in accordance with the rules applicable to the target Annual Bonus under the applicable bonus program established by the Compensation Committee (the “Determination Date”). |
(ii) | Payment. The Severance Payment is payable in a lump sum within two weeks following the Termination Date. Notwithstanding the foregoing, payments of the Pro-Rata Target Bonus portion of the Severance Payment shall be paid within thirty days following the Determination Date, except that if payment of one or more installments of the Pro-Rata Target Bonus portion of the Severance Payment must be delayed until following the Determination Date, the initial installment shall consist of a lump sum equal to the total of all such installments delayed or due as of such payment date, without adjustment for interest. |
(b) | Health Care Coverage Payments. Provided the Executive is covered by the Company’s health care plans immediately prior to the Termination Date, the Company shall pay to the Executive on a monthly basis, during the twelve-month period commencing on the Termination Date (or such shorter period ending as of the initial date the Executive is eligible for coverage under the health care plans of a subsequent employer), a taxable cash payment equal to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) premium for the highest level of coverage available under the Company’s group health plans, but reduced by the monthly amount that the Executive would pay for such coverage if the Executive was an active employee. |
(c) | Outstanding Equity Awards. The vesting of each and every outstanding equity award agreement executed by the Parties shall, to the extent such vesting is based upon the passage of time (rather than any performance metric) shall accelerate in full. |
All other benefits, if any, due the Executive following termination pursuant to this Section 3.2 shall be determined in accordance with the plans, policies and practices of the Company, provided the Executive shall not be entitled to participate in any other severance plan, policy or program of the Company. The Severance Benefits are payments and benefits to which the Executive is not otherwise entitled, are given in consideration for the Release (as described in Section 3.6), and are in lieu of any severance plan, policy or program of the Company or any of its subsidiaries that may now or hereafter exist. The payments and benefits to be provided pursuant to this Section 3.2 shall constitute liquidated damages and shall be deemed to satisfy and be in full and final settlement of all obligations of the Company to the Executive under this Agreement. The Executive acknowledges and agrees that such amounts are fair and reasonable, and are the Executive’s sole and exclusive remedy, in lieu of all other remedies at law or in equity, with respect to the termination of the Executive’s employment.
3.3 | Permanent Disability or Death. Upon termination of the Executive’s employment due to Permanent Disability or death, in each case within twelve months following a Change in Control Date, the Executive or the Executive’s estate (respectively) shall, subject to Section 3.6, be entitled to receive, in addition to the Base Obligations, a Pro Rata Target Bonus with respect to the calendar year in which the Termination Date occurs, determined and payable in the manner contemplated by Section 3.2(a). All other benefits, if any, due the Executive or the Executive’s estate (as applicable) following termination pursuant to this Section 3.3 shall be determined in accordance with the plans, policies and practices of the Company, provided the Executive and the Executive’s estate shall not be entitled to participate in any other severance plan, policy or program of the Company. |
3.4 | Termination for Cause by the Company or Termination Without Good Reason or Nonrenewal by the Executive. In the event of the termination of the Executive’s employment by the Company for Cause or by the Executive without Good Reason or the expiration of the Term upon notice of nonrenewal delivered by the Executive in accordance with Section 2, the Executive shall have no further rights to any compensation (including any Annual Bonus) or any other benefits under this Agreement other than the Base Obligations. All other benefits, if any, due the Executive following the Executive’s termination of employment pursuant to this Section 3.4 shall be determined in accordance with the plans, policies and practices of the Company, provided that the Executive shall not be entitled to participate in any severance plan, policy, or program of the Company. |
3.5 | Mitigation; Offset. Following the termination of the Executive’s employment for any reason, the Executive shall have no obligation or duty to seek subsequent employment or engagement as an employee (including self-employment) or as a consultant or otherwise mitigate the Company’s obligations hereunder nor shall the payments provided by this Section 3 be reduced by the compensation earned by the Executive as an employee or consultant from any such subsequent employment or consultancy. |
3.6 | Release. Notwithstanding anything to the contrary in this Agreement, receipt by the Executive of any Severance Benefits or other compensation or benefits under this Section 3 (other than the Base Obligations) is subject to the Executive executing and delivering to the Company a general release of claims following the Termination Date, in substantially the form attached as Exhibit A (the “Release”), that, within sixty days following the Termination Date, has become irrevocable by the Executive (such date the Release becomes irrevocable being the “Release Effective Date”). If the Executive dies or becomes legally incapacitated prior to the Release Effective Date, then the Release requirements described in the preceding sentence shall apply with respect to the Executive’s estate and the Release shall be modified as reasonably necessary to allow for execution and delivery by a personal representative of the Executive’s estate or the Executive’s authorized legal representative, as applicable. |
4. | Claims; Disputes. |
4.1 | Claims to Board. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any rejection by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the rejection and the specific provisions of this Agreement relied upon. |
4.2 | Disputes. Any dispute arising between the Parties under this Agreement, under any statute, regulation, or ordinance, under any other agreement between the Parties, or in way relating to the Executive’s employment shall be submitted to binding arbitration before the American Arbitration Association (the “AAA”) for resolution. Such arbitration shall be conducted in New York, New York, and the arbitrator shall apply New York law, including federal law as applied in New York courts. The arbitration shall be conducted in accordance with the AAA’s Employment Arbitration Rules as modified in this Section 4.2. The arbitration shall be conducted by a panel of three arbitrators that is mutually agreeable to both of the Parties, all in accordance with the AAA’s Employment Arbitration Rules then in effect. If the Parties cannot agree upon the panel of arbitrators, the arbitration shall be settled before a panel of three arbitrators, one to be selected by the Company, one by the Executive, and the third to be selected by the two persons so selected, all in accordance with the AAA’s Employment Arbitration Rules. With respect to any and all costs and expenses associated with any such arbitration that are not assignable to one of the Parties by the arbitrator, each Party shall pay their own costs and expenses, including attorneys’ fees and costs, except that the Company shall pay the cost of the arbitrators and the filing fees charged to the Executive by the AAA, provided the Executive is the claimant or counter claimant in such arbitration and is the prevailing Party. The award of the arbitrators shall be final and binding on the Parties, and judgment on the award may be confirmed and entered in any state or federal court in the City of New York, New York. The arbitration shall be conducted on a strictly confidential basis, and Executive shall not disclose the existence of a claim, the nature of a claim, any documents, exhibits, or information exchanged or presented in connection with such a claim, or the result of any action (collectively, “Arbitration Materials”), to any third party, with the sole exception of the Executive’s legal counsel. In the event of any court proceeding to challenge or enforce an arbitrators’ award, the Parties consent to the exclusive jurisdiction of the state and federal courts in New York, New York and agree to venue in that jurisdiction. The Parties agree to take all steps necessary to protect the confidentiality of the Arbitration Materials in connection with any such proceeding. |
5. | Miscellaneous. |
5.1 | Section 409A. This Agreement is intended to comply with the provisions of Section 409A and this Agreement shall, to the extent practicable, be construed in accordance therewith. Terms defined in this Agreement shall have the meanings given such terms under Section 409A if and to the extent required in order to comply with Section 409A. |
5.2 | Not an Employment Contract. The Executive acknowledges that this Agreement does not constitute a contract of employment or impose on the Company any obligation to retain the Executive as an employee and that this Agreement does not prevent the Executive from terminating employment at any time. |
5.3 | Entire Agreement; Amendments. This Agreement contains the entire understanding of the Parties with respect to the subject matter set forth in this Agreement, and shall supersede any and all previous contracts, arrangements or understandings between the Company and the Executive with respect to the subject matter set forth in this Agreement. This Agreement may not be altered, modified or amended except by written instrument signed by the Company and the Executive. |
5.4 | No Waiver. The failure of a Party to insist upon strict adherence to a term of this Agreement on any occasion shall not be considered a waiver of such Party’s rights or deprive such Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. |
5.5 | Successor; Assignment. Neither of the Parties shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder. Without limiting the foregoing, the Executive’s right to receive payments hereunder shall not be assignable or transferable whether by pledge, creation of a security interest or otherwise, other than a transfer by the Executive’s will or by the laws of descent and distribution. In the event of any attempted assignment or transfer contrary to this Section 5.5, the Company shall have no liability to pay the assignee or transferee any amount so attempted to be assigned or transferred. The Company shall cause this Agreement to be assumed by any entity that succeeds to all or substantially all of the Company’s business or assets and this Agreement shall be binding upon any successor to all or substantially all of the Company’s business or assets, provided that no such assumption shall release the Company of its obligations hereunder, to the extent not satisfied by such successor, without the Executive’s prior consent. |
5.6 | Notice. All notices, requests, consents, claims, demands, waivers and other communications under this Agreement shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by electronic mail (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next day (other than a Saturday, Sunday or other day on which commercial banks in the New York, New York, are authorized or required to close) if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 5.6): |
If to the Company: |
Chembio Diagnostics, Inc.
|
555 Wireless Boulevard
Hauppauge, New York 11788
Attention: Chief Executive Officer
Email: [**]
If to the Executive: | As set forth on the signature page hereof |
5.7 | Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. |
5.8 | Section 409A. Notwithstanding any other provision of this Agreement, any payment, settlement or benefit triggered by termination of the Executive’s employment with the Company shall not be made until six months and one day following Termination Date if such delay is necessary to avoid the imposition of any tax, penalty or interest under Section 409A. Any installment payments that are delayed pursuant to this Section 5.8 shall be accumulated and paid in a lump sum on the day that is six months and one day following the Termination Date (or, if earlier, upon the Executive’s death) and the remaining installment payments shall begin on such date in accordance with the other provisions of this Agreement. For purposes of this Agreement, termination or severance of employment shall be read to mean a “separation from service” within the meaning of Section 409A where it is reasonably anticipated that no further services would be performed after that date or that the level of services the Executive would perform after that date (whether as an employee or independent contractor) would permanently decrease to no more than twenty percent of the average level of bona fide services performed over the immediately preceding thirty-six month period. Additionally, the amount of expenses eligible for reimbursement or in-kind benefits to be provided during one calendar year may not affect the expenses eligible for reimbursement or any in-kind benefits to be provided in any other calendar year and the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. All reimbursements shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the reimbursable expense. This Agreement is intended to comply with the requirements of Section 409A (including the exceptions thereto), to the extent applicable, and the Agreement shall be administered and interpreted in accordance with such intent. If any provision contained in the Agreement conflicts with the requirements of Section 409A (or the exemptions intended to apply under the Agreement), the Agreement shall be deemed to be reformed to comply with the requirements of Section 409A (or the applicable exemptions thereto). The Company, after consulting with the Executive, may amend this Agreement or the terms of any award provided for in this Agreement in any manner that the Company considers necessary or advisable to ensure that cash compensation, equity awards or other benefits provided for in this Agreement are not subject to U.S. federal income tax, state or local income tax or any equivalent taxes in territories outside the United States prior to payment, exercise, vesting or settlement, as applicable, or any tax, interest or penalties pursuant to Section 409A. Any such amendments shall be made in a manner that preserves to the maximum extent possible the intended benefits to the Executive. This Section 5.8 does not create an obligation on the part of the Company to modify this Agreement and does not guarantee that the amounts or benefits owed under the Agreement shall not be subject to interest and penalties under Section 409A. For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A. |
5.9 | Clawback. The Executive agrees that compensation and benefits provided by the Company under this Agreement or otherwise shall be subject to recoupment or clawback by the Company under any applicable clawback or recoupment policy of the Company that is generally applicable to the Company’s executives, as may be adopted by the Board and in effect from time-to-time or as required by applicable law. |
5.10 | Interpretation. For purposes of this Agreement: |
(a) | headings used in this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement; |
(b) | any references in this Agreement to a Section refer to a Section of this Agreement, unless specified otherwise; |
(c) | the word “day” refers to a calendar day; |
(d) | the word “include” and “including” as used in this Agreement shall not be construed so as to exclude any other thing not referred to or described; |
(e) | the word “or” is not exclusive; |
(f) | the definition given for any term in this Agreement shall apply equally to both the singular and plural forms of the term defined; |
(g) | unless the context otherwise requires, (i) references in this Agreement to an agreement, instrument or other document mean such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (ii) references in this Agreement to a statute mean such statute as amended from time to time and include any successor legislation thereto and any rules and regulations promulgated thereunder; and |
(h) | this Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. |
5.11 | Counterparts. This Agreement may be executed in counterparts |
5.12 | , each of which shall be deemed an original but both of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. |
5.13 | Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
5.14 | Executive’s Acknowledgements. The Executive acknowledges that the Executive: (a) has read this Agreement; (b) has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of the Executive’s own choice or has voluntarily declined to seek such counsel; (c) understands the terms and consequences of this Agreement; and (d) understands that the law firm of K&L Gates LLP has acted and is acting as counsel to the Company in connection with the transactions contemplated by this Agreement, and is not acting as counsel for the Executive. |
* * *
In Witness Whereof, the Parties have executed, or caused to be executed, this Agreement as of February 9, 2022.
Chembio Diagnostics, Inc. |
By: | /s/ Richard L. Eberly | |
Richard L. Eberly | ||
Chief Executive Officer and President |
Paul J. Angelico |
/s/ Paul J. Angelico | ||
Address: | [**] | |
[**] | ||
Email: |
[**] |
Exhibit A
GENERAL RELEASE
This General Release (this “Release”) is entered into between Paul J. Angelico (the “Executive”) and Chembio Diagnostics, Inc., a Nevada corporation (the ‘‘Company’’), as of the date set forth on the signature page hereof.
A. | The Executive and the Company are parties to an Executive Retention Agreement entered into as of February 9, 2022 (the “Retention Agreement”). |
B. | The Executive has agreed to execute this Release as a condition to the Executive’s entitlement to certain payments and benefits upon termination of the Executive’s employment with the Company; |
In consideration of the premises and mutual promises herein contained and for other good and valuable consideration received or to be received by the Executive in accordance with the terms of the Retention Agreement, it is agreed as follows:
1. | Discharge of Claims. Excluding enforcement of covenants, promises and rights reserved herein, the Executive irrevocably and unconditionally releases, acquits and forever discharges the Company and each of the Company’s stockholders, predecessors, successors, assigns, directors, officers, employees, divisions, subsidiaries, affiliates (and directors, officers and employees of such companies, divisions, subsidiaries and affiliates) and all persons acting by, through, under or in concert with any of them (collectively, “Releasees”), or any of them, from any and all Claims (as defined below) through the date of this Release. The Executive agrees not to file a lawsuit or arbitration to assert any such Claim and further agrees that should any other person or entity file a lawsuit or arbitration to assert any such Claim, the Executive shall not seek or accept any personal relief in such action. |
1.1 | Except as stated below, “Claims” includes all actions or demands of any kind that the Executive may now have, may have had or may reasonably know the Executive should have had (although the Executive is not being asked to waive Claims that may arise after the date of this Release). More specifically, Claims include rights, causes of action, damages, penalties, losses, attorneys’ fees, costs, expenses, obligations, agreements, judgments and all other liabilities of any kind or description whatsoever, either in law or in equity, whether known or unknown, suspected or unsuspected. The nature of the Claims covered by this Release includes all actions or demands in any way based on the Executive’s employment with the Company, the terms and conditions of such employment, or the Executive’s separation from employment. More specifically, the following are among the types of Claims that are waived and barred by this Release to the extent allowable under applicable law (but shall be considered illustrative but not exhaustive): |
• | contract Claims, whether express or implied; |
• | tort Claims, such as for defamation or emotional distress; |
• | Claims under federal, state and municipal laws, regulations, ordinance or court decisions of any kind; |
• | Claims of discrimination, harassment or retaliation, whether based on race, color, religion, gender, sex, age, sexual orientation, handicap and/or disability, genetic information, national origin, or any other legally protected class; |
• | Claims under Title VII of the U.S. Civil Rights Act of 1964, the U.S. Age Discrimination in Employment Act of 1967, the U.S. Americans with Disabilities Act of 1990, the U.S. Family and Medical Leave Act of 1993, the U.S. Genetic Information Nondiscrimination Act of 2008, and similar state and local statutes, laws and ordinances, including the New York State Civil Rights Law, the New York State Equal Pay Law, the New York State Human Rights Law, the New York State Labor Law, the New York State Whistleblower Law, and the New York City Human Rights Law; |
• | Claims under the U.S. Employee Retirement Income Security Act of 1974, the U.S. Occupational Safety and Health Act of 1970, the U.S. False Claims Act, and similar state and local statutes, laws and ordinances; |
• | Claims for wrongful discharge; and |
• | Claims for attorneys’ fees, including litigation expenses and costs; |
provided that this Release shall not apply to (a) any obligation of the Company or any other Releasee under the Retention Agreement and (b) any right of the Executive to obtain contribution or indemnity against the Company or any other Releasee pursuant to contract, the Company’s charter or bylaws, or otherwise.
1.2 | Notwithstanding any other provision of this Release, this Release does not limit or bar any Claim relating to the validity or enforcement of this Release or any Claim that is not legally waivable, including whistleblowing claims pursuant to Rule 21F-17 under the U.S. Securities Exchange Act of 1934. In addition, this Release shall not operate to limit or the Executive’s right to file an administrative charge of discrimination with the Equal Employment Opportunity Commission or to testify, assist or participate in an investigation, hearing or proceeding conducted by the Equal Employment Opportunity Commission. This Release does, however, bar the Executive’s right to recover any personal or monetary relief, including if the Executive or anyone on the Executive’s behalf seeks to file a lawsuit or arbitration on the same basis as the charge of discrimination. Additionally, nothing in this Release is intended, or shall be interpreted, to (a) have a chilling effect on the Executive’s ability to engage in whistleblowing activity by prohibiting or restricting the Executive (or the Executive’s attorney) from initiating communications directly with, or responding to any inquiry from, or providing testimony before, the Securities and Exchange Commission regarding the Executive’s employment with the Company or (b) prevent the Executive from reporting to, communicating with, contacting, responding to an inquiry from, providing relevant information to, participating or assisting in an investigation conducted by the Securities and Exchange Commission or any other governmental enforcement agency. |
1.3. | This Agreement shall not in any way be construed as an admission by any of the Releasees that any Releasee has acted wrongfully or that the Executive has any rights whatsoever against any of the Releasees except as specifically set forth herein, and each of the Releasees specifically disclaims any liability to any party for any wrongful acts. |
2. | Non-Disparagement. |
2.1. | The Executive agrees that the Executive shall not at any time, either directly or indirectly, (a) issue, circulate, publish or utter any statement, remark, opinion or rumor that defames, disparages, denigrates, criticizes or speaks poorly about the Company or its affiliates (including its stockholders, directors and executive officers) or (b) disclose, disseminate or otherwise provide any information or material that may disparage, demean or reflect poorly upon, or harm or otherwise cause injury to, the image, reputation or character of the Company or any of its affiliates (including its stockholders, directors and executive officers) to any third parties, provided that the Executive shall respond accurately and fully to any question, inquiry or request for information when required by legal process and may make truthful statements in connection with any legal dispute related to or arising from this Release. |
2.2. | The Company agrees that neither the Company nor any of its directors or executive officers shall at any time, either directly or indirectly, (a) issue, circulate, publish or utter any statement, remark, opinion or rumor that defames, disparages, denigrates, criticizes or speaks poorly about the Executive or (b) disclose, disseminate or otherwise provide any information or material that may disparage, demean or reflect poorly upon, or harm or otherwise cause injury to, the image, reputation or character of the Executive to any third parties, that the Company and its directors and executive officers shall respond accurately and fully to any question, inquiry or request for information when required by legal process and may make truthful statements in connection with any legal dispute related to or arising from this Release. If the Company intends to issue a press release or internal communication concerning the matters covered by this Release, the Executive shall have the right to approve the terms thereof prior to its issuance, such approval not to be unreasonably withheld. |
3. | Return of Company Property. The Executive confirms and covenants that the Executive has returned to the Company, without retaining copies, all property of the Company and items related to the business of the Company (“Company Property”), including all (a) equipment, products, data, manuals, letters, emails, reports, agreements, communications (including intra-Company communications and whether in hard copy or stored electronically), (b) keys to Company property, (c) Company credit cards, identification cards and business cards, and (d) documents, memoranda, notes, papers, work product or other materials in the Executive’s possession or under the Executive’s control that (i) contain or are derived from any and all of the Company’s information (“Information”), including, for example, any data related to drawings, sketches, plans or other documents concerning the Company’s strategies, business or development plans, customers or suppliers, and research and development efforts, the Company’s development, design, construction or sales and marketing methods or techniques, or the Company’s trade secrets and other “know-how” or information not of a public nature, regardless of how such information came to the custody of the Executive, or (ii) are otherwise connected with or derived from the Executive’s services to the Company. |
4. | Cooperation. If the Executive receives a subpoena or process from any person or entity (including any governmental agency) that will or may require the Executive to disclose documents or information, or to provide testimony (in a deposition, court proceeding, or otherwise) regarding, in whole or in part, the Company or any of its affiliates (including its directors and executive officers), any Information or any Company Property, the Executive shall (a) to the extent permitted by law, notify of the Company of the subpoena or other process within twenty-four hours after receiving it and (b) to the maximum extent possible, not make any disclosure until the Company has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure, limit the scope or nature of such disclosure, or seek to participate in the proceeding or matter in which the disclosure is sought. |
5. | Review and Revocation by Executive. |
5.1. | The Executive understands (a) the Executive has been given a period of twenty-one days to review and consider this Release before signing it pursuant to the U.S. Age Discrimination in Employment Act of 1967 and (b) the Executive may use as much of such twenty-one-day period as the Executive wishes prior to signing this Release. |
5.2. | The Executive acknowledges and represents that the Executive understands the Executive may revoke the waiver of the Executive’s rights under the U.S. Age Discrimination in Employment Act of 1967 effectuated in this Release within seven days of signing this Release. Revocation can be made by delivering a written notice of revocation to , Chembio Diagnostics, Inc., 555 Wireless Boulevard, Hauppauge, New York 11788. For such a revocation to be effective, such officer must receive such written notice by no later than the close of business on the seventh day after the Executive signs this Release. If the Executive revokes the waiver of the Executive’s rights under the U.S. Age Discrimination in Employment Act of 1967, the Company shall have no obligations to the Executive under Section 3 of the Retention Agreement other than the Base Obligations (as defined in the Retention Agreement). |
5.3. | The Executive and the Company respectively represent and acknowledge that in executing this Release neither of them is relying upon, and has not relied upon, any representation or statement not set forth herein made by any of the agents, representatives or attorneys of the Releasees with regard to the subject matter, basis or effect of this Release or otherwise. |
5.4. | The Executive represents and agrees that the Executive (a) has been advised by the Company to discuss all aspects of this Release with the Executive’s attorney and, to the extent the Executive desires, has done so, (b) has carefully read and fully understands all of the provisions of this Release, and (c) is entering into this Release voluntarily. |
6. | Miscellaneous. |
6.1. | The Company and the Executive desire and intend that the provisions of this Release be enforced to the fullest extent permissible under law. In the event of any conflict between one or more provisions of this Release and any current or future law, such law shall prevail but the provisions of this Release affected by such conflict shall be curtailed and limited only to the extent necessary to bring those provisions within the requirements of law and the remaining provisions of this Release shall remain in full force and effect and shall be fully valid and enforceable. |
6.2. | This Release shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of laws principles thereof or to those of any other jurisdiction that, in either case, could cause the application of the laws of any jurisdiction other than the State of New York. |
6.3. | This Release (a) is binding on the successors and assigns of, and sets forth the entire agreement between, the parties hereto, (b) fully supersedes any and all prior agreements or understandings between the parties hereto pertaining to the subject matter hereof, and (c) may not be changed except by explicit written agreement to that effect subscribed by e. |
6.4. | For purposes of this Release: |
(a) | headings used in this Release are for convenience of reference only and shall not, for any purpose, be deemed a part of this Release; |
(b) | the words “include,” “includes” and “including” shall not be construed so as to exclude any other thing not referred to or described; |
(c) | the word “or” is not exclusive; |
(d) | unless the context otherwise requires, (i) references in this Release to an agreement, instrument or other document mean such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (ii) references in this Release to a statute mean such statute as amended from time to time and include any successor legislation thereto and any rules and regulations promulgated thereunder; and |
(e) | this Release shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. |
* * *
PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
This Release is executed by the Executive and on behalf of the Company as of , 20 .
Paul J. Angelico | Chembio Diagnostics, Inc. | |||
/s/ Paul J. Angelico | By: | /s/ Richard L. Eberly | ||
Name: | Richard L. Eberly | |||
Title: | President & CEO |
A-5
Exhibit (e)(16)
CHEMBIO DIAGNOSTICS, INC.
Executive Retention Agreement
This Executive Retention Agreement (this “Agreement”) is entered into between Chembio Diagnostics, Inc., a Nevada corporation (the “Company”), and Charles Caso (the “Executive” and, together with the Company, the “Parties”) as of the date set forth on the signature page hereof(the “Effective Date”).
Whereas, the Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its stockholders;
Whereas, as a condition to the Company’s execution and delivery of this Agreement, the Parties are entering into a Non-Disclosure, Intellectual Property, Non-Competition and Non-Solicitation Agreement dated as of the date of this Agreement (the “Restrictive Covenants Agreement”);
Whereas, the Company recognizes that, as is the case with many publicly-held corporations, the possibility of a change in control of the Company exists and that such possibility, and the uncertainty and questions that it may raise among key personnel, may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders, and
Whereas, the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company that appropriate steps should be taken to reinforce and encourage the continued employment and dedication of the Company’s key personnel without distraction, including distraction from the possibility of a change in control of the Company and related events and circumstances.
Now, Therefore, as an inducement for and in consideration of the Executive remaining in its employ and for other good and valuable consideration, the Parties agree that the Executive shall receive the severance benefits set forth below in the event the Executive’s employment with the Company is terminated.
1. | Key Definitions. As used herein, the following terms shall have the following respective meanings: |
1.1 | “Annual Bonus” shall mean an annual cash bonus for which the Executive may be eligible, in the discretion of the Compensation Committee, with respect to a calendar year in accordance with terms and provisions of the Executive Incentive Plan of the Company or any successor plan thereto, together with any supplemental incentive plan or plans thereunder, as may be established by the Compensation Committee, in its discretion, from time to time. |
1.2 | “Cause” shall mean: |
(a) | the Executive’s willful and continued failure to substantially perform the Executive’s reasonable assigned duties (other than any such failure resulting from incapacity due to physical or mental illness, approved leave of absence or any failure after the Executive gives notice of resignation for Good Reason), where such failure is not cured within thirty days after a written notice and demand for substantial performance is received by the Executive from the Board that specifically identifies the manner in which the Board believes the Executive has not substantially performed the Executive’s duties; |
(b) | the Executive’s willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company’s business or reputation; |
(c) | the Executive material breach of any written policy applicable to the Executive, including the Company’s code of business ethics and conduct or insider trading policy; or |
(d) | the Executive’s conviction of, or plea of guilty or no contest to, a felony under the laws of the United States or any State of the United States. |
For purposes of this Section 1.2, no act or failure to act by the Executive shall be considered “willful” unless it is done, or omitted to be done, in bad faith and without reasonable belief that the Executive’s action or omission was in the best interests of the Company.
1.3 | “Change in Control” shall mean the occurrence of any of the following events: |
(a) | the acquisition, directly or indirectly, by any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (a “Person” for purposes of this Section 1.3) of the beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that, in calculating the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time) of more than fifty percent of the outstanding securities of the Company; |
(b) | a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated; |
(c) | the sale, transfer or other disposition of all or substantially all of the assets of the Company; |
(d) | a complete liquidation or dissolution of the Company; or |
(e) | a reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent of the total combined voting power of the Company’s outstanding securities are transferred to a Person or Persons different from the Persons holding those securities immediately prior to such merger. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur unless one of the foregoing events constitutes a “change in control event” within the meaning of Section 409A.
1.4 | “Change in Control Date” shall mean the first date during the Term (as defined in Section 2) on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if (a) a Change in Control occurs, or shall have been announced or agreed to, (b) the Executive’s employment with the Company is subsequently terminated, and (c) if the date of termination is prior to the date of the actual or scheduled Change of Control and it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably designed to effect a Change in Control or (ii) otherwise arose in connection with or in anticipation of a Change in Control, such as, for example, as a condition thereto or in connection with cost reduction or elimination of duplicate positions, then for all purposes of this Agreement the “Change in Control Date” shall mean the date immediately prior to the date of such termination of employment. |
1.5 | “Good Reason” shall mean: |
(a) | a material diminution in the Executive’s authority, duties, responsibilities or reporting relationship in effect immediately prior to the Effective Date reducing the Executive’s position, duties or authority; |
(b) | a decrease in the annual rate of the Executive’s base salary (“Base Salary”); |
(c) | the Company’s failure to secure the agreement of any successor entity to the Company that the Executive shall continue in the Executive’s position without reduction in position, duties or authority; or |
(d) | the Company’s relocating the Executive’s principal work location beyond a fifty-mile radius of the Executive’s work location as of the Effective Date; |
provided that (i) the occurrence of a Change in Control, following which the Company continues to have its common stock publicly traded and the Executive is offered continued employment with such publicly traded entity as an officer with substantially the same, or greater, duties and authority as the Executive has with the Company immediately prior to the Effective Date, shall not be deemed to give rise to an event or condition constituting Good Reason and (ii) no event or condition shall constitute Good Reason unless (A) the Executive gives the Company a notice of termination specifying the Executive’s objection to such event or condition within ninety days following the occurrence of such event or condition, (B) such event or condition is not corrected, in all material respects, by the Company in a manner that is reasonably satisfactory to the Executive within thirty days following the Company’s receipt of such notice, and (C) the Executive resigns from the Executive’s employment with the Company not more than thirty days following the expiration of the thirty-day period described in the foregoing clause (B).
1.6 | “Permanent Disability” shall mean: |
(a) | the inability of the Executive to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months; or |
(b) | the Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. |
The Executive shall be deemed to have a Permanent Disability if the Executive is determined (i) by the Social Security Administration to have a “total disability” or (ii) in accordance with a disability insurance program to be “disabled,” provided the definition of “disabled” under the program complies with the definition of Permanent Disability hereunder. Otherwise, such Permanent Disability shall be certified by a physician chosen by the Company and reasonably acceptable to the Executive, unless the Executive is then legally incapacitated, in which case such physician shall be reasonably acceptable to the Executive’s authorized legal representative.
1.7 | “Section 409A” shall mean Section 409A of the Internal Revenue Code of 1986. |
1.8 | “Termination Date” shall mean: |
(a) | in the event of a termination of the Executive’s employment by the Company for Cause or by the Executive for Good Reason, the date specified in a notice of termination (or, if not specified therein, the date of delivery of such notice), but in no event earlier than the expiration of the cure period set forth in Section 1.2 or 1.5, respectively; |
(b) | in the event of a termination of the Executive’s employment by the Company without Cause, the date specified in a notice of termination (or if not specified therein, the date of delivery of such notice); |
(c) | in the event of a termination of the Executive’s employment by the Executive without Good Reason, the date specified in a notice of termination, but in no event less than sixty days following the date of delivery of such notice; |
(d) | in the event either Party shall have given to the other Party notice pursuant to Section 2 that the Term shall not be extended, the December 31 that is the final day of the Term; |
(e) | in the event of a termination of the Executive’s employment due to Permanent Disability, the date the Company terminates the Executive’s employment following the certification of the Executive’s Permanent Disability; and |
(f) | in the event of a termination of employment due to the Executive’s death, the date of the Executive’s death. |
2. | Term of Agreement. This Agreement shall take effect upon the Effective Date and shall expire upon the first to occur of (a) the expiration of the Term (as defined below) if a Change in Control Date has not occurred during the Term, (b) the date twelve months after the Change in Control Date, if the Executive is still employed by the Company as of such later date, and (c) the fulfillment by the Company of all of its obligations under Section 3 if the Executive’s employment with the Company terminates during the Term or within twelve months following the Change in Control Date. “Term” shall mean the period commencing as of the Effective Date and continuing in effect through December 31, 2022, provided that, commencing on January 1, 2023 and each January 1 thereafter, the Term shall be automatically extended for one additional calendar year unless, not later than the October 1 immediately preceding the scheduled expiration of the Term (or any extension thereof), either Party shall have given notice to the other Party that the Term shall not be extended. |
3. | Termination; Benefits to Executive. |
3.1 | Generally. In the event of the termination of the Executive’s employment for any reason, the Executive shall receive payment of the following (the “Base Obligations”): |
(a) | any unpaid Base Salary through the Termination Date, in regular payroll installments in accordance with the Company’s payroll practices as then in effect (but no less frequently than monthly); |
(b) | any unpaid vacation through the Termination Date as accrued in accordance with the Company’s then-current vacation policy, to be paid within fourteen days of the Termination Date; and |
(c) | any earned but unpaid Annual Bonus with respect to the calendar year ended prior to the Termination Date, to be paid in accordance with the payment timing and other terms of the Annual Bonus. |
In addition, in the event of the Executive’s termination of employment, the applicable provisions of each outstanding equity award agreement executed by the Parties shall govern the treatment of such equity award.
3.2 | Termination Related to Change in Control. In the event of the termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason or the expiration of the Term upon notice of nonrenewal delivered by the Company in accordance with Section 2, then, in each of the foregoing cases within twelve months following a Change in Control Date, the Executive shall, subject to Sections 3.6 and 3.7, be entitled to receive, in addition to the Base Obligations, the following payments and benefits (the “Severance Benefits”): |
(a) | Severance Payment. |
(i) | Amount. The Company shall pay the Executive an amount (the “Severance Payment”) equal to (i) 1.0 multiplied by the Base Salary with respect to the calendar year in which the Termination Date occurs and (ii) if the Compensation Committee has previously established a target Annual Bonus for the Executive with respect to the calendar year in which the Termination Date occurs, a pro rata target bonus (the “Pro-Rata Target Bonus”) determined by multiplying such target Annual Bonus of the Executive for such calendar year by a fraction, the numerator of which is the number of days in the calendar year in which the Termination Date occurs through the Termination Date and the denominator of which is three hundred sixty-five. The Pro-Rata Target Bonus shall be paid only in the event any performance goals established with respect to such target Annual Bonus have been satisfied. Payment of the Pro-Rata Target Bonus shall be delayed until following the date the Compensation Committee determines that such performance goals have been satisfied, in accordance with the rules applicable to the target Annual Bonus under the applicable bonus program established by the Compensation Committee (the “Determination Date”). |
(ii) | Payment. The Severance Payment is payable in a lump sum within two weeks following the Termination Date. Notwithstanding the foregoing, payments of the Pro-Rata Target Bonus portion of the Severance Payment shall be paid within thirty days following the Determination Date, except that if payment of one or more installments of the Pro-Rata Target Bonus portion of the Severance Payment must be delayed until following the Determination Date, the initial installment shall consist of a lump sum equal to the total of all such installments delayed or due as of such payment date, without adjustment for interest. |
(b) | Health Care Coverage Payments. Provided the Executive is covered by the Company’s health care plans immediately prior to the Termination Date, the Company shall pay to the Executive on a monthly basis, during the twelve-month period commencing on the Termination Date (or such shorter period ending as of the initial date the Executive is eligible for coverage under the health care plans of a subsequent employer), a taxable cash payment equal to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) premium for the highest level of coverage available under the Company’s group health plans, but reduced by the monthly amount that the Executive would pay for such coverage if the Executive was an active employee. |
(c) | Outstanding Equity Awards. The vesting of each and every outstanding equity award agreement executed by the Parties shall, to the extent such vesting is based upon the passage of time (rather than any performance metric) shall accelerate in full. |
All other benefits, if any, due the Executive following termination pursuant to this Section 3.2 shall be determined in accordance with the plans, policies and practices of the Company, provided the Executive shall not be entitled to participate in any other severance plan, policy or program of the Company. The Severance Benefits are payments and benefits to which the Executive is not otherwise entitled, are given in consideration for the Release (as described in Sections 3.6 and 3. 7), and are in lieu of any severance plan, policy or program of the Company or any of its subsidiaries that may now or hereafter exist. The payments and benefits to be provided pursuant to this Section 3.2 shall constitute liquidated damages and shall be deemed to satisfy and be in full and final settlement of all obligations of the Company to the Executive under this Agreement. The Executive acknowledges and agrees that such amounts are fair and reasonable, and are the Executive’s sole and exclusive remedy, in lieu of all other remedies at law or in equity, with respect to the termination of the Executive’s employment.
3.3 | Permanent Disability or Death. Upon termination of the Executive’s employment due to Permanent Disability or death, in each case within twelve months following a Change in Control Date, the Executive or the Executive’s estate (respectively) shall, subject to Sections 3.6 and 3.7, be entitled to receive, in addition to the Base Obligations, a Pro Rata Target Bonus with respect to the calendar year in which the Termination Date occurs, determined and payable in the manner contemplated by Section 3.2(a). All other benefits, if any, due the Executive or the Executive’s estate (as applicable) following termination pursuant to this Section 3.3 shall be determined in accordance with the plans, policies and practices of the Company, provided the Executive and the Executive’s estate shall not be entitled to participate in any other severance plan, policy or program of the Company. |
3.4 | Termination for Cause by the Company or Termination Without Good Reason or Nonrenewal by the Executive. In the event of the termination of the Executive’s employment by the Company for Cause or by the Executive without Good Reason or the expiration of the Term upon notice of nonrenewal delivered by the Executive in accordance with Section 2, the Executive shall have no further rights to any compensation (including any Annual Bonus) or any other benefits under this Agreement other than the Base Obligations. All other benefits, if any, due the Executive following the Executive’s termination of employment pursuant to this Section 3.4 shall be determined in accordance with the plans, policies and practices of the Company, provided that the Executive shall not be entitled to participate in any severance plan, policy, or program of the Company. |
3.5 | Mitigation; Offset. Following the termination of the Executive’s employment for any reason, the Executive shall have no obligation or duty to seek subsequent employment or engagement as an employee (including self-employment) or as a consultant or otherwise mitigate the Company’s obligations hereunder nor shall the payments provided by this Section 3 be reduced by the compensation earned by the Executive as an employee or consultant from any such subsequent employment or consultancy. |
3.6 | Release. Notwithstanding anything to the contrary in this Agreement, receipt by the Executive of any Severance Benefits or other compensation or benefits under this Section 3 (other than the Base Obligations) is subject to the Executive executing and delivering to the Company a general release of claims following the Termination Date, in substantially the form attached as Exhibit A (the “Release”), that, within sixty days following the Termination Date, has become irrevocable by the Executive (such date the Release becomes irrevocable being the “Release Effective Date”). If the Executive dies or becomes legally incapacitated prior to the Release Effective Date, then the Release requirements described in the preceding sentence shall apply with respect to the Executive’s estate and the Release shall be modified as reasonably necessary to allow for execution and delivery by a personal representative of the Executive’s estate or the Executive’s authorized legal representative, as applicable. |
3.7 | Restrictive Covenants Agreement. The Executive acknowledges and reaffirms the Executive’s obligations with respect to non-disclosure, non-competition, non-solicitation and other restrictions set forth in the Restrictive Covenants Agreement. Notwithstanding any other provision of this Agreement, in the event the Executive is deemed by the Company to have violated Section 3 of the Restrictive Covenants Agreement, the Company shall provide notice to the Executive and, upon the deemed delivery of such notice pursuant to Section 5.6, all amounts payable or benefits to be provided by the Company under this Section 3 shall no longer be due and payable or required to be provided. |
4. | Claims; Disputes. |
4.1 | Claims to Board. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any rejection by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the rejection and the specific provisions of this Agreement relied upon. |
4.2 | Disputes. Any dispute arising between the Parties under this Agreement, under any statute, regulation, or ordinance, under any other agreement between the Parties, or in way relating to the Executive’s employment shall be submitted to binding arbitration before the American Arbitration Association (the “AAA”) for resolution. Such arbitration shall be conducted in New York, New York, and the arbitrator shall apply New York law, including federal law as applied in New York courts. The arbitration shall be conducted in accordance with the AAA’s Employment Arbitration Rules as modified in this Section 4.2. The arbitration shall be conducted by a panel of three arbitrators that is mutually agreeable to both of the Parties, all in accordance with the AAA’s Employment Arbitration Rules then in effect. If the Parties cannot agree upon the panel of arbitrators, the arbitration shall be settled before a panel of three arbitrators, one to be selected by the Company, one by the Executive, and the third to be selected by the two persons so selected, all in accordance with the AAA’s Employment Arbitration Rules. With respect to any and all costs and expenses associated with any such arbitration that are .not assignable to one of the Parties by the arbitrator, each Party shall pay their own costs and expenses, including attorneys’ fees and costs, except that the Company shall pay the cost of the arbitrators and the filing fees charged to the Executive by the AAA, provided the Executive is the claimant or counter claimant in such arbitration and is the prevailing Party. The award of the arbitrators shall be final and binding on the Parties, and judgment on the award may be confirmed and entered in any state or federal court in the City of New York, New York. The arbitration shall be conducted on a strictly confidential basis, and Executive shall not disclose the existence of a claim, the nature of a claim, any documents, exhibits, or information exchanged or presented in connection with such a claim, or the result of any action (collectively, “Arbitration Materials”), to any third party, with the sole exception of the Executive’s legal counsel, who also shall be bound by confidentiality obligations no less protective than the provisions set forth in the Restrictive Covenant Agreement. In the event of any court proceeding to challenge or enforce an arbitrators’ award, the Parties consent to the exclusive jurisdiction of the state and federal courts in New York, New York and agree to venue in that jurisdiction. The Parties agree to take all steps necessary to protect the confidentiality of the Arbitration Materials in connection with any such proceeding and the entry of an appropriate protective order encompassing the confidentiality terms of the Restrictive Covenants Agreement. |
5. | Miscellaneous. |
5.1 | Section 409A. This Agreement is intended to comply with the provisions of Section 409A and this Agreement shall, to the extent practicable, be construed in accordance therewith. Terms defined in this Agreement shall have the meanings given such terms under Section 409A if and to the extent required in order to comply with Section 409A. |
5.2 | Not an Employment Contract. The Executive acknowledges that this Agreement does not constitute a contract of employment or impose on the Company any obligation to retain the Executive as an employee and that this Agreement does not prevent the Executive from terminating employment at any time. |
5.3 | Entire Agreement; Amendments. This Agreement, together with the Restrictive Covenants Agreement, contains the entire understanding of the Parties with respect to the subject matter set forth in this Agreement, and shall supersede any and all previous contracts, arrangements or understandings between the Company and the Executive with respect to the subject matter set forth in this Agreement. This Agreement may not be altered, modified or amended except by written instrument signed by the Company and the Executive. |
5.4 | No Waiver. The failure of a Party to insist upon strict adherence to a term of this Agreement on any occasion shall not be considered a waiver of such Party’s rights or deprive such Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. |
5.5 | Successor; Assignment. Neither of the Parties shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder. Without limiting the foregoing, the Executive’s right to receive payments hereunder shall not be assignable or transferable whether by pledge, creation of a security interest or otherwise, other than a transfer by the Executive’s will or by the laws of descent and distribution. In the event of any attempted assignment or transfer contrary to this Section 5.5, the Company shall have no liability to pay the assignee or transferee any amount so attempted to be assigned or transferred. The Company shall cause this Agreement to be assumed by any entity that succeeds to all or substantially all of the Company’s business or assets and this Agreement shall be binding upon any successor to all or substantially all of the Company’s business or assets, provided that no such assumption shall release the Company of its obligations hereunder, to the extent not satisfied by such successor, without the Executive’s prior consent. |
5.6 | Notice. All notices, requests, consents, claims, demands, waivers and other communications under this Agreement shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by electronic mail (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next day (other than a Saturday, Sunday or other day on which commercial banks in the New York, New York, are authorized or required to close) if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 5.6): |
If to the Company: | Chembio Diagnostics, Inc. 555 Wireless Boulevard Hauppauge, New York 11788 Attention: Chief Executive Officer Email: [**] |
If to the Executive: | As set forth on the signature page hereof |
5.7 | Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. |
5.8 | Section 409A. Notwithstanding any other provision of this Agreement, any payment, settlement or benefit triggered by termination of the Executive’s employment with the Company shall not be made until six months and one day following Termination Date if such delay is necessary to avoid the imposition of any tax, penalty or interest under Section 409A. Any installment payments that are delayed pursuant to this Section 5.8 shall be accumulated and paid in a lump sum on the day that is six months and one day following the Termination Date (or, if earlier, upon the Executive’s death) and the remaining installment payments shall begin on such date in accordance with the other provisions of this Agreement. For purposes of this Agreement, termination or severance of employment shall be read to mean a “separation from service” within the meaning of Section 409A where it is reasonably anticipated that no further services would be performed after that date or that the level of services the Executive would perform after that date (whether as an employee or independent contractor) would permanently decrease to no more than twenty percent of the average level of bona fide services performed over the immediately preceding thirty-six month period. Additionally, the amount of expenses eligible for reimbursement or in-kind benefits to be provided during one calendar year may not affect the expenses eligible for reimbursement or any in-kind benefits to be provided in any other calendar year and the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. All reimbursements shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the reimbursable expense. This Agreement is intended to comply with the requirements of Section 409A (including the exceptions thereto), to the extent applicable, and the Agreement shall be administered and interpreted in accordance with such intent. If any provision contained in the Agreement conflicts with the requirements of Section 409 A (or the exemptions intended to apply under the Agreement), the Agreement shall be deemed to be reformed to comply with the requirements of Section 409A (or the applicable exemptions thereto). The Company, after consulting with the Executive, may amend this Agreement or the terms of any award provided for in this Agreement in any manner that the Company considers necessary or advisable to ensure that cash compensation, equity awards or other benefits provided for in this Agreement are not subject to U.S. federal income tax, state or local income tax or any equivalent taxes in territories outside the United States prior to payment, exercise, vesting or settlement, as applicable, or any tax, interest or penalties pursuant to Section 409A. Any such amendments shall be made in a manner that preserves to the maximum extent possible the intended benefits to the Executive. This Section 5.8 does not create an obligation on the part of the Company to modify this Agreement and does not guarantee that the amounts or benefits owed under the Agreement shall not be subject to interest and penalties under Section 409A. For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A. |
5.9 | Clawback. The Executive agrees that compensation and benefits provided by the Company under this Agreement or otherwise shall be subject to recoupment or clawback by the Company under any applicable clawback or recoupment policy of the Company that is generally applicable to the Company’s executives, as may be adopted by the Board and in effect from time-to-time or as required by applicable law. |
5.10 | Interpretation. For purposes of this Agreement: |
(a) | headings used in this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement; |
(b) | any references in this Agreement to a Section refer to a Section of this Agreement, unless specified otherwise; |
(c) | the word “day” refers to a calendar day; |
(d) | the word “include” and “including” as used in this Agreement shall not be construed so as to exclude any other thing not referred to or described; |
(e) | the word “or” is not exclusive; |
(f) | the definition given for any term in this Agreement shall apply equally to both the singular and plural forms of the term defined; |
(g) | unless the context otherwise requires, (i) references in this Agreement to an agreement, instrument or other document mean such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (ii) references in this Agreement to a statute mean such statute as amended from time to time and include any successor legislation thereto and any rules and regulations promulgated thereunder; and |
(h) | this Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. |
5.11 | Counterparts. This Agreement may be executed in counterparts |
5.12 | , each of which shall be deemed an original but both of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. |
5.13 | Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
5.14 | Executive’s Acknowledgements. The Executive acknowledges that the Executive: (a) has read this Agreement; (b) has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of the Executive’s own choice or has voluntarily declined to seek such counsel; (c) understands the terms and consequences of this Agreement; and (d) understands that the law firm of K&L Gates LLP has acted and is acting as counsel to the Company in connection with the transactions contemplated by this Agreement, and is not acting as counsel for the Executive. |
* * *
In Witness Whereof, the Parties have executed, or caused to be executed, this Agreement as of February 9, 2022.
Chembio Diagnostics, Inc. | ||
By: | /s/ Richard L. Eberly | |
Richard L. Eberly | ||
Chief Executive Officer and President |
Charles Caso | ||
/s/ CHARLES CASO | ||
Address: | [**] | |
[**] | ||
Email: |
[**] |
Exhibit A
GENERAL RELEASE
This General Release (this “Release”) is entered into between Charles Caso (the “Executive”) and Chembio Diagnostics, Inc., a Nevada corporation (the “Company”), as of the date set forth on the signature page hereof.
A. | The Executive and the Company are parties to an Executive Retention Agreement entered into as of February 9, 2022 (the “Retention Agreement”). |
B. | The Executive has agreed to execute this Release as a condition to the Executive’s entitlement to certain payments and benefits upon termination of the Executive’s employment with the Company; |
In consideration of the premises and mutual promises herein contained and for other good and valuable consideration received or to be received by the Executive in accordance with the terms of the Retention Agreement, it is agreed as follows:
1. | Discharge of Claims. Excluding enforcement of covenants, promises and rights reserved herein, the Executive irrevocably and unconditionally releases, acquits and forever discharges the Company and each of the Company’s stockholders, predecessors, successors, assigns, directors, officers, employees, divisions, subsidiaries, affiliates (and directors, officers and employees of such companies, divisions, subsidiaries and affiliates) and all persons acting by, through, under or in concert with any of them (collectively, “Releasees”), or any of them, from any and all Claims (as defined below) through the date of this Release. The Executive agrees not to file a lawsuit or arbitration to assert any such Claim and further agrees that should any other person or entity file a lawsuit or arbitration to assert any such Claim, the Executive shall not seek or accept any personal relief in such action. |
1.1 | Except as stated below, “Claims” includes all actions or demands of any kind that the Executive may now have, may have had or may reasonably know the Executive should have had (although the Executive is not being asked to waive Claims that may arise after the date of this Release). More specifically, Claims include rights, causes of action, damages, penalties, losses, attorneys’ fees, costs, expenses, obligations, agreements, judgments and all other liabilities of any kind or description whatsoever, either in law or in equity, whether known or unknown, suspected or unsuspected. The nature of the Claims covered by this Release includes all actions or demands in any way based on the Executive’s employment with the Company, the terms and conditions of such employment, or the Executive’s separation from employment. More specifically, the following are among the types of Claims that are waived and barred by this Release to the extent allowable under applicable law (but shall be considered illustrative but not exhaustive): |
● | contract Claims, whether express or implied; |
● | tort Claims, such as for defamation or emotional distress; |
● | Claims under federal, state and municipal laws, regulations, ordinance or court decisions of any kind; |
● | Claims of discrimination, harassment or retaliation, whether based on race, color, religion, gender, sex, age, sexual orientation, handicap and/or disability, genetic information, national origin, or any other legally protected class; |
● | Claims under Title VII of the U.S. Civil Rights Act of 1964, the U.S. Age Discrimination in Employment Act of 1967, the U.S. Americans with Disabilities Act of 1990, the U.S. Family and Medical Leave Act of 1993, the U.S. Genetic Information Nondiscrimination Act of 2008, and similar state and local statutes, laws and ordinances, including the New York State Civil Rights Law, the New York State Equal Pay Law, the New York State Human Rights Law, the New York State Labor Law, the New York State Whistleblower Law, and the New York City Human Rights Law; |
● | Claims under the U.S. Employee Retirement Income Security Act of 1974, the U.S. Occupational Safety and Health Act of 1970, the U.S. False Claims Act, and similar state and local statutes, laws and ordinances; |
● | Claims for wrongful discharge; and |
● | Claims for attorneys’ fees, including litigation expenses and costs; |
provided that this Release shall not apply to (a) any obligation of the Company or any other Releasee under the Retention Agreement and (b) any right of the Executive to obtain contribution or indemnity against the Company or any other Releasee pursuant to contract, the Company’s charter or bylaws, or otherwise.
1.2 | Notwithstanding any other provision of this Release, this Release does not limit or bar any Claim relating to the validity or enforcement of this Release or any Claim that is not legally waivable, including whistleblowing claims pursuant to Rule 21F-17 under the U.S. Securities Exchange Act of 1934. In addition, this Release shall not operate to limit or the Executive’s right to file an administrative charge of discrimination with the Equal Employment Opportunity Commission or to testify, assist or participate in an investigation, hearing or proceeding conducted by the Equal Employment Opportunity Commission. This Release does, however, bar the Executive’s right to recover any personal or monetary relief, including if the Executive or anyone on the Executive’s behalf seeks to file a lawsuit or arbitration on the same basis as the charge of discrimination. Additionally, nothing in this Release is intended, or shall be interpreted, to (a) have a chilling effect on the Executive’s ability to engage in whistleblowing activity by prohibiting or restricting the Executive (or the Executive’s attorney) from initiating communications directly with, or responding to any inquiry from, or providing testimony before, the Securities and Exchange Commission regarding the Executive’s employment with the Company or (b) prevent the Executive from reporting to, communicating with, contacting, responding to an inquiry from, providing relevant information to, participating or assisting in an investigation conducted by the Securities and Exchange Commission or any other governmental enforcement agency. |
1.3. | This Agreement shall not in any way be construed as an admission by any of the Releasees that any Releasee has acted wrongfully or that the Executive has any rights whatsoever against any of the Releasees except as specifically set forth herein, and each of the Releasees specifically disclaims any liability to any party for any wrongful acts. |
2. | Non-Disparagement. |
2.1. | The Executive agrees that the Executive shall not at any time, either directly or indirectly, (a) issue, circulate, publish or utter any statement, remark, opinion or rumor that defames, disparages, denigrates, criticizes or speaks poorly about the Company or its affiliates (including its stockholders, directors and executive officers) or (b) disclose, disseminate or otherwise provide any information or material that may disparage, demean or reflect poorly upon, or harm or otherwise cause injury to, the image, reputation or character of the Company or any of its affiliates (including its stockholders, directors and executive officers) to any third parties, provided that the Executive shall respond accurately and fully to any question, inquiry or request for information when required by legal process and may make truthful statements in connection with any legal dispute related to or arising from this Release. |
2.2. | The Company agrees that neither the Company nor any of its directors or executive officers shall at any time, either directly or indirectly, (a) issue, circulate, publish or utter any statement, remark, opinion or rumor that defames, disparages, denigrates, criticizes or speaks poorly about the Executive or (b) disclose, disseminate or otherwise provide any information or material that may disparage, demean or reflect poorly upon, or harm or otherwise cause injury to, the image, reputation or character of the Executive to any third parties, that the Company and its directors and executive officers shall respond accurately and fully to any question, inquiry or request for information when required by legal process and may make truthful statements in connection with any legal dispute related to or arising from this Release. If the Company intends to issue a press release or internal communication concerning the matters covered by this Release, the Executive shall have the right to approve the terms thereof prior to its issuance, such approval not to be unreasonably withheld. |
3. | Return of Company Property. The Executive confirms and covenants that the Executive has returned to the Company, without retaining copies, all property of the Company and items related to the business of the Company (“Company Property”), including all (a) equipment, products, data, manuals, letters, emails, reports, agreements, communications (including intra-Company communications and whether in hard copy or stored electronically), (b) keys to Company property, (c) Company credit cards, identification cards and business cards, and (d) documents, memoranda, notes, papers, work product or other materials in the Executive’s possession or under the Executive’s control that contain or are derived from Information (as defined in the Restrictive Covenants Agreement) or that are otherwise connected with or derived from the Executive’s services to the Company. |
4. | Cooperation. If the Executive receives a subpoena or process from any person or entity (including any governmental agency) that will or may require the Executive to disclose documents or information, or to provide testimony (in a deposition, court proceeding, or otherwise) regarding, in whole or in part, the Company or any of its affiliates (including its directors and executive officers), any Information or any Company Property, the Executive shall (a) to the extent permitted by law, notify ______________ of the Company of the subpoena or other process within twenty-four hours after receiving it and (b) to the maximum extent possible, not make any disclosure until the Company has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure, limit the scope or nature of such disclosure, or seek to participate in the proceeding or matter in which the disclosure is sought. |
5. | Review and Revocation by Executive. |
5.1. | The Executive understands (a) the Executive has been given a period of twenty-one days to review and consider this Release before signing it pursuant to the U.S. Age Discrimination in Employment Act of 1967 and (b) the Executive may use as much of such twenty-one-day period as the Executive wishes prior to signing this Release. |
5.2. | The Executive acknowledges and represents that the Executive understands the Executive may revoke the waiver of the Executive’s rights under the U.S. Age Discrimination in Employment Act of 1967 effectuated in this Release within seven days of signing this Release. Revocation can be made by delivering a written notice of revocation to ___________________, Chembio Diagnostics, Inc., 555 Wireless Boulevard, Hauppauge, New York 11788. For such a revocation to be effective, such officer must receive such written notice by no later than the close of business on the seventh day after the Executive signs this Release. If the Executive revokes the waiver of the Executive’s rights under the U.S. Age Discrimination in Employment Act of 1967, the Company shall have no obligations to the Executive under Section 3 of the Retention Agreement other than the Base Obligations (as defined in the Retention Agreement). |
5.3. | The Executive and the Company respectively represent and acknowledge that in executing this Release neither of them is relying upon, and has not relied upon, any representation or statement not set forth herein made by any of the agents, representatives or attorneys of the Releasees with regard to the subject matter, basis or effect of this Release or otherwise. |
5.4. | The Executive represents and agrees that the Executive (a) has been advised by the Company to discuss all aspects of this Release with the Executive’s attorney and, to the extent the Executive desires, has done so, (b) has carefully read and fully understands all of the provisions of this Release, and (c) is entering into this Release voluntarily. |
6. | Miscellaneous. |
6.1. | The Company and the Executive desire and intend that the provisions of this Release be enforced to the fullest extent permissible under law. In the event of any conflict between one or more provisions of this Release and any current or future law, such law shall prevail but the provisions of this Release affected by such conflict shall be curtailed and limited only to the extent necessary to bring those provisions within the requirements of law and the remaining provisions of this Release shall remain in full force and effect and shall be fully valid and enforceable. |
6.2. | This Release shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of laws principles thereof or to those of any other jurisdiction that, in either case, could cause the application of the laws of any jurisdiction other than the State of New York. |
6.3. | This Release (a) is binding on the successors and assigns of, and sets forth the entire agreement between, the parties hereto, (b) fully supersedes any and all prior agreements or understandings between the parties hereto pertaining to the subject matter hereof, and (c) may not be changed except by explicit written agreement to that effect subscribed by e. |
6.4. | For purposes of this Release: |
(a) | headings used in this Release are for convenience of reference only and shall not, for any purpose, be deemed a part of this Release; |
(b) | the words “include,” “includes” and “including” shall not be construed so as to exclude any other thing not referred to or described; |
(c) | the word “or” is not exclusive; |
(d) | unless the context otherwise requires, (i) references in this Release to an agreement, instrument or other document mean such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (ii) references in this Release to a statute mean such statute as amended from time to time and include any successor legislation thereto and any rules and regulations promulgated thereunder; and |
(e) | this Release shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. |
* * *
PLEASE READ CAREFULLY. THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
This Release is executed by the Executive and on behalf of the Company as of ______________, 20__.
Charles Caso | Chembio Diagnostics, Inc. | ||
/s/ CHARLES CASO | By: | /s/ Richard L. Eberly | |
Name: Richard L. Eberly Title: President & CEO |
A-5
Exhibit (e)(17)
NON-DISCLOSURE, INTELLECTUAL PROPERTY,
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
This Non-Disclosure, Intellectual Property, Non-Competition and Non-Solicitation Agreement (the “Agreement”) is entered into between Chembio Diagnostics, Inc., a Nevada corporation (the “Company”), and Charles Caso (the “Executive” and, together with the Company, the “Parties”) as of the date set forth on the signature page hereof. The Parties are entering into this Agreement contemporaneously with, and as a condition to, their execution and delivery of an Executive Retention Agreement dated as of the date hereof (the “Executive Retention Agreement”).
In consideration of the mutual covenants, promises and agreements contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. | Confidentiality. |
(a) | The Executive hereby warrants, covenants and agrees that, without the prior express written consent of the Company and unless required by law, court order or similar process, the Executive shall hold in the strictest confidence, and shall not disclose to any person, firm, corporation or other entity, any and all of the Company’s information, including, for example, any data related to (i) drawings, sketches, plans or other documents concerning the Company’s strategies, business or development plans, customers or suppliers, and research and development efforts, (ii) the Company’s development, design, construction or sales and marketing methods or techniques, or (iii) the Company’s trade secrets and other “know-how” or information not of a public nature, regardless of how such information came to the custody of the Executive (collectively, clauses (i), (ii) and (iii) of this Section 1(a), “Information”). For purposes of this Agreement, Information shall include any information regarding a formula, pattern, compilation, program, device, method, technique or process that (A) derives independent economic value, present or potential, not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use and (B) is the subject of Company efforts. |
(b) | In the event the Executive is required by law, court order or similar process to disclose any Information, the Executive shall provide immediate notice of such obligatory disclosure prior to such disclosure, so that the Company, at its sole option, may attempt to seek a protective order or other appropriate remedy to preclude such disclosure. |
(c) | Upon the Executive’s termination, the Executive agrees to return to the Company all Company Information, including documents (and all copies thereof), any other Company property in the Executive’s possession or control, and any materials of any kind that contain or embody any proprietary or confidential material of the Company. |
(d) | The warranties, covenants and agreements set forth in this Section 1 shall not expire, shall survive this Agreement, and shall be binding upon the Executive without regard to the passage of time or any other event. |
2. | Company’s Right To Inventions and Discoveries. |
(a) | “Inventions” means all improvements, discoveries, inventions, works of authorship, mask works, computer programs, source and object codes, writings, formulas, ideas, processes, techniques, know-how and data, made or conceived or reduced to practice or developed by the Executive, either alone or jointly with others as a result of employment at the Company or one of its affiliates. “Proprietary Rights” means all trade secret, patent, copyright, trademark, trade name, service mark, and other intellectual property rights throughout the world. Inventions and Proprietary Rights do not include inventions that the Executive developed entirely on the Executive’s own time without using the Company’s equipment, supplies, facilities, or Information except for those inventions that either relate to the Company’s actual or anticipated business, research or development or that result from work performed by the Executive for the Company. |
(b) | The Executive hereby assigns and agrees to assign in the future to the Company all of the Executive’s right, title and interest in and to any and all Inventions and all Proprietary Rights, whether or not subject to protection under the patent, copyright, trademark or industrial design laws, made or conceived or reduced to practice or learned by the Executive (solely or jointly with others) during the Executive’s employment with the Company and for a one-year period after the Executive’s termination of employment with the Company (collectively “Assigned Intellectual Property”). The Executive further agrees that all Assigned Intellectual Property is the sole property of the Company. |
(c) | The Executive agrees to promptly notify and fully disclose to the Company all Assigned Intellectual Property, and will take such steps as are deemed necessary to maintain complete and current records of same. The Executive will, at the Company’s request and expense, whether during or after employment, take such steps as are reasonably necessary to assist the Company in securing, maintaining, defending or enforcing any title and right to Assigned Intellectual Property. |
3. | Non-Compete and Non-Solicit. |
(a) | The Executive acknowledges and recognizes the highly competitive nature of the Company’s business and that the Executive’s duties hereunder justify restricting the Executive’s further employment following any termination of employment. The Executive further acknowledges and understands that the Company recognizes the Executive’s importance and value to the Company and thus has provided the Executive with the rights and benefits set forth in the Executive Retention Agreement (as such rights and benefits may be amended from time to time) to induce the Executive to enter into this Agreement. |
(b) | The Executive agrees that so long as the Executive is employed by the Company, and for a period of one year following the termination of this Agreement, the Executive shall not, directly or indirectly: |
(i) | induce or attempt to induce any employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any other employee; |
(ii) | except when acting at the request of the Company on behalf of or for the benefit of the Company, induce suppliers, subcontractors, customers, agents, or other sources of material, services, or distribution of the Company’s business under contract or doing business with the Company to terminate, reduce, alter or divert business with or from the Company; and |
(iii) | either as a principal, agent, employee, employer, consultant, partner, member or manager of a limited liability company, shareholder of a company that does not have securities registered under the Securities Exchange Act of 1934 (the “1934 Act”), or a shareholder in excess of one percent of a company that has securities registered under the 1934 Act, corporate officer or director, or in any other individual or representative capacity, engage or otherwise participate in any manner or fashion in any business that directly competes with the business activities of the Company in or about any market in which the Company is, or has publicly announced a plan for doing business. |
The Executive further covenants and agrees that the restrictive covenants set forth in this Section 3(b) are reasonable as to duration, terms, and geographical area and that the same protects the legitimate interests of the Company, imposes no undue hardship on the Executive, and is not injurious to the public.
(c) | The covenant set forth in Section 3(b)(iii) shall not apply if the Executive’s employment is terminated within twelve months of a Change in Control. Ownership by the Executive, for investment purposes only, of less than one percent of any class of securities of a corporation if said securities are listed on a national securities exchange or registered under the 1934 Act shall not constitute a breach of the covenant set forth in Section 3(b)(iii). For these purposes, “Change in Control” shall mean the occurrence of any of the following: |
(i) | the acquisition, directly or indirectly, by any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act (a “Person”) of the beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 under the 1934 Act, except that, in calculating the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time) of more than fifty percent of the outstanding securities of the Company; |
(ii) | a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated; |
(iii) | the sale, transfer or other disposition of all or substantially all of the assets of the Company; |
(iv) | a complete liquidation or dissolution of the Company; or |
(v) | a reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent of the total combined voting power of the Company’s outstanding securities are transferred to a Person or Persons different from the Persons holding those securities immediately prior to such merger. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur unless one of the foregoing events constitutes a “change in control event” within the meaning of Section 409A of the Internal Revenue Code of 1986.
(d) | The Executive acknowledges and understands that, by virtue of his position with the Company, he will have exposure to various entities with which the Company does business or is in discussions to do business. Accordingly, the Executive hereby covenants and agrees that, so long as he is employed by the Company, he will not, except with the prior written consent of the Company, solicit or enter into any discussions for a position of employment with any such entities. |
(e) | It is the desire and intent of the Parties that the provisions of this paragraph be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this Section 3 shall be adjudicated to be invalid or enforceable, this Section 3 shall be deemed amended to apply in the broadest allowable manner and to delete therefrom the portion adjudicated to be invalid or unenforceable, such amendment and deletion to apply only with respect to the operation of this Section 3 in the particular jurisdiction in which that adjudication is made. |
4. | Remedies. If there is a breach or threatened breach of any provision of Section 1, 2 or 3, the Company will suffer irreparable harm and shall be entitled to an injunction restraining the Executive from such breach. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies for such breach or threatened breach. |
5. | Review by Executive. The Executive represents and agrees that he (a) has been advised by the Company to discuss all aspects of this Agreement with his attorney and, to the extent he desires, has done so, (b) has carefully read and fully understands all of the provisions of this Agreement, and (c) is entering into this Agreement voluntarily. |
6. | Miscellaneous. |
(a) | It is the clear intention of the Parties that no term, provision or clause of this Agreement shall be deemed to be invalid, illegal or unenforceable in any respect, unless such term, provision or clause cannot be otherwise construed, interpreted, or modified to give effect to the intent of the Parties and to be valid, legal or enforceable. The Parties specifically charge the trier of fact to give effect to the intent of the Parties, even if in doing so, invalidation of a specific provision of this Agreement is required to make the Agreement consistent with the foregoing stated intent. In the event that a term, provision, or clause cannot be so construed, interpreted or modified, the validity, legality and enforceability of the remaining provisions contained herein and other application(s) thereof shall not in any way be affected or impaired thereby and shall remain in full force and effect. |
(b) | The waiver by the Company or the Executive of the breach of any provision of this Agreement by the other Party shall not operate or be construed as a waiver of any subsequent breach by that Party. |
(c) | This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of laws principles thereof or to those of any other jurisdiction that, in either case, could cause the application of the laws of any jurisdiction other than the State of New York. The Executive hereby expressly consents to personal jurisdiction in the state and federal courts located in Suffolk County, New York for any lawsuit filed there against him by the Company arising from or relating to this Agreement. |
(d) | All notices, requests, consents, claims, demands, waivers and other communications under this Agreement shall be in writing and shall be deemed to have been given: (i) when delivered by hand (with written confirmation of receipt); (ii) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (iii) on the date sent by electronic mail (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next day (other than a Saturday, Sunday or other day on which commercial banks in the New York, New York, are authorized or required to close) if sent after normal business hours of the recipient; or (iv) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 6(d): |
If to the Company: | Chembio Diagnostics, Inc. |
555 Wireless Boulevard
Hauppauge, New York 11788
Attention: Chief Executive Officer
Email: [**]
If to the Executive: | As set forth on the signature page hereof |
(e) | This Agreement shall be binding upon the Executive and the Company and shall benefit the Company and its successors and assigns. This Agreement shall not be assignable by the Executive. |
(f) | For purposes of this Agreement: |
(i) | headings used in this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement; |
(ii) | any references in this Agreement to a Section refer to a Section of this Agreement, unless specified otherwise; |
(iii) | the words “include” and “including” shall not be construed so as to exclude any other thing not referred to or described; |
(iv) | the word “or” is not exclusive; |
(v) | unless the context otherwise requires, (A) references in this Agreement to an agreement, instrument or other document mean such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (B) references in this Agreement to a statute mean such statute as amended from time to time and include any successor legislation thereto and any rules and regulations promulgated thereunder; and |
(vi) | this Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. |
* * *
In Witness Whereof, the Parties have executed, or caused to be executed, this Agreement as of January , 2022.
Chembio Diagnostics, Inc. | ||
By: | /s/ Richard L. Eberly | |
Richard L. Eberly | ||
Chief Executive Officer and President |
Charles Caso | |||
/s/ Charles Caso | 2/9/2022 | ||
Address: | [**] | ||
[**] | |||
Email: | [**] | ||
[**] |
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