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): May 21, 2009 (May 21, 2009)
LUMINEX CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE
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000-30109
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74-2747608
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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12212 TECHNOLOGY BLVD.,
AUSTIN, TEXAS
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78727
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(Address of principal executive offices)
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(Zip Code)
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Registrants 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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
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(e)
Luminex Corporation Amended and Restated 2006 Equity Incentive Plan
At the Annual Meeting of Stockholders (the Meeting) of Luminex Corporation (Luminex) held
on May 21, 2009, Luminexs stockholders approved the Luminex Corporation Amended and Restated 2006
Equity Incentive Plan (the Equity Incentive Plan) which will be effective as of May 21, 2009.
The Luminex Corporation 2006 Equity Incentive Plan (the Original Plan) was initially approved by
Luminex on May 25, 2006 by a majority of our stockholders present in person or by proxy and
entitled to vote at our 2006 annual meeting of stockholders. The amendments, among other things:
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increase the number of shares available for issuance under the Original Plan by
3,325,000 shares (see Shares Available for Awards under the Plan below);
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provide that each share issued pursuant to a restricted share or a restricted share
unit award will reduce the share reserve for issuance under the Equity Incentive Plan by
1.48 shares, and that the expiration, termination, cash settlement or otherwise
forfeiting or cancelling of restricted share or restricted share unit awards will
increase such share reserve by 1.48 shares for each share subject to the expired,
terminated, cash settled or otherwise forfeited or cancelled restricted share or
restricted share unit awards (see Shares Available for Awards under the Plan below);
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modify the permissible performance goals associated with performance awards under the
Equity Incentive Plan (see Performance Awards below); and
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modify the change in control provision to provide the Compensation Committee of the
Board of Directors (the Committee) greater flexibility in administering the Equity
Incentive Plan in the event of a change of control (see Change in Control below).
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The amendments to the Equity Incentive Plan also include conforming amendments required by
changes in law, including Section 409A of the Internal Revenue Code of 1986 (the Code), and
miscellaneous clarifications to plan language.
The following is a brief summary of the principal features of the Equity Incentive Plan, which
is qualified in its entirety by reference to the full text of the Equity Incentive Plan, a copy of
which is attached hereto as Exhibit 10.1 and incorporated herein by reference. Capitalized terms
not defined herein shall have the meanings prescribed to them in the Equity Incentive Plan.
Shares Available for Awards under the Plan
. Under the Equity Incentive Plan, awards
may be made in common stock of Luminex. Subject to adjustment as provided by the terms of the
Equity Incentive Plan, the maximum number of shares of common stock with respect to which awards
may be granted under the Equity Incentive Plan was approximately 3,380,974 shares as of the
approval of the Equity Incentive Plan. Except as adjusted in accordance with the terms of the
Equity Incentive Plan, no more than 1,000,000 shares of common stock authorized under the Equity
Incentive Plan may be awarded as incentive stock options.
Each share issued pursuant to an option shall reduce the share reserve by one share. Each
share subject to a redeemed portion of a stock appreciation right (SAR) shall reduce the share
reserve by one share. Each share issued pursuant to a restricted share award or a restricted share
unit award shall reduce the share reserve by 1.48 shares. If any award granted under the Equity
Incentive Plan, the Original Plan or Luminexs 2000 Long-Term Incentive Plan (the 2000 Plan)
expires, terminates, is settled in cash (in whole or in part) or is otherwise forfeited or canceled
for any reason before it has vested or been exercised in full, the shares subject to such award
shall, to the extent of such expiration, cash settlement, forfeiture, or termination, again be
available for awards under the Equity Incentive Plan and the share reserve will be increased. Any
shares that again become available for grant shall be added back as (i) one share if such shares
were subject to options or SARs granted under the Equity Incentive Plan or under the 2000 Plan, and
(ii) 1.48 shares if such shares were subject to restricted share or restricted share unit awards
granted under the Equity Incentive Plan, the Original Plan or under the 2000 Plan. Notwithstanding
the foregoing, if an option or SAR is exercised, in whole or in part, by tender of shares or if
Luminexs tax withholding obligation is satisfied by withholding shares, the number of shares
deemed to have been issued under the Equity Incentive Plan shall be the number of shares that were
subject to the option or SAR or portion thereof, and not the net number of shares actually issued
and any SARs to be settled in shares shall be counted in full against the number of shares
available for issuance under the Equity Incentive Plan, regardless of the number of shares issued
upon the settlement of the SAR.
Shares issued by Luminex as substitute awards granted solely in connection with the assumption
of outstanding awards previously granted by a company acquired by Luminex, or with which Luminex
combines (Substitute Awards), do not reduce the number of shares available for awards under the
Equity Incentive Plan.
In addition, the Equity Incentive Plan imposes individual limitations on the amount of certain
awards in order to comply with Sections 162(m), 422 and 409A of the Code. Under these limitations,
no single participant may receive options or SARs in any calendar year that, taken together, relate
to more than 300,000 shares of common stock, subject to adjustment in certain circumstances.
With certain limitations and exceptions, awards made under the Equity Incentive Plan will be
equitably and proportionately adjusted by the Committee, as deemed appropriate by the Committee, to
prevent dilution or enlargement of benefits or potential benefits intended to be made available
under the Equity Incentive Plan in the event of any stock dividend, reorganization,
recapitalization, stock split, combination, merger, consolidation, change in laws, regulations or
accounting principles or other relevant unusual or nonrecurring event affecting Luminex.
Eligibility and Administration
. Current and prospective officers and employees, and
directors of, and consultants to, Luminex or its subsidiaries or affiliates are eligible to be
granted awards under the Equity Incentive Plan. The Committee will administer the Equity Incentive
Plan, except with respect to awards to non-employee directors, for which the Equity Incentive Plan
will be administered by the Board of Directors (the Board). The Committee will be composed of not
less than two non-employee directors, each of whom will be a Non-Employee Director for purposes
of Section 16 of the Exchange Act and Rule 16b-3 thereunder, an outside director within the
meaning of Section 162(m) and the regulations promulgated under the Code and will be an independent
director as defined by the listing standards of The Nasdaq Stock Market. Subject to the terms of
the Equity Incentive Plan, the Committee is authorized to select participants, determine
eligibility for participation and decide all questions concerning eligibility for and the amount of
awards under the Equity Incentive Plan, determine the type and number of awards to be granted,
determine and later amend (subject to certain limitations) the terms and conditions of any award,
interpret and specify the rules and regulations relating to the Equity Incentive Plan, and make all
other determinations which may be necessary or desirable for the administration of the Equity
Incentive Plan.
In addition, the Equity Incentive Plan authorizes the Committee to grant awards as an
alternative to, or as the form of payment for grants or rights earned or payable under, other bonus
or compensation plans, arrangements or policies of Luminex, grant substitute awards on such terms
and conditions as the Committee may prescribe, subject to compliance with the incentive stock
option rules under Section 422 of the Code and the nonqualified deferred compensation rules under
Section 409A of the Code, and make all determinations under the Equity Incentive Plan concerning
any participants separation from service with Luminex, including whether such separation occurs by
reason of cause, good reason, disability, retirement, or in connection with a change in control and
whether a leave constitutes a separation from service.
Stock Options and Stock Appreciation Rights
. The Committee is authorized to grant
stock options, including both incentive stock options, which can result in potentially favorable
tax treatment to the participant, and non-qualified stock options. The grant of an option or SAR
occurs when the Committee by resolution, written consent, or other appropriate action determines to
grant such option or SAR for a particular number of shares to a particular participant at a
particular option price or grant price, or such later date as the Committee shall specify in such
resolution, written consent or other appropriate action. The Committee may specify the terms of
such grants subject to the terms of the Equity Incentive Plan. The Committee is also authorized to
grant SARs, either with or without a related option. The exercise price per share subject to an
option and the grant price of an SAR is determined by the Committee at the time granted, but may
not be less than the fair market value of a share of common stock on the date of the grant, except
in the case of Substitute Awards. In the case of Substitute Awards or awards granted in connection
with an adjustment in the form of options or SARs, such grants shall have an option price (or grant
price) per share that is intended to maintain the economic value of the award that was replaced or
adjusted as determined by the Committee. The maximum term of each option or SAR, the times at which
each option or SAR will be exercisable, and the provisions requiring forfeiture of unexercised
options at or following separation from service generally are fixed by the Committee, except that
no option or SAR relating to an option may have a term exceeding ten years. Incentive stock options
that are granted to holders of more than ten percent of Luminexs voting securities are subject to
certain additional restrictions, including a five-year maximum term and a minimum exercise price of
110% of fair market value.
A stock option or SAR may be exercised in whole or in part at any time, with respect to whole
shares only, within the period permitted thereunder for the exercise thereof. Stock options and
SARs shall be exercised by written notice of intent to exercise the stock option or SAR and, with
respect to options, payment in full to Luminex of the amount of the option price for the number of
shares with respect to which the option is then being exercised. An award agreement may provide
that the period of time over which an option, other than an incentive stock option, or SAR may be
exercised shall be automatically extended if on the scheduled
expiration of such award, the participants exercise of such award would violate applicable
securities law; provided, however, that during the extended exercise period the option or SAR may
only be exercised to the extent such award was exercisable in accordance with its terms immediately
prior to such scheduled expiration date; provided further, however, that such extended exercise
period shall end not later than 30 days after the exercise of such option or SAR first would no
longer violate such laws.
Payment of the option price shall be made in (i) cash or cash equivalents, (ii) at the
discretion of the Committee, by transfer, either actually or by attestation, to Luminex of
unencumbered shares previously acquired by the participant, valued at the fair market value of such
shares on the date of exercise (or next succeeding trading date, if the date of exercise is not a
trading date), together with any applicable withholding taxes, such transfer to be upon such terms
and conditions as determined by the Committee, (iii) by a combination of (i) or (ii), or (iv) by
any other method approved or accepted by the Committee in its sole discretion, including, if the
Committee so determines, (x) a cashless (broker-assisted) exercise that complies with applicable
laws or (y) withholding shares (net-exercise) otherwise deliverable to the participant pursuant to
the option having an aggregate fair market value at the time of exercise equal to the total option
price. Until the optionee has been issued the shares subject to such exercise, he or she shall
possess no rights as a stockholder with respect to such shares. Luminex reserves, at any and all
times in Luminexs sole discretion, the right to establish, decline to approve or terminate any
program or procedures for the exercise of options by means of a method set forth in subsection (iv)
above, including with respect to one or more participants specified by Luminex notwithstanding that
such program or procedures may be available to other participants.
Except as otherwise provided in the applicable award agreement, an option or SAR ceases to
become exercisable upon a separation from service of the holder thereof. The Committee may
determine in its discretion that an option or SAR may be exercised following any such separation
from service, whether or not exercisable at the time of such separation; provided, however, that in
no event may an option or SAR be exercised after the expiration date of such award specified in the
applicable award agreement, except as otherwise provided in the Equity Incentive Plan.
Restricted Shares and Restricted Share Units
. The Committee is authorized to grant
restricted shares of common stock and restricted share units. Restricted shares are shares of
common stock subject to transfer restrictions as well as forfeiture upon certain separations from
service prior to the end of a restricted period or other conditions specified by the Committee in
the award agreement. A participant granted restricted shares of common stock generally has most of
the rights of a stockholder of Luminex with respect to the restricted shares, including the right
to receive dividends and the right to vote such shares. None of the restricted shares may be
transferred, encumbered or disposed of during the restricted period or until after fulfillment of
the restrictive conditions.
Each restricted share unit has a value equal to the fair market value of a share of common
stock on the date of grant. The Committee determines, in its sole discretion, the restrictions
applicable to the restricted share units. A participant will be credited with dividend equivalents
on any vested restricted share units at the time of any payment of dividends to stockholders on
shares of common stock. Except as determined otherwise by the Committee, restricted share units may
not be transferred, encumbered or disposed of, and such units shall terminate, without further
obligation on the part of Luminex, unless the participant remains in continuous employment (or
other service-providing capacity) of Luminex for the restricted period and any other restrictive
conditions relating to the restricted share units are met. Restricted share units are subject to
similar transfer restrictions as restricted shares, except that no shares are actually awarded to a
participant who is granted restricted share units on the date of grant, and such participant shall
have no rights of a stockholder with respect to such restricted share units until the restrictions
set forth in the applicable award agreement have lapsed.
Performance Awards
. A performance award consists of a right that is denominated in
cash or shares of common stock, valued in accordance with the achievement of certain performance
goals during certain performance periods as established by the Committee, and payable at such time
and in such form as the Committee shall determine. Performance awards may be paid in a lump sum or
in installments following the close of a performance period or on a deferred basis, as determined
by the Committee. Separation from service prior to the end of any performance period, other than
for reasons of death or total disability, will result in the forfeiture of the performance award. A
participants rights to any performance award may not be transferred, encumbered or disposed of in
any manner, except by will or the laws of descent and distribution or as the Committee may
otherwise determine.
Performance awards are subject to certain specific terms and conditions under the Equity
Incentive Plan. Unless otherwise expressly stated in the relevant award agreement, each award
granted to a Covered Officer under the Equity Incentive Plan is intended to be performance-based
compensation within the meaning of Section 162(m) of the Code. Performance goals for Covered
Officers will be limited to one or more of the following financial performance measures relating to
Luminex or any of its subsidiaries, operating units, business segments or divisions: (a) earnings
before interest, taxes, depreciation, amortization and/or stock compensation; (b) operating (or
gross) income or profit; (c) operating efficiencies; (d) return on equity, assets, capital, capital
employed or investment; (e) after tax operating income; (f) net income; (g) earnings or book value
per share;
(h) financial ratios; (i)
cash flow(s); (j) total sales or revenues or sales or revenues per employee; (k) production
(separate work units or SWUs); (l) stock price or total stockholder return; (m) dividends; (n) debt
or cost reduction; or (o) strategic business objectives, consisting of one or more objectives based
on meeting specified cost targets, business expansion goals, and goals relating to acquisitions,
joint ventures or collaborations or divestitures; or (p) any combination thereof. Each goal may be
expressed on an absolute and/or relative basis, may be based on or otherwise employ comparisons
based on internal targets, the past performance of Luminex or any subsidiary, operating unit or
division of Luminex and/or the past or current performance of other companies, and in the case of
earnings-based measures, may use or employ comparisons relating to capital, stockholders stock
and/or shares outstanding, or to assets or net assets. The Committee may appropriately adjust any
evaluation of performance under criteria set forth in the Equity Incentive Plan to exclude any of
the following events that occurs during a performance period: (i) asset impairments or write-downs,
(ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law,
accounting principles or other such laws or provisions affecting reported results, (iv) accruals
for reorganization and restructuring programs, (v) any extraordinary non-recurring items as
described in Accounting Principles Board Opinion No. 30 and/or in managements discussion and
analysis of financial condition and results of operations appearing in Luminexs annual report to
stockholders for the applicable year, and (vi) the effect of adverse federal, governmental or
regulatory action, or delays in federal, governmental or regulatory action; provided that the
Committee commits to make any such adjustments no longer than 90 days following the commencement of
each performance period (or such other time as may be required or permitted by Section 162(m) of
the Code). Notwithstanding the foregoing, the Committee may in its discretion, waive any
performance goals and/or other terms and conditions relating to a performance award.
To the extent necessary to comply with Section 162(m) of the Code, with respect to grants of
performance awards, no later than 90 days following the commencement of each performance period (or
such other time as may be required or permitted by Section 162(m) of the Code), the Committee will,
in writing, (1) select the performance goal or goals applicable to the performance period, (2)
establish the various targets and bonus amounts which may be earned for such performance period,
and (3) specify the relationship between performance goals and targets and the amounts to be earned
by each Covered Officer for such performance period. Following the completion of each performance
period, the Committee will certify in writing whether the applicable performance targets have been
achieved and the amounts, if any, payable to Covered Officers for such performance period. In
determining the amount earned by a Covered Officer for a given performance period, subject to any
applicable award agreement, the Committee shall have the right to reduce (but not increase) the
amount payable at a given level of performance to take into account additional factors that the
Committee may deem relevant to the assessment of individual or corporate performance for the
performance period. With respect to any Covered Officer, the maximum annual number of shares in
respect of which all performance awards may be granted under the Equity Incentive Plan is 300,000
and the maximum annual amount of all performance awards that are settled in cash is $3,000,000.
For purposes of the share counting provisions of the Equity Incentive Plan, a performance
award that is not settled in cash shall be treated as (i) an option award if the amounts payable
thereunder will be determined by reference to the appreciation of a share, and (ii) a restricted
share award if the amounts payable thereunder will be determined by reference to the full value of
a share.
Other Stock-Based Awards
. The Committee is authorized to grant any other type of
awards that are denominated or payable in, valued by reference to, or otherwise based on or related
to shares of common stock of Luminex. The Committee will determine the terms and conditions of such
awards, consistent with the terms of the Equity Incentive Plan. For purposes of the share counting
provisions of the Equity Incentive Plan, an other stock-based award that is not settled in cash
shall be treated as (i) an option award if the amounts payable thereunder will be determined by
reference to the appreciation of a share, and (ii) a restricted share award if the amounts payable
thereunder will be determined by reference to the full value of a share.
Non-Employee Director Awards
. The Board may provide that all or a portion of a
non-employee directors annual retainer and/or retainer fees or other awards or compensation as
determined by the Board be payable in non-qualified stock options, restricted shares, restricted
share units and/or other stock-based awards, including unrestricted shares, either automatically or
at the option of the non-employee directors. The Board will determine the terms and conditions of
any such awards, including those that apply upon the termination of a non-employee directors
service as a member of the Board. Non-employee directors are also eligible to receive other awards
pursuant to the terms of the Equity Incentive Plan, including options and SARs, restricted shares
and restricted share units, and other stock-based awards upon such terms as the Committee may
determine; provided, however, that with respect to awards made to members of the Committee, the
Equity Incentive Plan will be administered by the Board.
Separation from Service
. The Committee will determine the terms and conditions that
apply to any award upon the grantees separation from service with Luminex, its subsidiaries and
affiliates, and provide such terms in the applicable award agreement or in its rules or
regulations.
Change in Control
. Unless otherwise provided by the Committee, or in an award
agreement or by a contractual agreement between Luminex and an award holder, if, within one year
following a Change in Control (as defined in the Equity Incentive Plan), an
award holder separates from service with Luminex (or its successor) by reason of (a) death;
(b) disability; (c) normal retirement or early retirement; (d) for Good Reason (as defined in the
Equity Incentive Plan) by the award holder; or (e) involuntary termination by Luminex for any
reason other than for Cause (as defined in the Equity Incentive Plan), all outstanding Awards of
such award holder shall vest, become immediately exercisable and payable and have all restrictions
lifted.
Additionally, in the event of a Change in Control, subject to certain conditions provided for
in the Equity Incentive Plan: (i) the Committee may take such actions as it deems appropriate to
provide for the acceleration of the exercisability, vesting and/or settlement in connection with
such Change in Control of each or any outstanding award or portion thereof and shares acquired
pursuant thereto upon such conditions (if any), including termination of the award holders service
prior to, upon, or following such Change in Control, to such extent as the Committee shall
determine, (ii) the surviving, continuing, successor, or purchasing corporation or other business
entity or parent thereof, as the case may be (the Acquiror), may, without the consent of any
award holder, either assume or continue Luminexs rights and obligations under each or any award or
portion thereof outstanding immediately prior to the Change in Control or substitute for each or
any such outstanding award or portion thereof a substantially equivalent award with respect to the
Acquirors stock, as applicable, and (iii) the Committee may, in its discretion and without the
consent of any award holder, determine that, upon the occurrence of a Change in Control, each or
any award or a portion thereof outstanding immediately prior to the Change in Control and not
previously exercised or settled shall be canceled in exchange for a payment with respect to each
vested share (and each unvested share, if so determined by the Committee) subject to such canceled
award in (a) cash, (b) stock of Luminex or of a corporation or other business entity a party to the
Change in Control, or (c) other property which, in any such case, shall be in an amount having a
fair market value equal to the fair market value of the consideration to be paid per share in the
Change in Control, reduced by the exercise or purchase price per share, if any, under such award
(which payment may, for the avoidance of doubt, be $0, in the event the per share exercise or
purchase price of an award is greater than the per share consideration in connection with the
Change in Control).
Amendment and Termination
. The Board may amend, alter, suspend, discontinue or
terminate the Equity Incentive Plan or any portion of the Equity Incentive Plan at any time, except
that stockholder approval must be obtained for any such action if such approval is necessary to
comply with any tax or regulatory requirement with which the Board deems it desirable or necessary
to comply. The Committee may waive any conditions or rights under, amend any terms of, or alter,
suspend, discontinue, cancel or terminate any award, either prospectively or retroactively. The
Committee does not have the power, however, to (i) amend the terms of previously granted options to
reduce the exercise price per share subject to such option, (ii) amend the terms of previously
granted SARs to reduce the grant price of such SARs, (iii) cancel such options and grant substitute
options with a lower exercise price per share than the cancelled options, or (iv) cancel such SARs
and grant substitute and grant substitute SARs with a lower grant price than the cancelled SARs, in
each case without the approval of Luminexs stockholders. The Committee also may not materially and
adversely affect the rights of any award holder without the award holders consent.
Other Terms of Awards
. Luminex may take action, including the withholding of amounts
from any award made under the Equity Incentive Plan, to satisfy withholding and other tax
obligations. The Committee may provide for additional cash payments to participants to defray any
tax arising from the grant, vesting, exercise or payment of any award. Except as permitted by the
applicable award agreement, awards granted under the Equity Incentive Plan generally may not be
pledged or otherwise encumbered and are not transferable except by will or by the laws of descent
and distribution, or as permitted by the Committee in its discretion.
Forms of Award Agreements
. In connection with the adoption of the Equity Incentive
Plan, on May 20, 2009, the Board approved forms of award agreements for awards under the Equity
Incentive Plan which will be used for awards under the Equity Incentive Plan effective May 21,
2009. The forms of award agreements are attached hereto as Exhibits 10.2 through 10.6 and
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No.
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Description
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10.1
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Luminex Corporation Amended and Restated 2006 Equity Incentive Plan
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10.2
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Form of Non-Qualified Stock Option Agreement
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10.3
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Form of Restricted Share Award Agreement (Officers and Employees)
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10.4
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Form of Restricted Share Award Agreement (Directors)
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10.5
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Form of Restricted Share Unit Agreement (Officers and Employees)
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10.6
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Form of Restricted Share Unit Agreement (Directors)
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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.
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Date: May 21, 2009
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LUMINEX CORPORATION
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By:
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/s/ Harriss T. Currie
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Name:
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Harriss T. Currie
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Title:
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Vice President Finance and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No.
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Description
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10.1
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Luminex Corporation Amended and Restated 2006 Equity Incentive Plan
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10.2
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Form of Non-Qualified Stock Option Agreement
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10.3
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Form of Restricted Share Award Agreement (Officers and Employees)
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10.4
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Form of Restricted Share Award Agreement (Directors)
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10.5
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Form of Restricted Share Unit Agreement (Officers and Employees)
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10.6
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Form of Restricted Share Unit Agreement (Directors)
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Exhibit 10.1
LUMINEX CORPORATION
AMENDED AND RESTATED 2006 EQUITY INCENTIVE PLAN
TABLE OF CONTENTS
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Section 1. Purpose
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1
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Section 2. Definitions
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1
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Section 3. Administration
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4
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Section 4. Shares Available For Awards
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6
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Section 5. Eligibility
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6
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Section 6. Stock Options And Stock Appreciation Rights
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7
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Section 7. Restricted Shares And Restricted Share Units
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9
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Section 8. Performance Awards
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10
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Section 9. Other Stock-Based Awards
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11
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Section 10. Non-Employee Director And Outside Director Awards
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11
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Section 11. Provisions Applicable To Covered Officers And Performance Awards
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11
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Section 12. Separation from Service
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13
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Section 13. Change In Control
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Section 14. Amendment And Termination
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Section 15. General Provisions
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Section 16. Term Of The Plan
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LUMINEX CORPORATION
AMENDED AND RESTATED 2006 EQUITY INCENTIVE PLAN
Section 1. Purpose.
This plan shall be known as the Luminex Corporation Amended and Restated 2006 Equity
Incentive Plan (the Plan). The purpose of the Plan is to promote the interests of Luminex
Corporation (the Company) and its shareholders by (i) attracting and retaining key officers,
employees and directors of, and consultants to, the Company and its Subsidiaries and Affiliates;
(ii) motivating such individuals by means of performance-related incentives to achieve long-range
performance goals; (iii) enabling such individuals to participate in the long-term growth and
financial success of the Company; (iv) encouraging ownership of stock in the Company by such
individuals; and (v) linking their compensation to the long-term interests of the Company and its
shareholders. With respect to any awards granted under the Plan that are intended to comply with
the requirements of performance-based compensation under Section 162(m) of the Code, the Plan
shall be interpreted in a manner consistent with such requirements.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
2.1 Affiliate
shall mean (i) any entity that, directly or indirectly, is controlled by the
Company, (ii) any entity in which the Company has a significant equity interest, (iii) an affiliate
of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act, and
(iv) any entity in which the Company has at least twenty percent (20%) of the combined voting power
of the entitys outstanding voting securities, in each case as designated by the Board as being a
participating employer in the Plan.
2.2 Award
shall mean any Option, Stock Appreciation Right, Restricted Share Award,
Restricted Share Unit, Performance Award, or Other Stock-Based Award granted under the Plan,
whether singly, in combination or in tandem, to a Participant by the Committee (or the Board)
pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee (or
the Board) may establish.
2.3 Award Agreement
shall mean any written agreement, contract or other instrument or
document evidencing any Award, which may, but need not, be executed or acknowledged by a
Participant.
2.4 Board
shall mean the Board of Directors of the Company.
2.5 Cause
shall mean, unless otherwise defined in the applicable Award Agreement, (i) the
engaging by the Participant in willful misconduct that is injurious to the Company or its
Subsidiaries or Affiliates, or (ii) the embezzlement or misappropriation of funds or property of
the Company or its Subsidiaries or Affiliates by the Participant. For purposes of this paragraph,
no act, or failure to act, on the Participants part shall be considered willful unless done, or
omitted to be done, by the Participant not in good faith and without reasonable belief that the
Participants action or omission was in the best interest of the Company. Any determination of
Cause for purposes of the Plan or any Award shall be made by the Committee in its sole discretion.
Any such determination shall be final and binding on a Participant.
2.6 Change in Control
shall mean, unless otherwise provided in the applicable Award
Agreement, the happening of one of the following:
(a) any person or entity, including a group as defined in Section 13(d)(3) of the
Exchange Act, other than the Company or a wholly-owned Subsidiary thereof or any employee
benefit plan of the Company or any of its Subsidiaries, becomes the beneficial owner of the
Companys securities having 35% or more of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of directors of the Company
(other than as a result of an issuance of securities initiated by the Company in the
ordinary course of business); or
(b) as the result of, or in connection with, any cash tender or exchange offer, merger
or other business combination, sales of assets or contested election, or any combination of
the foregoing transactions, less than a majority of the combined voting power of the then
outstanding securities of the Company or any successor corporation or entity entitled to
vote generally in the election of the directors of the Company or such other corporation or
entity after such transaction are held in the aggregate by the holders of the Companys
securities entitled to vote generally in the election of directors of the Company
immediately prior to such transaction; or
(c) during any period of two consecutive years, individuals who at the beginning of any
such period constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the Companys shareholders,
of each director of the Company first elected during such period was approved by a vote of
at least two-thirds of the directors of the Company then still in office who were directors
of the Company at the beginning of any such period.
2.7 Code
shall mean the Internal Revenue Code of 1986, as amended from time to time.
2.8 Committee
shall mean a committee of the Board composed of not less than two Non-Employee
Directors, each of whom shall be (i) a non-employee director for purposes of Exchange Act
Section 16 and Rule 16b-3 thereunder, (ii) an outside director for purposes of Section 162(m),
and (iii) independent within the meaning of the listing standards of the Nasdaq Stock Market.
2.9 Consultant
shall mean any consultant to the Company or its Subsidiaries or Affiliates.
2.10 Covered Officer
shall mean at any date (i) any individual who, with respect to the
previous taxable year of the Company, was a covered employee of the Company within the meaning of
Section 162(m); provided, however, that the term Covered Officer shall not include any such
individual who is designated by the Committee, in its discretion, at the time of any Award or at
any subsequent time, as reasonably expected not to be such a covered employee with respect to the
current taxable year of the Company or the taxable year of the Company in which the applicable
Award will be paid or vested, and (ii) any individual who is designated by the Committee, in its
discretion, at the time of any Award or at any subsequent time, as reasonably expected to be such a
covered employee with respect to the current taxable year of the Company or with respect to the
taxable year of the Company in which any applicable Award will be paid or vested.
2.11 Director
shall mean a member of the Board.
2.12 Disability
shall mean, unless otherwise defined in the applicable Award Agreement, a
disability that would qualify as a total and permanent disability under the Companys then current
long-term disability plan.
2.13 Early Retirement
shall mean retirement, for purposes of this Plan, with the express
consent of the Company at or before the time of such retirement, from active employment with the
Company and any Subsidiary or Affiliate prior to age 65, in accordance with any applicable early
retirement policy of the Company then in effect or as may be approved by the Committee.
2.14 Effective Date
shall have the meaning provided in
Section 16.1
of the Plan.
2.15 Employee
shall mean a current or prospective officer or employee of the Company or of
any Subsidiary or Affiliate.
2.16 Exchange Act
shall mean the Securities Exchange Act of 1934, as amended from time to
time.
2.17 Fair Market Value
with respect to the Shares, shall mean, for purposes of a grant of an
Award as of any date, (i) the reported closing sales price of the Shares on the Nasdaq Stock
Market, or any other such market or exchange as is the principal trading market for the Shares, on
such date, or in the absence of reported sales on such date, the closing sales price on the
immediately preceding date on which sales were reported or (ii) in the event there is no public
market for the Shares on such date, the fair market value as determined, in good faith and by
the reasonable application of a reasonable valuation method, by the Committee in its sole
discretion, and for purposes of a sale of a Share as of any date, the actual sales price on that
date.
2
2.18 Good Reason
shall mean (i) a material reduction in a Participants position, authority,
duties or responsibilities, (ii) any material reduction in a Participants annual base salary as in
effect immediately prior to a Change in Control; (iii) the relocation of the office at which the
Participant is to perform the majority of his or her duties following a Change in Control to a
location more than 30 miles from the location at which the Participant performed such duties prior
to the Change in Control; or (iv) the failure by the Company or its successor to continue to
provide the Participant with benefits substantially similar in aggregate value to those enjoyed by
the Participant under any of the Companys pension, life insurance, medical, health and accident or
disability plans in which Participant was participating immediately prior to a Change in Control,
unless the Participant is offered participation in other comparable benefit plans generally
available to similarly situated employees of the Company or its successor after the Change in
Control.
2.19 Grant Price
shall mean the price established at the time of grant of an SAR pursuant to
Section 6 used to determine whether there is any payment due upon exercise of the SAR.
2.20 Incentive Stock Option
shall mean an option to purchase Shares from the Company that is
granted under
Section 6
of the Plan and that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.
2.21 Non-Employee Director
shall mean a member of the Board who is not an officer or
employee of the Company or any Subsidiary or Affiliate.
2.22 Non-Qualified Stock Option
shall mean an option to purchase Shares from the Company
that is granted under
Sections 6
or
10
of the Plan and is not intended to be an
Incentive Stock Option.
2.23 Normal Retirement
shall mean, unless otherwise defined in the applicable Award
Agreement, retirement of a Participant from active employment with the Company or any of its
Subsidiaries or Affiliates on or after such Participants 65
th
birthday.
2.24 Option
shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
2.25 Option Price
shall mean the purchase price payable to purchase one Share upon the
exercise of an Option.
2.26 Other Stock-Based Award
shall mean any Award granted under
Sections 9
or
10
of the Plan. For purposes of the share counting provisions of Section 4.1 hereof, an
Other Stock-Based Award that is not settled in cash shall be treated as (i) an Option Award if the
amounts payable thereunder will be determined by reference to the appreciation of a Share, and (ii)
a Restricted Share Award if the amounts payable thereunder will be determined by reference to the
full value of a Share.
2.27 Outside Director
shall mean, with respect to the grant of an Award, a member of the
Board then serving on the Committee.
2.28 Participant
shall mean any Employee, Director, Consultant or other person who receives
an Award under the Plan.
2.29 Performance Award
shall mean any Award granted under
Section 8
of the Plan.
For purposes of the share counting provisions of
Section 4.1
hereof, a Performance Award
that is not settled in cash shall be treated as (i) an Option Award if the amounts payable
thereunder will be determined by reference to the appreciation of a Share, and (ii) a Restricted
Share Award if the amounts payable thereunder will be determined by reference to the full value of
a Share.
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2.30 Person
shall mean any individual, corporation, partnership, limited liability company,
association, joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.
2.31 Restricted Share
shall mean any Share granted under
Sections 7
to
10
of the Plan.
2.32 Restricted Share Unit
shall mean any unit granted under
Sections 7
to
10
of the Plan.
2.33 Retirement
shall mean Normal or Early Retirement.
2.34 SEC
shall mean the Securities and Exchange Commission or any successor thereto.
2.35 Section 16
shall mean Section 16 of the Exchange Act and the rules promulgated
thereunder and any successor provision thereto as in effect from time to time.
2.36 Section 162(m)
shall mean Section 162(m) of the Code and the regulations promulgated
thereunder and any successor provision thereto as in effect from time to time.
2.37 Separation from Service
or
Separates from Service
shall have the meaning ascribed to
such term pursuant to Section 409A of the Code and the regulations promulgated thereunder.
2.38 Shares
shall mean shares of the common stock, $0.001 par value, of the Company.
2.39 Share Reserve
shall have the meaning set forth in Section 4.1 hereof.
2.40 Stock Appreciation Right
or
SAR
shall mean a stock appreciation right granted under
Sections 6
,
8
or
10
of the Plan that entitles the holder to receive, with
respect to each Share encompassed by the exercise of such SAR, the amount determined by the
Committee and specified in an Award Agreement. In the absence of such a determination, the holder
shall be entitled to receive, with respect to each Share encompassed by the exercise of such SAR,
the excess of the Fair Market Value of such Share on the date of exercise over the Grant Price.
2.41 Subsidiary
shall mean any Person (other than the Company) of which 50% or more of its
voting power or its equity securities or equity interest is owned directly or indirectly by the
Company.
2.42 Substitute Awards
shall mean Awards granted solely in assumption of, or in substitution
for, outstanding awards previously granted by a company acquired by the Company or with which the
Company combines.
2.43 2000 Plan
shall have the meaning set forth in Section 4.1 hereof.
Section 3. Administration.
3.1
Authority of Committee.
The Plan shall be administered by a Committee, which shall be
appointed by and serve at the pleasure of the Board; provided, however, with respect to Awards to
Outside Directors, all references in the Plan to the Committee shall be deemed to be references to
the Board. Subject to the terms of the Plan and applicable law, and in addition to other express
powers and authorizations conferred on the Committee by the Plan, the Committee shall have full
power and authority in its discretion to: (i) designate Participants; (ii) determine eligibility
for participation in the Plan and decide all questions concerning eligibility for and the amount of
Awards under the Plan; (iii) determine the type or types of Awards to be granted to a Participant;
(iv) determine the number of Shares to be covered by, or with respect to which payments, rights or
other matters are to be calculated in connection with Awards; (v) determine the timing, terms, and
conditions of any Award; (vi) accelerate the time at which all or any part of an Award may be
settled or exercised; (vii) determine whether, to what extent, and under what circumstances Awards
may be settled or exercised in cash, Shares, other securities, other Awards or other
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property, or
canceled, forfeited or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended; (viii) determine whether, to what extent, and
under what circumstances cash, Shares, other securities, other Awards, other property, and other
amounts payable with respect to an Award shall be deferred either automatically or at the election
of the holder thereof or of the Committee; (ix) grant Awards as an alternative to, or as the form
of payment for grants or rights earned or payable under, other bonus or compensation plans,
arrangements or policies of the Company or a Subsidiary or Affiliate; (x) grant Substitute Awards
on such terms and conditions as the Committee may prescribe, subject to compliance with the
Incentive Stock Option rules under Section 422 of the Code and the nonqualified deferred
compensation rules under Section 409A of the Code, where applicable; (xi) make all determinations
under the Plan concerning any Participants Separation from Service with the Company or a
Subsidiary or Affiliate, including whether such separation occurs by reason of Cause, Good Reason,
Disability, Retirement, or in connection with a Change in Control and whether a leave constitutes a
Separation from Service; (xii) interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (xiii) except to the extent prohibited by
Section 6.2
, amend or modify the terms of any Award at or after grant with the consent of
the holder of the Award; (xiv) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
(xv) make any other determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan, subject to the exclusive authority of the Board under
Section 14
hereunder to amend or terminate the Plan.
3.2
Committee Discretion Binding.
Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and
shall be final, conclusive, and binding upon all Persons, including the Company, any Subsidiary or
Affiliate, any Participant and any holder or beneficiary of any Award. A Participant or other
holder of an Award may contest a decision or action by the Committee with respect to such person or
Award only on the grounds that such decision or action was arbitrary or capricious or was unlawful,
and any review of such decision or action shall be limited to determining whether the Committees
decision or action was arbitrary or capricious or was unlawful.
3.3
Action by the Committee.
The Committee shall select one of its members as its Chairperson
and shall hold its meetings at such times and places and in such manner as it may determine. A
majority of its members shall constitute a quorum. All determinations of the Committee shall be
made by not less than a majority of its members. Any decision or determination reduced to writing
and signed by all of the members of the Committee shall be fully effective as if it had been made
by a majority vote at a meeting duly called and held. The exercise of an Option or receipt of an
Award shall be effective only if an Award Agreement shall have been duly executed and delivered on
behalf of the Company following the grant of the Option or other Award. The Committee may appoint
a Secretary and may make such rules and regulations for the conduct of its business, as it shall
deem advisable.
3.4
Delegation.
Subject to the terms of the Plan and applicable law, the Committee may
delegate to one or more officers or managers of the Company or of any Subsidiary or Affiliate, or
to a Committee of such officers or managers, the authority, subject to such terms and limitations
as the Committee shall determine, to grant Awards to or to cancel, modify or waive rights with
respect to, or to alter, discontinue, suspend or terminate Awards held by Participants who are not
officers or directors of the Company for purposes of Section 16 or who are otherwise not subject to
such Section.
3.5
No Liability.
No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Award granted hereunder.
5
Section 4. Shares Available For Awards.
4.1
Shares Available.
Subject to the provisions of
Section 4.2
below, the maximum
aggregate number of Shares which may be issued pursuant to all Awards after the effective date of
the amendment and restatement of this Plan is equal to the sum of (i) 3,325,000 Shares and (ii) the
number of shares available for grant under the Plan as of the end of the day that is the effective
date of the amendment and restatement of this Plan (such aggregate amount being, the Share
Reserve). The number of Shares with respect to which Incentive Stock Options may be granted shall
be no more than 1,000,000. Each Share issued pursuant to an Option shall reduce the Share Reserve
by one (1) share. Each Share subject to a redeemed portion of a SAR shall reduce the Share Reserve
by one (1) share. Each Share issued pursuant to a Restricted Stock Award or a Restricted Stock
Unit Award shall reduce the Share
Reserve by one and forty-eight one-hundreths (1.48) shares. If any Award granted under this Plan
(whether before or after the effective date of the amendment and restatement of this Plan) shall
expire, terminate, be settled in cash (in whole or in part) or otherwise be forfeited or canceled
for any reason before it has vested or been exercised in full, the Shares subject to such Award
shall, to the extent of such expiration, cash settlement, forfeiture, or termination, again be
available for Awards under the Plan, in accordance with this Section 4.1. If any Award granted
under the Companys 2000 Long-Term Incentive Plan (the 2000 Plan) shall expire, terminate, be
settled in cash (in whole or in part) or otherwise be forfeited or canceled for any reason before
it has vested or been exercised in full, the Shares subject to such Award shall, to the extent of
such expiration, cash settlement, forfeiture, or termination, again be available for Awards under
the Plan, and the Share Reserve shall be increased, in accordance with this Section 4.1. The
Committee may make such other determinations regarding the counting of Shares issued pursuant to
this Plan as it deems necessary or advisable, provided that such determinations shall be permitted
by law. Notwithstanding the foregoing, if an Option or SAR is exercised, in whole or in part, by
tender of Shares or if the Companys tax withholding obligation is satisfied by withholding Shares,
the number of Shares deemed to have been issued under the Plan for purposes of the limitation set
forth in this Section 4.1 shall be the number of Shares that were subject to the Option or SAR or
portion thereof, and not the net number of Shares actually issued and any SARs to be settled in
Shares shall be counted in full against the number of Shares available for issuance under the Plan,
regardless of the number of shares issued upon the settlement of the SAR. Any Shares that again
become available for grant pursuant to this Section shall be added back as (i) one (1) Share if
such Shares were subject to Options or Stock Appreciation Rights granted under the Plan or options
or stock appreciation rights granted under the 2000 Plan, and (ii) as one and forty-eight
one-hundredths (1.48) Shares if such Shares were subject to Awards other than Options or Stock
Appreciation Rights granted under the Plan or awards other than options or stock appreciation
rights granted under the 2000 Plan. Notwithstanding the foregoing and subject to adjustment as
provided in
Section 4.2
hereof, no Participant may receive Options or SARs under the Plan
in any calendar year that, taken together, relate to more than 300,000 Shares.
4.2
Adjustments.
Without limiting the Committees discretion as provided in
Section
13
hereof, in the event that the Committee determines that any dividend or other distribution
(whether in the form of cash, Shares, other securities or other property, and other than a normal
cash dividend), recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other
securities of the Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event affects the Shares, then
the Committee shall, in an equitable and proportionate manner as deemed appropriate by the
Committee (and, as applicable, in such manner as is consistent with Sections 162(m), 422 and 409A
of the Code and the regulations thereunder) either: (i) adjust any or all of (1) the aggregate
number of Shares or other securities of the Company (or number and kind of other securities or
property) with respect to which Awards may be granted under the Plan; (2) the number of Shares or
other securities of the Company (or number and kind of other securities or property) subject to
outstanding Awards under the Plan, provided that the number of Shares subject to any Award shall
always be a whole number; (3) the grant or exercise price with respect to any Award under the Plan,
and (4) the limits on the number of Shares or Awards that may be granted to Participants under the
Plan in any calendar year; (ii) provide for an equivalent award in respect of securities of the
surviving entity of any merger, consolidation or other transaction or event having a similar
effect; or (iii) make provision for a cash payment to the holder of an outstanding Award. Any such
adjustments to outstanding Awards shall be effected in a manner that precludes the material
enlargement of rights and benefits under such Awards.
4.3
Substitute Awards.
Any Shares issued by the Company as Substitute Awards in connection
with the assumption or substitution of outstanding grants from any acquired corporation shall not
reduce the Shares available for Awards under the Plan.
4.4
Sources of Shares Deliverable Under Awards.
Any Shares delivered pursuant to an Award may
consist, in whole or in part, of authorized and unissued Shares or of issued Shares which have been
reacquired by the Company.
Section 5. Eligibility.
Any Employee, Director or Consultant shall be eligible to be designated a Participant;
provided, however, that Outside Directors shall only be eligible to receive Awards granted
consistent with
Section 10
.
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Section 6. Stock Options And Stock Appreciation Rights.
6.1
Grant.
Subject to the provisions of the Plan, the Committee shall have sole and complete
authority to determine the Participants to whom Options and SARs shall be granted, the number of
Shares subject to each Award, the exercise price and the conditions and limitations applicable to
the exercise of each Option and SAR. An Option may be granted with or without a related SAR. An
SAR may be granted with or without a related Option. The grant of an Option or SAR shall occur
when the Committee by resolution, written consent or other appropriate action determines to grant
such Option or SAR for a particular number of Shares to a particular Participant at a particular
Option Price or Grant Price, as the case may be, or such later date as the Committee shall specify
in such resolution, written consent or other appropriate action. The Committee shall have the
authority to grant Incentive Stock Options and to grant Non-Qualified Stock Options. In the case
of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply
with Section 422 of the Code, as from time to time amended, and any regulations implementing such
statute. A person who has been granted an Option or SAR under this Plan may be granted additional
Options or SARs under the Plan if the Committee shall so determine; provided, however, that to the
extent the aggregate Fair Market Value (determined at the time the Incentive Stock Option is
granted) of the Shares with respect to which all Incentive Stock Options are exercisable for the
first time by an Employee during any calendar year (under all plans described in Section 422(d) of
the Code of the Employees employer corporation and its parent and Subsidiaries) exceeds $100,000,
such Options shall be treated as Non-Qualified Stock Options.
6.2
Price.
The Committee in its sole discretion shall establish the Option Price at the time
each Option is granted and the Grant Price at the time each SAR is granted. Except in the case of
Substitute Awards, the Option Price of an Option may not be less than the Fair Market Value of a
Share on the date of grant of such Option. Except with respect to Substitute Awards, the Grant
Price of an SAR may not be less than the Fair Market Value of a Share on the date of grant of such
SAR. In the case of Substitute Awards or Awards granted in connection with an adjustment provided
for in
Section 4.2
hereof in the form of Options or SARS, such grants shall have an Option
Price (or Grant Price) per Share that is intended to maintain the economic value of the Award that
was replaced or adjusted as determined by the Committee. Notwithstanding the foregoing and except
as permitted by the provisions of
Section 4.2
hereof, the Committee shall not have the
power to (i) amend the terms of previously granted Options to reduce the Option Price of such
Options, (ii) amend the terms of previously granted SARs to reduce the Grant Price of such SARs,
(iii) cancel such Options and grant substitute Options with a lower Option Price than the cancelled
Options, or (iv) cancel such SARs and grant substitute SARs with a lower Grant Price than the
cancelled SARs, in each case without the approval of the Companys shareholders.
6.3
Term.
Subject to the Committees authority under
Section 3.1
and the provisions
of
Section 6.6
, each Option and SAR and all rights and obligations thereunder shall expire
on the date determined by the Committee and specified in the Award Agreement. The Committee shall
be under no duty to provide terms of like duration for Options or SARs granted under the Plan.
Notwithstanding the foregoing, but subject to
Section 6.4(a)
hereof, no Option or SAR shall
be exercisable after the expiration of ten (10) years from the date such Option or SAR was granted.
6.4
Exercise.
(a) Each Option and SAR shall be exercisable at such times and subject to such terms
and conditions as the Committee may, in its sole discretion, specify in the applicable Award
Agreement or thereafter. The Committee shall have full and complete authority to determine,
subject to
Section 6.6
herein, whether an Option or SAR will be exercisable in full
at any time or from time to time during the term of the Option or SAR, or to provide for the
exercise thereof in such installments, upon the occurrence of such events and at such times
during the term of the Option or SAR as the Committee may determine. An Award Agreement may
provide that the period of time over which an Option, other than an Incentive Stock Option,
or SAR may be exercised shall be automatically extended if on the scheduled expiration of
such Award, the Participants exercise of such Award would violate applicable securities
law; provided, however, that during the extended exercise period the Option or SAR may only
be exercised to the extent such Award was exercisable in accordance with its terms
immediately prior to such scheduled expiration date; provided further, however, that such
extended exercise period shall end not later than thirty (30) days after the exercise of
such Option or SAR first would no longer violate such laws.
7
(b) The Committee may impose such conditions with respect to the exercise of Options or
SARs, including without limitation, any relating to the application of federal, state or
foreign securities laws or the Code, as it may deem necessary or advisable. The exercise of
any Option granted hereunder shall be effective only at such time as the sale of Shares
pursuant to such exercise will not violate any state or federal securities or other laws.
(c) An Option or SAR may be exercised in whole or in part at any time, with respect to
whole Shares only, within the period permitted thereunder for the exercise thereof, and
shall be exercised by written notice of intent to exercise the Option or SAR, delivered to
the Company at its principal office, and payment in full to the Company at the direction of
the Committee of the amount of the Option Price for the number of Shares with respect to
which the Option is then being exercised.
(d) Payment of the Option Price shall be made in (i) cash or cash equivalents, or, (ii)
at the discretion of the Committee, by transfer, either actually or by attestation, to the
Company of unencumbered Shares previously acquired by the Participant, valued at the Fair
Market Value of such Shares on the date of exercise (or next succeeding trading date, if the
date of exercise is not a trading date), together with any applicable withholding taxes,
such transfer to be upon such terms and conditions as determined by the Committee, (iii) by
a combination of (i) or (ii), or (iv) by any other method approved or accepted by the
Committee in its sole discretion, including, if the Committee so determines, (x) a cashless
(broker-assisted) exercise that complies with applicable laws or (y) withholding Shares
(net-exercise) otherwise deliverable to the Participant pursuant to the Option having an
aggregate Fair Market Value at the time of exercise equal to the total Option Price. Until
the optionee has been issued the Shares subject to such exercise, he or she shall possess no
rights as a stockholder with respect to such Shares. The Company reserves, at any and all
times in the Companys sole discretion, the right to establish, decline to approve or
terminate any program or procedures for the exercise of Options by means of a method set
forth in subsection (iv) above, including with respect to one or more Participants specified
by the Company notwithstanding that such program or procedures may be available to other
Participants.
(e) At the Committees discretion, the amount payable as a result of the exercise of an
SAR may be settled in cash, Shares or a combination of cash and Shares. A fractional Share
shall not be deliverable upon the exercise of a SAR but a cash payment will be made in lieu
thereof.
6.5
Separation from Service.
Except as otherwise provided in the applicable Award Agreement,
an Option or SAR may be exercised only to the extent that it is then exercisable, and if at all
times during the period beginning with the date of granting such Award and ending on the date of
exercise of such Award the Participant is an Employee, Non-Employee Director or Consultant, and
shall terminate immediately upon a Separation from Service by the Participant. An Option or SAR
shall cease to become exercisable upon a Separation from Service of the holder thereof.
Notwithstanding the foregoing provisions of this
Section 6.5
to the contrary, the Committee
may determine in its discretion that an Option or SAR may be exercised following any such
Separation from Service, whether or not exercisable at the time of such separation; provided,
however, that in no event may an Option or SAR be exercised after the expiration date of such Award
specified in the applicable Award Agreement, except as provided in
Section 6.4(a)
.
6.6
Ten Percent Stock Rule.
Notwithstanding any other provisions in the Plan, if at the time
an Option is otherwise to be granted pursuant to the Plan, the optionee or rights holder owns
directly or indirectly (within the meaning of Section 424(d) of the Code) Shares of the Company
possessing more than ten percent (10%) of the total combined voting power of all classes of Stock
of the Company or its parent or Subsidiary or Affiliate corporations (within the meaning of
Section 422(b)(6) of the Code), then any Incentive Stock Option to be granted to such optionee or
rights holder pursuant to the Plan shall satisfy the requirement of Section 422(c)(5) of the Code,
and the Option Price shall be not less than one hundred ten percent (110%) of the Fair Market Value
of the Shares of the Company, and such Option by its terms shall not be exercisable after the
expiration of five (5) years from the date such Option is granted.
8
Section 7. Restricted Shares And Restricted Share Units.
7.1
Grant.
(a) Subject to the provisions of the Plan, the Committee shall have sole and complete
authority to determine the Participants to whom Restricted Shares and Restricted Share Units
shall be granted, the number of Restricted Shares and/or the number of Restricted Share
Units to be granted to each Participant, the duration of the period during which, and the
conditions under which, the Restricted Shares and Restricted Share Units may be forfeited to
the Company, and the other terms and conditions of such Awards. The Restricted Share and
Restricted Share Unit Awards shall be evidenced by Award Agreements in such form as the
Committee shall from time to time approve, which agreements shall comply with and be subject
to the terms and conditions provided hereunder and any additional terms and conditions
established by the Committee that are consistent with the terms of the Plan.
(b) Each Restricted Share and Restricted Share Unit Award made under the Plan shall be
for such number of Shares as shall be determined by the Committee and set forth in the Award
Agreement containing the terms of such Restricted Share or Restricted Share Unit Award.
Such agreement shall set forth a period of time during which the grantee must remain in the
continuous employment (or other service-providing capacity) of the Company in order for the
forfeiture and transfer restrictions to lapse. If the Committee so determines, the
restrictions may lapse during such restricted period in installments with respect to
specified portions of the Shares covered by the Restricted Share or Restricted Share Unit
Award. The Award Agreement may also, in the discretion of the Committee, set forth
performance or other conditions that will subject the Shares to forfeiture and transfer
restrictions. The Committee may, at its discretion, waive all or any part of the
restrictions applicable to any or all outstanding Restricted Share and Restricted Share Unit
Awards.
7.2
Delivery of Shares and Transfer Restrictions.
(a) At the time of a Restricted Share Award, a certificate representing the number of
Shares awarded thereunder shall be registered in the name of the grantee. Such certificate
shall be held by the Company or any custodian appointed by the Company for the account of
the grantee subject to the terms and conditions of the Plan, and shall bear such a legend
setting forth the restrictions imposed thereon as the Committee, in its discretion, may
determine. The foregoing to the contrary notwithstanding, the Committee may, in its
discretion, provide that a Participants ownership of Restricted Shares prior to the lapse
of any transfer restrictions or any other applicable restrictions shall, in lieu of such
certificates, be evidenced by a book entry (
i.e
., a computerized or manual entry) in the
records of the Company or its designated agent in the name of the Participant who has
received such Award, and confirmation and account statements sent to the Participant with
respect to such book-entry Shares may bear the restrictive legend referenced in the
preceding sentence. Such records of the Company or such agent shall, absent manifest error,
be binding on all Participants who receive Restricted Share Awards evidenced in such manner.
The holding of Restricted Shares by the Company or such an escrow holder, or the use of
book entries to evidence the ownership of Restricted Shares, in accordance with this Section
7.2(a), shall not affect the rights of Participants as owners of the Restricted Shares
awarded to them, nor affect the restrictions applicable to such shares under the Award
Agreement or the Plan, including the transfer restrictions.
(b) Unless otherwise provided in the applicable Award Agreement, the grantee shall have
all rights of a shareholder with respect to the Restricted Shares, including the right to
receive dividends and the right to vote such Shares, subject to the following restrictions:
(i) the grantee shall not be entitled to delivery of the stock certificate until the
expiration of the restricted period and the fulfillment of any other restrictive conditions
set forth in the Award Agreement with respect to such Shares; (ii) none of the Shares may be
sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of
during such restricted period or until after the fulfillment of any such other restrictive
conditions; and (iii) except as otherwise determined by the Committee at or after grant, all
of the Shares shall be forfeited and all rights of the grantee to such Shares shall
terminate, without further obligation on the part of the Company, unless the grantee remains
in the continuous employment of the Company for the entire restricted period in relation to
which such Shares were granted and unless any other restrictive conditions relating to the
Restricted Share Award are met. Restricted Share Units shall be subject to similar transfer
restrictions as Restricted Share Awards, except that no Shares are actually awarded to a
Participant who is granted Restricted Share Units on the date of grant, and such Participant
shall have no rights of a stockholder with respect to such Restricted Share Units until the
restrictions set forth in the applicable Award Agreement have lapsed.
9
7.3
Termination of Restrictions.
At the end of the restricted period and provided that any
other restrictive conditions of the Restricted Share Award are met, or at such earlier time as
otherwise determined by the Committee, all restrictions set forth in the Award Agreement relating
to the Restricted Share Award or in the Plan shall lapse as to the restricted Shares subject
thereto, and a stock certificate for the appropriate number of Shares, free of the restrictions and
restricted stock legend, shall be delivered to the Participant or the Participants beneficiary or
estate, as the case may be (or, in the case of book-entry Shares, such restrictions and restricted
stock legend shall be removed from the confirmation and account statements delivered to the
Participant or the Participants beneficiary or estate, as the case may be, in book-entry form).
7.4
Payment of Restricted Share Units.
Each Restricted Share Unit shall have a value equal to
the Fair Market Value of a Share. Restricted Share Units shall be paid in cash, Shares, other
securities or other property, as determined in the sole discretion of the Committee, upon the lapse
of the restrictions applicable thereto, or otherwise in accordance with the applicable Award
Agreement. The applicable Award Agreement shall specify whether a Participant will be entitled to
receive dividend equivalent rights in respect of Restricted Share Units at the time of any payment
of dividends to shareholders on Shares. If the applicable Award Agreement specifies that a
Participant will be entitled to dividend equivalent rights, (i) the amount of any such dividend
equivalent right shall equal the amount that would be payable to the Participant as a stockholder
in respect of a number of Shares equal to the number of vested Restricted Share Units then credited
to the Participant, (ii) any such dividend equivalent right shall be paid in accordance with the
Companys payment practices as may be established from time to time and as of the date on which
such dividend would have been payable in respect of outstanding Shares, and (iii) the applicable
Award Agreement will specify whether dividend equivalents shall be paid in respect of Restricted
Share Units that are not yet vested. Except as otherwise determined by the Committee at or after
grant, Restricted Share Units may not be sold, assigned, transferred, pledged, hypothecated or
otherwise encumbered or disposed of, and all Restricted Share Units and all rights of the grantee
to such Restricted Share Units shall terminate, without further obligation on the part of the
Company, unless the grantee remains in continuous employment of the Company for the entire
restricted period in relation to which such Restricted Share Units were granted and unless any
other restrictive conditions relating to the Restricted Share Unit Award are met.
Section 8. Performance Awards.
8.1
Grant.
The Committee shall have sole and complete authority to determine the Participants
who shall receive a Performance Award, which shall consist of a right that is (i) denominated in
cash or Shares (including but not limited to Restricted Shares and Restricted Share Units),
(ii) valued, as determined by the Committee, in accordance with the achievement of such performance
goals during such performance periods as the Committee shall establish, and (iii) payable at such
time and in such form as the Committee shall determine.
8.2
Terms and Conditions.
Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any Performance Award and
the amount and kind of any payment or transfer to be made pursuant to any Performance Award, and
may amend specific provisions of the Performance Award; provided, however, that such amendment may
not adversely affect existing Performance Awards made within a performance period commencing prior
to implementation of the amendment.
8.3
Payment of Performance Awards.
Performance Awards may be paid in a lump sum or in
installments following the close of the performance period or, in accordance with the procedures
established by the Committee, on a deferred basis. Separation from Service prior to the end of any
performance period, other than for reasons of death or Disability, will result in the forfeiture of
the Performance Award, and no payments will be made. Notwithstanding the foregoing, the Committee
may in its discretion, waive any performance goals and/or other terms and conditions relating to a
Performance Award. A Participants rights to any Performance Award may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered or disposed of in any manner, except by
will or the laws of descent and distribution, and/or except as the Committee may determine at or
after grant.
10
Section 9. Other Stock-Based Awards.
The Committee shall have the authority to determine the Participants who shall receive an
Other Stock-Based Award, which shall consist of any right that is (i) not an Award described in
Sections 6
and
7
above and (ii) an Award of Shares or an Award denominated or
payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as deemed by the Committee to
be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the terms and conditions of any such Other
Stock-Based Award.
Section 10. Non-Employee Director And Outside Director Awards.
10.1 The Board may provide that all or a portion of a Non-Employee Directors annual retainer,
meeting fees and/or other awards or compensation as determined by the Board, be payable (either
automatically or at the election of a Non-Employee Director) in the form of Non-Qualified Stock
Options, Restricted Shares, Restricted Share Units and/or Other Stock-Based Awards, including
unrestricted Shares. The Board shall determine the terms and conditions of any such Awards,
including the terms and conditions which shall apply upon a termination of the Non-Employee
Directors service as a member of the Board, and shall have full power and authority in its
discretion to administer such Awards, subject to the terms of the Plan and applicable law.
10.2 The Board may also grant Awards to Outside Directors pursuant to the terms of the Plan,
including any Award described in
Sections 6
,
7
and
9
above. With respect
to such Awards, all references in the Plan to the Committee shall be deemed to be references to the
Board.
Section 11. Provisions Applicable To Covered Officers And Performance Awards.
11.1 Notwithstanding anything in the Plan to the contrary, unless the Committee determines
that a Performance Award to be granted to a Covered Officer should not qualify as
performance-based compensation for purposes of Section 162(m), Performance Awards granted to
Covered Officers shall be subject to the terms and provisions of this
Section 11
.
11.2 The Committee may grant Performance Awards to Covered Officers based solely upon the
attainment of performance targets related to one or more performance goals selected by the
Committee from among the goals specified below. For the purposes of this
Section 11
,
performance goals shall be limited to one or more of the following Company, Subsidiary, operating
unit, business segment or division financial performance measures:
|
(a)
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earnings before any one or more of the following: interest,
taxes, depreciation, amortization and/or stock compensation;
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(b)
|
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operating (or gross) income or profit;
|
|
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(c)
|
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operating efficiencies;
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(d)
|
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return on equity, assets, capital, capital employed or
investment;
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(e)
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after tax operating income;
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(f)
|
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net income;
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(g)
|
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earnings or book value per Share;
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(h)
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financial ratios;
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(i)
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cash flow(s);
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(j)
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total sales or revenues or sales or revenues per employee;
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(k)
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production (separate work units or SWUs);
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11
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(l)
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stock price or total shareholder return;
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(m)
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dividends;
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(n)
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debt or cost reduction;
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(o)
|
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strategic business objectives, consisting of one or more
objectives based on meeting specified cost targets, business expansion goals
(including, without limitation, developmental, strategic or manufacturing
milestones of products or projects in development, execution of contracts with
current or prospective customers and development of business expansion
strategies) and goals relating to acquisitions, joint ventures or collaborations
or divestitures; or
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(p)
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any combination thereof.
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Each goal may be expressed on an absolute and/or relative basis, may be based on or otherwise
employ comparisons based on internal targets, the past performance of the Company or any
Subsidiary, operating unit, business segment or division of the Company and/or the past or current
performance of other companies, and in the case of earnings-based measures, may use or employ
comparisons relating to capital, shareholders equity and/or Shares outstanding, or to assets or
net assets. The Committee may appropriately adjust any evaluation of performance under criteria
set forth in this
Section 11.2
to exclude any of the following events that occurs during a
performance period: (i) asset impairments or write-downs, (ii) litigation or claim judgments or
settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or
provisions affecting reported results, (iv) accruals for reorganization and restructuring programs,
(v) any extraordinary non-recurring items as described in Accounting Principles Board Opinion No.
30 and/or in managements discussion and analysis of financial condition and results of operations
appearing in the Companys annual report to shareholders for the applicable year and (vi) the
effect of adverse federal, governmental or regulatory action, or delays in federal, governmental or
regulatory action; provided that the Committee commits to make any such adjustments within the 90
day period set forth in
Section 11.4
.
11.3 With respect to any Covered Officer, the maximum annual number of Shares in respect of
which all Performance Awards may be granted under
Section 8
of the Plan is 300,000 and the
maximum amount of all Performance Awards that are settled in cash and that may be granted under
Section 8
of the Plan in any year is $3,000,000.
11.4 To the extent necessary to comply with Section 162(m), with respect to grants of
Performance Awards, no later than 90 days following the commencement of each performance period (or
such other time as may be required or permitted by Section 162(m) of the Code), the Committee
shall, in writing, (1) select the performance goal or goals applicable to the performance period,
(2) establish the various targets and bonus amounts which may be earned for such performance
period, and (3) specify the relationship between performance goals and targets and the amounts to
be earned by each Covered Officer for such performance period. Following the completion of each
performance period, the Committee shall certify in writing whether the applicable performance
targets have been achieved and the amounts, if any, payable to Covered Officers for such
performance period. In determining the amount earned by a Covered Officer for a given performance
period, subject to any applicable Award Agreement, the Committee shall have the right to reduce
(but not increase) the amount payable at a given level of performance to take into account
additional factors that the Committee may deem relevant in its sole discretion to the assessment of
individual or corporate performance for the performance period.
11.5 Unless otherwise expressly stated in the relevant Award Agreement, each Award granted to
a Covered Officer under the Plan is intended to be performance-based compensation within the
meaning of Section 162(m). Accordingly, unless otherwise determined by the Committee, if any
provision of the Plan or any Award Agreement relating to such an Award does not comply or is
inconsistent with Section 162(m), such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements, and no provision shall be deemed to confer upon the
Committee discretion to increase the amount of compensation otherwise payable to a Covered Officer
in connection with any such Award upon the attainment of the performance criteria established by
the Committee.
12
Section 12. Separation from Service.
The Committee shall have the full power and authority to determine the terms and conditions
that shall apply to any Award upon a Separation from Service with the Company, its Subsidiaries and
Affiliates, including a separation from the Company with or without Cause, by a Participant
voluntarily, or by reason of death, Disability, Early Retirement or Retirement, and may provide
such terms and conditions in the Award Agreement or in such rules and regulations as it may
prescribe.
Section 13. Change In Control.
Unless otherwise provided by the Committee, or in an Award Agreement or by a contractual
agreement between the Company and a Participant, if, within one year following a Change in Control,
a Participant Separates from Service with the Company (or its successor) by reason of (a) death;
(b) Disability; (c) Normal Retirement or Early Retirement; (d) for Good Reason by the Participant;
or (e) involuntary termination by the Company for any reason other than for Cause, all outstanding
Awards of such Participant shall vest, become immediately exercisable and payable and have all
restrictions lifted. In addition, subject to the requirements and limitations of Section 409A if
applicable, the Committee may provide for any one or more of the following at or after grant of any
Award hereunder:
(a)
Accelerated Vesting
. The Committee may, in its discretion, provide in any Award
Agreement, or, in the event of a Change in Control, may take such actions as it deems appropriate
to provide, for the acceleration of the exercisability, vesting and/or settlement in connection
with such Change in Control of each or any outstanding Award or portion thereof and Shares acquired
pursuant thereto upon such conditions (if any), including termination of the Participants service
prior to, upon, or following such Change in Control, to such extent as the Committee shall
determine. In the event of a Change of Control, and without the consent of any Participant, the
Committee may, in its discretion, provide that for a period of at least fifteen (15) days prior to
the Change in Control, any Options or Stock Appreciation Rights shall be exercisable as to all
Shares subject thereto and that upon the occurrence of the Change in Control, such Stock Options or
Stock Appreciation Rights shall terminate and be of no further force and effect.
(b)
Assumption, Continuation or Substitution.
In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or other business entity or parent
thereof, as the case may be (the
Acquiror
), may, without the consent of any Participant, either
assume or continue the Companys rights and obligations under each or any Award or portion thereof
outstanding immediately prior to the Change in Control or substitute for each or any such
outstanding Award or portion thereof a substantially equivalent award with respect to the
Acquirors stock, as applicable. For purposes of this Section, if so determined by the Committee,
in its discretion, an Award denominated in Shares shall be deemed assumed if, following the Change
in Control, the Award (as adjusted, if applicable, pursuant to
Section 4.2
hereof) confers
the right to receive, subject to the terms and conditions of the Plan and the applicable Award
Agreement, for each Share subject to the Award immediately prior to the Change in Control, the
consideration (whether stock, cash, other securities or property or a combination thereof) to which
a holder of a share of Stock on the effective date of the Change in Control was entitled; provided,
however, that if such consideration is not solely common stock of the Acquiror, the Committee may,
with the consent of the Acquiror, provide for the consideration to be received upon the exercise or
settlement of the Award, for each Share subject to the Award, to consist solely of common stock of
the Acquiror equal in Fair Market Value to the per share consideration received by holders of
Shares pursuant to the Change in Control. If any portion of such consideration may be received by
holders of Shares pursuant to the Change in Control on a contingent or delayed basis, the Committee
may, in its sole discretion, determine such Fair Market Value per share as of the time of the
Change in Control on the basis of the Committees good faith estimate of the present value of the
probable future payment of such consideration. Any Award or portion thereof which is neither
assumed or continued by the Acquiror in connection with the Change in Control nor exercised or
settled as of the time of consummation of the Change in Control shall terminate and cease to be
outstanding effective as of the time of consummation of the Change in Control.
13
(c)
Cash-Out of Awards
. The Committee may, in its discretion and without the
consent of any Participant, determine that, upon the occurrence of a Change in Control, each or any
Award or a portion thereof outstanding immediately prior to the Change in Control and not
previously exercised or settled shall be canceled in exchange for
a payment with respect to each vested Share (and each unvested Share, if so determined by the
Committee) subject to such canceled Award in (i) cash, (ii) stock of the Company or of a
corporation or other business entity a party to the Change in Control, or (iii) other property
which, in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market
Value of the consideration to be paid per Share in the Change in Control, reduced by the exercise
or purchase price per share, if any, under such Award (which payment may, for the avoidance of
doubt, be $0, in the event the per share exercise or purchase price of an Award is greater than the
per share consideration in connection with the Change in Control). If any portion of such
consideration may be received by holders of Shares pursuant to the Change in Control on a
contingent or delayed basis, the Committee may, in its sole discretion, determine such Fair Market
Value per share as of the time of the Change in Control on the basis of the Committees good faith
estimate of the present value of the probable future payment of such consideration. In the event
such determination is made by the Committee, the amount of such payment (reduced by applicable
withholding taxes, if any), if any, shall be paid to Participants in respect of the vested portions
of their canceled Awards as soon as practicable following the date of the Change in Control and in
respect of the unvested portions of their canceled Awards in accordance with the vesting schedules
applicable to such Awards.
Section 14. Amendment And Termination.
14.1
Amendments to the Plan.
The Board may amend, alter, suspend, discontinue or terminate
the Plan or any portion thereof at any time; provided that no such amendment, alteration,
suspension, discontinuation or termination shall be made without shareholder approval if such
approval is necessary to comply with any tax or regulatory requirement for which or with which the
Board deems it necessary or desirable to comply.
14.2
Amendments to Awards.
Subject to the restrictions of
Section 6.2
, the Committee
may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel
or terminate, any Award theretofore granted, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely affect the rights of any Participant or any holder or beneficiary of any
Award theretofore granted shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary.
14.3
Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.
The
Committee is hereby authorized to make equitable and proportionate adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring
events (and shall make such adjustments for the events described in
Section 4.2
hereof)
affecting the Company, any Subsidiary or Affiliate, or the financial statements of the Company or
any Subsidiary or Affiliate, or of changes in applicable laws, regulations or accounting
principles.
Section 15. General Provisions.
15.1
Limited Transferability of Awards.
Except as otherwise provided in the Plan, an Award
Agreement or by the Committee at or after grant, no Award shall be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a Participant, except by will or the laws
of descent and distribution. No transfer of an Award by will or by laws of descent and
distribution shall be effective to bind the Company unless the Company shall have been furnished
with written notice thereof and an authenticated copy of the will and/or such other evidence as the
Committee may deem necessary or appropriate to establish the validity of the transfer. No transfer
of an Award for value shall be permitted under the Plan.
15.2
Dividend Equivalents.
In the sole and complete discretion of the Committee, an Award may
provide the Participant with dividends or dividend equivalents, payable in cash, Shares, other
securities or other property on a current or deferred basis. All dividend or dividend equivalents
which are not paid currently may, at the Committees discretion, accrue interest, be reinvested
into additional Shares, or, in the case of dividends or dividend equivalents credited in connection
with Performance Awards, be credited as additional Performance Awards and paid to the Participant
if and when, and to the extent that, payment is made pursuant to such Award. The total number of
Shares available for grant under
Section 4
shall not be reduced to reflect any dividends or
dividend equivalents that are reinvested into additional Shares or credited as Performance Awards.
14
15.3.
Compliance with Section 409A of the Code.
No Award (or modification thereof) shall
provide for deferral of compensation that does not comply with Section 409A of the Code unless the
Committee, at the time of grant, specifically provides that the Award is not intended to comply
with Section 409A of the Code. Notwithstanding any provision of this Plan to the contrary, if one
or more of the payments or benefits received or to be received by a Participant pursuant to an
Award would cause the Participant to incur any additional tax or interest under Section 409A of the
Code, the Committee may reform such provision to maintain to the maximum extent practicable the
original intent of the applicable provision without violating the provisions of Section 409A of the
Code. Although the Company intends to administer the Plan so that Awards will be exempt from, or
will comply with, the requirements of Section 409A of the Code, the Company does not warrant that
any Award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or
any other provision of federal, state, local or foreign law. The Company shall not be liable to
any Participant for any tax, interest, or penalties that Participant might owe as a result of the
grant, holding, vesting, exercise, or payment of any Award under the Plan.
15.4
No Rights to Awards.
No Person shall have any claim to be granted any Award, and there
is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards.
The terms and conditions of Awards need not be the same with respect to each Participant.
15.5
Share Certificates.
All certificates for Shares or other securities of the Company or
any Subsidiary or Affiliate delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations and other requirements of the SEC or any state
securities commission or regulatory authority, any stock exchange or other market upon which such
Shares or other securities are then listed, and any applicable Federal or state laws, and the
Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
15.6
Tax Withholding.
A Participant may be required to pay to the Company or any Subsidiary
or Affiliate and the Company or any Subsidiary or Affiliate shall have the right and is hereby
authorized to withhold from any Award, from any payment due or transfer made under any Award or
under the Plan, or from any compensation or other amount owing to a Participant the amount (in
cash, Shares, other securities, other Awards or other property) of any applicable withholding or
other tax-related obligations in respect of an Award, its exercise or any other transaction
involving an Award, or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes. The Committee may provide for additional cash payments to holders of
Options to defray or offset any tax arising from the grant, vesting, exercise or payment of any
Award. Without limiting the generality of the foregoing, the Committee may in its discretion
permit a Participant to satisfy or arrange to satisfy, in whole or in part, the tax obligations
incident to an Award by: (a) electing to have the Company withhold Shares or other property
otherwise deliverable to such Participant pursuant to the Award (provided, however, that the amount
of any Shares so withheld shall not exceed the amount necessary to satisfy required federal, state
local and foreign withholding obligations using the minimum statutory withholding rates for
federal, state, local and/or foreign tax purposes, including payroll taxes, that are applicable to
supplemental taxable income) and/or (b) tendering to the Company Shares owned by such Participant
(or by such Participant and his or her spouse jointly) and purchased or held for the requisite
period of time as may be required to avoid the Companys or the Affiliates or Subsidiaries
incurring an adverse accounting charge, based, in each case, on the Fair Market Value of the Shares
on the payment date as determined by the Committee. All such elections shall be irrevocable, made
in writing, signed by the Participant, and shall be subject to any restrictions or limitations that
the Committee, in its sole discretion, deems appropriate.
15.7
Award Agreements.
Each Award hereunder shall be evidenced by an Award Agreement that
shall be delivered to the Participant and may specify the terms and conditions of the Award and any
rules applicable thereto. In the event of a conflict between the terms of the Plan and any Award
Agreement, the terms of the Plan shall prevail. The Committee shall, subject to applicable law,
determine the date an Award is deemed to be granted. The Committee or, except to the extent
prohibited under applicable law, its delegate(s) may establish the terms of agreements or other
documents evidencing Awards under this Plan and may, but need not, require as a condition to any
such agreements or documents effectiveness that such agreement or document be executed by the
Participant, including by electronic signature or other electronic indication of acceptance, and
that such Participant agree to such further terms and conditions as specified in such agreement or
document. The grant of an Award under this Plan shall not confer any rights upon the Participant
holding such Award other than such terms, and subject to such
conditions, as are specified in this Plan as being applicable to such type of Award (or to all
Awards) or as are expressly set forth in the agreement or other document evidencing such Award.
15
15.8
No Limit on Other Compensation Arrangements.
Nothing contained in the Plan shall prevent
the Company or any Subsidiary or Affiliate from adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant of Options, Restricted Shares,
Restricted Share Units, Other Stock-Based Awards or other types of Awards provided for hereunder.
15.9
No Right to Employment.
The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company or any Subsidiary or Affiliate.
Further, the Company or a Subsidiary or Affiliate may at any time dismiss a Participant from
employment, free from any liability or any claim under the Plan, unless otherwise expressly
provided in an Award Agreement.
15.10
No Rights as Shareholder.
Subject to the provisions of the Plan and the applicable
Award Agreement, no Participant or holder or beneficiary of any Award shall have any rights as a
shareholder with respect to any Shares to be distributed under the Plan until such person has
become a holder of such Shares. Notwithstanding the foregoing, in connection with each grant of
Restricted Shares hereunder, the applicable Award Agreement shall specify if and to what extent the
Participant shall not be entitled to the rights of a shareholder in respect of such Restricted
Shares.
15.11
Governing Law.
The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan and any Award Agreement shall be determined in accordance with the
laws of the State of Delaware without giving effect to conflicts of laws principles.
15.12
Severability.
If any provision of the Plan or any Award is, or becomes, or is deemed to
be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person
or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
15.13
Other Laws.
The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines that the issuance or
transfer of such Shares or such other consideration might violate any applicable law or regulation
(including applicable non-U.S. laws or regulations) or entitle the Company to recover the same
under Exchange Act Section 16(b), and any payment tendered to the Company by a Participant, other
holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to
the relevant Participant, holder or beneficiary.
15.14
No Trust or Fund Created.
Neither the Plan nor any Award shall create or be construed
to create a trust or separate fund of any kind or a fiduciary relationship between the Company or
any Subsidiary or Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Subsidiary or Affiliate pursuant to an
Award, such right shall be no greater than the right of any unsecured general creditor of the
Company or any Subsidiary or Affiliate.
15.15
No Fractional Shares.
No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award, and the Committee shall determine whether cash, other securities or other
property shall be paid or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
15.16
Headings.
Headings are given to the sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.
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Section 16. Term Of The Plan.
16.1
Effective Date.
The Plan shall be effective, and will amend and restate the previous
plan as set forth herein effective, as of May 21, 2009 provided it has been approved by the Board
and by the Companys shareholders.
16.2
Expiration Date.
No new Awards shall be granted under the Plan after the tenth
(10
th
) anniversary of the Effective Date. Unless otherwise expressly provided in the
Plan or in an applicable Award Agreement, any Award granted hereunder may, and the authority of the
Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award or
to waive any conditions or rights under any such Award shall, continue after the tenth
(10
th
) anniversary of the Effective Date.
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Exhibit 10.4
LUMINEX CORPORATION
RESTRICTED SHARE AWARD AGREEMENT
(Directors)
THIS RESTRICTED SHARE AWARD AGREEMENT
(this Agreement) is made and entered into as of the
day of
, 20_____
(the Grant Date), between Luminex Corporation, a Delaware
corporation (the Company), and
, the Grantee). Capitalized terms not
otherwise defined herein shall have the meaning ascribed to such terms in the Luminex Corporation
Amended and Restated 2006 Equity Incentive Plan (the Plan).
WHEREAS,
the Company has adopted the Plan, which permits the issuance of restricted shares of
the Companys common stock, par value $0.001 per share (the Common Stock); and
WHEREAS,
pursuant to the Plan, the Board has granted an award of restricted shares to the
Grantee as provided herein;
NOW, THEREFORE,
in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
1.
Grant of Restricted Shares
.
(a) The Company hereby grants to the Grantee an award (the Award) of
shares
of Common Stock of the Company (the Shares or the Restricted Shares) on the terms and
conditions set forth in this Agreement and as otherwise provided in the Plan.
(b) The Grantees rights with respect to the Award shall remain forfeitable at all times prior
to the dates on which the restrictions shall lapse in accordance with
Section 2
and
Section 3
hereof.
2.
Terms and Rights as a Stockholder
.
(a) Except as provided herein and subject to such other exceptions as may be determined by the
Board in its discretion, the Restricted Period for Restricted Shares granted herein shall expire
on the date of the annual meeting of stockholders held in the year following the year in which the
Award was made.
(b) The Grantee shall have all rights of a stockholder with respect to the Restricted Shares,
including the right to receive dividends and the right to vote such Shares, subject to the
following restrictions:
(i) the Grantee shall not be entitled to delivery of the stock certificate for any Shares
until the expiration of the Restricted Period as to such Shares and the fulfillment of any other
restrictive conditions set forth herein;
(ii) none of the Restricted Shares may be sold, assigned, transferred, pledged, hypothecated
or otherwise encumbered or disposed of during the Restricted Period as to such Shares and until the
fulfillment of any such other restrictive conditions set forth herein; and
(iii) except as otherwise determined by the Board at or after the grant of the Award
hereunder, all of the Restricted Shares shall be forfeited, and all rights of the Grantee to such
Shares shall terminate, without further obligation on the part of the Company, unless the Grantee
continues his/her service as a director of the Company, a Subsidiary or Affiliate for the entire
Restricted Period.
(c) Notwithstanding the foregoing, the Restricted Period shall automatically terminate as to
all Restricted Shares awarded hereunder (as to which such Restricted Period has not previously
terminated) upon the termination of the Grantees service as a director of the Company, a
Subsidiary or Affiliate which results from the Grantees death or Disability.
(d) Notwithstanding the foregoing, upon a Change in Control, the Restricted Period shall
automatically terminate as to all Restricted Shares awarded hereunder (to the extent such
Restricted Period has not previously terminated).
Any Shares, any other securities of the Company and any other property (except for cash dividends)
distributed with respect to the Restricted Shares shall be subject to the same restrictions, terms
and conditions as such Restricted Shares.
3.
Termination of Restrictions
. Following the termination of the Restricted Period
and provided that all other restrictive conditions set forth herein have been met, all restrictions
set forth in this Agreement or in the Plan relating to the Restricted Shares shall lapse and a
stock certificate for the appropriate number of Shares, free of the restrictions and restrictive
stock legend (but subject to any legend appropriate under securities laws), shall, upon request, be
delivered to the Grantee or the Grantees beneficiary or estate, as the case may be, pursuant to
the terms of this Agreement (or, in the case of book-entry Shares, such restrictions and restricted
stock legend shall be removed from the confirmation and account statements delivered to the Grantee
in book-entry form).
4.
Delivery of Shares
.
(a) As of the date hereof, certificates representing the Restricted Shares shall be registered
in the name of the Grantee and held by the Company or transferred to a custodian appointed by the
Company for the account of the Grantee subject to the terms and conditions of the Plan and shall
remain in the custody of the Company or such custodian until their delivery to the Grantee or
Grantees beneficiary or estate as set forth in
Section 4(b)
hereof or their reversion to
the Company as set forth in
Section 2(b)
hereof. The Board may, in its discretion, provide
that Grantees ownership of Restricted Shares prior to the lapse of any transfer restrictions or
any other applicable restrictions shall, in lieu of such certificates, be evidenced by a book
entry (i.e. a computerized or manual entry) in the Companys records in accordance with and
subject to the applicable provisions of the Plan.
2
(b) Certificates representing Restricted Shares in respect of which the Restricted Period has
lapsed pursuant to this Agreement shall be delivered to the Grantee (or Grantees personal
representative, if applicable) upon request following the date on which the restrictions on such
Restricted Shares lapse.
(c) Each certificate representing Restricted Shares shall bear (and confirmation and account
statements sent to Grantee with respect to book-entry Shares may bear) a legend in substantially
the following form or substance:
THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN
THE LUMINEX CORPORATION AMENDED AND RESTATED 2006 EQUITY INCENTIVE PLAN (THE PLAN)
AND THE RESTRICTED SHARE AWARD AGREEMENT (THE AGREEMENT) BETWEEN THE OWNER OF THE
RESTRICTED SHARES REPRESENTED HEREBY AND LUMINEX CORPORATION (THE COMPANY). THE
RELEASE OF SUCH SHARES FROM SUCH TERMS AND CONDITIONS SHALL BE MADE ONLY IN
ACCORDANCE WITH THE PROVISIONS OF THE PLAN AND THE AGREEMENT AND ALL OTHER
APPLICABLE POLICIES AND PROCEDURES OF THE COMPANY, COPIES OF WHICH ARE ON FILE AT
THE COMPANY.
5.
Effect of Lapse of Restrictions
. To the extent that the Restricted Period
applicable to any Restricted Shares shall have lapsed, the Grantee may receive, hold, sell or
otherwise dispose of such Shares free and clear of the restrictions imposed under the Plan and this
Agreement.
6.
No Right to Continued Service
. This Agreement shall not be construed as giving
Grantee the right to continue to service as a director of the Company or any Subsidiary or
Affiliate, and the Company or any Subsidiary or Affiliate may at any time dismiss Grantee from
service as a director, free from any liability or any claim under the Plan.
7.
Adjustments
. The Board shall make equitable and proportionate adjustments in the
terms and conditions of, and the criteria included in, this Award in recognition of unusual or
nonrecurring events (and shall make adjustments for the events described in
Section 4.2
of
the Plan) affecting the Company, or the financial statements of the Company, or of changes in
applicable laws, regulations, or accounting principles in accordance with the Plan, whenever the
Board determines that such event(s) affect the Shares. Any such adjustments shall be effected in a
manner that precludes the material enlargement of rights and benefits under this Award.
8.
Amendment to Award
. Subject to the restrictions contained in the Plan, the Board
may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate, the Award, prospectively or retroactively; provided that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or termination that would
adversely affect the rights of the Grantee or any holder or beneficiary of the Award shall not
to that extent be effective without the consent of the Grantee, holder or beneficiary affected.
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9.
Withholding of Taxes
. The Company may take such actions as it deems necessary to
satisfy any withholding obligations or withholding taxes applicable to the Company or the Grantee.
10.
Plan Governs
. The Grantee hereby acknowledges receipt of a copy of the Plan and
agrees to be bound by all the terms and provisions thereof. The terms of this Agreement are
governed by the terms of the Plan, and in the case of any inconsistency between the terms of this
Agreement and the terms of the Plan, the terms of the Plan shall govern.
11.
Severability
. If any provision of this Agreement is, or becomes, or is deemed to
be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or the Award, or
would disqualify the Plan or Award under any laws deemed applicable by the Board, such provision
shall be construed or deemed amended to conform to the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Board, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person
or Award, and the remainder of the Plan and Award shall remain in full force and effect.
12.
Notices
. All notices required to be given under this Grant shall be deemed to be
received if delivered or mailed as provided for herein, to the parties at the following addresses,
or to such other address as either party may provide in writing from time to time.
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To the Company:
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Luminex Corporation
12212 Technology Blvd.
Austin, TX 78727
Attn: Corporate Secretary and Chief Financial Officer
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To the Grantee:
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The address then maintained with respect to the Grantee in the
Companys records.
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13.
Governing Law
. The validity, construction and effect of this Agreement shall be
determined in accordance with the laws of the State of Delaware without giving effect to conflicts
of laws principles.
14.
Successors in Interest
. This Agreement shall inure to the benefit of and be
binding upon any successor to the Company. This Agreement shall inure to the benefit of the
Grantees legal representatives. All obligations imposed upon the Grantee and all rights granted
to the Company under this Agreement shall be binding upon the Grantees heirs, executors,
administrators and successors.
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15.
Resolution of Disputes
. Any dispute or disagreement which may arise under, or as
a result of, or in any way related to, the interpretation, construction or application of this
Agreement shall be determined by the Board. Any determination made hereunder shall be final,
binding and conclusive on the Grantee and the Company for all purposes. The Grantee may
contest a decision or action by the Board with respect to such Grantee only on the grounds that
such decision or action was arbitrary or capricious or was unlawful, and any review of such
decision or action shall be limited to determining whether the Boards decision or action was
arbitrary or capricious or unlawful.
(remainder of page left blank intentionally)
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IN WITNESS WHEREOF,
the parties have caused this Restricted Share Award Agreement to be duly
executed effective as of the day and year first above written.
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GRANTEE:
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Please Print
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GRANTEE:
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Signature
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