ex4_1.htm


    
      
        

      

    

    
      
        

      

    

    CHEMBIO
DIAGNOSTICS, INC.

    2008
STOCK INCENTIVE PLAN

    FORM
OF STOCK OPTION AGREEMENT

    


    Chembio
Diagnostics, Inc. (the “Company”), pursuant to its 2008 Stock Incentive Plan
(the “Plan”), hereby grants to the Optionee listed below (“Optionee”), an option
to purchase the number of shares of the Company’s Common Stock set forth below,
subject to the terms and conditions of the Plan and this Stock Option Agreement.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Stock Option Agreement.

     

    
      	
              I.  

            	
              NOTICE OF STOCK OPTION
      GRANT

            


    

     

    
      	
              Optionee:

            	 
      	
              ___________________________________

            
	
              Date
      of Stock Option Agreement:

            	 
      	
              ___________________________________

            
	
              Date
      of Grant:

            	 
      	
              ___________________________________

            
	
              Vesting
      Commencement Date:

            	 
      	
              ___________________________________

            
	
              Exercise
      Price per Share:

            	 
      	
              ___________________________________

            
	
              Total
      Number of Shares Granted:

            	 
      	
              ___________________________________

            
	
              Term/Expiration
      Date:

            	 
      	
              ___________________________________

            


    

    


    
      	
              Type of
      Option:

            	
              ⁮
      Incentive Stock Option or  ⁮ Non-Incentive Stock
      Option

            


    

     

    
      	
              Vesting
      Schedule:

            	
              The
      Option Shares subject to this Option shall vest according to the following
      schedule:

            


    

     

    
      	
              ___________________________________________________________

              ___________________________________________________________

            


    

    


    
      	
              Termination
      Period:

            	
              This
      Option may be exercised, to the extent vested, for thirty days after
      Optionee ceases to be an Eligible Person, or such longer period as may be
      applicable upon the death or disability of Optionee as provided herein
      (or, if not provided herein, then as provided in the Plan), but in no
      event later than the Term/Expiration Date as provided
    above.

            


    

     

    
      	
              II.  

            	
              AGREEMENT

            


    

     

    1. Grant of
Option.  The Company hereby grants to Optionee an Option to
purchase the number of shares of Common Stock (the “Option Shares”) set forth in
the Notice of Grant, at the exercise price per share set forth in the Notice of
Grant (the “Exercise Price”).  Notwithstanding anything to the
contrary anywhere else in this Option Agreement, this grant of an Option is
subject to the terms, definitions and provisions of the Plan adopted by the
Company, which is incorporated herein by reference.

     

    If
designated in the Notice of Grant as an Incentive Stock Option, this Option is
intended to qualify as an Incentive Stock Option as defined in Section 422
of the Code; provided,
however, that to the extent that the aggregate Fair Market Value of stock
with respect to which Incentive Stock Options (within the meaning of Code
Section 422, but without regard to Code Section 422(d)), including this Option,
exercisable for the first time by Optionee during any calendar year (under the
Plan and all other incentive stock option plans of the Company, if any) exceeds
$100,000, such options shall be treated as not qualifying under Code
Section 422, but rather shall be treated as Non-Incentive Stock Options to
the extent required by Code Section 422.  The rule set forth in the
preceding sentence shall be applied by taking options into account in the order
in which they were granted.  For purposes of these rules, the Fair
Market Value of stock shall be determined as of the time the option with respect
to such stock is granted.

     

    2. Exercise of
Option.  This Option is exercisable as follows:

     

    (a) Right to
Exercise.

     

    (i) This
Option shall be exercisable cumulatively according to the vesting schedule set
out in the Notice of Grant.  For purposes of this Stock Option
Agreement, Option Shares subject to this Option shall vest based on Optionee’s
continued status as an Eligible Person.

     

    (ii) This
Option may not be exercised for a fraction of a Share.

     

    (iii) In the
event of Optionee’s death, disability or other termination of Optionee’s status
as an Eligible Person, the exercisability of the Option is governed by
Sections 7, 8 and 9 below.

     

    (iv) In no
event may this Option be exercised after the date of expiration of the term of
this Option as set forth in the Notice of Grant.

    
      
        

      

    

    
    

    (b) Method of
Exercise.  This Option shall be exercisable by written Notice
(in the form attached as Exhibit
A).  The Notice must state the number of Option Shares for
which the Option is being exercised, and such other representations and
agreements with respect to such Option Shares as may be required by the Company
pursuant to the provisions of the Plan.  The Notice must be signed by
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company.  The Notice must be accompanied by payment of the
Exercise Price plus payment of any
applicable withholding tax.  This Option shall be deemed to be
exercised upon receipt by the Company of such written Notice accompanied by the
Exercise Price and payment of any applicable withholding tax.

     

    No Option
Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise comply with all relevant provisions of law and the
requirements of any stock exchange upon which the Option Shares may then be
listed.  Assuming such compliance, for income tax purposes the Option
Shares shall be considered transferred to Optionee on the date on which the
Option is exercised with respect to such Option Shares.

     

    3. Optionee’s
Representations.  If the Option Shares purchasable pursuant to
the exercise of this Option have not been registered under the Securities Act of
1933, as amended (the “Securities Act”), at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.

     

    4. Method of
Payment.  Payment of the Exercise Price shall be by any of the
following, or a combination thereof:

     

    (a) cash;

     

    (b) check;

     

    (c) if the
aggregate purchase price of the Option Shares purchased by any Optionee at one
time exceeds $5,000, the Compensation Committee, solely in its discretion, may
permit all or part of the Exercise Price for the Option Shares to be paid by
delivery to the Company of cancelled shares of the Company's Common Stock owned
by the Optionee pursuant to Section 8 of the Plan; or

     

    (d) with the
consent of the Compensation Committee, any method of payment, or combination
thereof that is permitted in the Plan.

     

    5. Restrictions on
Exercise.  If the issuance of Option Shares upon such exercise
or if the method of payment for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, then the
Option may also not be exercised.  The Company may require Optionee to
make any representation and warranty to the Company as may be required by any
applicable law or regulation before allowing the Option to be
exercised.

     

    6. Termination of
Relationship.  If Optionee ceases to be an Eligible Person
(other than by reason of Optionee’s death or the total and permanent disability
of Optionee as defined in Code Section 22(e)(3)), Optionee may exercise this
Option, to the extent the Option was vested at the date on which Optionee ceases
to be an Eligible Person, but only within thirty days from such date (and in no
event later than the expiration date of the term of this Option set forth in the
Notice of Grant).  To the extent that the Option is not vested at the
date on which Optionee ceases to be an Eligible Person, or if Optionee does not
exercise this Option within the time specified herein, the Option shall
terminate.

     

    7. Disability of
Optionee.  If Optionee ceases to be an Eligible Person as a
result of his or her total and permanent disability as defined in Code Section
22(e)(3), Optionee may exercise the Option to the extent the Option was vested
at the date on which Optionee ceases to be an Eligible Person, but only within
thirty days from such date (and in no event later than the expiration date of
the term of this Option as set forth in the Notice of Grant).  To the
extent that the Option is not vested at the date on which Optionee ceases to be
an Eligible Person, or if Optionee does not exercise such Option within the time
specified herein, the Option shall terminate.

     

    8. Death of
Optionee.  If Optionee ceases to be an Eligible Person as a
result of the death of Optionee, the vested portion of the Option may be
exercised at any time within thirty days following the date of death (and in no
event later than the expiration date of the term of this Option as set forth in
the Notice of Grant) by Optionee’s estate or by a person who acquires the right
to exercise the Option by bequest or inheritance.  To the extent that
the Option is not vested at the date of death, or if the Option is not exercised
within the time specified herein, the Option shall terminate.

     

    9. Non-Transferability of
Option.  This Option may not be transferred in any manner by
the Optionee, either voluntarily or involuntarily, except by will or the laws of
descent and distribution.  The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of
Optionee.

     

    10. Term of
Option.  This Option may be exercised only within the term set
out in the Notice of Grant.

     

    11. Restrictions on Option
Shares.  Optionee hereby agrees that Option Shares purchased
upon the exercise of the Option shall be subject to such terms and conditions as
the Compensation Committee shall determine in its sole
discretion.  Such terms and conditions may, in the Compensation
Committee’s sole discretion, be contained in the Exercise Notice with respect to
the Option or in such other agreement as the Compensation Committee shall
determine and which the Optionee hereby agrees to enter into at the request of
the Company.

     

    (Signature
Page Follows)

    
       

      
        
          

        

      

      
         


      

    


    This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which shall constitute one document.

     

    CHEMBIO
DIAGNOSTICS, INC.

     

    By:________________________________

     

    Name:______________________________

     

    Title:_______________________________

     

    OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE VESTING OF OPTION SHARES PURSUANT TO THE OPTION
HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE
COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY’S 2008 STOCK INCENTIVE PLAN,
WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT
WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR
SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO
TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE AND WITH OR WITHOUT PRIOR NOTICE, UNLESS THE COMPANY AND THE OPTIONEE HAVE
AGREED OTHERWISE IN WRITING.

     

    Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof.  Optionee hereby
accepts this Option subject to all of the terms and provisions
hereof.  Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option, and fully understands all provisions of the
Option.  Optionee hereby agrees to accept as binding, conclusive, and
final all decisions or interpretations of the Compensation Committee upon any
questions arising under the Plan or this Option.  Optionee further
agrees to notify the Company upon any change in the residence address indicated
below.

     

    Dated:
__________________                                                                                     

                          Name:
____________________________________

    Address:
__________________________________

    Address:
__________________________________

    
    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

    EXHIBIT
A

     

    CHEMBIO
DIAGNOSTICS, INC.

    2008
STOCK INCENTIVE PLAN

    EXERCISE
NOTICE

    Chembio
Diagnostics, Inc.

    Attention:
Richard J. Larkin

     

    1. Exercise of
Option.  Effective as of today, ___________, _____, the
undersigned (“Optionee”) hereby elects to exercise Optionee’s option to purchase
_________ shares of the Common Stock (the “Option Shares”) of Chembio
Diagnostics, Inc. (the “Company”) under and pursuant to the Company’s 2008 Stock Incentive
Plan (the “Plan”) and the Stock Option Agreement dated
_____________________ (the “Option Agreement”).  Capitalized terms
used herein without definition shall have the meanings given in the Option
Agreement.

     

    
      	
              Date
      of Grant:

            	 
      	
              ______________________________

            
	
              Number
      of Option Shares as to which Option is Exercised:

            	 
      	 
      
	
              Exercise
      Price per Share:

            	 
      	
              $____________

            
	
              Total
      Exercise Price:

            	 
      	
              $____________

            
	
              Certificate
      to be Issued in Name of:

            	 
      	 
      
	
              Payment
      Delivered Herewith:

            	
               ̈

            	
              $____________

            


    

    


    Type of Option:
                                            ̈   Incentive
Stock Option       ̈   Non-Qualified
Stock Option

    


    2. Representations of
Optionee.  Optionee acknowledges that Optionee has received,
read, and understood the Plan and the Option Agreement.  Optionee
agrees to abide by and be bound by their terms and conditions.

     

    3. Rights as
Shareholder.  Until the stock certificate evidencing such
Option Shares is issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist with
respect to Option Shares subject to the Option, notwithstanding the exercise of
the Option.  The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued.  Optionee shall
enjoy rights as a shareholder until such time as Optionee disposes of the Option
Shares of the Company.  Upon such exercise, Optionee shall have no
further rights as a holder of the Option Shares.

     

    4. Tax
Consultation.  Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee’s purchase of the Option
Shares.  Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase of the
Option Shares and that Optionee is not relying on the Company for any tax
advice.

     

    5. Restrictive Legends and
Stop-Transfer Orders.

     

    (a) Legends.  Optionee
understands and agrees that the Company shall cause the legends set forth below
or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Option Shares together with any other
legends that may be required by state or federal securities laws:

     

    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), AND ARE ‘RESTRICTED SECURITIES’ AS THAT TERM
IS DEFINED IN RULE 144 UNDER THE 1933 ACT.  THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE 1933 ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED
TO THE SATISFACTION OF THE COMPANY THROUGH REASONABLE MEANS AS DETERMINED BY THE
COMPANY, INCLUDING AN OPINION OF SELLER’S COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY.”

     

    (b) Stop-Transfer
Notices.  Optionee agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue appropriate
“stop transfer” instructions to its transfer agent, if any, and that, if the
Company transfers its own securities, it may make appropriate notations
to the same effect in its own records.

     

    (c) Refusal to
Transfer.  The Company shall not be required (i) to
transfer on its books any Option Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement or
(ii) to treat as owner of such Option Shares or to accord the right to vote
or pay dividends to any purchaser or other transferee to whom such Option Shares
shall have been so transferred.

     

    6. Successors and
Assigns.  The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company.  Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, representatives, administrators,
successors and assigns.

    
      
        

      

    

    
      
      

    

    7. Interpretation.  Any
dispute regarding the interpretation of this Agreement shall be submitted by
Optionee or by the Company forthwith to the Company’s Board of Directors or
committee thereof that is responsible for the administration of the Plan (the
“Compensation Committee”), which shall review such dispute at its next regular
meeting.  The resolution of such a dispute by the Compensation
Committee shall be final and binding on the Company and on the
Optionee.

     

    8. Governing Law;
Severability.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada excluding that body
of law pertaining to conflicts of law.  Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.

     

    9. Notices.  All
notices, requests, demands, directions and other communications (“Notices”)
concerning this Agreement shall be in writing and shall be mailed, delivered
personally, sent by telecopier or facsimile, or emailed to the applicable party
at the address of such party.  When mailed, each such Notice shall be
sent by first class, certified mail, return receipt requested, enclosed in a
postage prepaid wrapper, and shall be effective on the fifth business day after
it has been deposited in the mail.  When delivered personally, each
such Notice shall be effective when delivered to the address for the respective
party, provided that it is delivered on a business day and further provided that
it is delivered prior to 5:00 p.m., local time of the party to whom the notice
is being delivered, on that business day; otherwise, each such Notice shall be
effective on the first business day occurring after the date on which the Notice
is delivered.  When sent by email, telecopier or facsimile, each such
Notice shall be effective on the day on which it is sent provided that it is
sent on a business day and further provided that it is sent prior to 5:00 p.m.,
local time of the party to whom the Notice is being sent, on that business day;
otherwise, each such Notice shall be effective on the first business day
occurring after the date on which the Notice is sent.  Each Notice
shall be addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.

     

    10. Further
Instruments.  The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

     

    11. Delivery of
Payment.  Optionee herewith delivers to the Company the full
Exercise Price for the Option Shares as set forth above in Section 1, as
well as any applicable withholding tax.

     

    12. Entire
Agreement.  The Plan and Option Agreement are incorporated
herein by reference.  This Agreement, the Plan, the Option Agreement
and the Investment Representation Statement constitute the entire agreement of
the parties and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof.

     

    
      	
              Accepted
      by:

            	
              Submitted
      by:

            
	 
      	 
      
	
              CHEMBIO
      DIAGNOSTICS, INC.

            	
              OPTIONEE

            
	 
      	 
      
	
              By:                                                                    

            	 
      
	
              Name:                                                                    

            	
              Name:                                                                    

            
	
              Its:                                                                    

            	
              Address:                                                                    

            
	 
      	 
      


    

    
       

      
         


        
          

        

      

      
         


      

    

    EXHIBIT
B

     

    INVESTMENT
REPRESENTATION STATEMENT

    OPTIONEE                                :           ______________________

    COMPANY                                :           Chembio
Diagnostics, Inc.

    SECURITY                                :           Common
Stock

    AMOUNT                                :           ______________________

    DATE                                :           ______________________

     

    In connection with the purchase of the
above-listed shares of Common Stock (the “Securities”) of Chembio Diagnostics,
Inc. (the “Company”), the undersigned (the “Optionee”) represents to the Company
the following:

    


    (a) Optionee
represents, warrants and agrees as follows:  (a) that all Option
Shares are being acquired solely for investment for his own account and not on
behalf of any other person or entity; (b) that no Option Shares will be sold or
otherwise distributed in violation of the Securities Act of 1933, as amended, or
any other applicable federal or state securities laws; (c) that he or she will
report all sales of Option Shares to the Company in writing on a form prescribed
by the Company; and (d) that if he or she is subject to reporting requirements
under Section 16(a) of the Exchange Act, (i) he or she will not violate
Section 16(b) of the Exchange Act, (ii) he or she will furnish the
Company with a copy of each Form 4 and Form 5 filed by him or her, and (iii) he
or she will timely file all reports required under the federal securities
laws. 

     

    (b) Optionee
is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities.  Optionee is
acquiring these Securities for investment for Optionee’s own account only and
not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”).

     

    (c) Optionee
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Optionee’s investment
intent as expressed herein.  Optionee understands that the Securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is
available.  Optionee further acknowledges and understands that the
Company is under no obligation to register the Securities.  Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend that prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company and any other legend required under applicable state
securities laws.

     

    (d) Optionee
is familiar with the provisions of Rule 144 promulgated under the
Securities Act, which, in substance, permit limited public resale of “restricted
securities” acquired, directly or indirectly from the issuer thereof, in a
non-public offering subject to the satisfaction of certain
conditions.

     

    (e) Optionee
further understands that in the event all of the applicable requirements of Rule
144 are not satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and that,
notwithstanding the fact that Rule 144 is not exclusive, the Staff of the
Securities and Exchange Commission has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rules 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.  Optionee
understands that no assurances can be given that any such other registration
exemption will be available in such event.

     

    (f) Optionee
shall immediately notify the Company in writing of any sale, transfer,
assignment or other disposition (or action constituting a disqualifying
disposition within the meaning of Section 421 of the Code) of any Securities
acquired through exercise of an incentive stock option, within two years after
the grant of such incentive stock option or within one year after the
acquisition of such Securities, setting forth the date and manner of
disposition, the number of Securities disposed of and the price at which such
Securities were disposed. 

     

    Signature
of Optionee:

    


    
 

    Optionee

    


    Date:
_______________________, ____