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Share Name | Share Symbol | Market | Type |
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Chembio Diagnostics Inc | NASDAQ:CEMI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.455 | 0.44 | 0.46 | 0 | 01:00:00 |
Filed by the Registrant ☒ |
Filed by a Party other than the Registrant ☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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(Name of Registrant as Specified In Its Charter)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state
how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Proposal
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— Election of Directors |
Proposal
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— Approval of Reincorporation in Delaware |
Provision
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Nevada
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Delaware
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Provision
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Nevada
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Delaware
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Removing
Directors
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Any one or all of the directors may be removed by the holders of not less than two-thirds of the voting power of a corporation’s issued and
outstanding stock. The NRS does not distinguish between removal of directors with or without cause. NRS 78.335.
The Nevada Bylaws state that, except as otherwise provided by the NRS, any director or the entire board of directors may be removed with or
without cause by the affirmative vote of the holders of two-thirds of the voting power of the issued and outstanding common stock entitled to vote.
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Any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to
vote at an election of directors, except as follows: (a) in the case of a corporation whose board is classified, stockholders may effect such removal only for cause unless the certificate of incorporation provides otherwise; or (b) in the
case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against such director’s removal would be sufficient to elect such director if then
cumulatively voted at an election of the entire board, or, if there be classes of directors, at an election of the class of directors of which such director is a part. DGCL §141.
Following the reincorporation, any director may be removed from the board of directors at any time, with or without cause, by the holders of a majority of the shares entitled to vote at an election of
directors. Thus, the ability of stockholders to remove directors will not be subject to a supermajority vote following the reincorporation.
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Filling Director
Vacancies
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All vacancies on the board of directors, including those caused by an increase in the number of directors, may be filled by a majority of the
remaining directors, though less than a quorum, unless it is otherwise provided in the articles of incorporation. Unless otherwise provided in the articles of incorporation, upon a resignation by a director, the board may fill the vacancy
with each director so appointed to hold office during the remainder of the term of office of the resigning director. NRS 78.335.
The Nevada Bylaws are consistent with the NRS.
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All vacancies on the board of directors may be filled by a majority of the remaining directors, though less than a quorum, unless the certificate
of incorporation or bylaws provide otherwise. Unless otherwise provided in the certificate of incorporation or bylaws, the board may fill the vacancies for the remainder of the term of office of resigning director or directors. Further, if,
at the time of filling any vacancy, the directors then in office shall constitute less than a majority of the whole board, the Delaware Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the
total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the
directors then in office. DGCL §223. Under the common law, stockholder have the inherent right to fill board vacancies and newly created directorships absent a clear
provision to the contrary contained in the certificate of incorporation or bylaws.
The Delaware Bylaws and the Delaware Charter eliminate the common law right of stockholders to fill vacancies and newly-created directorships and provide that only the board
of directors may fill vacancies and newly-created directorships.
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Provision
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Nevada
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Delaware
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Provision
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Nevada
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Delaware
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Quorum for
Stockholder
Meeting
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Unless the articles of incorporation or bylaws provide otherwise, a majority of the voting power, present in person or by proxy at a meeting of
stockholders (regardless of whether the proxy has authority to vote on all matters), constitutes a quorum for the transaction of business. NRS 78.320.
The Nevada Bylaws are consistent with the NRS.
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The certificate of incorporation or bylaws may specify the number of shares (and the amount of other securities having voting power) the holders
of which shall be present or represented by proxy at any meeting in order to constitute a quorum for, and the votes that shall be necessary for, the transaction of any business, but a quorum may not consist of less than one-third of the
shares entitled to vote at the meeting, except that, where a separate vote by one or more classes or series is required, a quorum may not consist of less than one-third of the shares of each such class or series. In the absence of such a
specification: (a) a majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at a stockholder meeting; (b) in all matters other than the election of directors and matters for which the
DGCL specifies a different vote, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders; (c) directors shall be
elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors; and (d) where a separate vote by one or more classes or series is required, a
majority of the outstanding shares of each such class or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter and, in all matters other than the
election of directors and matters for which the DGCL specifies a different vote, the affirmative vote of the majority of shares of each such class or series present in person or represented by proxy at the meeting shall be the act of each
such class or series. A bylaw amendment adopted by stockholders specifying the votes necessary for election of directors may not be further amended or repealed by the board of directors. DGCL §216.
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Consistent with the DGCL, the Delaware Bylaws state that the holders of one-third in voting power of the capital stock issued and outstanding and entitled to vote,
present in person or represented by proxy, shall constitute a quorum for the transaction of business. The Delaware Bylaws and Nevada Bylaws differ with respect to quorum requirements in that the Delaware Bylaws impose a lower quorum
threshold.
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Provision
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Nevada
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Delaware
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Cumulative
Voting for
Directors
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The NRS permits cumulative voting in the election of directors only if the articles of incorporation provide for cumulative voting and certain
procedures for the exercise of cumulative voting are followed. NRS 78.360.
The Nevada Charter does not provide for cumulative voting.
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Under the DGCL, a corporation may provide for cumulative voting in its certificate of incorporation. DGCL
Section 214.
The Delaware Charter does not provide for cumulative voting.
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Duration of
Proxies
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A proxy is effective only for a period of six months from the date of its creation, unless it is coupled with an interest or unless otherwise
provided by the stockholder in the proxy, which duration may not exceed seven years. A proxy shall be deemed irrevocable if the written authorization states that the proxy is irrevocable, but is irrevocable only for as long as it is coupled
with an interest sufficient in law to support an irrevocable power. NRS 78.355.
The Nevada Bylaws do not change this statutory rule.
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A proxy executed by a stockholder will remain valid for a period of three years, unless the proxy provides for a longer period. A duly executed
proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest
with which it is coupled is an interest in the stock itself or an interest in the corporation generally. DGCL §212
The Delaware Bylaws do not change this statutory rule. The DGCL statutory default provides for proxies to remain valid for a longer duration than
the NRS statutory default.
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Advance Notice
Provisions
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The Nevada Bylaws do not contain advance notice requirements for business to be brought by a stockholder before an annual or special meeting of
stockholders.
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The Delaware Bylaws contain advance notice requirements for business to be brought before an annual or special meeting of stockholders, including
nominations of persons for election as directors. As a result, stockholders must satisfy specific timing and information requirements in order to have a proposal considered at or in order to nominate a person for election as a director at
an annual or special meeting or to present other stockholder business. Any proposal or nomination that fails to comply with these timing and information requirements may be disqualified.
The Delaware Bylaws and the Nevada Bylaws are materially different in this respect.
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Provision
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Nevada
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Delaware
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Stockholder
Votes for
Mergers and
Similar
Transactions
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Under the NRS, the approval of a majority of outstanding shares entitled to vote, as well as the board of directors, is required for a merger or a
sale of substantially all of the assets of the corporation. Generally, the NRS does not require a stockholder vote of the surviving corporation in a merger if: (a) the plan of merger does not amend the existing articles of incorporation;
(b) each share of stock of the surviving corporation outstanding immediately before the effective date of the merger is an identical outstanding share after the merger; (c) the number of voting shares outstanding immediately after the
merger, plus the number of voting shares issued as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more
than 20% the total number of voting shares of the surviving domestic corporation outstanding immediately before the merger; and (d) the number of participating shares outstanding immediately after the merger, plus the number of
participating shares issuable as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger, will not exceed by more than 20% the total
number of participating shares outstanding immediately before the merger. NRS 92A.130.
The Nevada Charter and Nevada Bylaws do not change the statutory rule.
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Under the DGCL, the approval of a majority of outstanding shares entitled to vote, as well as the board of directors, generally is required for
most mergers or a sale of all or substantially all of the assets of the corporation. Generally, the DGCL does not require a stockholder vote of the surviving corporation in a merger (unless the corporation provides otherwise in its
certificate of incorporation) if: (a) the plan of merger does not amend the existing certificate of incorporation; (b) each share of stock of the surviving corporation outstanding immediately before the effective date of the merger is an
identical outstanding share after the effective date of the merger; and (c) either no shares of common stock of the surviving corporation and no shares, securities or obligations convertible into such stock are to be issued or delivered
under the plan of merger, or the authorized unissued shares or shares of common stock of the surviving corporation to be issued or delivered under the plan of merger plus those initially issuable upon conversion of any other shares,
securities or obligations to be issued or delivered under such plan do not exceed 20% of the shares of common stock of such constituent corporation outstanding immediately prior to the effective date of the merger. DGCL §251.
The Delaware Charter and Delaware Bylaws do not change the statutory rule. The NRS and the DGCL are substantially similar in regard to stockholder
approval of mergers and other corporate transactions.
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Consideration
of Non-
Stockholder
Interests
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The NRS authorizes directors, when taking action on behalf of the corporation, to consider the interests of constituencies other than
stockholders, including employees, suppliers, creditors, customers and the community and society as a whole. NRS 78.138(4).
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Delaware case law limits the ability of the board of directors to consider the interests of non-stockholders when taking action on behalf of the
corporation.
This aspect of Delaware law could, in some circumstances, limit the discretion of the board in responding to unsolicited takeover proposals or similar events.
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Provision
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Nevada
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Delaware
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Provision
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Nevada
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Delaware
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Provision
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Nevada
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Delaware
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Director
Standard of
Conduct
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Under the NRS, directors and officers must exercise their powers in good faith and with a view to the interests of the corporation.
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Under the DGCL, the standards of conduct for directors have developed through written opinions of the Delaware courts. Generally, directors are
subject to fiduciary duties of care, loyalty and good faith.
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Limitation on
Director
Liability
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Under the NRS, unless the articles of incorporation provide for greater individual liability, a director or officer is not individually liable to
the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that (a) the director’s or officer’s act or failure to act
constituted a breach of his or her fiduciary duties as a director or officer and (b) the breach of those duties involved intentional misconduct, fraud, or a knowing violation of law. NRS 78.138.
Consistent with this statutory rule, the Nevada Charter provide that the personal liability of the directors of the corporation is eliminated to
the fullest extent permitted by the NRS. The Nevada Bylaws do not change this statutory rule.
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Under the DGCL, if the certificate of incorporation so provides, the personal liability of a director for monetary damages for breach of the
fiduciary duty of care as a director may be eliminated or limited. The certificate of incorporation may not, however, limit or eliminate a director’s personal liability for (a) any breach of the director’s duty of loyalty to the corporation
or its stockholders, (b) acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law, (c) payment of unlawful dividends, stock repurchases or redemptions, or (d) any transaction in which the
director received an improper personal benefit. DGCL §102.
Consistent with this statutory rule, the Delaware Charter limits the personal liability of a director for monetary damages for breach of the fiduciary duty of care as
permitted under the DGCL. The DGCL is more extensive than the NRS in the enumeration of actions under which we may not eliminate a director’s personal liability.
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Provision
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Nevada
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Delaware
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Provision
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Nevada
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Delaware
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Provision
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Nevada
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Delaware
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Provision
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Nevada
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Delaware
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Control Share
Acquisition
Statute
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The NRS control share acquisition statute applies to Nevada corporations that do business in Nevada (directly or through affiliates) and that have
200 or more stockholders of record (at least 100 of whom have addresses in Nevada), unless the articles of incorporation or bylaws of the corporation provide otherwise. If applicable, this statute generally provides that any person
acquiring a defined control percentage (20%, 33-1/3% or a majority) of the corporation’s outstanding shares in the secondary market will not be entitled to vote those shares unless those voting rights are restored by a majority vote of the
disinterested stockholders. Unless otherwise provided in the articles of incorporation or the bylaws, if the control shares are accorded full voting rights and the holder acquires control shares with a majority of the voting power, any
stockholder, other than the acquiring person, who does not vote in favor of authorizing voting rights for the control shares is entitled to dissent and demand payment of the fair value of his or her shares. NRS 78.378-.3793.
The Nevada Bylaws expressly opted out of the control share acquisition statute.
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The DGCL does not include a control share acquisition provision. Because the Nevada Bylaws opted out of the NRS control share acquisition statute,
there will be no substantive change with respect to control share acquisitions.
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Forum Selection
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The Nevada Charter and the Nevada Bylaws do not contain any provisions governing selection of forum for litigating corporate claims.
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The Delaware Charter provides that, with specified exceptions, (a) the Delaware Court of Chancery will be the sole and exclusive forum for all claims based upon a violation of a duty by
a current or former director or officer or stockholder in such capacity, or as to which the DGCL confers jurisdiction upon the Delaware Court of Chancery and (b) the U.S. federal district courts will be the exclusive forum for the
resolution of any complaint asserting a cause of action arising under the Securities Act of 1933. Neither of these choice of forum provisions would affect suits brought to enforce any liability or duty created by the Securities Exchange
Act of 1934 or the rules and regulations thereunder, jurisdiction over which is exclusively vested by statute in the U.S. federal courts. Because these provisions will be located in the Delaware Charter rather than the Delaware Bylaws,
any future amendment of these provisions will be more difficult to achieve due to the need to obtain approval of not only the board but also holders of at least two-thirds in voting power of the outstanding shares of capital stock
entitled to vote thereon.
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Resolved: |
That the state of incorporation of Chembio Diagnostics, Inc. shall be changed from the State of Nevada to the State of Delaware (the “Reincorporation”) in accordance with the Plan of
Conversion, the Certificate of Conversion and the Articles of Conversion in the forms included as Appendix A, Appendix B and Appendix E, respectively, to the Proxy Statement for the 2020 Annual Meeting of Stockholders; and that the Certificate of Incorporation and the Bylaws in the forms attached to such Plan of
Conversion and included as Appendix C and Appendix D, respectively, to such Proxy Statement, as amended by the Definitive Additional Proxy
Materials filed on July 7, 2020, are approved and adopted effective upon the Reincorporation.
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1 Year Chembio Diagnostics Chart |
1 Month Chembio Diagnostics Chart |
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