LUMINEX CORP (Form: 8-K, Received: 03/28/2016 06:02:23)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 25, 2016 (March 22, 2016)

LUMINEX CORPORATION

(Exact name of registrant as specified in its charter)



DELAWARE	000-30109	74-2747608
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)



12212 TECHNOLOGY BLVD., AUSTIN, TEXAS		78727
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (512) 219-8020

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Amended and Restated Management Incentive Plan

On March 22, 2016, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Luminex Corporation, a Delaware corporation (the “Company), approved an amended and restated Management Incentive Plan (the “Management Incentive Plan”). The amendments to the Management Incentive Plan make various clarifying edits and provide that any award made pursuant to the Management Incentive Plan shall be subject to mandatory repayment by the participant to the Company to the extent provided under applicable laws which impose mandatory recoupment, under the circumstances set forth in such applicable laws, including the Sarbanes Oxley Act of 2002, among other things.

The preceding description of the Management Incentive Plan is qualified in its entirety by reference to the full text of the Management Incentive Plan, which is filed as Exhibit 10.1 to this report and which is incorporated herein by reference.

2016 Cash-Based Executive Performance Incentives

On March 22, 2016, the Committee also approved the 2016 cash-based performance incentive opportunities under the Management Incentive Plan, as amended, for the Company’s named executive officers and certain other executives.

The performance awards under the Management Incentive Plan are based upon achievement of an established Company performance goal (“Company Financial Goal”) as well as research and development, departmental and other project goals (“Key Objectives”) and leadership goals (“Leadership Goals”), in each case as determined by the Committee and subject to such adjustments and exclusions as determined by the Committee. The Company Financial Goal is based on a matrix of revenue and operating profit for the year ended December 31, 2016 and is the same for each participant. Certain Key Objectives are the same for each participant while others vary by executive and are based on specified research and development, management or strategic initiatives, projects or other requirements, with each objective given a specified weight. The Leadership Goals are the same for each participant and are generally designed to drive the Company’s culture to obtain the results required for the Company’s success.

The total target awards for the Company’s named executive officers and certain other executives (other than as noted below for Mr. Shamir) in 2016 are weighted 50% for the achievement of the Company Financial Goal, 20% for the achievement of Key Objectives applicable to each participant, 20% for the achievement of Key Objectives that vary by participant and 10% for the achievement of Leadership Goals and are based on a target bonus established by the Committee for each participant. The total target award for Mr. Shamir in 2016 is weighted 50% for the achievement of the Company Financial Goal and 50% for the achievement of Key Objectives. The target bonuses for each named executive officer and certain other executives approved, reflected as a percentage of 2016 earned base salary, are the same as for 2015 and are as follows:



Name	Title	Target Bonus
Nachum Shamir	President and Chief Executive Officer	100%
Harriss T. Currie	Senior Vice President, Finance, Chief Financial Officer and Treasurer	50%
Russell W. Bradley	Senior Vice President, Corporate Development and Chief Marketing Officer	50%
Richard W. Rew II	Senior Vice president, General Counsel and Corporate Secretary	50%
Nancy M. Fairchild	Senior Vice President, Human Resources	50%

Following the end of the fiscal year, the Committee will determine whether and the extent to which the applicable targets were met. The Company Financial Goal is subject to an over/underachievement scale with possible payouts of 0% to 200% of the target bonus for the Company Financial Goal based on financial results between specified minimum and maximum performance levels of the performance targets. The minimum threshold represents the level of Company performance below which no incentive will be paid for the Company Financial Goal and is established annually by the Committee. The target threshold represents the level where the actual incentive award paid for the Company Financial Goal equals the targeted award and the maximum threshold represent the performance level where the actual incentive award paid equals the maximum amount permitted under the Management Incentive Plan. Minimum payouts for minimum threshold performance start at 30% of the target value for the Company Financial Goal.

Except as otherwise determined by the Committee, Key Objectives and Leadership Goals are generally not subject to an overachievement scale for the Company’s named executive officers and certain other executives other than Mr. Shamir. Certain of Mr. Shamir’s Key Objectives are subject to overachievement payouts up to 200% for 2016.

Accordingly, the Management Incentive Plan opportunities for 2016 provide for potential performance bonuses ranging from 0% to 195% of Mr. Shamir’s target bonus amount and 0% to 150% of the target bonus amount of our other named executive officers and certain other executives, subject in each case to the achievement of the total consolidated revenue threshold approved by the Committee for 2016.

Grant of Options

On March 22, 2016, the Committee also approved an award of stock options (the “Base Options”) to the Company’s named executive officers and certain other executives that vest solely upon the passage of time over four years. Below is the grant date fair value of the Base Options granted to these individuals on March 22, 2016:



Name	Title	Grant Date Fair Value of Base Options
Nachum Shamir	President and Chief Executive Officer	$1,393,000
Harriss T. Currie	Senior Vice President, Finance, Chief Financial Officer and Treasurer	$315,000
Russell W. Bradley	Senior Vice President, Corporate Development and Chief Marketing Officer	$210,000
Richard W. Rew II	Senior Vice president, General Counsel and Corporate Secretary	$227,500
Nancy M. Fairchild	Senior Vice President, Human Resources	$245,000

The Base Options have an exercise price equal to the closing market price for the Company’s common stock on the NASDAQ Global Select Market on the date of grant (March 22, 2016) and expire seven years from the date of grant. The Base Options are time-based, with 25% vesting on each of the first four anniversaries of the grant date. The Base Options are exercisable into shares of the Company’s common stock. The Base Options were awarded pursuant to the Company’s Third Amended and Restated 2006 Equity Incentive Plan (the “Plan”) and a Non-Qualified Stock Option Agreement, a form of which was previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, and which is incorporated herein by reference.

On March 22, 2016, the Committee also approved an award of stock options (the “Performance Options”) to the Company’s named executive officers and certain other executives that vest over four years based on achievement of certain operating profit and revenue targets in 2016, which consists of the same Company Financial Goal described above applicable to the 2016 Management Incentive Plan. Below is the grant date fair value of the Performance Options granted to these individuals on March 22, 2016 assuming target performance:



Name	Title	Target Grant Date Fair Value of Performance Options
Nachum Shamir	President and Chief Executive Officer	$597,000
Harriss T. Currie	Senior Vice President, Finance, Chief Financial Officer and Treasurer	$135,000
Russell W. Bradley	Senior Vice President, Corporate Development and Chief Marketing Officer	$90,000
Richard W. Rew II	Senior Vice president, General Counsel and Corporate Secretary	$97,500
Nancy M. Fairchild	Senior Vice President, Human Resources	$105,000

The Performance Options also have an exercise price equal to the closing market price for the Company’s common stock on the NASDAQ Global Select Market on the date of grant (March 22, 2016) and expire seven years from the date of grant. The Performance Options are measured over a performance period ending on December 31, 2016. Following the end of the fiscal year, the Committee will determine the number of Performance Options which remain eligible to vest based upon the level of achievement of the Company Financial Goal. If the Company fails to meet the threshold performance for the performance period, no Performance Options will be eligible to vest. Minimum vesting for minimum threshold performance starts at 30% of the target value for the Company Financial Goal. If the Company’s performance exceeds the target performance, the recipient may receive additional Performance Options above the target number, subject to a maximum of 200% of the target award. The Performance

Options that remain eligible to vest after the determination date will vest 25% on each of the first four anniversaries of the grant date. In the event of a change of control of the Company before the end of the performance period, the Performance Options will automatically vest based on the greater of actual achievement of the pro-rated Company Financial Goal as of the date of the change of control or 100% of target performance, as determined by the Committee in its sole discretion. The Performance Options are exercisable into shares of the Company’s common stock. The Performance Options were awarded pursuant to the Plan and a Performance Stock Option Agreement, a form of which will be filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.



Exhibit No.		Description
10.1		Amended and Restated Management Incentive Plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



Date: March 25, 2016	LUMINEX CORPORATION

	By:	/s/ Harriss T. Currie
		Name:	Harriss T. Currie
		Title:	Chief Financial Officer, Senior Vice President of Finance

EXHIBIT INDEX



Exhibit No.		Description
10.1		Amended and Restated Management Incentive Plan.

Exhibit 10.1

LUMINEX CORPORATION

AMENDED AND RESTATED

MANAGEMENT INCENTIVE PLAN

BACKGROUND AND OBJECTIVES

The Management Incentive Plan (the “ MIP ”) has been established by Luminex Corporation (the “ Company ”) to encourage and reward successful performance by its senior officers consistent with the Company’s compensation philosophies and objectives. The MIP provides an annual incentive compensation opportunity for key executives for achieving important Company financial performance targets, project goals, and individual performance leadership goals (collectively “ Goals ”). Each year the Compensation Committee of the Luminex Board of Directors (the “ Committee ”), in consultation with the Chief Executive Officer (the “ CEO ”), will establish award opportunities and goals for determination of potential awards hereunder. The following defines MIP eligibility, the size of potential award opportunities, performance measurement, form and timing of award payments, administrative guidelines and definitions for ongoing MIP participants.

ELIGIBILITY

Eligibility for an award under the MIP (an “ MIP Award ”) will be proposed by the CEO and approved by the Committee at or near the beginning of each fiscal year (each such year being a “ Performance Period ”). Generally, MIP participants (“ Participants ”) will be selected from key executives who primarily are responsible for the annual growth and profitability of Luminex. As new officers join the Company, they may be afforded the opportunity to participate in the MIP in the sole discretion of the Committee.

AWARD OPPORTUNITIES

Each Participant will be eligible for a payout for each applicable Performance Period if Total Consolidated Revenue (or such other metric (or metrics) as may be established by the Committee from year to year) for that year exceeds the threshold amount established by the Committee for such year (the “ Threshold Amount ”). Payouts under the MIP will be subject to a maximum payout established by the Committee for each Participant as a percentage of the Participant’s base salary. Within that limit, each Participant will be assigned a targeted award opportunity, based on actual performance achievement described under ‘Performance Objectives’ below and/or other factors deemed relevant by the Committee.

Each Participant’s base salary earned for the Performance Period will be multiplied by the actual MIP award percentage earned as approved by the Committee to determine the dollar value of the award for that Performance Period. The award percentage shall be recommended by the CEO and submitted to the Committee for review and approval. The MIP Award will be paid to each individual Participant as soon as is practical thereafter and in accordance with ‘Form and Timing of Awards’ set forth below. The Committee has the discretion to determine that no or reduced awards are payable to a Participant if the Committee determines that a Participant’s conduct during the Performance Period was inconsistent with the Company’s Code of Compliance or the Participant otherwise materially breaches any employment agreement or other material Company policy or conduct requirement.

PERFORMANCE OBJECTIVES

Except as otherwise determined by the Committee, the performance objectives shall typically consist of four elements: Corporate Financial Objectives, Corporate Research and Development Goals, Key Project Objectives, and Leadership Objectives. Within each of the foregoing elements, the Committee may approve multiple goals or objectives, with individual weightings as approved by the Committee. The MIP performance objectives and relative weightings will be proposed by the CEO and approved by the Committee not later than 90 days after the beginning of each fiscal year. The performance objectives will be subject to such adjustments and exclusions as determined by the Committee upon the recommendation of the CEO or other factors deemed appropriate by the Committee. MIP objectives shall be equitably adjusted during the year if a major change occurs in the Company’s capital structure, e.g., an acquisition or merger.

Except as otherwise determined by the Committee, Corporate Financial Objectives are subject to an over/underachievement scale with possible payouts of 0% to 200% of the potential ‘Target’ bonus amount allocated to each such objective based on financial results between specified ‘Minimum,’ ‘Target’ and ‘Maximum’ levels (as further described below) of the applicable performance targets calculated on a linear basis, with minimum payouts starting at a defined threshold established annually by the Committee.

Except as applicable for the CEO, or as otherwise determined by the Committee, Research & Development Goals, Key Project and Leadership Objectives are not subject to an overachievement scale, but specified project goals are typically graded 100% for on time completion, 75% for 100% completion that is late but still occurs during the plan year, 50% for at least 50% completion and meeting the schedule, 25% for partial completion which was also behind schedule and 0% for failure to complete at least 50% of the project. In each case, the final decision will be up to the judgment of the Committee based, in part, upon the recommendation of the CEO. The Leadership Goal shall be generally valued at 10% and is usually only applicable to individuals at the Senior Vice President and Vice President levels. Measurement of the Leadership goal will range from 0% to 10%, usually in full percentage increments based upon the judgment of the Committee following input of the CEO.

The Committee has established performance thresholds relating to Corporate Financial Objectives in the following categories:


•	Minimum Acceptable - The Luminex performance level below which no incentive will be paid for the Corporate Financial Objectives portion of the performance objectives, which will be set annually for each of the Corporate Financial Objectives;


•	Target - The Luminex performance level where the actual incentive award equals the targeted award, which is set individually for each Officer; and


•	Maximum - The Luminex performance level where the actual incentive award exceeds the targeted award by the maximum amount permitted under the MIP, which will be set annually for each of the Corporate Financial Objectives.

FORM AND TIMING OF AWARDS

MIP Award calculations will be certified and finalized (and the resulting MIP Awards paid) between January 1 and March 15 ^th of the fiscal year following the close of a Performance Period. All MIP Awards will be paid in cash in a lump sum unless a written decision to defer an award has been filed with the MIP administrator pursuant to a plan or other procedures approved by the Committee. The Committee reserves the discretion to make payments of MIP Awards in shares of the Company’s common stock, restricted or unrestricted.

ADMINISTRATIVE GUIDELINES

Subject to applicable law, all amendments, guidelines, procedures, designations, determinations, interpretations, and other decisions under or with respect to the MIP (including the Recoupment Policy described below) or any MIP Award, whether before or after the date of grant, shall be within the sole discretion of the Committee, which may be made at any time and shall be final, conclusive and binding.


•	Employee Termination - To receive an award, a participant must be an employee of the Company on the day the MIP Award is paid, unless waived by the Committee, or as required by the terms of a written agreement with an employee or by applicable law.


•	New Hires - Employees must be employed on or by October 1 ^st of the Performance Period to be eligible for an award, unless waived by the Committee upon the recommendation by the CEO. MIP Awards for new hires are earned on a pro-rata basis, based on their salary earned during the Performance Period, unless waived by the Committee.


•	Base Salary Rate - Base salary for MIP Award calculations shall be the actual base salary earned for the applicable Performance Period.


•	Support Documentation - The Luminex Chief Financial Officer shall be responsible for maintaining all necessary support documentation regarding performance and bonus calculations under the MIP.


•	No Rights to Awards - No employee shall have any claim to be granted any award and there is no obligation for uniformity of treatment among Participants. The terms and conditions of awards, if any, need not be the same with respect to each Participant.

BONUS RECOUPMENT POLICY

The Company can recover any incentive compensation awarded or paid pursuant to this MIP based on (i) achievement of financial results that were subsequently the subject of a restatement, other than as a result of changes to accounting rules and regulations, or (ii) financial information or performance metrics subsequently found to be materially inaccurate, in each case regardless of individual fault. The recovery policy applies to any incentive compensation earned or paid to an employee pursuant to this MIP at a time when he or she is an employee after the effective date of the MIP. Subsequent changes in status (including, without

limitation, change of title or responsibilities, retirement or termination of employment) do not affect the Company’s rights to recover compensation under the policy. The Committee will administer this policy and exercise its discretion and business judgment in the fair application of this policy based on the facts and circumstances as it deems relevant in its sole discretion. More specifically, the Committee shall determine in its discretion any appropriate amounts to recoup, and the timing and form of recoupment; provided that any recoupment shall not exceed the portion of any applicable bonus paid hereunder that is in excess of the amount of performance-based or incentive compensation that would have been paid or granted based on the actual, restated financial statements or actual level of the applicable financial or performance metrics as determined by the Committee in its sole discretion. In addition, (1) any award made pursuant to this MIP shall be subject to mandatory repayment by the participant to the Company to the extent provided under applicable laws which impose mandatory recoupment, under the circumstances set forth in such applicable laws, including the Sarbanes Oxley Act of 2002, and (2) the provisions set forth under this "Bonus Recoupment Policy" section of the MIP may be amended by the Committee from time to time, including without limitation to comply with final SEC rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or any recoupment or "clawback" policy adopted or amended by the Company in connection therewith.

For avoidance of doubt, the Company may offset the amounts of any such required recoupment against any amounts otherwise owed by a participant to the Company, including by the cancellation of unvested equity awards, in each case as determined by the Committee in its sole discretion and consistent with section 409A of the Internal Revenue Code, as amended.

If any restatement of the Company’s financial results indicates that the Company should have made higher performance-based or incentive-based payments than those actually made under the MIP for a period affected by the restatement, then the Committee shall have the discretion to cause the Company to make appropriate incremental payments to effected participants then-currently employed by the Company. The Committee will determine, in its sole discretion, the amount, form and timing of any such incremental payments, which shall be no more than the difference between the amount of performance-based or incentive compensation that was paid or awarded and the amount that would have been paid or granted based on the actual, restated financial statements.

As amended and restated March 22, 2016

Luminex Corporation Compensation Committee