EXHIBIT 10.1
CONSULTANT AGREEMENT
THIS CONSULTANT AGREEMENT (the "Agreement") is effective as of the 5th
day of September, 2002 (the "Effective Date"), by and between Xxxx X. Xxxxxxxx,
Ph.D. ("Consultant") and Luminex Corporation, a Delaware corporation (the
"Company").
WHEREAS, the Company has entered into an Asset Purchase Agreement,
effective as of September 5, 2002, with Rules-Based Medicine, Inc., a Delaware
corporation and wholly owned subsidiary of the Company ("Seller"), and RBM
Acquisition, Inc., a Delaware corporation ("Buyer"), pursuant to which Buyer is
purchasing certain assets of Seller and assuming the liabilities of Seller
relating to the business (the "RBM Business") of developing and commercializing
testing services and reagent kit products for the pharmaceutical, diagnostics,
toxicology, epidemiology and biotechnology markets, generating and selling
access to a database of information from blood samples and other fluids or
tissues and determining the relevance of such information and establishing an
intellectual property position around the relationship of the information to
health and disease including diagnostics, prognostics and therapeutics (the
"Transaction");
WHEREAS, Consultant has served as the President and Chief Executive
Officer of the Company pursuant to the terms of the Employment Agreement, dated
as of March 10, 2000 (the "Employment Agreement") and as a member of the Board
of Directors and serving in the capacity of Chairman; and
WHEREAS, Consultant will resign from his employment with the Company
and in his capacity as a director effective September 5, 2002, enter into this
Agreement and shall become employed by Buyer.
NOW, THEREFORE, in consideration of the foregoing and the covenants,
representations and agreements set forth below, the Company and Consultant
hereby agree as follows:
1. Retention as Consultant. The Company hereby retains Consultant, and
Consultant hereby agrees to render services to the Company, upon the terms and
conditions contained in this Agreement. Consultant hereby confirms his
resignation as an officer and director of the Company effective as of September
5, 2002.
2. Term of the Agreement. The term of this Agreement (the "Term") shall
commence on the Effective Date and shall terminate on the first anniversary of
the Effective Date.
3. Services to be Provided by Consultant.
3.1. Scope, Responsibilities and Duties. Consultant agrees to
provide consulting services to the Company so that the Company may have
the benefit of the experience and knowledge possessed by Consultant,
including but not limited to meeting
with customers, providing technical advice on Company products and
services, providing general business advice, marketing and strategic
input, personnel support and such other matters as reasonably requested
by the Board of Directors or the Chief Executive Officer of the Company
(the "Services"). Such Services shall be performed at times and places
selected by mutual agreement of the Company and Consultant within
normal business hours, which services shall be reasonably related to
Consultant's previous responsibilities with the Company prior to the
date of this Agreement and only as reasonably needed by the Company.
Consultant shall not be required to perform the Services at the offices
of the Company except as Consultant may from time to time agree.
Consultant shall not be expected to be available to perform such
services on a daily basis, it being acknowledged that Consultant shall
have substantial duties and responsibilities with respect to the RBM
Business of Buyer and scheduling of any Services shall be subject to
such duties and responsibilities. Consultant agrees to provide the
Services from time to time as requested by the Board of Directors or
the Chief Executive Officer of the Company upon reasonable advance
notice. It shall be the duty of Consultant in rendering the Services to
make such periodic reports to the Company relating to the Services as
the Chief Executive Officer or the Board of Directors of the Company
may, from time to time, reasonably request.
3.2. Non-exclusivity. Subject to the provisions of Sections 7 and 9
below, Consultant by reason of the obligations ascribed to him
hereunder shall not be limited in any manner in accepting other
employment and performing services for others, provided he fully
performs his obligations hereunder.
4. Compensation. As compensation for the Services to be provided by
Consultant to the Company, the Company shall pay to Consultant, and Consultant
agrees to accept the following:
4.1. Cash Compensation. Consultant shall receive a fee of $350,000
during the Term, payable in equal payments during the Term consistent
with the timing of the payroll distributions of the Company.
4.2. Stock Options. Consultant will be entitled to exercise his
vested options for the purchase of the Company's common stock, $.001
par value per share ("Common Stock"), which are set forth on Exhibit A
attached hereto, for the lesser of (i) the life of the option or (ii)
two (2) years from the date hereof. All unvested options to purchase
Common Stock held by Consultant shall be terminated as of his last day
of employment.
Consultant shall not be entitled to any other compensation for the
Services to be provided hereunder, except as provided herein. The Company shall
not be responsible for withholding from the compensation payable to Consultant
any amounts for federal, state or local income taxes, social security or state
disability or unemployment insurance.
5. Expenses. Upon receipt of itemized vouchers, expense account reports
and supporting documents submitted to the Company in accordance with the
Company's procedures then in effect, the Company shall reimburse Consultant for
all reasonable and necessary business
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expenses (including travel and entertainment expenses) incurred ordinarily and
necessarily by Consultant in connection with the performance of Consultant's
duties hereunder.
6. Termination. Termination pursuant to this Section, unless terminated
by Consultant pursuant to Section 6.2, shall become effective immediately upon
receipt by Consultant of written notice from the Company of such termination.
6.1. Termination for Cause. The Company may terminate this Agreement
for cause at any time without further obligation or liability to
Consultant. A termination shall be for "cause" if Consultant (a)
commits a criminal act involving moral turpitude or (b) commits a
material breach of any of the covenants, terms and provisions hereof
(including, but not limited to, failure to obey lawful and proper
written directions delivered to Consultant by the Company's Chief
Executive Officer or its Board of Directors regarding Services as set
forth in Section 3.1), which breach shall continue after five (5) days
(the "Notice Period") written notice from the Company describing such
breach in reasonable detail. If the Notice Period is impracticable,
then the Notice Period shall be reduced to such period of time as may
be reasonable in light of circumstances, as determined by the Company
in its reasonable discretion, and set forth in such notice.
6.2. Termination Without Cause. Either the Company or Consultant may
terminate this Agreement without cause and for any reason at any time.
Upon a termination of this Agreement by the Company pursuant to this
Section 6.2, Consultant shall be entitled to receive any remaining fees
payable as provided in Section 4.1 during the remainder of the Term
pursuant to the terms of this Agreement, such fees payable in equal
payments during the remainder of the Term. Upon a termination of this
Agreement by Consultant without cause pursuant to this Section 6.2,
Consultant shall be entitled to all fees accrued hereunder through the
date of termination with no further payment obligation on the part of
the Company.
6.3. Termination by Incapacity or Disability of Consultant. If
Consultant shall become unable to fully perform the Services in
accordance with the terms of this Agreement due to incapacity, ill
health or disability for a consecutive period of 90 days, the Company
may, at its option, terminate this Agreement. During any incapacity,
ill health or disability and upon a termination of this Agreement by
the Company pursuant to this Section 6.3, Consultant shall be entitled
to receive any remaining fees payable as provided in Section 4.1 during
the remainder of the Term pursuant to the terms of this Agreement, such
fees payable in equal payments during the remainder of the Term.
6.4. Death of Consultant. Upon the death of Consultant, Consultant's
estate shall be entitled to receive any remaining fees payable as
provided in Section 4.1 during the remainder of the Term pursuant to
the terms of this Agreement, such fees payable in equal payments during
the remainder of the Term.
6.5. Survival. It is understood that termination of this Agreement
shall not relieve a party hereto from any liability which, at the time
of such termination, has already accrued to the other party. The
following provisions and all subsections therein
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shall survive any expiration or termination of this Agreement: Sections
5, 6, 7, 8, 9, 10.2, 11, 12, 13, 14, 15, 16, 17 and 18. Except as
otherwise expressly provided in this Section 6, all other rights and
obligations of the parties shall terminate upon termination of this
Agreement.
7. Confidential Information.
7.1. Acknowledgment of Proprietary Interest. As between the
parties, Consultant agrees that all Confidential Information is a
valuable, special and unique asset of the Company's business (and may
constitute "trade secrets" under the Uniform Trade Secrets Act and
Texas state law), access to and knowledge of which are essential to the
performance of Consultant's duties hereunder. Consultant acknowledges
the proprietary interest of the Company in all Confidential
Information. Consultant agrees that all Confidential Information
learned by Consultant in connection with his provision of Services or
otherwise, whether developed by Consultant alone or in conjunction with
others or otherwise, is and shall remain the exclusive property of the
Company. Consultant acknowledges and agrees that his disclosure or use
of any Confidential Information in violation of this Section 7 will
result in irreparable injury and damage to the Company.
7.2. Confidential Information Defined. "Confidential Information"
means all confidential and proprietary information of the Company,
written, oral or computerized, as it may exist from time to time,
including without limitation (i) information derived from reports,
investigations, experiments, research and work in progress, (ii)
methods of operation, (iii) market data, (iv) technology, hardware,
proprietary computer programs and code (in object code and source code
format) including without limitation the xMap proprietary system and
consumables, (v) drawings, designs, plans and proposals, (vi) marketing
and sales programs, (vii) client and supplier lists and any other
information about the Company's relationships with others, (viii)
historical financial information and financial projections, (ix)
network and system architecture, (x) all other formulae, patterns,
devices or compilations, concepts, ideas, materials and information
prepared or performed for or by the Company, and (xi) all information
related to the business plan, business, products, purchases or sales of
the Company or any of its suppliers and customers, other than
information that is publicly available. "Confidential Information"
shall not include information relating to the RBM Business not
otherwise covered by the preceding sentence, except to the extent such
information is licensed to Buyer.
7.3. Covenant Not To Divulge Confidential Information. The Company
is entitled to prevent the disclosure of Confidential Information. As a
portion of the consideration for the hiring of Consultant and for the
compensation being paid to Consultant by the Company, Consultant shall,
at all times during the Term and thereafter, hold in strict confidence
and shall not disclose or allow to be disclosed to any person, firm or
corporation, other than to persons engaged by the Company to further
the business of the Company, and not to use except in the pursuit of
the business of the Company, the Confidential Information, without the
prior written consent of the Company. This Section 7 shall survive and
continue in full force and effect in accordance
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with its terms after, and will not be deemed to be terminated by, any
termination of this Agreement.
7.4. Return of Materials at Termination. In the event of any
termination of this Agreement for any reason, Consultant shall promptly
deliver to the Company all property of the Company, including without
limitation all documents, data and other information containing,
derived from or otherwise pertaining to Confidential Information.
Consultant shall not take or retain any property of the Company,
including without limitation any documents, data or other information,
or any reproduction or excerpt thereof, containing, derived from or
pertaining to any Confidential Information. The obligation of
confidentiality set forth in this Section 7 shall continue
notwithstanding Consultant's delivery of such documents, data and
information to the Company.
8. Inventions; Assignment.
8.1. Inventions Defined. All rights to discoveries, inventions,
improvements, designs, work product and innovations (including without
limitation all data and records pertaining thereto) that relate to the
business of the Company (excluding discoveries, inventions,
improvements, designs, work product and innovations directly relating
to the RBM Business), whether or not specifically within Consultant's
duties or responsibilities and whether or not patentable, copyrightable
or reduced to writing, that Consultant may discover, invent, create or
originate during the term of his consulting relationship with the
Company, was discovered, invented, created or originated during his
employment with the Company or otherwise, and for a period of six (6)
months thereafter, either alone or with others and whether or not
during working hours or using the facilities of the Company
("Inventions"), shall be the exclusive property of the Company.
Consultant shall promptly disclose all Inventions to the Company, shall
execute at the request of the Company any assignments or other
documents the Company may deem necessary to protect or perfect its
rights therein, and shall assist the Company, at the Company's expense,
in obtaining, defending and enforcing the Company's rights therein.
Consultant hereby appoints the Company as his attorney-in-fact to
execute on his behalf any assignments or other documents deemed
necessary by the Company to protect or perfect its rights to any
Inventions.
8.2. Covenant to Assign and Cooperate. Without limiting the
generality of the foregoing, Consultant shall assign and transfer, and
does hereby assign and transfer, to the Company worldwide right, title
and interest of Consultant in the Inventions. Consultant agrees that
the Company may file copyright registrations and apply for and receive
patents (including without limitation Letters Patent in the United
States) for the Inventions in the Company's name in such countries as
may be determined solely by the Company. Consultant shall communicate
to the Company all facts known to Consultant relating to the Inventions
and shall cooperate with the Company's reasonable requests in
connection with vesting title to the Inventions and related copyrights
and patents exclusively in the Company and in connection with
obtaining, maintaining, protecting and enforcing the Company's
exclusive copyrights and patent rights in the Inventions. Consultant
further acknowledges and agrees that all Inventions, original works of
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authorship, developments, concepts, know-how, improvements or trade
secrets which are made by Consultant (solely or jointly with Company),
relating to the business of the Company but excluding those directly
related to the RBM Business, within the scope of and during the Term of
this Agreement, are "works made for hire" under 17 U.S.C. ss. 101 of the
U.S. Copyright Act of 1976, and are compensated by such amounts paid to
Consultant under this Agreement, unless regulated otherwise by the
mandatory law of the state of Texas. In the event that any such
Invention is deemed by a court of competent jurisdiction not to be a
"work made for hire", this Agreement shall operate as an irrevocable
assignment by Consultant to the Company of all right, title and interest
in and to such Inventions, including without limitation all intellectual
property rights therein. The Company shall not be required to designate
Consultant as author of any Invention, and Consultant shall have no
right to exercise any economic rights to the Inventions. Without
limiting the foregoing, Consultant shall not have the right to and will
not reproduce, adapt, modify, publish, distribute, sublicense, publicly
perform or communicate, translate, lease, import and otherwise exploit
the Inventions, except as expressly authorized by the Company in
writing. If, during the Term of this Agreement, Consultant incorporates
into a Company product, process or instrument, an Invention owned by
Consultant or in which Consultant has an interest, the Company is hereby
granted and shall have a non-exclusive, royalty-free, irrevocable,
perpetual, worldwide license (with the right to sublicense through
multiple tiers of sublicensees) to make, have made, copy, modify, make
derivative works of, use, sell and otherwise distribute such Invention
as part of or in connection with such product, process or instrument
without Consultant's prior written consent.
8.3. Successors and Assigns. Consultant's obligations under this
Section 8 shall inure to the benefit of the Company and its successors
and assigns and shall survive the expiration of the term of this
Agreement for such time as may be necessary to protect the proprietary
rights of the Company in the Inventions.
8.4. Consideration and Expenses. Consultant shall perform his
obligations under this Section 8 at the Company's expense, but without
any additional or special compensation therefor.
9. Non-competition.
9.1. Covenant Not to Compete. Consultant acknowledges that during
his employment he received, and during the Term the Company has agreed
to provide to him, and he shall receive from the Company, special
training and knowledge, including without limitation the Confidential
Information. Consultant acknowledges that the Confidential Information
is valuable to the Company and, therefore, its protection and
maintenance constitutes a legitimate interest to be protected by the
Company by the enforcement of the covenant not to compete contained in
this Section 9. Consultant also acknowledges that such covenant not to
compete is ancillary to other enforceable agreements of the parties,
including without limitation the agreements regarding Confidential
Information in Section 7. Therefore, Consultant shall not directly or
indirectly:
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(i) for a period equal to the later of (A) one year following
the date of the termination of this Agreement or (B) two years from the
date hereof (unless extended pursuant to the terms of this Section 9)
engage, alone or as a stockholder, partner, member, manager, director,
officer, employee of or consultant to, any entity other than the Company
or its affiliate in any business activities that were conducted by the
Company as of the date hereof (the "Designated Industry") other than the
RBM Business; or
(ii) for a period equal to the later of (A) one year following
the date of the termination of this Agreement or (B) two years from the
date hereof (unless extended pursuant to the terms of this Section 9)
(1) induce or attempt to induce any employee of the Company to leave the
employ of the Company, (2) in any way interfere with the relationship of
the Company and any employee, as of the date hereof and/or during the
Term of this Agreement, of the Company, (3) employ, or otherwise engage
as an employee, independent contractor, or otherwise, any employee as of
the date hereof and/or during the Term of this Agreement, of the
Company, or (4) induce or attempt to induce any customer, supplier,
licensee, or business relation of the Company to cease doing business
with the Company, or in any way interfere with the relationship between
any customer, supplier, licensee, or business relation of the Company.
9.2. Exclusion. Notwithstanding the provisions of this Section 9,
Employee's non-competition obligations hereunder shall not preclude
Employee from owning less than one percent of the voting power or
economic interest in any publicly traded corporation conducting business
activities in the Designated Industry.
9.3. No Offset. The representations and covenants contained in this
Section 9 on the part of Consultant shall be construed as ancillary to
and independent of any other provision of this Agreement, and the
existence of any claim (monetary or otherwise) or cause of action of
Consultant against the Company or any officer, director or stockholder
of the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of the
covenants of Consultant contained in this Section 9.
9.4. Extension and Survival. If Consultant violates any covenant
contained in this Section 9, the Company shall not, as a result of such
violation be deprived of the benefit of the full period of any such
covenant. Accordingly, the covenants of Consultant contained in this
Section 9 shall be deemed to have durations as specified in Section 9.1,
which periods shall be extended by a number of days equal to the sum of
the total number of days Consultant is found by a court of competent
jurisdiction to be in violation of any of the covenants contained in
this Section 9. This Section 9 shall survive and continue in full force
and effect in accordance with its terms after, and will not be deemed to
be terminated by, any termination of this Agreement.
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9.5. Severability. If at any time the provisions of this Section 9
are determined to be invalid or unenforceable by reason of being vague
or unreasonable as to area, duration or scope of activity, this Section
9 shall be considered divisible and shall be immediately amended to only
such area, duration or scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having
jurisdiction over the matter; and Consultant agrees that this Section 9
as so amended shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
9.6. Business of the Company. For purposes of Sections 8 and 9
hereof, "the business of the Company" and the "business activities that
were conducted by the Company" are defined as (i) Consultant's actual
knowledge of the business of the Company as of the date hereof and (ii)
the description set forth in the Company's Annual Report on Form 10-K
for the year ended December 31, 2001 and as subsequently set forth in
any periodic or other report filed by the Company with the Securities
and Exchange Commission as of the date hereof.
10. Relationship of the Parties.
10.1. Consultant enters into this Agreement as, and shall continue
to be, an independent contractor. The parties agree that no employment
relationship, partnership, joint venture or other association shall be
deemed created by this Agreement. Under no circumstances shall
Consultant look to the Company as his employer, or as a partner, agent,
or principal. Consultant shall not be entitled to any benefits accorded
to the Company's employees including, without limitation, workers'
compensation, disability insurance, vacation or sick pay.
10.2. Consultant shall have the entire responsibility to discharge
any and all of his obligations under federal, state or local laws,
regulations or orders now or hereafter in effect, relating to taxes,
unemployment compensation or insurance, social security, workers'
compensation, disability pensions and tax withholdings (the "Tax
Obligations"). Consultant hereby agrees to indemnify and hold the
Company harmless for any and all claims, losses, costs, fees,
liabilities, damages or injuries suffered by the Company arising out of
Consultant's failure to properly discharge the Tax Obligations.
11. Resignation of Employment. The parties hereby agree that Consultant
has voluntarily resigned his employment with the Company pursuant to Section
6(b)(iii) of the Employment Agreement and that the Employment Agreement is
hereby terminated.
12. Arbitration.
12.1. Any dispute regarding any aspect of this Agreement or any act
which would violate any provision in this Agreement (hereafter referred
to as "arbitrable dispute") shall be resolved by an experienced
arbitrator licensed to practice law in the State of Texas and selected
in accordance with the rules of the American Arbitration
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Association, as the exclusive remedy for such dispute. Judgment on any
award rendered by such arbitrator may be entered in any court having
proper jurisdiction.
12.2. Should Consultant or the Company institute any legal action or
administrative proceeding regarding any dispute or matter covered by
this Section by any method other than said arbitration, the responding
party shall be entitled to recover from the other party all damages,
costs, expenses and attorneys' fees incurred as a result of such
action.
13. Severability and Governing Law.
13.1. Should any of the provisions in this Agreement be declared or
be determined to be illegal or invalid, all remaining parts, terms or
provisions shall be valid, and the illegal or invalid part, term or
provision shall be deemed not to be a part of this Agreement.
13.2. This Agreement is made and entered into in the State of Texas
and shall in all respects be interpreted, enforced and governed under
the laws of Texas without regard to the principles of conflicts of law.
14. Proper Construction.
14.1. The language of all parts of this Agreement shall in all cases
be construed as a whole according to its fair meaning, and not strictly
for or against any of the parties.
14.2. As used in this Agreement, the term "or" shall be deemed to
include the term "and/or" and the singular or plural number shall be
deemed to include the other whenever the context so indicates or
requires.
14.3. The paragraph headings used in this Agreement are intended
solely for convenience of reference and shall not in any manner amplify,
limit, modify or otherwise be used in the interpretation of any of the
provisions hereof.
15. Entire Agreement. This Agreement is the entire agreement between
Consultant and the Company and fully supersedes any and all prior agreements or
understandings between the parties pertaining to its subject matter, including
without limitation the Employment Agreement.
16. Notices. All notices, requests, demands and other communications
called for or contemplated under this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered, on the date of
transmission if sent by facsimile, on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, postage prepaid,
and properly addressed as follows:
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If to the Company: Luminex Corporation
00000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: General Counsel
If to Consultant: Xxxx X. Xxxxxxxx, Ph.D.
0 Xxxxx Xxxx
Xxxxxx, XX 00000
17. Amendments. This Agreement may not be amended, supplemented,
canceled, or discharged except by written instrument executed by the parties
hereto.
18. Waivers. All waivers hereunder shall be in writing. No waiver by any
party hereto of any breach or anticipated breach of any provision of this
Agreement by any other party shall be deemed a waiver of any other
contemporaneous, preceding, or succeeding breach or anticipated breach, whether
or not similar, on the part of the same or any other party.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have hereby executed this
Agreement as of the day and year first written above.
LUMINEX CORPORATION
/s/ Xxxx X. Xxxxxxxx, Ph.D. By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- --------------------------------------
Xxxx X. Xxxxxxxx, Ph.D. Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: Acting Chief Financial Officer
-------------------------------
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EXHIBIT A
Common Stock Options of Xxxx Xxxxxxxx
Exercise
Grant Shares Subject Price Vested Unvested
Date to Option(1) Per Share Options(2) Options(3)
--------- ------------ --------- ---------- ----------
5/20/99 510,000 $ 3.92 510,000 0
3/15/00 100,000 17.00 80,555 19,445
12/05/00 3,990 25.0625 2,327 1,663
12/05/00 121,010 25.0625 70,589 50,421
1/19/01 50,000 24.8125 26,388 23,612
5/23/02 50,000 6.52 4,166 45,834
------------
(1) All options are non-qualified stock options except for the grant on
12/05/00 for 3,990 which are ISOs.
(2) As of September 5, 2002.
(3) These options are terminated as of the date of this Agreement.
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