DRAFT INDEMNIFICATION AGREEMENT
exhibit 10.1
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of the
___ day of , 2008, by and between LUMINEX CORPORATION, a Delaware corporation (the
“Company”), and the undersigned (“Indemnitee”).
RECITALS
WHEREAS, it is essential to the Company that it attract and retain as directors and officers
the most capable persons available; and
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of public companies in the current
environment; and
WHEREAS, the Indemnitee is currently serving/is willing to serve as a director and/or officer
of the Company and is willing to continue serving in such capacity if Indemnitee is adequately
protected against the risks associated with such service; and
WHEREAS, Section 145 of the General Corporation Law of the State of Delaware (the
“DGCL”), under which law the Company is organized, empowers a corporation to indemnify a
person serving as a director or officer of the Company and a person who serves at the request of
the company as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise, and Section 145 of the DGCL and the certificate of
incorporation of the Company specify that the indemnification set forth in Section 145 and in the
certificate of incorporation, respectively, shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any law (common or statutory), agreement,
vote of stockholders or disinterested directors or otherwise; and
WHEREAS, the Company and the Indemnitee have concluded that the indemnities available under
the Company’s certificate of incorporation, bylaws and any insurance now or hereafter in effect
need to be supplemented to more fully protect the Indemnitee against the risks associated with the
Indemnitee’s service to the Company; and
WHEREAS, in recognition of Indemnitee’s need for additional protection against personal
liability in order to enhance Indemnitee’s service to the Company in an effective manner, and in
order to induce Indemnitee to continue to provide services to the Company as a director and/or
officer thereof, the Company wishes to provide in this Agreement for the indemnification of
Indemnitee to the fullest extent permitted by the DGCL and as set forth in this Agreement.
NOW THEREFORE, in consideration of the foregoing, the covenants contained herein and
Indemnitee’s continued service to the Company, the Company and Indemnitee, intending to be legally
bound, hereby agree as follows:
Section 1. Definitions. The following terms, as used herein, shall have the following
respective meanings:
“Affiliate” of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting
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securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings
relative to the foregoing.
“Change in Control” shall be deemed to have taken place if: (i) any person or group of
persons (as such term is defined in Rule 13d-5(b)(1) promulgated under the Exchange Act) acquires
shares carrying more than fifty percent (50%) of the voting rights at general meetings of the
Company, (ii) the stockholders of the Company approve a merger or consolidation of the Company with
any other company, other than (x) a merger or consolidation which actually results in the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity) more
than fifty percent (50%) of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or consolidation, or (y) a merger
or consolidation effected to implement a recapitalization of the Company (or similar transaction)
in which no person or group of persons acquires more than fifty percent (50%) of the combined
voting power of the Company’s then outstanding securities, (iii) the stockholders of the Company
approve a plan of complete liquidation of the Company or an arrangement for the sale or disposition
of the Company or all or substantially all of the Company’s overall assets or any transaction
having a similar effect; (iv) individuals who constitute the Incumbent Board cease for any reason
to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date of this Agreement whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual who was designated by a Person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (ii) or (iii) of this definition or whose initial
assumption of office occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Incumbent Board; or (v) there occurs any other
event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or a response to any similar item on any similar schedule or form promulgated under
the Exchange Act), whether or not the Company is then subject to such reporting requirement;
provided, that no Change in Control shall be deemed to result from any corporate changes to
the Company’s certificate of incorporation or by-laws at the Company not resulting from one of the
events specified above or from any change in the relative rights and powers of one or more classes
of the Company’s capital stock whether effected by contract or otherwise, in each case to the
extent that they result from or are related to the settlement of any criminal or civil litigation
or do not result in the occurrence of any of the events specified in clauses (i) through (v) of
this definition.
“Claim” means (a) any threatened, pending or completed action, suit, proceeding or
arbitration or other alternative dispute resolution mechanism, or (b) any inquiry, hearing or
investigation, whether conducted by the Company or any other Person, that Indemnitee in good faith
believes might lead to the institution of any such action, suit, proceeding or arbitration or other
alternative dispute resolution mechanism, in each case whether civil, criminal, administrative or
other (whether or not the claims or allegations therein are groundless, false or fraudulent) and
includes, without limitation, those brought by or in the name of the Company or any director or
officer of the Company.
“Company Agent” means any director, officer, partner, employee, agent, trustee or
fiduciary of the Company, any Subsidiary or any Other Enterprise.
“Covered Event” means any event or occurrence on or after the date of this Agreement
related to the fact that Indemnitee is or was a Company Agent or related to anything done or not
done by Indemnitee in any such capacity, and includes, without limitation, any such event or
occurrence (a) arising from performance of the responsibilities, obligations or duties imposed by
ERISA or any similar
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applicable provisions of state or common law; or (b) arising from any merger, consolidation or
other business combination involving the Company, any Subsidiary or any Other Enterprise, including
without limitation any sale or other transfer of all or substantially all of the business or assets
of the Company, any Subsidiary or any Other Enterprise; provided, however, that in
any such case, Indemnitee acted in good faith and in a manner which such Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, and in the case of a
criminal proceeding, in addition the Indemnitee [(x)] had no reasonable cause to believe that such
Indemnitee’s conduct was unlawful and (y) has not admitted that Indemnitee’s conduct was unlawful.
“D&O Insurance” means the directors’ and officers’ liability insurance maintained by
or for the benefit of the Company, its directors or officers as of the date of this Agreement and
any replacement or substitute policies.
“Determination” means a determination made by (a) a majority vote of Disinterested
Directors even if less than a quorum; (b) Independent Legal Counsel, in a written opinion addressed
to the Company and Indemnitee; (c) the stockholders of the Company; or (d) a decision by a court of
competent jurisdiction not subject to further appeal.
“Disinterested Director” shall be a director of the Company who is not or was not a
party to the Claim giving rise to the subject matter of a Determination.
“Exchange Act” means the Securities Exchange Act of 1934, as amended to date.
“Expenses” includes reasonable attorneys’ fees and all other reasonable costs, travel
expenses, fees of experts, transcript costs, filing fees, witness fees, telephone charges, postage,
copying costs, delivery service fees and other reasonable expenses and obligations of any nature
whatsoever paid or incurred in connection with investigating, prosecuting or defending, being a
witness in or participating in (including on appeal), or preparing to prosecute or defend, be a
witness in or participate in any Claim, for which Indemnitee is or becomes legally obligated to
pay.
“Incumbent Board” means the Board of Directors of the Company, as it is composed as of
the date of this Agreement.
“Independent Legal Counsel” shall mean a law firm or a member of a law firm that (a)
neither is nor in the past five (5) years has been retained to represent in any material matter the
Company, any Subsidiary, Indemnitee or any other party to the Claim, (b) under applicable standards
of professional conduct then prevailing would not have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee’s rights to indemnification
under this Agreement and (c) is reasonably acceptable to the Company and Indemnitee.
“Loss” means any amount which Indemnitee is legally obligated to pay as a result of
any Claim, including, without limitation (a) all judgments, penalties and fines, and amounts paid
or to be paid in settlement, (b) all interest, assessments and other charges paid or payable in
connection therewith and (c) any federal, state, local or foreign taxes imposed (net of the value
to Indemnitee of any tax benefits resulting from tax deductions or otherwise as a result of the
actual or deemed receipt of any payments under this Agreement, including the creation of the
Trust).
“Other Enterprise” means any corporation (other than the Company or any Subsidiary),
partnership, joint venture, association, employee benefit plan, trust or other enterprise or
organization to which Indemnitee renders service at the request of the Company or any Subsidiary.
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“Parent” shall have the meaning set forth in the regulations of the Securities and
Exchange Commission under the Securities Act of 1933, as amended; provided the term “Parent” shall
not include the board of directors of a corporation in its capacity as a board of directors, and
provided further that if the other party to any transaction referred to in Section 12.1.2 has no
Parent as so defined above, “Parent” shall mean such other party.
“Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government (or any subdivision,
department, commission or agency thereof), and includes without limitation any “person”, as such
term is used in Sections 13(d) and 14(d) of the Exchange Act.
“Potential Change in Control” shall be deemed to have occurred if (a) the Company
enters into an agreement or arrangement the consummation of which would result in the occurrence of
a Change in Control, (b) any Person (including the Company) publicly announces an intention to take
or to consider taking actions which if consummated would constitute a Change in Control or (c) the
Board of Directors of the Company adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
“Subsidiary” means any entity of which more than fifty percent (50%) of the
outstanding securities having ordinary voting power to elect a majority of the board of directors
or managers, as applicable, of such entity is now or hereafter owned, directly or indirectly, by
the Company.
“Trust” has the meaning set forth in Section 9.2.
“Voting Securities” means any securities of the Company which vote generally in the
election of directors.
Section 2. Indemnification.
2.1. General Indemnity Obligation.
2.1.1. Subject to the remaining provisions of this Agreement, the Company hereby indemnifies
and holds Indemnitee harmless for any Losses or Expenses arising from any Claims relating to (or
arising in whole or in part out of) any Covered Event, including without limitation, any Claim the
basis of which is any actual or alleged breach of duty, neglect, error, misstatement, misleading
statement, omission or other act done or attempted by Indemnitee in the capacity as a Company
Agent, whether or not Indemnitee is acting or serving in such capacity at the date of this
Agreement, at the time liability is incurred or at the time the Claim is initiated.
2.1.2. The obligations of the Company under this Agreement shall apply to the fullest extent
authorized or permitted by the provisions of applicable law, as presently in effect or as changed
after the date of this Agreement, whether by statute or judicial decision (but, in the case of any
subsequent change, only to the extent that such change permits the Company to provide broader
indemnification than permitted prior to giving effect thereto).
2.1.3. Indemnitee shall not be entitled to indemnification pursuant to this Agreement in
connection with any Claim initiated by Indemnitee against the Company or any director or officer of
the Company, unless the Company has joined in or consented to the initiation of such Claim;
provided, however, that the provisions of this Section 2.1.3 shall not
apply (i) following a Change in Control to Claims seeking enforcement of this Agreement, the
certificate of incorporation or bylaws of the Company or any other agreement now or hereafter in
effect relating to indemnification for Covered Events or (ii)
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absent a Change in Control, to Claims seeking enforcement of this Agreement, the certificate of
incorporation or bylaws of the Company or any other agreement now or hereafter in effect relating
to indemnification for Covered Events, but only if the Indemnitee is ultimately determined to be
entitled to indemnification.
2.1.4. If Indemnitee is entitled under any provision of this Agreement to indemnification by
the Company for some or a portion of the Losses or Expenses paid with respect to a Claim but not,
however, for the total amount thereof, the Company shall nevertheless indemnify and hold Indemnitee
harmless against the portion thereof to which Indemnitee is entitled.
2.1.5. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee
has been successful on the merits or otherwise in defense of any or all Claims relating to (or
arising in whole or in part out of) a Covered Event or in defense of any issue or matter therein,
including dismissal without prejudice, the Company shall indemnify and hold Indemnitee harmless
against all Expenses incurred in connection therewith.
2.2. Indemnification for Serving as Witness and Certain Other Claims. Notwithstanding
any other provision of this Agreement, the Company hereby indemnifies and holds Indemnitee harmless
for all Expenses in connection with (a) the preparation to serve or service as a witness in any
Claim in which Indemnitee is not a party, if such actual or proposed service as a witness arose by
reason of Indemnitee having served as a Company Agent on or after the date of this Agreement and
(b) any Claim initiated by Indemnitee on or after the date of this Agreement (i) for recovery under
any D&O Insurance; (ii) following a Change in Control, for enforcement of the indemnification
obligations of the Company under this Agreement, the Certificate of Incorporation or Bylaws of the
Company or any other agreement now or hereafter in effect relating to indemnification for Covered
Events, regardless of whether Indemnitee ultimately is determined to be entitled to such insurance
recovery or indemnification, as the case may be; or (iii) absent a Change in Control, for
enforcement of this Agreement, the Certificate of Incorporation or Bylaws of the Company or any
other agreement now or hereafter in effect relating to indemnification for Covered Events, but only
if the Indemnitee is ultimately determined to be entitled to indemnification.
Section 3. Limitation on Indemnification.
3.1. Coverage Limitations. No indemnification is available pursuant to the provisions
of this Agreement:
3.1.1. If such indemnification is not lawful;
3.1.2. If Indemnitee’s conduct giving rise to the Claim with respect to which indemnification
is requested was knowingly fraudulent, a knowing violation of law, deliberately dishonest or in bad
faith or constituted willful misconduct;
3.1.3. In respect of any Claim based upon or attributable to Indemnitee gaining in fact any
personal profit or advantage to which Indemnitee was not legally entitled;
3.1.4. In respect of any Claim based upon or in connection with a proceeding by or in the
right of the Company in which Indemnitee was adjudged liable to the Company unless and only to the
extent that the Court of Chancery of Delaware shall determine upon application that, despite the
adjudication of such liability but in view of all circumstances of the case, the Indemnitee is
fairly and reasonably entitled to indemnity for such expenses (including attorney’s fees) which the
Court of Chancery of Delaware shall deem proper;
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3.1.5. In respect of any Claim for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act; or
3.2. No Duplication of Payments. The Company shall not be liable under this Agreement
to make any payment otherwise due and payable to the extent Indemnitee has otherwise actually
received payment (whether under the certificate of incorporation or the bylaws of the Company, the
D&O Insurance or otherwise) of any amounts otherwise due and payable under this Agreement.
Section 4. Payments and Determinations.
4.1. Advancement and Reimbursement of Expenses. If requested by Indemnitee, the
Company shall advance to Indemnitee, no later than five (5) business days following any such
request, any and all Expenses for which indemnification is available under Section 2 (after
giving effect to Section 3). In order to obtain such advancement or reimbursement, the
Indemnitee must also furnish to the Company a written affirmation of his good faith belief that he
has conducted himself in good faith and that he reasonably believed that: (1) in the case of
conduct in his official capacity with the corporation, that his conduct was in its best interest;
and (2) in all other cases, that his conduct was at least not opposed to its best interests; and
(3) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful and has not admitted that his conduct was unlawful. In addition, Indemnitee must furnish
to the Company a written undertaking, executed personally or on his behalf, to repay the advance if
it is ultimately determined that he is not entitled to indemnification. Upon any Determination
that Indemnitee is not permitted to be indemnified for any Expenses so advanced, Indemnitee hereby
agrees to reimburse the Company (or, as appropriate, any Trust established pursuant to Section 9.2)
for all such amounts previously paid. Such obligation of reimbursement shall be unsecured and no
interest shall be charged thereon.
4.2. Payment and Determination Procedures.
4.2.1. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company
a written request, together with such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a
request for indemnification, advise the Board of Directors in writing that Indemnitee has requested
indemnification.
4.2.2. Upon written request by Indemnitee for indemnification pursuant to Section 4.2.1, a
Determination with respect to Indemnitee’s entitlement thereto shall be made as promptly as
practicable in the specific case (a) if a Change in Control shall have occurred, as provided in
Section 4.2.3; and (b) if a Change in Control shall not have occurred, by (i) the Board of
Directors by a majority vote of Disinterested Directors, (ii) Independent Legal Counsel, if either
(A) there are no Disinterested Directors or (B) a majority vote of Disinterested Directors
otherwise so directs or (iii) the stockholders of the Company (if submitted by the Board of
Directors) but shares of stock owned by or voted under the control of any Indemnitee who is at the
time party to the proceeding may not be voted. If a Determination is made that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such
Determination.
4.2.3. If no Determination is made within sixty (60) days after receipt by the Company of a
request for indemnification by Indemnitee pursuant to Section 4.2.1, a Determination shall
be deemed to have been made that Indemnitee is entitled to the requested indemnification (and the
Company shall pay the related Losses and Expenses no later than ten (10) days after the expiration
of such 60-day period), except where such indemnification is not lawful; provided,
however, that (a) such 60-day period
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may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the Person
or Persons making the Determination in good faith require such additional time for obtaining or
evaluating the documentation and information relating thereto; and (b) the foregoing provisions of
this Section 4.2.3 shall not apply (i) if the Determination is to be made by the
stockholders of the Company and if (A) within fifteen (15) days after receipt by the Company of the
request by Indemnitee pursuant to Section 4.2.1 the Board of Directors has resolved to
submit such Determination to the stockholders at an annual meeting of the stockholders to be held
within seventy-five (75) days after such receipt, and such Determination is made at such annual
meeting, or (B) a special meeting of stockholders is called within fifteen (15) days after such
receipt for the purpose of making such Determination, such meeting is held for such purpose within
sixty (60) days after having been so called and such Determination is made at such special meeting,
or (ii) if the Determination is to be made by Independent Legal Counsel.
Section 5. D & O Insurance.
5.1. Current Policies. The Company hereby represents and warrants to Indemnitee that
Exhibit 1 contains a complete and accurate description of the D&O Insurance and that such insurance
is in full force and effect.
5.2. Continued Coverage. The Company shall maintain, to the extent practicable, the
D&O Insurance for so long as this Agreement remains in effect. The Company shall cause the D&O
Insurance to cover Indemnitee, in accordance with its terms and at all times such insurance is in
effect, to the maximum extent of the coverage provided thereby for any director or officer of the
Company.
5.3. Indemnification. In the event of any reduction in, or cancellation of, the D&O
Insurance (whether voluntary or involuntary on behalf of the Company), the Company shall, and
hereby agrees to, indemnify and hold Indemnitee harmless against any Losses or Expenses which
Indemnitee is or becomes obligated to pay as a result of the Company’s failure to maintain the D&O
Insurance in effect in accordance with the provisions of Section 5.2, to the fullest extent
permitted by applicable law, notwithstanding any provision of the certificate of incorporation or
the bylaws of the Company, or any other agreement now or hereafter in effect relating to
indemnification for Covered Events. The indemnification available under this Section 5.3
is in addition to all other obligations of indemnification of the Company under this Agreement and
shall be the only remedy of Indemnitee for a breach by the Company of its obligations set forth in
Section 5.2.
Section 6. Subrogation. In the event of any payment under this Agreement to or on
behalf of Indemnitee, the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee against any Person other than the Company or Indemnitee in respect
of the Claim giving rise to such payment. Indemnitee shall execute all papers reasonably required
and shall do everything reasonably necessary to secure such rights, including the execution of such
documents reasonably necessary to enable the Company effectively to bring suit to enforce such
rights.
Section 7. Notification and Defense of Claims.
7.1. Notice by Indemnitee. Indemnitee shall give notice in writing to the Company as
soon as practicable after Indemnitee becomes aware of any Claim with respect to which
indemnification will or could be sought under this Agreement; provided, however,
that the failure of Indemnitee to give such notice, or any delay in giving such notice, shall not
relieve the Company of its obligations under this Agreement except to the extent the Company is
actually prejudiced by any such failure or delay.
7.2. Insurance. The Company shall give prompt notice of the commencement of any Claim
relating to Covered Events to the insurers on the D&O Insurance, if any, in accordance with the
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procedures set forth in the respective policies in favor of Indemnitee. The Company shall
thereafter take all necessary action to cause such insurers to pay, on behalf of Indemnitee, all
amounts payable as a result of such Claims in accordance with the terms of such policies.
7.3. Defense.
7.3.1. In the event any Claim relating to Covered Events is by or in the right of the Company,
Indemnitee may, at the option of Indemnitee, either control the defense thereof or accept the
defense provided under the D&O Insurance; provided, however, that Indemnitee may
not control the defense if such decision would jeopardize the coverage provided by the D&O
Insurance, if any, to the Company or the other directors and officers covered thereby; and
provided further that the amounts expended by the Company shall be reimbursed to the
Company by the Indemnitee if the standards and requirements of Section 145 of the DGCL so require.
7.3.2. In the event any Claim relating to Covered Events is other than by or in the right of
the Company, Indemnitee may, at the option of Indemnitee, either control the defense thereof,
require the Company to defend or accept the defense provided under the D&O Insurance;
provided, however, that Indemnitee may not control the defense or require the
Company to defend if such decision would jeopardize the coverage provided by the D&O Insurance to
the Company or the other directors and officers covered thereby. In the event that Indemnitee
requires the Company to so defend, or in the event that Indemnitee proceeds under the D&O Insurance
but Indemnitee determines that such insurers under the D&O Insurance are unable or unwilling to
adequately defend Indemnitee against any such Claim, the Company shall promptly undertake to defend
any such Claim, at the Company’s sole cost and expense, utilizing counsel of Indemnitee’s choice
who has been approved by the Company. If appropriate, the Company shall have the right to
participate in the defense of any such Claim.
7.3.3. In the event the Company shall fail, as required by any election by Indemnitee pursuant
to Section 7.3.2, timely to defend Indemnitee against any such Claim, Indemnitee shall have
the right to do so, including without limitation, the right (notwithstanding Section 7.3.4)
to make any settlement thereof, and to recover from the Company, to the extent otherwise permitted
by this Agreement, all Expenses and Losses paid as a result thereof.
7.3.4. The Company shall have no obligation under this Agreement with respect to any amounts
paid or to be paid in settlement of any Claim without the express prior written consent of the
Company to any related settlement. In no event shall the Company authorize any settlement imposing
any liability or other obligations on Indemnitee without the express prior written consent of
Indemnitee. Neither the Company nor Indemnitee shall unreasonably withhold consent to any proposed
settlement.
Section 8. Determinations and Related Matters.
8.1. Presumptions.
8.1.1. If a Change in Control shall have occurred, Indemnitee shall be entitled to a
rebuttable presumption that Indemnitee is entitled to indemnification under this Agreement and the
Company shall have the burden of proof in rebutting such presumption.
8.1.2. The termination of any claim by judgment, order or settlement (whether with or without
court approval) or any conviction, guilty plea or plea of nolo contendere or its equivalent, which
such conviction or plea does not establish (through the Indemnitee’s admission or otherwise) that
the Indemnitee’s conduct was not subject to indemnification hereunder, shall not adversely affect
either the right of Indemnitee to indemnification under this Agreement or the presumptions to which
Indemnitee is
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otherwise entitled pursuant to the provisions of this Agreement nor create a presumption that
Indemnitee did not meet any particular standard of conduct or have a particular belief or that a
court has determined that indemnification is not permitted by applicable law.
8.2. Appeals; Enforcement.
8.2.1. In the event that (a) a Determination is made that Indemnitee shall not be entitled to
indemnification under this Agreement, (b) any Determination to be made by Independent Legal Counsel
is not made within ninety (90) days of receipt by the Company of a request for indemnification
pursuant to Section 4.2.1 or (c) the Company fails to otherwise perform any of its
obligations under this Agreement (including, without limitation, its obligation to make payments to
Indemnitee following any Determination made or deemed to have been made that such payments are
appropriate), Indemnitee shall have the right to commence a Claim in any court of competent
jurisdiction, as appropriate, to seek a Determination by the court, to challenge or appeal any
Determination which has been made, or to otherwise enforce this Agreement. If a Change of Control
shall have occurred, Indemnitee shall have the option to have any such Claim conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association. Any such judicial
proceeding challenging or appealing any Determination shall be deemed to be conducted de novo and
without prejudice by reason of any prior Determination to the effect that Indemnitee is not
entitled to indemnification under this Agreement. Any such Claim shall be at the sole expense of
Indemnitee except as provided in Section 9.3.
8.2.2. If a Determination shall have been made or deemed to have been made pursuant to this
Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such
Determination in any judicial proceeding or arbitration commenced pursuant to this Section
8.2, except if such indemnification is unlawful.
8.2.3. The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 8.2 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this Agreement. The Company
hereby consents to service of process and to appear in any judicial or arbitration proceedings and
shall not oppose Indemnitee’s right to commence any such proceedings.
8.3. Procedures. Indemnitee shall cooperate with the Company and with any Person
making any Determination with respect to any Claim for which a claim for indemnification under this
Agreement has been made, as the Company may reasonably require. Indemnitee shall provide to the
Company or the Person making any Determination, upon reasonable advance request, any documentation
or information reasonably available to Indemnitee and necessary to (a) the Company with respect to
any such Claim or (b) the Person making any Determination with respect thereto.
Section 9. Change in Control Procedures.
9.1. Determinations. If there is a Change in Control, any Determination to be made
under Section 4 shall be made by Independent Legal Counsel selected by Indemnitee and approved by
the Company (which approval shall not be unreasonably withheld). The Company shall pay the
reasonable fees of the Independent Legal Counsel and indemnify fully such Independent Legal Counsel
against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising
out of or relating to this Agreement or the engagement of Independent Legal Counsel pursuant
hereto.
9.2. Establishment of Trust. Following the occurrence of any Potential Change in
Control, the Company, upon receipt of a written request from Indemnitee, shall create a Trust (the
“Trust”) for the
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benefit of Indemnitee, the trustee of which shall be a bank or similar financial institution with
trust powers chosen by Indemnitee. From time to time, upon the written request of Indemnitee, the
Company shall fund the Trust in amounts sufficient to satisfy any and all Losses and Expenses
reasonably anticipated at the time of each such request to be incurred by Indemnitee for which
indemnification may be available under this Agreement. The amount or amounts to be deposited in
the Trust pursuant to the foregoing funding obligation shall be determined by mutual agreement of
Indemnitee and the Company or, if the Company and Indemnitee are unable to reach such an agreement,
or, in any event, a Change in Control has occurred by Independent Legal Counsel (selected pursuant
to Section 9.1). The terms of the Trust shall provide that, except upon the prior written
consent of Indemnitee and the Company, (a) the Trust shall not be revoked or the principal thereof
invaded, other than to make payments to unsatisfied judgment creditors of the Company, (b) the
Trust shall continue to be funded by the Company in accordance with the funding obligations set
forth in this Section, (c) the Trustee shall promptly pay or advance to Indemnitee any amounts to
which Indemnitee shall be entitled pursuant to this Agreement, and (d) all unexpended funds in the
Trust shall revert to the Company upon a Determination by Independent Legal Counsel (selected
pursuant to Section 9.1) or a court of competent jurisdiction that Indemnitee has been
fully indemnified under the terms of this Agreement. All income earned on the assets held in the
trust shall be reported as income by the Company for federal, state, local and foreign tax
purposes.
9.3. Expenses. Following any Change in Control, the Company shall be liable for, and
shall pay the Expenses paid or incurred by Indemnitee in connection with the making of any
Determination (irrespective of the determination as to Indemnitee’s entitlement to indemnification)
or the prosecution of any Claim pursuant to Section 8.2, and the Company hereby agrees to
indemnify and hold Indemnitee harmless therefrom. If requested by counsel for Indemnitee, the
Company shall promptly give such counsel an appropriate written agreement with respect to the
payment of its fees and expenses and such other matters as may be reasonably requested by such
counsel.
Section 10. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company, any Subsidiary, any Other Enterprise or
any Affiliate of the Company against Indemnitee or Indemnitee’s spouse, heirs, executors,
administrators or personal or legal representatives after the expiration of two years from the date
of accrual of such cause of action, and any claim or cause of action of the Company, any
Subsidiary, any Other Enterprise or any Affiliate of the Company shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations, whether established
by statute or judicial decision, is otherwise applicable to any such cause of action such shorter
period shall govern.
Section 11. Contribution. If the indemnification provisions of this Agreement should
be unenforceable under applicable law in whole or in part or insufficient to hold Indemnitee
harmless in respect of any Losses and Expenses incurred by Indemnitee, then for purposes of this
Section 11, the Company shall be treated as if it were, or was threatened to be made, a
party defendant to the subject Claim and the Company shall contribute to the amounts paid or
payable by Indemnitee as a result of such Losses and Expenses incurred by Indemnitee in such
proportion as is appropriate to reflect the relative benefits accruing to the Company on the one
hand and Indemnitee on the other and the relative fault of the Company on the one hand and
Indemnitee on the other in connection with such Claim, as well as any other relevant equitable
considerations. For purposes of this Section 11 the relative benefit of the Company shall
be deemed to be the benefits accruing to it and to all of its directors, officers, employees and
agents (other than Indemnitee) on the one hand, as a group and treated as one entity, and the
relative benefit of Indemnitee shall be deemed to be an amount not greater than the Indemnitee’s
yearly base salary or Indemnitee’s compensation from the Company during the first year in which the
Covered Event forming the basis for the subject Claim was alleged to have occurred. The relative
fault shall be determined by reference to, among other things, the fault of the Company and all of
its directors, officers,
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employees and agents (other than Indemnitee) on the one hand, as a group and treated as one entity,
and Indemnitee’s and such group’s relative intent, knowledge, access to information and opportunity
to have altered or prevented the Covered Event forming the basis for the subject Claim.
Section 12. Miscellaneous Provisions.
12.1. Successors and Assigns, Etc.
12.1.1. This Agreement shall be binding upon and inure to the benefit of (a) the Company, its
successors and assigns (including any direct or indirect successor by merger, consolidation or
operation of law or by transfer of all or substantially all of its assets) and (b) Indemnitee and
the heirs, personal and legal representatives, executors, administrators or assigns of Indemnitee.
12.1.2. The Company shall not consummate any consolidation, merger or other business
combination, nor will it transfer 50% or more of its assets (in one or a series of related
transactions), unless the ultimate Parent of the successor to the business or assets of the Company
shall have first executed an agreement, in form and substance satisfactory to Indemnitee, to
expressly assume all obligations of the Company under this Agreement and agree to perform this
Agreement in accordance with its terms, in the same manner and to the same extent that the Company
would be required to perform this Agreement if no such transaction had taken place; provided that,
if the Parent is not the Company, the legality of payment of indemnity by the Parent shall be
determined by reference to the fact that such indemnity is to be paid by the Parent rather than the
Company.
12.2. Severability. The provisions of this Agreement are severable. If any provision
of this Agreement shall be held by any court of competent jurisdiction to be invalid, void or
unenforceable, such provision shall be deemed to be modified to the minimum extent necessary to
avoid a violation of law and, as so modified, such provision and the remaining provisions shall
remain valid and enforceable in accordance with their terms to the fullest extent permitted by law.
12.3. Rights Not Exclusive; Continuation of Right of Indemnification. Nothing in this
Agreement shall be deemed to diminish or otherwise restrict Indemnitee’s right to indemnification
pursuant to any provision of the certificate of incorporation or bylaws of the Company, any
agreement, vote of stockholders or Disinterested Directors, applicable law or otherwise. This
Agreement shall be effective as of the date first above written and continue in effect until no
Claims relating to any Covered Event may be asserted against Indemnitee and until any Claims
commenced prior thereto are finally terminated and resolved, regardless of whether Indemnitee
continues to serve as a director of the Company, any Subsidiary or any Other Enterprise.
12.4. No Employment Agreement. Nothing contained in this Agreement shall be construed
as giving Indemnitee any right to be retained in the employ of the Company, any Subsidiary or any
Other Enterprise.
12.5. Subsequent Amendment. No amendment, termination or repeal of any provision of
the certificate of incorporation or bylaws of the Company, or any respective successors thereto, or
of any relevant provision of any applicable law, shall affect or diminish in any way the rights of
Indemnitee to indemnification, or the obligations of the Company, arising under this Agreement,
whether the alleged actions or conduct of Indemnitee giving rise to the necessity of such
indemnification arose before or after any such amendment, termination or repeal.
12.6. Notices. Notices required under this Agreement shall be given in writing and
shall be deemed given when delivered in person or sent by certified or registered mail, return
receipt requested,
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postage prepaid. Notices shall be directed to the Company at Luminex Corporation, 00000
Xxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxx 00000, Attention: Corporate Secretary, and to Indemnitee at
the address set forth on the signature page hereto (or such other address as either party may
designate in writing to the other).
12.7. Governing Law. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware applicable to contracts made and performed in
such state without giving effect to the principles of conflict of laws.
12.8. Headings. The headings of the Sections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a substantive part of this Agreement or to
affect the construction thereof.
12.9. Counterparts. This Agreement may be executed in any number of counterparts all
of which taken together shall constitute one instrument.
12.10. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall constitute, or be deemed to constitute, a waiver of
any other provisions hereof (whether or not similar) nor shall any such waiver constitute a
continuing waiver.
12.11. Integration. This Agreement contains the entire agreement and understanding of
the parties with respect to the subject matter hereof. There are no restrictions, agreements,
promises, representations, warranties, covenants or undertakings with respect to the subject matter
hereof other than those expressly set forth or referred to herein. This Agreement expressly
supersedes all prior agreements and understandings, if any, between the parties with respect to the
subject matter hereof.
[Signature page follows.]
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The parties hereto have caused this Agreement to be duly executed as of the day and year first
above written.
| LUMINEX CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| INDEMNITEE |
||||
| Name: | ||||
| Address: | ||||
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