Exhibit 10.1
LUMINEX CORPORATION
2009 LONG TERM INCENTIVE PLAN
Purpose and Administration of the Plan
The 2009 Long-Term Incentive Plan (the “LTIP”) has been established by Luminex
Corporation (the “Company”) to encourage and reward superior long-term
performance from specified key executive officers. Awards under the LTIP shall
be treated as Performance Awards under the Luminex Corporation 2006 Equity
Incentive Plan (as the same may be amended from time to time, the “Plan”).
Subject to applicable law, all designations, determinations, interpretations,
and other decisions under or with respect to the LTIP or any award shall be
within the sole discretion of the Compensation Committee (the “Committee”), may
be made at any time and shall be final, conclusive and binding upon all persons.
Designations, determinations, interpretations, and other decisions made by the
Committee with respect to the LTIP or any award hereunder need not be uniform
and may be made selectively among Participants (as defined below), whether or
not such Participants are similarly situated. All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the Plan.
Participation
The Committee shall have the sole and absolute discretion to determine those
officers of the Company who shall be eligible to receive an award pursuant to
the LTIP (each, a “Participant”).
Incentive Calculation and Payment of Awards
The Committee will make awards pursuant to the LTIP as set forth on Schedule A
hereto, on such terms as the Committee may prescribe based on the performance
criteria set forth on Schedule A hereto and such other factors as it may deem
appropriate. The period over which the performance shall be evaluated is the
period beginning January 1, 2009 and ending on December 31, 2011 (the
“Performance Period”). The Committee shall determine whether and to what extent
each performance goal has been met at the end of the Performance Period.
Awards pursuant to the LTIP will be paid in Restricted Share Units issued as
follows: (a) upon the Effective Date (or such later date as determined by the
Committee and/or required by the Company’s equity award policies), a number of
Restricted Share Units shall be issued to each Participant equal to the number
of Shares such Participant would earn if “Maximum Performance” in accordance
with Schedule A were achieved with respect to each performance goal (calculated
in the manner specified on Schedule A), and (b) following the close of the
Performance Period, only the number of Restricted Share Units that equate to the
actual performance, as determined by the Committee pursuant to Schedule A, shall
be eligible to vest (the “Eligible Units”) and settle as Shares as further set
forth in the applicable Award Agreement for such Performance Award. The
Committee shall make its determination under the LTIP by March 15 of the year
following the close of the Performance Period. The form of Restricted Share Unit
Award Agreement is attached hereto as Schedule B. Except as set forth in the
applicable Award Agreement or as the Committee may otherwise determine in its
sole and absolute discretion, termination of a Participant’s employment prior to
the end of the Performance Period will result in the forfeiture of the
Performance Award by the Participant, and no payments shall be made with respect
thereto.
This LTIP is not a “qualified” plan for federal income tax purposes, and any
payments are subject to applicable tax withholding requirements.

 

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Adjustments for Unusual or Nonrecurring Events
In addition to any adjustments enumerated in the definition of the performance
goals set forth on Schedule A hereto, the Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in, awards
in recognition of unusual or nonrecurring events affecting any Participant, the
Company, or any subsidiary or affiliate, or the financial statements of the
Company or of any subsidiary or affiliate; in the event of changes in applicable
laws, regulations or accounting principles; or in the event the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the LTIP. The Committee is also authorized to adjust performance targets
or awards to avoid unwarranted penalties or windfalls. Notwithstanding the
foregoing, the Committee shall not have the discretion to increase any Award
payable to any Covered Officer in excess of that provided by the application of
the terms and conditions of Schedule A attached hereto.
Miscellaneous
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.
No Rights to Awards; No Trust or Fund Created
No person shall have any claim to be granted any award and there is no
obligation for uniformity of treatment among Participants. The terms and
conditions of awards, if any, need not be the same with respect to each
Participant. The Company reserves the right to terminate the LTIP at any time in
the Company’s sole discretion. Neither the LTIP nor any award hereunder 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.
Interpretation and Governing Law
This LTIP shall be governed by and interpreted and construed in accordance with
the internal laws of the State of Delaware, without reference to principles of
conflicts or choices of laws.
Effective Date
This LTIP shall be effective as of February 26, 2009 (the “Effective Date”).

 

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Schedule A
2009 LTIP Performance Goal Weighting:

                  Participant   Share Price   OCF/S
CEO
    50 %     50 %
CFO
    50 %     50 %

2009 LTIP Performance Targets:

                          Metric   Threshold Performance   Target Performance  
Maximum Performance
Share Price1
  $ 32.38     $ 36.79     $ 58.42  
OCF/S2
  $ 0.134     $ 0.152     $ 0.241  

 

1   For purposes of calculating performance, Share Price means the average of
the Fair Market Value of a Company Share for the 20 trading days immediately
preceding the end of the Performance Period (which 20 trading days shall include
the last day of the Performance Period if the same is a trading day). In
determining whether the Share Price targets have been met, the Committee shall
adjust the targets to appropriately take into account 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 securities or warrants or other rights to purchase Shares
or other securities of the Company, or other similar corporate transaction or
event that affects the Shares (collectively the “Share Events”).   2   For
purposes of calculating performance, OCF/S means the Company’s average total
operating cash flows per diluted share for the 4 fiscal quarters ended
December 31, 2011. “Total operating cash flows” means the net cash provided by
operating activities as reflected on the Company’s financial statements for the
12 months ended December 31, 2011 included in its Annual Report on Form 10-K for
the period ended December 31, 2011. The diluted shares will be equal to the
“shares used in computing net income (loss) per share, diluted” for the
12 months ended December 31, 2011 as reflected in the Company’s financial
statements. In computing total operating cash flows, diluted shares and OCF/S,
(i) the Committee shall appropriately take into account any Share Events and
(ii) the effects of the following shall be excluded: (a) losses and gains
related to litigation (or claim) judgments or settlements, (b) acquisition costs
required to be expensed currently per FAS 141(R), (c) securitizing of accounts
receivable, and (d) any extraordinary non-recurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management’s discussion and
analysis of financial condition and results of operations appearing in the
Company’s annual report to shareholders for the applicable year, all as
reasonably determined in good faith by the Committee. In the event of a
significant acquisition or disposition by the Company during the Performance
Period, total operating cash flows and OCF/S targets for various levels of
performance shall be proportionately adjusted by the Committee.

 

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2009 LTIP Participant Opportunities:
Each Participant in the LTIP is assigned a target award amount expressed in
dollars (the “Target Amount”). The potential payout amounts are based on
Threshold, Target and Maximum levels of payout based on the aggregate weighted
achievement of the corresponding performance targets for the LTIP Participants
as follows:

                                  Participant   Target Amount   Threshold  
Target   Maximum
CEO
  $ 800,000       60 %     100 %     275 %
CFO
  $ 300,000       60 %     100 %     275 %

The potential payout amounts are expressed above as a percentage of the
applicable Target Amount and the number of shares eligible to be vested will be
determined by dividing the specified amount of the Target Amount by the closing
price of the Company’s common stock as reported by the Nasdaq Stock Market on
the grant date, in each case at the applicable weighted aggregate performance
level. Payouts between Threshold and Maximum for Participants shall be
calculated by the Committee in its sole discretion using straight-line
interpolation. The finally determined weighted aggregate share payouts shall be
deemed to be the Eligible Units under the LTIP.