LUMINEX CORPORATION
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 25, 2006 (May 25, 2006)
LUMINEX CORPORATION
(Exact Name of Registrant as Specified in Charter)
|
|
|
|
|
Delaware
|
|
000-30109
|
|
74-2747608 |
|
|
|
|
|
(State or Other Jurisdiction of Incorporation)
|
|
(Commission File
Number)
|
|
(IRS Employer
Identification No.) |
|
|
|
12212 Technology Boulevard, Austin, Texas
|
|
78727 |
|
|
|
(Address of Principal Executive Offices)
|
|
(Zip Code) |
Registrants telephone number, including area code: (512) 219-8020
Not Applicable
(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 (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry Into a Material Definitive Agreement.
2006 Equity Incentive Plan
At the Annual Meeting of Stockholders (the Meeting) of Luminex Corporation (the Company)
held on May 25, 2006, the Companys stockholders approved the Luminex Corporation 2006 Equity
Incentive Plan (the Equity Incentive Plan). The Equity Incentive Plan authorizes awards in
respect of an aggregate of 2,000,000 shares. The Equity Incentive Plan will be effective as of May
25, 2006 and will replace the Companys 2000 Long-Term Incentive Plan and 2001 Broad-Based Stock
Option Plan, under which plans the Board will not issue further grants.
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.
Shares Available for Awards under the Plan. Under the Equity Incentive Plan, awards
may be made in common stock of the Company. 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 is 2,000,000. 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. The maximum number of
shares with respect to which awards may be granted under the Equity Incentive Plan shall be
increased by the number of shares with respect to which options or other awards were granted under
the 2000 Plan as of the effective date of the Equity Incentive Plan, but which terminate, expire
unexercised, or are settled for cash, forfeited or cancelled or withheld without delivery of the
shares under the terms of the 2000 Plan after the effective date of the Equity Incentive Plan.
Shares of common stock subject to an award under the Equity Incentive Plan but which
terminate, expire unexercised or are settled for cash, or are forfeited, cancelled or withheld
without delivery of the shares, including shares of common stock withheld or surrendered in payment
of any exercise or purchase price of an award or taxes relating to an award, remain available for
awards under the Equity Incentive Plan. Shares of common stock issued under the Equity Incentive
Plan may be either newly issued shares or shares which have been reacquired by the Company. Shares
issued by the Company as substitute awards granted solely in connection with the assumption of
outstanding awards previously granted by a company acquired by the Company, or with which the
Company 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 Section 162(m) of the Internal Revenue Code of 1986, as amended (the
Code). Under these limitations, no single participant may receive options or stock appreciation
rights (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, awards made under the Equity Incentive Plan may be adjusted by the
Compensation Committee of the Board of Directors (the Committee) in its discretion or 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 the Company.
Eligibility and Administration. Current and prospective officers and employees, and
directors of, and consultants to, the Company 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. 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 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.
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 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 is determined by the Committee, 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. 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 termination of
employment 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 the Companys 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 the Company of the amount of the option price for the number
of shares with respect to which the option is then being exercised.
Payment of the option price must be made in cash or cash equivalents, or, at the discretion of
the Committee, (i) by transfer, either actually or by attestation, to the Company of shares that
have been held by the participant for at least six months (or such lesser period as may be
permitted by the Committee) which have a fair market value on the date of exercise equal to the
option price, together with any applicable withholding taxes, or (ii) by a combination of such cash
or cash equivalents and such shares; provided, however, that a participant is not entitled to
tender shares pursuant to successive, substantially simultaneous exercises of any stock option of
the Company. Subject to applicable securities laws and Company policy, the Company may permit an
option to be exercised by delivering a notice of exercise and simultaneously selling the shares
thereby acquired, pursuant to a brokerage or similar agreement approved in advance by proper
officers of the Company, using the proceeds of such sale as payment of the option price, together
with any applicable withholding taxes. Until the participant has been issued the shares subject to
such exercise, he or she shall possess no rights as a stockholder with respect to such shares.
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 terminations of
employment 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 the Company 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 the Company, unless the participant remains in continuous employment of
the Company for the restricted period and any other restrictive conditions relating to the
restricted share units are met.
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. Termination of employment 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). Performance goals for Covered Officers will be
limited to one or more of the following financial performance measures relating to the Company or
any of its subsidiaries, operating units, business segments or divisions: (a) earnings before
interest, taxes, depreciation and/or amortization; (b) operating 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) cash flow(s); (i) total
sales or revenues or sales or revenues per employee; (j) production (separate work units or SWUs);
(k) stock price or total stockholder return; (l) dividends; (m) debt reduction; or (n) strategic
business objectives, consisting of one or more objectives based on meeting specified cost targets,
business expansion goals, and goals relating to acquisitions or divestitures; or 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 the Company or any
subsidiary, operating unit 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, 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 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 and (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 stockholders for the applicable year.
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)), 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.
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. The Committee will determine the terms and conditions of such awards,
consistent with the terms of the Equity Incentive Plan.
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.
Termination of Employment. The Committee will determine the terms and conditions that
apply to any award upon the termination of employment with the Company, its subsidiaries and
affiliates, and provide such terms in the applicable award agreement or in its rules or
regulations.
Change in Control. Notwithstanding any other provision of the Equity Incentive Plan,
unless otherwise provided in an award agreement or other contractual agreement between the Company
and an award holder, if, within one year following a Change in Control, an award holders
employment with the Company (or its successor) is terminated by reason of (a) death; (b)
disability; (c) Normal Retirement or Early Retirement; (d) for Good Reason by the award holder; or
(e) involuntary termination by the Company for any reason other than for Cause, all outstanding
Awards of such award holder shall vest, become immediately exercisable and payable and have all
restrictions lifted.
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 amend the terms of previously granted options to
reduce the exercise price per share subject to such option or to cancel such options and grant
substitute options with a lower exercise price per share than the cancelled options. The Committee
also may not materially and adversely affect the rights of any award holder without the award
holders consent.
Other Terms of Awards. The Company 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.
Certain Federal Income Tax Consequences. The following is a brief description of the
Federal income tax consequences generally arising with respect to awards under the Equity Incentive
Plan.
The Equity Incentive Plan is not intended to be a qualified plan under Section 401(a) of the
Code.
2006 Management Stock Purchase Plan
In addition to the Equity Incentive Plan, the Companys stockholders approved the Luminex
Corporation 2006 Management Stock Purchase Plan (the MSPP) at the Meeting.
Subject to adjustment as provided in the plan, the MSPP provides for the granting of rights to
purchase up to an aggregate of 500,000 shares of the Companys common stock to officers (including
executive officers) of the Company. The MSPP will be
administered by the Committee. The Committee
can make such rules and regulations and establish such procedures for the administration of the
MSPP as it deems appropriate.
The maximum number of shares of the common stock to be authorized and reserved for issuance
under the MSPP is 500,000 shares, subject to equitable adjustment as set forth in the MSPP,
provided that no individual officer may exercise rights to receive more than 50,000 shares in any
year under the MSPP.
The following is a brief summary of the principal features of the MSPP, which is qualified in
its entirety by reference to the full text of the MSPP, a copy of which is attached hereto as
Exhibit 10.5 and incorporated herein by reference.
All officers of the Company and each designated subsidiary shall be eligible to be designated
as participants in the MSPP. Each participant may elect to receive, in lieu of a specified portion
of his or her annual bonus a number of restricted shares equal to the amount of such specified
portion of the annual bonus divided by a dollar amount equal to 80% of the fair market value of a
share on the date on which such restricted shares are granted. Any participant who makes such an
election will be entitled to a grant of restricted shares generally by March 15 of each calendar
year following the year for which the election is in effect. Generally, any election to participate
in the MSPP is effective beginning with the calendar year next following the year in which the
election is made. Once an election has become effective, a participant may cancel such election or
make a change in the applicable bonus
reduction percentage by filing an appropriate notice. However, any such notice is generally not
effective until the beginning of the calendar year next following the year in which it is filed.
The restricted period for restricted shares granted under the MSPP is generally three years
from the date of grant. However, if the Committee determines that the Company may lose
its federal income tax deduction in connection with the future lapsing of restrictions on
restricted shares held by an executive officer because of the $1.0 million annual deductibility cap
of Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), the
Committee, in its discretion, can cause some or all of such restricted shares to be converted into
an equal number of restricted stock units, as to which payment will be postponed until such time
as the payment will not cause the Company to lose its deduction. When the payment is made, it will
be made in shares of common stock.
With respect to restricted shares granted under the MSPP, if a participants employment is
terminated during the restricted period, then, except as provided below, the participants rights
to such restricted shares will be entirely forfeited and the participant will instead have the
right to receive a cash payment equal to the lesser of (i) the then-current fair market value of
the restricted shares or (ii) the bonus amounts foregone by the participant as a condition of
receiving such restricted shares. If, during the restricted period, termination of employment of a
participant resulted from death or total and permanent disability, the restrictions on the
restricted shares will immediately lapse. If, during the restricted period, a participant is
terminated by the Company without cause, the participants right to the restricted shares will be
forfeited entirely and the participant will instead have the right to receive a cash payment equal
to either (i) the then-current fair market value of the restricted shares or (ii) the bonus amounts
foregone by the participant as a condition of receiving such restricted shares. The
Committee will decide, in its sole discretion, which of these amounts will be payable. In addition,
the Committee may, in its discretion, accelerate the lapse of such restrictions upon a
participants retirement. The same rules regarding termination of employment will apply to any
restricted share units that have been substituted for restricted shares.
The Committee can, in its discretion and on such terms and conditions as it
determines, permit or require a participant to pay all or a portion of any taxes arising in
connection with the grant of restricted shares or the lapse of restrictions thereon by having the
Company withhold such shares of the common stock or by the participant delivering previously
acquired shares of the common stock having a fair market value equal to the amount of taxes to be
withheld.
No grants of restricted stock can be made under the MSPP after May 25, 2016. Holdings of
restricted shares acquired prior thereto, however, can extend beyond such date, and the provisions
of the MSPP will continue to apply thereto.
The Board can amend, suspend or discontinue the MSPP; provided, however, that no amendment
which requires stockholder approval for the MSPP to comply with any law, regulation or stock
exchange requirement shall be effective unless approved by the requisite vote of stockholders. In
addition, the Committee can make such amendments as it deems necessary to comply with
applicable laws, rules and regulations.
Item 9.01. Financial Statements and Exhibits.
Exhibits
|
10.1 |
|
Luminex Corporation 2006 Equity Incentive Plan (incorporated by
reference as Exhibit A to the Companys Proxy Statement for its
Annual Meeting of Shareholders held on May 25, 2006) |
|
|
10.2 |
|
Form of Non-Qualified Stock Option Agreement |
|
|
10.3 |
|
Form of Restricted Share Award Agreement (Officers and Employees) |
|
|
10.4 |
|
Form of Restricted Share Award Agreement (Directors) |
|
|
10.5 |
|
Luminex Corporation 2006 Management Stock Purchase Plan (incorporated
by reference as Exhibit B to the Companys Proxy Statement for its
Annual Meeting of Shareholders held on May 25, 2006) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LUMINEX CORPORATION |
|
|
|
|
|
|
Date: May 25, 2006
|
|
By:
|
/s/ Harriss T. Currie |
|
|
|
|
|
|
|
|
|
|
|
Harriss T. Currie |
|
|
|
|
|
Vice President, Finance and Chief Financial Officer |
|
|
EXHIBIT INDEX
|
10.1 |
|
Luminex Corporation 2006 Equity Incentive Plan (incorporated by
reference as Exhibit A to the Companys Proxy Statement for its
Annual Meeting of Shareholders held on May 25, 2006) |
|
|
10.2 |
|
Form of Non-Qualified Stock Option Agreement |
|
|
10.3 |
|
Form of Restricted Share Award Agreement (Officers and Employees) |
|
|
10.4 |
|
Form of Restricted Share Award Agreement (Directors) |
|
|
10.5 |
|
Luminex Corporation 2006 Management Stock Purchase Plan (incorporated
by reference as Exhibit B to the Companys Proxy Statement for its
Annual Meeting of Shareholders held on May 25, 2006) |