UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to .
Commission file number: 0-19890
LIFECELL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 76-0172936
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
LifeCell Corporation
3606 Research Forest Drive
The Woodlands, Texas 77381
(Address of principal executive office) (zip code)
(713) 367-5368
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of August 13, 1996, there were outstanding 4,608,658 shares of Common Stock,
par value $.001 of the registrant.
<PAGE>
LIFECELL CORPORATION
Quarter Ended June 30, 1996
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheets, June 30, 1996 (Unaudited) and December 31, 1995 4
Statements of Operations, Three Months and Six Months Ended
June 30, 1996 and 1995 (Unaudited) 5
Statements of Cash Flows, Six Months Ended June 30, 1996 and 1995
(Unaudited) 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
2
Part I. FINANCIAL INFORMATION
Item 1 Financial Statements
The following audited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made herein are adequate to make the
information presented not misleading. These financial statements should be read
in conjunction with the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
The information presented in the accompanying financial statements is unaudited,
but in the opinion of management, reflects all adjustments (which include only
normal recurring adjustments) necessary to present fairly such information.
3
LIFECELL CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ..................................... $ 817,004 $ 3,015,332
Accounts and other receivables, net ........................... 328,402 251,509
Inventories ................................................... 675,166 351,502
Prepayments and other ......................................... 226,033 51,838
------------ ------------
Total current assets .......................................... 2,046,605 3,670,181
FURNITURE AND EQUIPMENT, net .................................. 475,594 415,563
INTANGIBLE ASSETS, net ........................................ 300,312 290,295
------------ ------------
Total assets .................................................. $ 2,822,511 $ 4,376,039
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .............................................. $ 508,916 $ 384,780
Accrued liabilities ........................................... 279,694 218,351
Notes payable ................................................. 119,873 --
Deferred revenues ............................................. 157,971 179,002
------------ ------------
Total current liabilities ..................................... 1,066,454 782,133
Deferred credit ............................................... 1,500,000 1,500,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Series A preferred stock, $.001 par value, 300,000
shares authorized, 264,500 issued and outstanding ........... $ 5,626,633 $ 5,496,793
Common stock, $.001 par value, 25,000,000 shares
authorized, respectively,
4,403,658 shares issued and outstanding .................... 4,404 4,404
Warrants outstanding to purchase 574,066 shares of Common stock 226,560 226,560
Additional paid-in capital .................................... 21,160,808 21,160,808
Unearned portion of restricted stock
compensation and warrants ..................................... -- (19,906)
Accumulated deficit ........................................... (26,762,348) (24,774,753)
------------ ------------
Total stockholders' equity .................................... 256,057 2,093,906
============ ============
Total liabilities and stockholders' equity .................... $ 2,822,511 $ 4,376,039
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
4
LIFECELL CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Product sales ..................................... $ 429,065 $ 130,158 $ 849,701 $ 227,951
Corporate alliance ................................ 132,909 177,115 288,385 422,039
Research and development contracts and grants ..... 115,546 91,272 115,546 178,971
----------- ----------- ----------- -----------
Total revenues ................................ 677,520 398,545 1,253,632 828,961
COSTS AND EXPENSES:
Costs of goods sold ............................... $ 272,401 $ 182,468 $ 544,158 $ 284,800
Contract research and development ................. 248,455 268,387 403,931 601,010
Proprietary research and development .............. 141,429 284,234 331,464 597,960
General and administrative ........................ 385,346 398,761 772,692 807,440
Selling and marketing ............................. 551,803 361,884 1,102,525 682,511
----------- ----------- ----------- -----------
Total costs and expenses .......................... $ 1,599,434 $ 1,495,734 $ 3,154,770 $ 2,973,721
LOSS FROM OPERATIONS .............................. (921,914) (1,097,189) (1,901,138) (2,144,760)
----------- ----------- ----------- -----------
Interest income and other ......................... $ 13,263 $ 80,998 $ 43,383 $ 170,483
----------- ----------- ----------- -----------
NET LOSS .......................................... $ (908,651) $(1,016,191) $(1,857,755) $(1,974,277)
LOSS PER SHARE BEFORE EFFECT OR PREFERRED DIVIDENDS
AND ACCRETION OF STOCK ............................ $ (0.21) $ (0.24) $ (0.42) $ (0.46)
EFFECT OF PREFERRED DIVIDENDS AND ACCRETION OR
PREFERRED STOCK ................................... (0.03) (0.05) (0.07) (0.10)
----------- ----------- ----------- -----------
LOSS PER SHARE .................................... $ (0.24) $ (0.29) $ (0.49) $ (0.56)
----------- ----------- ----------- -----------
SHARES USED IN COMPUTING LOSS PER SHARE ........... 4,403,658 4,297,592 4,403,658 4,297,592
</TABLE>
The accompanying notes are an integral part of
these financial statements.
5
LIFECELL CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ....................................................... $(1,857,755) $(1,974,277)
Adjustments to reconcile net loss to net cash
used in operating activities -
Depreciation and amortization .............................. 84,866 65,983
Earned portion of restricted stock compensation and warrants 19,906 124,603
Change in assets and liabilities
(Increase) decrease in accounts and other receivables .... (76,893) (95,059)
(Increase) decrease in inventories ....................... (323,664) (237,010)
(Increase) decrease in prepayments and other ............. (174,195) 34,443
Increase (decrease) in accounts payable and accrued
liabilities ............................................ 185,479 215,289
Increase (decrease) in deferred revenues and credit ...... (21,031) (121,870)
----------- -----------
Total Adjustments .............................................. (305,532) (13,621)
----------- -----------
Net cash provided by (used in) operating activities ............ (2,163,287) (1,987,898)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ........................................... (138,212) (138,767)
Intangible assets .............................................. (16,702) (3,690)
Short-term investments ......................................... -- 2,431,885
----------- -----------
Net cash used in investing activities .......................... (154,914) 2,289,428
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable ........................ 140,990 --
Payments of notes payable ...................................... (21,117) --
----------- -----------
Net cash provided by (used in) financing activities .......... 119,873 --
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS .................................................... (2,198,328) 301,530
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD ...................................................... 3,015,332 1,877,295
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD ......................................................... $ 817,004 $ 2,178,825
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for interest ....................... $ 4,157 $ --
During 1996 and 1995, the Company recorded
a dividend payable of $211,600 and $158,700, respectively
</TABLE>
The accompanying notes are an integral part of
these financial statements.
6
LIFECELL CORPORATION
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
Note 1. - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim financial statements reflect all adjustments
which, in the opinion of management, are necessary for a fair presentation of
the results for the interim periods presented. These financial statements should
be read in conjunction with the Company's Annual Report on Form 10-K for the
year ended December 31, 1995. The interim results are not necessarily indicative
of the results for a full year.
OPERATIONS
The Company has a history of operating losses and anticipates continuing
operating losses through 1996. The Company previously anticipated that its
existing financial resources would be sufficient to satisfy its increased
marketing and manufacturing efforts into the third quarter of 1996. The Company
previously indicated that should additional financing not be obtained by the
beginning of the third quarter of 1996, it would reduce its current operations
and delay certain expenditures in order to conserve its resources and be able to
continue its operations through the end of 1996. In August 1996, the Company
secured a 60-day, $250,000 working capital loan and raised $620,000 from the
exercise of warrants. Based on these events, the Company has not reduced current
operations or delayed expenditures. The Company's existing capital resources,
including proceeds from the loan and exercise of warrants, however, will not be
sufficient to fund operations at current levels through 1996. Accordingly,
although the unaudited financial statements for the six-months ended June 30,
1996 have not been audited or reviewed by the Company's independent public
accountants, such accountants have informed the Company that if the conditions
described above continue to exist at the time of their audit of the financial
statements for the year ending December 31, 1996, their report on those
statements will include an explanatory paragraph regarding substantial doubt
about the Company's ability to continue as a going concern.
The Company is currently seeking additional financing. There can be no
assurance, however, that the Company will be able to obtain financing on
favorable terms in the foreseeable future. The unavailability of such financing
would delay or prevent the development and marketing of the Company's products
or cause the Company to cease operations.
CASH, CASH EQUIVALENTS AND SHORT TERM INVESTMENTS
For purposes of the statements of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents. The Company invests any excess cash in interest bearing
money market accounts and A1/P1 commercial paper with maturities of one year or
less.
CERTAIN RECLASSIFICATIONS
Certain reclassifications have been made to the 1995 financial statements
contained herein to conform with the classifications presented in 1996.
Note 2. - LOSS PER SHARE
Loss per share has been computed by dividing net loss, which has been increased
for periodic accretion and imputed and stated dividends, by the weighted average
number of shares of Common Stock outstanding during the periods. In all
applicable years, all Common Stock equivalents, including the Series A Preferred
Stock, were antidilutive and, accordingly, were not included in the computation.
7
LIFECELL CORPORATION
Note 3. - SERIES A PREFERRED STOCK
On November 10, 1994, the Company raised gross proceeds of approximately $5.3
million in a private offering of units consisting of convertible preferred stock
and warrants. The Company sold 264,500 units at a price of $20 per unit. Each
unit included one share of Series A Convertible Preferred Stock (Series A
Preferred Stock) and one warrant to purchase one share of Common Stock. Each
share of Series A Preferred Stock is convertible into 6.69 shares of Common
Stock. The Series A Preferred Stock is convertible at any time at the option of
the holder. The preferred stock automatically converts to Common Stock on
November 9, 1997 and may be redeemed sooner by the Company if, after November 9,
1995, the closing bid price of LifeCell's Common Stock averages $5.17 per share
for 20 consecutive days. The Series A Preferred Stock bears dividends at annual
rates of $1.20, $1.60, and $2.00 per share for each of the first, second and
third years, respectively, after the date of original issuance. Dividends may be
paid in cash, Common Stock, or any combination of cash and Common Stock at the
Company's discretion. The Series A Preferred Stock is senior to the Company's
Common Stock in liquidation. The Series A Preferred Stock has no ordinary voting
rights. While the preferred shares are outstanding or any dividends are owed
thereon, the Company may not declare or pay cash dividends on its Common Stock.
The units were not registered under the Securities Act of 1933 and may not be
offered or sold absent registration under the Act or an applicable exemption
from registration requirements. Each unit also includes a two-year warrant that
is exercisable for one share of Common Stock at $3.54 per share. The warrants
were recorded at $105,800 in the accompanying financial statements. As of June
30, 1996, warrants to purchase an aggregate of 263,250 shares of Common Stock
were outstanding. The private placement agent was issued a warrant to purchase
90,816 shares of Common Stock at $6.00 per share. The agent's warrant has a term
of five years commencing June 30, 1995 and was recorded at $5,000 in the
accompanying financial statements.
The carrying amount of the Series A Preferred Stock is increased for accrued and
unpaid stated dividends plus periodic accretion, using the effective interest
method, such that the carrying amount equals the redemption amount on the
earliest possible redemption date, November 9, 1997. Series A Preferred Stock is
also increased by imputed dividends resulting from the increasing dividend
rates.
On November 9, 1995, the Company paid dividends on the Series A Preferred Stock
of an aggregate of $317,400 by issuing 103,816 shares of Common Stock.
8
LIFECELL CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Revenues in the second quarter were generated by product sales, a corporate
alliance and research and development contracts and grants.
THREE MONTHS ENDED JUNE 30, 1996 AND 1995. Total revenues for the second quarter
of 1996 were $677,520, an increase of $278,975 over the same period in 1995. As
a result of increased marketing activities, product sales for the quarter
increased $298,907 over the same period in 1995. The Company reported $132,909
in corporate alliance revenue in the second quarter of 1996, from a license and
development agreement with Medtronic, Inc. (the Medtronic Agreement) for the
co-development of tissue heart valves, compared with $177,115 in the same
quarter of 1995. The decrease in corporate alliance revenue was directly related
to the maturity of the project and the planned decrease in activities performed
by LifeCell in the second quarter of 1996. The Company had research and
development grant income of $115,546 in the second quarter of 1996 compared with
$91,272 in the same quarter of 1995. This increase is due to an additional
research agreement entered into by the Company in 1996. Interest income
decreased by $67,735 for the second quarter of 1996 resulting from a decrease in
average funds available for investment and lower interest rates in 1996 as
compared to 1995.
Total costs and expenses for the second quarter of 1996 were $1,599,434, an
increase of $103,700 from the same period in 1995, primarily due to increased
activities in selling and marketing. Costs of goods sold for the second quarter
of 1996 was $272,401 compared to $182,468 for the same period in 1995. This
increase was due to increased sales in 1996 as compared to the same period in
1995 and the shift from the development of AlloDerm to manufacturing, consistent
with taking a product to market. Costs of goods sold as a percentage of sales
decreased as a result of volume efficiencies. Cost of contract research and
development is equal to the total of revenue recorded for research and
development contracts and grants and the corporate alliance, as they are cost
reimbursement contracts. Proprietary research and development expense decreased
to $141,429 in the second quarter of 1996 from $284,234 in the second quarter of
1995 due to the shift in the Company's focus from development to manufacturing.
General and administrative expenses remained relatively consistent with the same
period of the prior year. Selling and marketing expenses increased to $551,803
in the second quarter of 1996 from $361,884 in the second quarter of 1995
primarily due to the addition of plastic surgery sales personnel and an increase
in promotional activities related to AlloDerm marketing activities and the
commercial introduction of the AlloDerm graft in the periodontal and plastic
surgery markets.
SIX MONTHS ENDED JUNE 30, 1996 AND 1996. Total revenues for the six-month period
ended June 30, 1996 were $1,253,632, an increase of $424,671 over the same
period in 1995. As a result of increased marketing activities, product sales for
the six-month period increased $621,750 over the same period in 1995. The
Company reported $288,385 in corporate alliance revenue for the six-month period
ended June, 1996 compared with $422,039 in the same period of 1995. The decrease
in corporate alliance revenue was directly related to certain non-recurring
revenue received by LifeCell in the first quarter of 1995 under the Medtronic
Agreement and the planned decrease in activities performed by LifeCell related
to the maturity of the project. The Company had research and development
contracts and grants income of $115,546 for the six-month period ended June 30,
1996 compared with $178,971 in the same period of 1995. This increase is due to
an additional research agreement entered into by the Company in 1996. Interest
income decreased by $127,100 for the six-month period ended June 30, 1996
resulting from a decrease in average funds available for investment and lower
interest rates in 1996 as compared to 1995.
Total costs and expenses for the six-month period ended June 30, 1996 were
$3,154,770, an increase of $181,049 compared to the same period of the prior
year due to an increase in cost of goods sold and increased activities in
selling and marketing. Cost of goods sold for the six-month period ended June
30, 1996 were $544,158 compared to $284,800 in the same period of 1995. This
increase was due to an increase in product sales and the shift from the
development of AlloDerm to processing, consistent with taking a product to
market. Cost of contract research and development is equal to the total of
revenue recorded for research and development contracts and grants and the
corporate alliance, as they are cost reimbursement contracts. Proprietary
research and development expense decreased to $331,464 in the first six-months
of 1996 from $597,960 in the same period of 1995 primarily due to the shift in
the Company's focus from the development of AlloDerm to processing. General and
administrative expense remained relatively consistent with the prior year.
Selling and marketing expense increased to $1,102,525 in the first six-months of
1996 from $682,511 in the same period of 1995 primarily due to the addition of
sales personnel and promotional activities related to AlloDerm marketing
activities and the commercial introduction of the AlloDerm graft in the
periodontal and plastic surgery markets.
9
LIFECELL CORPORATION
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, LifeCell's principal sources of funds have been equity
offerings, product sales, a corporate alliance, government contracts and grants
and interest on investments.
LifeCell funds research and development activities with external funds from its
corporate alliance and government grants. In April 1996, LifeCell was awarded a
one year $613,000 contract from the U.S. Navy. LifeCell's strategy is to use
existing funds and funds raised from financings to fund a marketing and
distribution effort for AlloDerm.
In 1994, LifeCell entered into agreements with Medtronic pursuant to which
Medtronic paid LifeCell a license fee of $1.5 million and agreed, subject to
certain rights to terminate at Medtronic's discretion, to fund the development
of LifeCell's proprietary tissue processing technology in the field of heart
valves. To date, LifeCell has received approximately $1.6 million in development
funding for this program.
LifeCell expects to incur substantial expenses related to AlloDerm, including
costs of clinical studies, production, sales and marketing, product
introduction, technical seminars, ongoing administrative activities and research
and development activities, including regulatory and quality assurance programs
and continuing applications for patent protection for the proprietary aspects of
its technology.
In January 1996, LifeCell borrowed $120,000 from a bank for working capital
purposes. The loan is secured by cash, requires monthly payments of $2,000, plus
interest, matures December 31, 1996 and bears interest at a rate equal to 6.05%
per annum.
In August 1996, LifeCell borrowed $250,000 from the same bank for working
capital purposes. This loan is secured by accounts and other receivables,
matures October 1996, and bears interest at a rate equal to prime plus .25% per
annum.
In August 1996, to secure interim financing, LifeCell offered holders of certain
warrants issued in connection with the Company's private placement of Series A
Preferred Stock in 1994 the opportunity to exercise such warrants at a reduced
price in exchange for the exercise of such warrants prior to August 30, 1996. To
date, LifeCell has received $620,000 of the maximum $815,000 of potential
financing available from such warrant exercises.
The Company has a history of operating losses and anticipates continuing
operating losses through 1996. The Company previously anticipated that its
existing financial resources would be sufficient to satisfy its increased
marketing and processing efforts into the third quarter of 1996. The Company
previously indicated that should additional financing not be obtained by the
beginning of the third quarter of 1996, it would reduce its current operations
and delay certain expenditures in order to conserve its resources and be able to
continue its operations through the end of 1996. In August 1996, the Company
secured the $250,000 loan described above, and the Company raised $620,000 from
the exercise of warrants described above. Based on these events, the Company has
not reduced current operations or delayed expenditures. The Company's existing
capital resources, including proceeds from the loan and exercise of warrants,
however, will not be sufficient to fund operations at current levels through
1996. Accordingly, although the unaudited financial statements for the
six-months ended June 30, 1996 have not been audited or reviewed by the
Company's independent public accountants, such accountants have informed the
Company that if the conditions described above continue to exist at the time of
their audit of the financial statements for the year ending December 31, 1996,
their report on those statements will include an explanatory paragraph regarding
substantial doubt about the Company's ability to continue as a going concern.
The Company is currently seeking additional financing. There can be no
assurance, however, that the Company will be able to obtain financing on
favorable terms in the foreseeable future. If such financing is not obtained by
November 1996, LifeCell intends to reduce its current operations and delay
certain planned expenditures, including those related to increased marketing
efforts, to conserve its resources and maintain its operations through the end
of 1996. The continued unavailability of such financing would further delay or
prevent the development and marketing of the Company's products or cause the
Company to cease operations.
10
LIFECELL CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
On May 20, 1996, at the Company's annual meeting of stockholders, the
individuals listed below were elected directors. Set forth opposite each
director's name is the tabulation of votes cast. No votes were cast
against any nominee for director.
<TABLE>
<CAPTION>
NAME SHARES VOTED FOR: SHARES WITHHELD: BROKER NON-VOTES:
<S> <C> <C> <C>
Michael E. Cahr ............... 2,984,770 3,300 0
P. William Curreri, M.D ....... 2,984,920 3,150 0
James G. Foster ............... 2,984,770 3,300 0
Paul M. Frison ................ 2,984,920 3,150 0
Christopher Kraft, Ph.D ....... 2,984,770 3,300 0
Stephen A. Livesey, M.D., Ph.D 2,984,920 3,150 0
Thomas G. Ricks ............... 2,984,920 3,150 0
Martin P. Sutter .............. 2,984,920 3,150 0
</TABLE>
The stockholders approved an amendment to the LifeCell Corporation
Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 12,500,000 to 25,000,000. The
tabulation of votes with respect to this item is as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR: SHARES VOTED AGAINST: SHARES ABSTAINED: BROKER NON-VOTES
<S> <C> <C> <C> <C>
Common 2,968,318 11,452 5,300 3,000
</TABLE>
The stockholders approved an amendment to the LifeCell Corporation
Second Amended and Restated 1992 Stock Option Plan to increase the
number of authorized shares for which options may be granted under the
plan from 530,254 to 1,000,000. The tabulation of votes with respect to
this item is as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR: SHARES VOTED AGAINST: SHARES ABSTAINED: BROKER NON-VOTES
<S> <C> <C> <C>
Common 2,871,328 112,442 1,300 3,000
</TABLE>
The stockholders also approved the adoption of the LifeCell
Corporation Second Amended and Restated 1993 Non-Employee Director
Stock Option Plan. The tabulation of votes with respect to this item
is as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR: SHARES VOTED AGAINST: SHARES ABSTAINED: BROKER NON-VOTES
<S> <C> <C> <C>
Common 2,782,446 200,824 1,800 3,000
</TABLE>
11
LIFECELL CORPORATION
Item 5. Other Information
Cautionary Statements
The Company's expectations with respect to future results of operations embodied
in oral and written forward-looking statements, including those made in
connection with this Quarterly Report on Form 10-Q, are subject to the following
risks and uncertainties that must be considered when evaluating the likelihood
of the Company's realization of such expectations.
No Assurance of Additional Necessary Capital
The Company anticipates that its current financial resources will be adequate to
maintain its current and planned operations into November 1996. The report of
Arthur Andersen LLP, the Company's independent public accountants, on LifeCell's
financial statements for the year ended December 31, 1995, includes an emphasis
paragraph with respect to the Company's need for future financing to fund the
manufacturing and development of markets for its products. The Company's future
capital requirements will depend on many factors, including successful expansion
of sales of AlloDerm, continued scientific progress with its research and
development programs and expansion of such programs and progress of preclinical
and clinical assessment of products under development. If the Company does not
obtain additional financing by November 1996, it intends to reduce its current
operations and delay certain planned expenditures, including those related to
increased marketing efforts, to conserve its resources and maintain its
operations through the end of 1996. There can be no assurance that the Company
will be successful in obtaining additional capital in amounts sufficient to
continue to fund its operations and product development or on terms satisfactory
to the Company. If the Company is unable to secure such financing, the Company's
ability to sustain operations would be materially adversely affected.
History of Operating Losses
The Company has incurred substantial losses since inception in January 1986,
including losses of approximately $3.4 million, $3.7 million and $3.9 million in
1993, 1994 and 1995, respectively, and had an accumulated deficit of
approximately $26.8 million at June 30, 1996. There can be no assurance that the
Company will ever become profitable. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations".
FDA Regulatory Status of AlloDerm
In November 1995, following LifeCell's commercial introduction of AlloDerm for
periodontal applications, the Company received a letter from the Center for
Devices and Radiological Health ("CDRH"). The letter stated that the CDRH
considered AlloDerm to be a "device" as defined by the FDC Act, and that a 510
(k) premarket notification was required to be submitted and cleared by the FDA
in order to market the product. LifeCell responded to the CDRH in November 1995
stating the Company's view that AlloDerm is banked human tissue under an interim
rule published by the FDA in 1993 and that no 510(k) clearance is required. By
letter dated March 6, 1996, the CDRH indicated that both the CDRH and the CBER
remained of the view that AlloDerm was a device. The letter suggested that the
Company contact the FDA Ombudsman's Office if it disagreed with this view. In
April 1996, the Company responded to the FDA's March 1996 letter and again
stated its belief that AlloDerm preserved human dermis is banked human tissue,
not a medical device, and also requested a meeting with the FDA Ombudsman to
discuss this matter. The meeting was held in May 1996, and, while no formal FDA
response to the Company's presentation has been issued by the FDA, the agency
indicated that it would like to review the Company's labeling which was
submitted on May 31, 1996. In June 1996, the Company responded to two questions
raised by the agency on use of AlloDerm as a subcutaneous implant in plastic and
reconstructive surgery. Although the Company believes that AlloDerm falls within
the definition of banked human tissue, there can be no assurance that the FDA
will agree. If the FDA were to conclude definitively that AlloDerm is a device,
the Company would continue marketing the product while the Company seeks 510(k)
clearance. There is no assurance that the FDA would consent to the continued
marketing of AlloDerm pending the FDA clearance of a 510(k) notice, nor is
there any assurance that 510(k) clearance for AlloDerm ultimately would be
obtained or that the FDA would not take enforcement action against the Company
related to the continued marketing of this product. The failure to obtain any
such consent or clearance would have a material adverse effect on the Company.
12
LIFECELL CORPORATION
Availability of Materials
The Company's business will be dependent on the availability of human cadaveric
skin and cardiovascular tissue to the extent that LifeCell is unable
successfully to develop products using animal tissue. A limited supply of
donated skin is available. Although the Company has established what it believes
to be an adequate source of cadaveric skin to satisfy the expected demand for
AlloDerm, there can be no assurance that the availability of human skin and
cardiovascular tissue will be sufficient to meet LifeCell's demand for such
materials.
Patents and Proprietary Rights
LifeCell's ability to compete effectively with other companies is materially
dependent upon the proprietary nature of its technologies. LifeCell relies
primarily on patents and trade secrets to protect its technologies. LifeCell
currently has the exclusive right to eight patents through a license agreement
with the Board of Regents of the University of Texas System. In addition,
LifeCell has been issued three patents and has five pending United States patent
applications. There can be no assurance that LifeCell will obtain any additional
key patents or other protection, that the patents currently applied for will be
granted, that existing patents or proprietary rights owned by or licensed to
LifeCell will not be invalidated or that patents will provide significant
commercial benefits. Th invalidation of key patents or proprietary rights owned
by or licensed to LifeCell could have a material adverse effect on LifeCell and
on its business prospects.
LifeCell believes that it owns or has the right to use all knowledge necessary
to manufacture and market its current products and planned products without
infringing any existing patent or proprietary rights of others such that it
would be liable for damages or prevented from manufacturing or marketing its
products. No assurances may be given, however, that the Company's patents or
other proprietary rights may not be subject of an infringement or other claim
that could invalidate to some extent its patents or other rights. Any successful
patent infringement claim could have a material adverse effect on the Company.
There can be no assurance that LifeCell will no be required to resort to
litigation to protect its patents or other proprietary rights or that the
Company may be subject or patent litigation to defend its patents or other
rights against claims or infringement or other intellectual property claims.
Such litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on the Company's financial condition and
results of operations.
LifeCell has also applied for patent protection in several foreign countries.
Because of the differences in patent laws and laws concerning proprietary
rights, the extent of protection provided by United States patents or
proprietary rights owned by or licensed to LifeCell may differ from that of
their foreign counterparts.
13
LIFECELL CORPORATION
Uncertainty of Market Acceptance
Achieving broad market acceptance for AlloDerm and LifeCell's proposed products
will require substantial additional marketing efforts. There can be no assurance
that AlloDerm or any of LifeCell's proposed products ultimately will achieve
widespread commercial acceptance.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
3.1 Restated Certificate of Incorporation of LifeCell Corporation,
as amended
3.2 Amended and Restated By-Laws of LifeCell Corporation
10.1 LifeCell Corporation Second Amended and Restated 1992 Stock
Option Plan, as amended by First Amendment to LifeCell
Corporation Second Amended and Restated 1992 Stock Option Plan
10.2 LifeCell Corporation Second Amended and Restated 1993
Non-Employee Director Stock Option Plan
11.1 Statement regarding Computation of Per Share Earnings
27.1 Financial Data Schedule
b. Reports on Form 8-K
None
14
LIFECELL CORPORATION
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 thereunto duly authorized.
LIFECELL CORPORATION
Date: AUGUST 14, 1996 By: /s/PAUL M. FRISON
Paul M. Frison
President and Chief Executive Officer
Date: AUGUST 14, 1996 By: /s/ ANTHONY A. BROWN
Anthony A. Brown
Vice President, Chief Financial Officer
and Secretary
15
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description of Exhibits Page
3.1 Restated Certificate of Incorporation of LifeCell Corporation,
as amended
3.2 Amended and Restated By-laws of LifeCell Corporation
10.1 LifeCell Corporation Second Amended and Restated 1992 Stock
Option Plan, as amended by First Amendment to LifeCell
corporation Second Amended and Restated 1992 Stock Option Plan
10.2 LifeCell Corporation Second Amended and Restated 1993
Non-Employee Director Stock Option Plan
11.1 Statement regarding Computation of Per Share Earnings
27.1 Financial Data Schedule
16
RESTATED CERTIFICATE OF INCORPORATION
OF
LIFECELL CORPORATION
(Originally incorporated under the name
"Successor LifeCell Corporation" on January 6, 1992)
FIRST: The name of the Corporation is LifeCell Corporation.
SECOND: The registered office of the Corporation in the State of
Delaware is located at Corporation Trust Center, 1209 Orange Street in the City
of Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of capital stock that the Corporation
shall have authority to issue is 14,500,000, of which 2,000,000 shares of the
par value of $.001 per share shall be a class designated Preferred Stock
("Preferred Stock"), and 12,500,000 shares of the par value of $.001 per share
shall be a class designated Common Stock ("Common Stock").
The voting powers, designations, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof, of the Preferred Stock and Common Stock,
and the authority with respect thereto expressly granted to the Board of
Directors of the Corporation, are as follows:
A. COMMON STOCK.
1. VOTING RIGHTS. The holders of shares of Common Stock shall have the
following voting rights:
(a) Each share of Common Stock shall entitle the holder thereof
to one vote on all matters submitted to a vote of the stockholders of the
Corporation.
(b) Except as otherwise required by law or the provisions of this
Restated Certificate of Incorporation, the holders of shares of Common Stock
shall not be entitled to vote separately as a class on any matter submitted to a
vote of the stockholders of the Corporation.
2. LIQUIDATION. Subject to the provisions of this Restated Certificate
of Incorporation, in the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, after payment
or provision for payment of any preferential amount due the holders of shares of
any other class or series of stock, the holders of shares of Common Stock shall
be entitled to receive ratably, based on the number of shares
-1-
of Common Stock held by such holders, any assets of the Corporation available
for distribution to holders of Common Stock.
3. DIVIDENDS. Subject to the provisions of this Restated Certificate of
Incorporation, the Board of Directors, in its discretion, out of funds legally
available for the payment of dividends and at such times and in such manner as
determined by the Board of Directors, may declare and pay dividends on the
outstanding shares of Common Stock of the Corporation.
4. REACQUIRED SHARES. Any shares of Common Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever that have been retired
shall upon their retirement become authorized but unissued shares of Common
Stock.
B. PREFERRED STOCK.
1. ADDITIONAL SERIES OF PREFERRED STOCK.
The Board of Directors is hereby expressly vested with the authority to
adopt a resolution or resolutions providing for the issue of authorized but
unissued shares of Preferred Stock, which shares may be issued from time to time
in one or more series and in such amounts as may be determined by the Board of
Directors in such resolution or resolutions. The voting powers, designations,
preferences and relative, participating, optional or other special rights, if
any, of each such series of Preferred Stock and the qualifications, limitations
or restrictions, if any, thereof (collectively the "Series Terms"), shall be
such as are stated and expressed in a resolution or resolutions providing for
the creation or revision of such Series Terms adopted by the Board of Directors
or, to the extent permitted by law, a committee of the Board of Directors to
which such responsibility is specifically and lawfully delegated.
2. SERIES A PREFERRED STOCK.
The voting powers, designations, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of one series of Preferred Stock, the
Series A Preferred Stock, designated on November 9, 1994, are as follows:
(a) DESIGNATION. The designation of the series shall be "Series A
Preferred Stock" (the "Series A Preferred Stock").
(b) NUMBER. The number of shares constituting the Series A
Preferred Stock shall be 300,000.
(c) VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(i) Except as required by law or Section B.2.(c)(ii) of
this Article Fourth, the holders of shares of Series A Preferred Stock shall not
have any right or power to vote on any question or in any proceeding or to be
represented at or to receive notice of any meeting or consent of stockholders.
On any matters on which the holders of the Series A
-2-
Preferred Stock shall be entitled to vote, each share of Series A Preferred
Stock shall entitle the holder thereof to one vote multiplied by the number of
shares of Common Stock into which such share of Series A Preferred Stock is
convertible on the record date for such vote.
(ii) Without the vote or consent of the holders of at
least a majority of the shares of Series A Preferred Stock then outstanding, the
Corporation may not (A) authorize, create or issue, or increase the authorized
number of shares of, any class or series of capital stock ranking prior to or on
a parity with the Series A Preferred Stock either as to dividends or
liquidation, (B) authorize, create or issue any class or series of common stock
of the Corporation other than the Common Stock, (C) authorize any
reclassification of the Series A Preferred Stock, (D) authorize, create or issue
any securities convertible into capital stock prohibited by Section B.2.(c)(ii)
(A) or (B) of this Article Fourth, or (E) amend Section B.2 of this Article
Fourth.
(d) LIQUIDATION.
(i) PREFERENCE. Subject to the rights of the holders of
any other series of Preferred Stock ranking senior to or on a parity with the
Series A Preferred Stock with respect to liquidation and any other class or
series of capital stock of the Corporation ranking senior to or on a parity with
the Series A Preferred Stock with respect to liquidation, in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the holders of record of the issued and
outstanding shares of Series A Preferred Stock shall be entitled to receive, out
of the assets of the Corporation available for distribution to the holders of
shares of Series A Preferred Stock, prior and in preference to any distribution
of any of the assets of the Corporation to the holders of Common Stock or and
any other series of Preferred Stock ranking junior to the Series A Preferred
Stock with respect to liquidation and any other class or series of capital stock
of the Corporation ranking junior to the Series A Preferred Stock with respect
to liquidation, an amount in cash per share equal to $20.00, plus an amount
equal to all dividends accrued and unpaid on each such share (whether or not
declared) up to the date fixed for distribution. If, upon such liquidation,
dissolution or winding up of the affairs of the Corporation, the assets of the
Corporation distributable among the holders of Series A Preferred Stock and any
other series of Preferred Stock ranking on a parity therewith in respect thereto
or any class or series of capital stock of the Corporation ranking on a parity
therewith in respect thereto shall be insufficient to permit the payment in full
to all such holders of shares of the preferential amounts payable to them, then
the entire assets of the Corporation available for distribution to such holders
of shares shall be distributed ratably among such holders in proportion to the
respective amounts that would be payable per share if such assets were
sufficient to permit payment in full. After payment of the full amount to which
they are entitled upon liquidation pursuant to this Section B.2.(d)(i), the
holders of shares of Series A Preferred Stock will not be entitled to any
further participation in any distribution of assets by the Corporation. Neither
a consolidation or merger of the Corporation with another corporation or other
entity nor a sale, transfer, lease or exchange of all or part of the
Corporation's assets will be considered a liquidation, dissolution or winding up
of the affairs of the Corporation for purposes of this Section B.2.(d)(i).
-3-
(ii) ADJUSTMENTS. The liquidation preference provided for
herein with respect to the Series A Preferred Stock shall be equitably adjusted
to reflect any stock dividend, stock distribution, stock split or reverse stock
split, combination of shares, subdivision of shares or reclassification of
shares with respect to the Series A Preferred Stock.
(e) CONVERSION RIGHTS.
(i) OPTIONAL CONVERSION. Subject to and upon compliance
with the provisions of this Section B.2.(e) (and Section B.2.(g) with respect to
conversion after notice of redemption), the holder of any shares of Series A
Preferred Stock shall have the right at such holder's option, at any time or
from time to time, and without the payment of any additional consideration
therefor, to convert any of such shares of Series A Preferred Stock into fully
paid and nonassessable shares of Common Stock at the Conversion Price (as
defined in Section B.2.(e)(iii) below) in effect on any Conversion Date (as
defined in Section B.2.(e)(iv) below) upon the terms hereinafter set forth.
(ii) AUTOMATIC CONVERSION. Each outstanding share of
Series A Preferred Stock shall automatically be converted, without any further
act of the Corporation or its stockholders, at the Conversion Price then in
effect, into fully paid and nonassessable shares of Common Stock on November 9,
1997.
(iii) NUMBER OF CONVERSION SHARES. Each share of Series A
Preferred Stock shall be convertible pursuant to Sections B.2.(e)(i) and
B.2.(e)(ii) into a number of shares of Common Stock determined by dividing (x)
$20.00 by (y) the Conversion Price in effect on any Conversion Date. For the
purposes of this Section B.2.(e), the term "Conversion Price" shall initially
mean $2.99.
(iv) MECHANICS OF CONVERSION. The holder of any shares of
Series A Preferred Stock may exercise the conversion right specified in Section
B.2.(e)(i) by surrendering to the Corporation or any transfer agent of the
Corporation the certificate or certificates for the shares to be converted,
accompanied by written notice specifying the number of shares to be converted.
Upon the occurrence of automatic conversion pursuant to Section B.2.(e)(ii), the
outstanding shares of Series A Preferred Stock shall be converted automatically
without any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent; provided that the Corporation shall not be obligated to issue to
any holder certificates evidencing the shares of Common Stock issuable upon such
conversion unless certificates evidencing such shares of Series A Preferred
Stock are delivered either to the Corporation or any transfer agent of the
Corporation. Conversion shall be deemed to have been effected on the date when
delivery of notice of an election to convert and of certificates for shares
being converted is made or on the date specified in Section B.2.(e)(ii), as the
case may be, and such date is referred to herein as the "Conversion Date".
Subject to the provisions of Section B.2.(e)(vi)(C), as promptly as practicable
thereafter (and after surrender of the certificate or certificates representing
shares of Series A Preferred Stock to the Corporation or any transfer agent of
the Corporation in the case of conversion pursuant to Section B.2.(e)(ii)) the
Corporation shall issue and deliver to or upon the written order of such holder
a certificate or certificates for the number of full shares of Common Stock
-4-
to which such holder is entitled and a check or cash with respect to any
fractional interest in a share of Common Stock as provided in Section
B.2.(e)(v). Subject to the provisions of Section B.2.(e)(v)(C), the person in
whose name the certificate or certificates for Common Stock are to be issued
shall be deemed to have become a holder of record of such Common Stock on the
applicable Conversion Date. Upon conversion of only a portion of the number of
shares covered by a certificate representing shares of Series A Preferred Stock
surrendered for conversion (in the case of conversion pursuant to Section
B.2.(e)(i)), the Corporation shall issue and deliver to or upon the written
order of the holder of the certificate so surrendered for conversion, at the
expense of the Corporation, a new certificate covering the number of shares of
Series A Preferred Stock representing the unconverted portion of the
certificate so surrendered.
(v) FRACTIONAL SHARES. No fractional shares of Common
Stock or scrip shall be issued upon conversion of shares of Series A Preferred
Stock. If more than one share of Series A Preferred Stock shall be surrendered
for conversion at any one time by the same holder or shall be held by the same
holder at the time of any automatic conversion, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares so surrendered or held, as the case may be.
Instead of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of any shares of Series A Preferred Stock, the
Corporation shall pay out of funds legally available therefor a cash adjustment
in respect of such fractional interest, rounded to the nearest one hundredth
(1/100th) of a share, in an amount equal to that fractional interest of the then
Current Market Price (as defined in Section B.2.(e)(vii) below), rounded to the
nearest cent ($.01).
(vi) COMMON STOCK CONVERSION PRICE ADJUSTMENTS. The
Conversion Price shall be subject to adjustment from time to time as follows:
(A) STOCK DIVIDENDS, SUBDIVISIONS,
RECLASSIFICATIONS OR COMBINATIONS. If the Corporation shall (x) declare a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (y) subdivide or reclassify the outstanding shares of Common Stock into a
greater number of shares of Common Stock or (z) combine or reclassify the
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Conversion Price in effect at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be adjusted to that price determined by multiplying
the Conversion Price in effect by a fraction (x) the numerator of which shall be
the total number of issued and outstanding shares of Common Stock immediately
prior to such dividend, distribution, subdivision, combination or
reclassification and (y) the denominator of which shall be the total number of
issued and outstanding shares of Common Stock immediately after such dividend,
distribution, subdivision, combination or reclassification. Successive
adjustments in the Conversion Price shall be made whenever any event specified
above shall occur.
(B) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT.
All calculations under this Section B.2.(e)(vi) shall be made to the nearest
cent ($.01) or to the nearest one hundredth (1/100th) of a share, as the case
may be. Any provision of this Section B.2.(e) to the contrary notwithstanding,
no adjustment in the Conversion Price shall be
-5-
made if the amount of such adjustment would be less than 1% of the then current
Conversion Price until the end of one year after such adjustment would otherwise
have been required; but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together with
any subsequent adjustment which, together with such amount and any other amount
or amounts so carried forward, shall aggregate 1% of the then current Conversion
Price or more, provided that if the events giving rise to such adjustments occur
within three months of each other, then such adjustments shall be calculated as
if these events giving rise to them had occurred simultaneously on the date of
the first such event.
(C) TIMING OF ISSUANCE OF ADDITIONAL COMMON STOCK
UPON CERTAIN ADJUSTMENTS. In any case in which the provisions of this Section
B.2.(e)(vi) shall require that an adjustment shall become effective immediately
after a record date for an event, the Corporation may defer until the occurrence
of such event (x) issuing to the holder of any share of Series A Preferred Stock
converted after such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the shares of Common Stock
issuable upon such conversion before giving effect to such adjustment and (y)
paying to such holder any amount of cash in lieu of a fractional share of Common
Stock pursuant to Section B.2.(e)(v); provided that the Corporation upon request
shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares, and such cash,
upon the occurrence of the event requiring such adjustment.
(vii) CURRENT MARKET PRICE. The "Current Market Price" at
any date shall mean, in the event the Common Stock is publicly traded, the
average of the daily closing prices per share of such equity security for the 20
consecutive trading days ending on the trading day immediately before such date
(as adjusted for any stock dividend, split, combination or reclassification that
took effect during such 20 trading day period). The closing price for each day
shall be the last reported sale price regular way or, in case no such reported
sale takes place on such day, the average of the last closing bid prices regular
way, in either case on the principal national securities exchange on which such
equity security is listed or admitted to trading, or if not listed or admitted
to trading on any national securities exchange, the closing bid price for such
day reported by NASDAQ, if such equity security is traded over-the-counter and
quoted in the National Market System, or if such equity security is so traded,
but not so quoted, the average of the closing bid prices of such equity security
as reported by NASDAQ or any comparable system or, if such equity security is
not listed on NASDAQ or any comparable system, the average of the closing bid
prices as furnished by two members of the National Association of Securities
Dealers, Inc., selected in good faith from time to time by the Board of
Directors of the Corporation for that purpose. If such equity security is not
traded in such manner that the quotations referred to above are available for
the period required hereunder, Current Market Price per share of such equity
security shall be deemed to be the fair value as determined in good faith by the
Board of Directors of the Corporation, irrespective of any accounting treatment.
(viii) STATEMENT REGARDING ADJUSTMENTS. Whenever the
Conversion Price shall be adjusted as provided in Section B.2.(e)(vi), the
Corporation shall forthwith file, at the office of any transfer agent for the
Series A Preferred Stock and at the principal office of the
-6-
Corporation, a statement showing in detail the method of calculation of such
adjustment, the facts requiring such adjustment and the Conversion Price that
shall be in effect after such adjustment, and the Corporation shall also cause a
copy of such statement to be sent by mail, first class postage prepaid, to each
holder of shares of Series A Preferred Stock at its address appearing on the
Corporation's records. Each such statement shall be signed by the Corporation's
chief financial officer. Where appropriate, such copy may be given in advance
and may be included as part of a notice required to be mailed under the
provisions of Section B.2.(e)(ix).
(ix) NOTICE TO HOLDERS. In the event the Corporation shall
propose to take any action of the type described in Section B.2.(e)(vi)(A) or
B.2.(e)(x), the Corporation shall give notice to each holder of shares of Series
A Preferred Stock in the manner set forth in Section B.2.(e)(viii), which notice
shall specify the record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice shall also
set forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Conversion Price and the number, kind or class
of shares or other securities or property which shall be deliverable upon
conversion of shares of Series A Preferred Stock. In the case of any action
which would require the fixing of a record date, such notice shall be given at
least ten calendar days prior to the date so fixed, and in the case of all other
action, such notice shall be given at least 15 calendar days prior to the taking
of such proposed action. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of any such action.
(x) MERGERS, ETC. In the event the Corporation shall be a
party to any transaction (including, without limitation, a merger,
consolidation, sale, lease or transfer of all or substantially all of its
assets, reclassification of the Common Stock or reorganization of the Company)
as a result of which shares of Common Stock shall be converted into the right to
receive stock, securities or other property (including cash or any combination
thereof), each share of Series A Preferred Stock shall thereafter be convertible
into the kind and amount of shares of stock and other securities and property
receivable (including cash) upon the consummation of such transaction by a
holder of that number of shares of Common Stock, or fraction thereof, into which
one share of Series A Preferred Stock was convertible immediately prior to such
transaction.
(xi) TREASURY STOCK. For the purposes of this Section
B.2.(e), the sale or other disposition of any shares of Common Stock theretofore
held in the Corporation's treasury shall be deemed to be an issuance thereof.
(xii) COSTS. The Corporation shall pay all documentary,
stamp, transfer or other transactional taxes attributable to the issuance or
delivery of shares of Common Stock upon conversion of any shares of Series A
Preferred Stock; provided that the Corporation shall not be required to pay any
taxes which may be payable in respect of any transfer involved in the issuance
or delivery of any certificate for such shares in a name other than that of the
holder of the shares of Series A Preferred Stock in respect of which such shares
are being issued.
-7-
(xiii) DIVIDENDS UPON CONVERSION. In connection with any
conversion of shares of Series A Preferred Stock, the Corporation shall pay
accrued and unpaid dividends thereon in accordance with the provisions of
Section B.2.(f)(iv).
(f) DIVIDENDS.
(i) GENERAL.
(A) Subject to the rights of the holders of any
other series of Preferred Stock ranking senior to or on a parity with the Series
A Preferred Stock with respect to dividends and any other class or series of
capital stock of the Corporation ranking senior to or on a parity with the
Series A Preferred Stock with respect to dividends, other than the Common Stock,
the holders of the Series A Preferred Stock shall be entitled to receive, when
and as declared by the Board of Directors, cumulative dividends per share of
Series A Preferred Stock at the rate per annum of (1) $1.20, during the period
commencing on the date of original issuance of any shares of Series A Preferred
Stock and ending on November 9, 1995, (2) $1.60, during the period commencing on
November 10, 1995, and ending on November 9, 1996, and (3) $2.00, during the
period commencing on November 10, 1996, and ending on November 9, 1997.
(B) Dividends on the Series A Preferred Stock will
accrue on each February 9, May 9, August 9 and November 9, occurring after the
date of original issuance (each such date being referred to herein as an
"Accrual Date" and the three-month period or portion thereof, as the case may
be, ending on an Accrual Date being referred to herein as an "Accrual Period").
Dividends will accrue from the date of original issuance. Dividends will be paid
(when and as declared by the Board of Directors of the Corporation) annually, in
the arrears, on November 9, 1995, November 9, 1996, and November 9, 1997. Each
such dividend shall be paid to the holders of record of shares of the Series A
Preferred Stock as they appear on the stock register of the Corporation on such
record date not exceeding 45 nor less than ten calendar days preceding the
payment date thereof, as shall be fixed by the Board of Directors of the
Corporation. Dividends on account of arrears for any past dividend periods may
be declared and paid at any time, without reference to any regular dividend
payment date, to holders of record on such date, not exceeding 45 nor less than
ten calendar days preceding the payment date thereof, as may be fixed by the
Board of Directors of the Corporation. Holders of shares of Series A Preferred
Stock at the close of business on a dividend payment record date will be
entitled to receive the dividend payable with respect to such shares on the
corresponding dividend payment date notwithstanding the conversion thereof or
the Corporation's default on payment of the dividend due on such dividend
payment date. However, for shares of Series A Preferred Stock surrendered for
conversion during the period from the close of business on any dividend payment
record date to the opening of business on the corresponding dividend payment
date, the Corporation shall only be required to pay the dividend to the holder
of such shares on the dividend payment record date. Except as so provided above
and in Section below, no payment or adjustment will be made on account of
accrued or unpaid dividends upon conversion of shares of Series A Preferred
Stock. Holders of shares of Series A Preferred Stock called for redemption on a
redemption date falling between a dividend payment record date and the dividend
payment date shall, in lieu of receiving such dividend on the dividend payment
date,
-8-
receive such dividend payment on the redemption payment date (unless such
holders convert such shares in accordance with this Section B.2. of this Article
Fourth).
(C) The Corporation shall pay the dividends on the
Series A Preferred Stock described in Section B.2.(f)(i)(A), at the
Corporation's option and in its sole discretion, out of funds legally available
therefor (1) in cash, (2) in shares of Common Stock, such that the number of
shares of Common Stock to be distributed as a dividend with respect to the
portion of the dividend attributable to each Accrual Period shall be equal to
the number obtained by dividing the dollar amount of the portion of the dividend
attributable to such Accrual Period by the greater of (I) the Current Market
Price of the Common Stock on the tenth trading day immediately preceding the
applicable Accrual Date and (II) $2.00 (as shall be equitably adjusted to
reflect any stock dividend, stock distribution, stock split or reverse stock
split, combination of shares, subdivision of shares or reclassification of
shares with respect to the Common Stock), or (III) in any combination of cash
and shares of Common Stock that the Corporation may determine in its sole
discretion, with the number of shares of Common Stock to be distributed in
connection therewith to be calculated on the basis set forth in Section
B.2.(f)(i)(c)(2).
(D) No fractional shares of Common Stock or scrip
shall be issued upon payment of any dividends in shares of Common Stock. If more
than one share of Series A Preferred Stock shall be held by the same holder at
the time of any dividend payment date, the number of full shares of Common Stock
issuable upon payment of such dividends shall be computed on the basis of the
aggregate dividend amount that the Corporation has determined to pay in Common
Stock shares. Instead of any fractional shares of Common Stock which would
otherwise be issuable upon payment of such dividends, the Corporation shall pay
out of funds legally available therefor a cash adjustment in respect of such
fractional interest, rounded to the nearest one hundredth (1/100th) of a share,
in an amount equal to that fractional interest of the then Current Market Price,
rounded to the nearest cent ($.01).
(E) Notwithstanding the dividend rate otherwise
applicable pursuant to Section B.2.(f)(i)(C) and notwithstanding any other
provision of this Section B.2.of this Article Fourth to the contrary, in the
event the Corporation pays any dividends in shares of Common Stock and pursuant
to the provisions of Section B.2.(f)(i)(C) the Current Market Price used in the
calculation of the number of shares payable in respect of such dividends in
respect of any Accrual Period is less than $2.00, as shall be equitably adjusted
to reflect any stock dividend, stock distribution, stock split or reverse stock
split, combination of shares, subdivision of shares or reclassification of
shares with respect to the Common Stock (and, therefore, pursuant to and for
purposes of Section B.2.(f)(i)(C), deemed to be equal to $2.00, as so adjusted),
payment of any such dividends in shares of Common Stock calculated pursuant
thereto shall constitute payment in full of any such dividends.
(ii) ALLOCATION OF DIVIDENDS. Dividends on the Series A
Preferred Stock, if paid, or if declared and set apart for payment, must be paid
or declared and set apart for payment on all outstanding shares of Series A
Preferred Stock contemporaneously. In the event dividends on the Series A
Preferred Stock and any other series of Preferred Stock ranking on a parity
therewith in respect thereto or any other class or series of capital stock of
the
-9-
Corporation ranking on a parity therewith in respect thereto are declared and
paid in an amount less than all accumulated and current dividends on all of such
shares, the total amount declared and paid shall be allocated among all of such
shares so that the per share dividend to be declared and paid on each share is
the same percentage of the sum of the accumulated dividends for each such share.
In the event dividends are declared and paid on the Series A Preferred Stock in
a combination of cash and shares of Common Stock, the percentage of the dividend
paid in cash and the percentage of the dividend paid in stock must be the same
for each share of Series A Preferred Stock.
(iii) DIVIDEND PRIORITIES. The Corporation shall not
declare or pay any distributions to the holders of the Common Stock or any other
class or series of capital stock ranking junior to the Series A Preferred Stock
in respect of dividends during any period of time in which any shares of Series
A Preferred Stock are outstanding or in which any dividends payable on any
shares of Series A Preferred Stock have not been declared and paid in full. In
this Section B.2.(f)(iii), "distribution" means the transfer of cash or property
without consideration, whether by way of dividend or otherwise (except a
dividend solely in shares of Common Stock), or the purchase or redemption by the
Corporation of shares of Common Stock or any other shares of capital stock of
the Corporation ranking junior to the Series A Preferred Stock in respect of
dividends for cash or property, but does not include the repurchase by the
Corporation of shares from an officer, director, employee or consultant of the
Corporation.
(iv) DIVIDENDS ON CONVERSION OR REDEMPTION.
(A) Immediately prior to the conversion of any
shares of Series A Preferred Stock into Common Stock or the redemption of any
shares of Series A Preferred Stock, all accrued and unpaid dividends payable
pursuant to Section B.2.(f) (whether or not declared) on such shares so
converted or redeemed, as the case may be, (prorated until the date of
conversion or redemption, as the case may be, in respect of the Accrual Period
in which such date occurs) shall be payable, at the Corporation's option and in
its sole discretion, out of funds legally available therefor (1) in cash, (2) in
shares of Common Stock, such that the number of shares of Common Stock to be
distributed with respect to the portion of the dividend attributable to each
Accrual Period shall be equal to the number obtained by dividing the dollar
amount of the portion of the dividend attributable to such Accrual Period by the
greater of (I) the Current Market Price of the Common Stock on the tenth trading
day immediately preceding the applicable Accrual Date and (II) $2.00 (as shall
be equitably adjusted to reflect any stock dividend, stock distribution, stock
split or reverse stock split, combination of shares, subdivision of shares or
reclassification of shares with respect to the Common Stock), or (III) in any
combination of cash and shares of Common Stock that the Corporation may
determine in its sole discretion, with the number of shares of Common Stock to
be distributed in connection therewith to be calculated on the basis set forth
in Section B.2.(f)(iv)(A)(2).
(B) No fractional shares of Common Stock or scrip
shall be issued upon payment of any dividends in shares of Common Stock upon
conversion or redemption of any shares of Series A Preferred Stock. If more than
one share of Series A Preferred Stock shall be surrendered for conversion at any
one time by the same holder, shall be held by the same holder at the time of any
automatic conversion or shall be held by the same
-10-
holder at the time of any redemption, as the case may be, the number of full
shares of Common Stock issuable upon payment of such dividends shall be computed
on the basis of the aggregate dividend amount that the Corporation has
determined to pay in Common Stock shares. Instead of any fractional shares of
Common Stock which would otherwise be issuable upon payment of such dividends,
the Corporation shall pay out of funds legally available therefor a cash
adjustment in respect of such fractional interest, rounded to the nearest one
hundredth (1/100th) of a share, in an amount equal to that fractional interest
of the then Current Market Price, rounded to the nearest cent ($.01).
(C) Notwithstanding the dividend rate otherwise
applicable pursuant to Section B.2.(f)(i)(A) and notwithstanding any other
provision of this Section of this Article Fourth to the contrary, in the event
the Corporation pays any dividends in shares of Common Stock upon conversion or
redemption of any shares of Series A Preferred Stock and pursuant to the
provisions of Section the Current Market Price used in the calculation of the
number of shares payable in respect of such dividends in respect of any Accrual
Period is less than $2.00, as shall be equitably adjusted to reflect any stock
dividend, stock distribution, stock split or reverse stock split, combination of
shares, subdivision of shares or reclassification of shares with respect to the
Common Stock (and, therefore, pursuant to and for purposes of Section
B.2.(f)(iv)(A), deemed to be equal to $2.00, as so adjusted), payment of any
such dividends in shares of Common Stock calculated pursuant thereto shall
constitute payment in full of any such dividends.
(g) REDEMPTION.
(i) GENERAL.
(A) At any time after November 9, 1995, the
Corporation may redeem in whole or in part the then outstanding shares of Series
A Preferred Stock; provided, however, that the Corporation may not redeem any
shares of Series A Preferred Stock unless the Current Market Price of the Common
Stock on a date (which date may be prior to, on or after November 9, 1995) that
is within ten trading days of the date notice of redemption is given pursuant to
Section equals or exceeds $5.17 (as shall be equitably adjusted to reflect any
stock dividend, stock distribution, stock split or reverse stock split,
combination of shares, subdivision of shares or reclassification of shares with
respect to the Common Stock).
(B) The Corporation shall redeem the Series A
Preferred Stock by paying a redemption amount equal to $20.00 per share of
Series A Preferred Stock (the "Redemption Price"), at the Corporation's option
and in its sole discretion, out of funds legally available therefor (1) in cash,
(2) in shares of Common Stock, such that the number of shares of Common Stock to
be distributed in payment of the Redemption Price shall be equal to the number
obtained by dividing the dollar amount of the Redemption Price by the lesser of
(I) the Current Market Price of the Common Stock on the tenth trading day
immediately preceding the date notice of redemption is given pursuant to Section
B.2.(g)(iii) and (II) the Conversion Price on the redemption payment date, or
(3) in any combination of cash and shares of Common Stock that the Corporation
may determine in its sole discretion, with the number of shares of Common
-11-
Stock distributed in connection therewith to be calculated on the basis set
forth in Section B.2.(f)(iv)(B)(2).
(C) No fractional shares of Common Stock or scrip
shall be issued upon payment of the Redemption Price or any portion thereof in
shares of Common Stock. If more than one share of Series A Preferred Stock shall
be held by the same holder at the time of any redemption, the number of full
shares of Common Stock issuable upon payment of the Redemption Price, or any
portion thereof, shall be computed on the basis of the aggregate Redemption
Price that the Corporation has determined to pay in Common Stock shares. Instead
of any fractional shares of Common Stock which would otherwise be issuable upon
payment of any such Redemption Price, the Corporation shall pay out of funds
legally available therefor a cash adjustment in respect of such fractional
interest, rounded to the nearest one hundredth (1/100th) of a share, in an
amount equal to that fractional interest of the then Current Market Price,
rounded to the nearest cent ($.01).
(D) In connection with any redemption of shares of
Series A Preferred Stock, in addition to the Redemption Price, the Corporation
shall pay accrued and unpaid dividends thereon in accordance with the provisions
of Section B.2.(f)(iv).
(E) The Redemption Price payable pursuant hereto
shall be equitably adjusted to reflect any stock dividend, stock distribution,
stock split or reverse stock split, combination of shares, subdivision of shares
or reclassification of shares with respect to any shares of the Series A
Preferred Stock.
(ii) PARTIAL REDEMPTION. In case of the redemption of only
part of the Series A Preferred Stock at the time outstanding, at the option of
the Board of Directors, such redemption shall be made pro rata or the shares to
be redeemed shall be chosen by lot in such manner as may be prescribed by the
Board of Directors.
(iii) NOTICE.
(A) Notice of any proposed redemption of Series A
Preferred Stock shall be given by the Corporation by mailing a copy of such
notice by first class mail, postage prepaid, not less than 30 nor more than 90
calendar days prior to the date fixed for such redemption to each holder of
record of the shares to be redeemed at his address appearing on the books of the
Corporation.
(B) Each such notice shall state, among other
things, (1) the redemption payment date, (2) whether the Redemption Price will
be paid in shares of Common Stock or cash, or in a combination of Common Stock
and cash, (3) that dividends on the shares to be redeemed shall cease to accrue
following such redemption payment date, and (4) that dividends accrued to and
including the date fixed for redemption will be paid as specified in said
notice.
(C) Notice having been mailed as aforesaid, from
and after the redemption payment date, unless the Corporation shall be in
default in providing money or
-12-
Common Stock for the payment of the Redemption Price (or for any accrued and
unpaid dividends to and including the redemption payment date), (1) dividends on
the shares of Series A Preferred Stock so called for redemption shall cease to
accrue, (2) said shares shall be deemed no longer outstanding, and (3) all
rights of the holders thereof as stockholders of the Corporation (except the
right to receive from the Corporation any monies or Common Stock payable upon
redemption without interest thereon) shall cease except for the rights
applicable to any Common Stock paid pursuant to the redemption.
(iv) CONVERSION PRIOR TO REDEMPTION. The holder of any
shares of Series A Preferred Stock to whom notice of redemption has been given
pursuant hereto may pursuant to the provisions of Section B.2.(f) hereof elect
to convert the shares of Series A Preferred Stock for which notice of redemption
has been given at any time on or prior to the tenth calendar day immediately
preceding the redemption payment date.
(h) REACQUIRED SHARES. Any shares of Series A Preferred Stock
redeemed, purchased, converted or otherwise acquired by the Corporation in any
manner whatsoever shall not be reissued as part of such series and shall be
retired promptly after the acquisition thereof. All such shares shall upon their
retirement and the filing of any certificate required in connection therewith
pursuant to the Delaware General Corporation Law become authorized but unissued
shares of Preferred Stock.
C. NUMBER OF AUTHORIZED SHARES.
The number of authorized shares of any class of capital stock of the
Corporation may be increased or decreased (but not below the number of shares
thereof then outstanding) by the affirmative vote of the holders of a majority
of the shares of capital stock of the Corporation entitled to vote on matters
submitted to a vote of the stockholders of the Corporation, and no class vote
shall be required in connection therewith.
D. NO PREEMPTIVE RIGHTS.
No holder of shares of stock of the Corporation shall have any
preemptive or other right, except as such rights are expressly provided herein
or by contract, to purchase or subscribe for or receive any shares of any class,
or series thereof, of stock of the Corporation, whether now or hereafter
authorized, or any warrants, options, bonds, debentures or other securities
convertible into, exchangeable for or carrying any right to purchase any shares
of any class, or series thereof, of stock; but such additional shares of stock
and such warrants, options, bonds, debentures or other securities convertible
into, exchangeable for or carrying any right to purchase any shares of any
class, or series thereof, of stock may be issued or disposed of by the Board of
Directors to such persons, and on such terms and for such lawful consideration,
as in its discretion it shall deem advisable or as the Corporation shall have by
contract agreed.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: Elections of directors need not be by written ballot unless the
bylaws of the Corporation shall so provide.
-13-
SEVENTH:
A. A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law hereafter is amended
to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Corporation, in addition to
the limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended Delaware General Corporation Law. Any
repeal or modification of this paragraph by the stockholders of the Corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of such
repeal or modification.
B. The Corporation shall indemnify any director or officer to the full extent
permitted by Delaware law.
EIGHTH: In furtherance of, and not in limitation of, the powers
conferred by statute, the Board of Directors is expressly authorized to adopt,
amend or repeal the bylaws of the Corporation, or adopt new bylaws, without any
action on the part of the stockholders.
IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate
of Incorporation, which restates and integrates and also amends the
Corporation's Restated Certificate of Incorporation as heretofore amended, after
having been duly adopted by the Corporation in accordance with the provisions of
Sections 242 and 245 of the Delaware General Corporation Law, to be signed by
its duly authorized officer on this 20th day of June, 1995.
LIFECELL CORPORATION
By /S/ PAUL M. FRISON
Paul M. Frison, Chairman of the Board,
President and Chief Executive Officer
-14-
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
LIFECELL CORPORATION
LifeCell Corporation, a Delaware corporation (the "Corporation"), does
hereby certify:
That the amendment set forth below to the Corporation's Restated
Certificate of Incorporation was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware:
I. The first paragraph of Article FOURTH of the Corporation's Restated
Certificate of Incorporation is hereby deleted and replaced in its entirety by
the following:
FOURTH: The total number of shares of capital stock that the Corporation
shall have authority to issue is 27,000,000, of which 2,000,000 shares of the
par value of $.001 per share shall be a class designated Preferred Stock
("Preferred Stock") and 25,000,000 shares of the par value of $.001 per share
shall be a class designated Common Stock ("Common Stock").
-15-
IN WITNESS WHEREOF, LifeCell Corporation has caused this Certificate to
be signed by its duly authorized officer this 20th day of May, 1996.
LIFECELL CORPORATION
By /s/ PAUL M. FRISON
Paul M. Frison, President
-16-
AMENDED AND RESTATED BY-LAWS
OF
LIFECELL CORPORATION
ADOPTED MARCH 15, 1996
ARTICLE I
OFFICES
SECTION 1.01. REGISTERED OFFICE. The registered office of the
corporation in the State of Delaware shall be in the City of Wilmington, County
of New Castle, and the name of its registered agent shall be The Corporation
Trust Company.
SECTION 1.02. OTHER OFFICES. The corporation may also have offices
at such other places both within and without the State of Delaware as the Board
of Directors may from time to time determine or the business of the corporation
may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01. PLACE OF MEETING. All meetings of stockholders for
the election of directors shall be held at such place, either within or without
the State of Delaware, as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting.
SECTION 2.02. ANNUAL MEETING.
(a) The annual meeting of stockholders shall be held for the
election of directors at such date and time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting.
(b) Nominations of persons for election to the Board of Directors
of the corporation and the proposal of business to be transacted by the
stockholders may be made at an annual meeting of stockholders (i) pursuant to
the corporation's notice with respect to such meeting, (ii) by or at the
direction of the Board of Directors or (iii) by any stockholder of the
corporation who was a stockholder of record at the time of giving of the notice
provided for in this section, who is entitled to vote at the meeting and who has
complied with the notice procedures set forth in this section.
(c) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (iii) of paragraph (b) of
this
-1-
Section 2.02, the stockholder must have given timely notice thereof in writing
to the Secretary of the corporation and such business must be a proper matter
for stockholder action under the General Corporation Law of the State of
Delaware. To be timely, a stockholder's notice shall be delivered to the
Secretary at the principal executive offices of the corporation not less than 60
days nor more than 90 days prior to the first anniversary of the date of the
corporation's annual meeting of stockholders held in the immediately preceding
year; provided, however, that in the event that no annual meeting was held in
the immediately preceding year or the date of the annual meeting is more than 30
days prior to or more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the 90th day
prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made. Such
stockholder's notice shall set forth (i) as to each person whom the stockholders
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); (ii)
as to any other business that the stockholder proposes to bring before the
meeting, a brief description of such business, the reasons for conducting such
business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (iii) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made (A) the name
and address of such stockholder, as they appear on the corporation's books, and
of such beneficial owner and (B) the class and number of shares of the
corporation which are owned beneficially and of record by such stockholder and
such beneficial owner.
(d) Only persons nominated in accordance with the procedures set
forth in this Section 2.02 shall be eligible to serve as directors and only such
business shall be conducted at an annual meeting of stockholders as shall have
been brought before the meeting in accordance with the procedures set forth in
this Section 2.02. The chairman of the meeting shall determine whether a
nomination or any business proposed to be transacted by the stockholders has
been properly brought before the meeting and, if any proposed nomination or
business has not been properly brought before the meeting, the chairman shall
declare that such proposed business or nomination shall not be presented for
stockholder action at the meeting.
(e) For purposes of this Section 2.02, "public announcement" shall
mean disclosure in a press release reported by Dow Jones News Service,
Associated Press or a comparable national news service, or disclosure pursuant
to the corporation's notice with respect to the annual meeting of stockholders.
-2-
(f) Nothing in this Section 2.02 shall be deemed to affect any
rights of stockholders to request inclusion of proposals in the corporation's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
SECTION 2.03. VOTING LIST. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice, or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
SECTION 2.04. SPECIAL MEETING. Special meetings of the
stockholders, for any purpose or purposes prescribed in the notice of meeting,
unless otherwise prescribed by statute or by the Restated Certificate of
Incorporation, may be called by only the Board of Directors or the President and
shall be held at such place, on such date and at such time as they, he or she
shall fix.
SECTION 2.05. NOTICE OF MEETING. Written notice of the annual, and
each special meeting of stockholders, stating the time, place and purpose or
purposes thereof, shall be given to each stockholder entitled to vote thereat,
not less than 10 nor more than 60 days before the meeting.
SECTION 2.06. QUORUM. The holders of a majority of the stock issued
and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at any meeting of stockholders for the
transaction of business except as otherwise provided by statute or by the
Restated Certificate of Incorporation. Notwithstanding the other provisions of
the Restated Certificate of Incorporation or these by-laws, the holders of a
majority of the shares of capital stock entitled to vote thereat, present in
person or represented by proxy, whether or not a quorum is present, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. If
the adjournment is for more than 30 days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally notified.
SECTION 2.07. PROXIES AND VOTING. At any meeting of the
stockholders, every stockholder entitled to vote may vote in person or by proxy
-3-
authorized by an instrument in writing or by a transmission permitted by law
filed in accordance with the procedure established for the meeting. Any copy,
facsimile telecommunication or other reliable reproduction of the writing or
transmission created pursuant to this paragraph may be substituted or used in
lieu of the original writing or transmission for any and all purposes for which
the original writing or transmission could be used, provided that such copy,
facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission.
All voting, including on the election of directors but excepting
where otherwise required by law, may be by a voice vote; provided, however, that
upon demand therefore by a stockholder entitled to vote or by his or her proxy,
a stock vote shall be taken. Every stock vote shall be taken by ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
The corporation may, and to the extent required by law, shall, in advance of any
meeting of stockholders, appoint one or more inspectors to act at the meeting
and make a written report thereof. The corporation may designate one or more
persons as alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the person
presiding at the meeting may, and to the extent required by law, shall, appoint
one or more inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his ability. Every vote taken by ballots shall be counted by an
inspector or inspectors appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast,
and except as otherwise required by law, all other matters shall be determined
by a majority of the votes cast affirmatively or negatively.
SECTION 2.08. CONSENT OF STOCKHOLDERS. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken for or in
connection with any corporate action by any provision of the statutes, the
meeting and vote of stockholders may be dispensed with if all the stockholders
who would have been entitled to vote upon the action if such meeting were held
shall consent in writing to such corporate action being taken; or on the written
consent of the holders of stock having not less than the minimum percentage of
the vote required by statute for the proposed corporate action, and provided
that prompt notice must be given to all stockholders of the taking of corporate
action without a meeting and by less than unanimous written consent.
SECTION 2.09. VOTING OF STOCK OF CERTAIN HOLDERS. Shares standing
in the name of another corporation, domestic or foreign, may be voted by such
officer, agent or proxy as the by-laws of such corporation may prescribe, or in
the absence of such provision, as the Board of Directors of such corporation may
determine. Shares standing in the name of a deceased person may be voted by the
executor or
-4-
administrator of such deceased person, either in person or by proxy. Shares
standing in the name of a guardian, conservator or trustee may be voted by such
fiduciary, either in person or by proxy, but no such fiduciary shall be entitled
to vote shares held in such fiduciary capacity without a transfer of such shares
into the name of such fiduciary. Shares standing in the name of a receiver may
be voted by such receiver. A stockholder whose shares are pledged shall be
entitled to vote such shares, unless in the transfer by the pledgor on the books
of the corporation, he has expressly empowered the pledgee to vote thereon, in
which case only the pledgee, or his proxy, may represent the stock and vote
thereon.
SECTION 2.10. TREASURY STOCK. The corporation shall not vote,
directly or indirectly, shares of its own stock owned by it; and such shares
shall not be counted in determining the total number of outstanding shares.
SECTION 2.11. FIXING RECORD DATE. The Board of Directors may fix in
advance a date, which shall not be more than 60 days nor less than 10 days
preceding the date of any meeting of stockholders, nor more than 60 days
preceding the date for payment of any dividend or distribution, or the date for
the allotment of rights, or the date when any change, or conversion or exchange
of capital stock shall go into effect, or a date in connection with obtaining a
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend or distribution, or to receive
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, or to give such consent, and in
such case such stockholders and only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, any such meeting and any adjournment thereof, or to receive payment of such
dividend or distribution, or to receive such allotment of rights, or to exercise
such rights, or to give such consent, as the case may be, notwithstanding any
transfer of any stock on the books of the corporation after any such record date
fixed as aforesaid.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01. POWERS. The business and affairs of the corporation
shall be managed by its Board of Directors, which may exercise all such powers
of the corporation and do all such lawful acts and things as are not by statute
or by the Restated Certificate of Incorporation or by these by-laws directed or
required to be exercised or done by the stockholders.
SECTION 3.02. NUMBER, ELECTION AND TERM. The number of directors
which shall constitute the whole Board shall be not less than one. Such number
of directors shall be as specified in the corporation's Restated Certificate of
Incorporation, or, if not specified in the Restated Certificate of
Incorporation, such
-5-
number of directors shall from time to time be fixed and determined by the
directors and shall be set forth in the notice of any meeting of stockholders
held for the purpose of electing directors. The directors shall be elected at
the annual meeting of stockholders, except as provided in Section 3.03, and each
director elected shall hold office until his successor shall be elected and
shall qualify. Directors need not be residents of Delaware or stockholders of
the corporation.
SECTION 3.03. VACANCIES, ADDITIONAL DIRECTORS AND REMOVAL FROM
OFFICE. Unless otherwise provided in the Restated Certificate of Incorporation
or these by-laws, (a) if (i) any vacancy occurs in the Board of Directors caused
by death, resignation, retirement, disqualification or removal from office, or
otherwise, of any director elected by all of the stockholders having the right
to vote as a single class or (ii) any new directorship is created by an increase
in the authorized number of directors which shall be elected by all of the
stockholders having the right to vote as a single class, then a majority of the
directors then in office, even if less than a quorum, or a sole remaining
director, may choose a successor or fill the newly created directorship and any
director so chosen shall hold office until the next annual election and until
his successor shall be duly elected and shall qualify, unless sooner displaced
and (b) if (i) any vacancy occurs in the Board of Directors caused by death,
resignation, retirement, disqualification or removal from office, or otherwise,
of any director elected by the holders of any class or classes of stock or
series thereof entitled to elect such director pursuant to the Restated
Certificate of Incorporation or (ii) any new directorship is created by an
increase in the authorized number of directors which shall be elected by the
holders of any class or classes of stock or series thereof entitled to elect
such director pursuant to the Restated Certificate of Incorporation, then a
majority of the directors elected by such class or classes or series thereof
then in office, or a sole remaining director so elected, may choose a successor
or fill the newly created directorship and any director so chosen shall hold
office until the next annual election and until his successor shall be duly
elected and shall qualify, unless sooner displaced. Unless otherwise provided in
the corporation's Restated Certificate of Incorporation, any director may be
removed either for or without cause at any special meeting of stockholders duly
called and held for such purpose.
SECTION 3.04. REGULAR MEETING. A regular meeting of the Board of
Directors shall be held each year, without other notice than this by-law, at the
place of, and immediately following, the annual meeting of stockholders; and
other regular meetings of the Board of Directors shall be held each year, at
such time and place as the Board of Directors may provide, by resolution, either
within or without the State of Delaware, without other notice than such
resolution.
SECTION 3.05. SPECIAL MEETING. Special meetings of the Board of
Directors may be called by the Chairman of the Board or by the President and
shall be called by the Secretary on the written request of any two directors.
The Chairman or President so calling, or the directors so requesting, any such
meeting shall fix the time and any place, either within or without the State of
Delaware, as the place for holding such meeting.
-6-
SECTION 3.06. NOTICE OF SPECIAL MEETING. Written notice of special
meetings of the Board of Directors shall be given to each director at least 24
hours prior to the time of such meeting. Any director may waive notice of any
meeting. The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
purpose of objecting to the transaction of any business because the meeting is
not lawfully called or convened. Neither the business to be transacted at, nor
the purpose of, any special meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting, except that notice shall be
given of any proposed amendment to the by-laws if it is to be adopted at any
special meeting or with respect to any other matter where notice is required by
statute.
SECTION 3.07. QUORUM. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, and the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute, by the Restated Certificate
of Incorporation or by these by-laws. If a quorum shall not be present at any
meeting of the Board of Directors, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
SECTION 3.08. ACTION WITHOUT MEETING. Unless otherwise restricted
by the Restated Certificate of Incorporation or these by-laws, any action
required or permitted to be taken at any meeting of the Board of Directors, or
of any committee thereof as provided in Article IV of these by-laws, may be
taken without a meeting, if a written consent thereto is signed by all members
of the Board or of such committee, as the case may be, and such written consent
is filed with the minutes of proceedings of the Board or committee.
SECTION 3.09. COMPENSATION. Directors, as such, shall not be
entitled to any stated salary for their services unless voted by the
stockholders or the Board of Directors; but by resolution of the Board of
Directors, a fixed sum and expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the Board of Directors or any
meeting of a committee of directors. No provision of these by-laws shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
ARTICLE IV
COMMITTEE OF DIRECTORS
SECTION 4.01. DESIGNATION, POWERS AND NAME. The Board of Directors
may, by resolution passed by a majority of the whole Board, designate one or
more committees, including, if they shall so determine, an Executive Committee,
each such committee to consist of two or more of the directors of the
corporation. The
-7-
committee shall have and may exercise such of the powers of the Board of
Directors in the management of the business and affairs of the corporation as
may be provided in such resolution. The committee may authorize the seal of the
corporation to be affixed to all papers which may require it. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
such committee. In the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names and such limitations of authority as
may be determined from time to time by resolution adopted by the Board of
Directors.
SECTION 4.02. MINUTES. Each committee of directors shall keep
regular minutes of its proceedings and report the same to the Board of Directors
when required.
SECTION 4.03. COMPENSATION. Members of special or standing
committees may be allowed compensation for attending committee meetings, if the
Board of Directors shall so determine.
ARTICLE V
NOTICE
SECTION 5.01. METHODS OF GIVING NOTICE. Whenever under the
provisions of the statutes, the Restated Certificate of Incorporation or these
by-laws, notice is required to be given to any director, member of any committee
or stockholder, such notice shall be in writing and delivered personally or
mailed to such director, member or stockholder; provided that in the case of a
director or a member of any committee such notice may be given orally or by
telephone or telegram. If mailed, notice to a director, member of a committee or
stockholder shall be deemed to be given when deposited in the United States mail
first class in a sealed envelope, with postage thereon prepaid, addressed, in
the case of a stockholder, to the stockholder at the stockholder's address as it
appears on the records of the corporation or, in the case of a director or a
member of a committee, to such person at his business address. If sent by
telegraph, notice to a director or member of a committee shall be deemed to be
given when the telegram, so addressed, is delivered to the telegraph company.
SECTION 5.02. WRITTEN WAIVER. Whenever any notice is required to be
given under the provisions of the statutes, the Restated Certificate of
Incorporation or these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
-8-
ARTICLE VI
OFFICERS
SECTION 6.01. OFFICERS. The officers of the corporation shall
consist of a President and a Secretary. A Chairman of the Board, a Vice Chairman
of the Board, one or more Vice Presidents (any one or more of which may be
designated Executive Vice President or Senior Vice President), and a Treasurer
may also be elected by the Board of Directors. The Board of Directors may
appoint such other officers and agents, including Assistant Vice Presidents,
Assistant Secretaries and Assistant Treasurers, as it shall deem necessary, who
shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined by the Board. Any two or more offices
may be held by the same person. The Chairman and Vice Chairman of the Board
shall be elected from among the directors. With the foregoing exceptions, none
of the other officers need be a director, and none of the officers need be a
stockholder of the corporation.
SECTION 6.02. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the Board of Directors at its first
regular meeting held after the annual meeting of stockholders or as soon
thereafter as conveniently possible. Each officer shall hold office until his
successor shall have been chosen and shall have qualified or until his death or
the effective date of his resignation or removal, or until he shall cease to be
a director in the case of the Chairman or the Vice Chairman.
SECTION 6.03. REMOVAL AND RESIGNATION. Any officer or agent elected
or appointed by the Board of Directors may be removed without cause by the
affirmative vote of a majority of the Board of Directors whenever, in its
judgment, the best interests of the corporation shall be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed. Any officer may resign at any time by giving written
notice to the corporation. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein, and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
SECTION 6.04. VACANCIES. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
SECTION 6.05. SALARIES. The salaries of all officers and agents of
the corporation shall be fixed by the Board of Directors or pursuant to its
direction; and no officer shall be prevented from receiving such salary by
reason of his also being a director.
SECTION 6.06. CHAIRMAN OF THE BOARD. The Chairman of the Board (if
one is elected by the Board) shall preside at all meetings of the Board of
Directors
-9-
or of the stockholders of the corporation. In the Chairman's absence, such
duties shall be attended to by the Vice Chairman of the Board (if one is elected
by the Board). The Chairman shall formulate and submit to the Board of Directors
or the Executive Committee matters of general policy for the corporation and
shall perform such other duties as usually appertain to the office or as may be
prescribed by the Board of Directors or the Executive Committee.
SECTION 6.07. VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the
Board (if one is elected by the Board) shall, in the absence of the Chairman of
the Board, perform the duties and exercise the powers of the Chairman of the
Board. The Vice Chairman shall perform such other duties as from time to time
may be prescribed by the Board of Directors or the Executive Committee or
assigned by the Chairman of the Board.
SECTION 6.08. PRESIDENT. The President shall be the chief executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control the business and affairs of
the corporation. In the absence of the Chairman of the Board and the Vice
Chairman of the Board (if elected by the Board), the President shall preside at
all meetings of the Board of Directors and of the stockholders. He may also
preside at any such meeting attended by the Chairman or Vice Chairman of the
Board if he is so designated by the Chairman, or in the Chairman's absence by
the Vice Chairman. He shall have the power to appoint and remove subordinate
officers, agents and employees, except those elected or appointed by the Board
of Directors. The President shall keep the Board of Directors and the Executive
Committee fully informed and shall consult them concerning the business of the
corporation. He may sign with the Secretary or any other officer of the
corporation thereunto authorized by the Board of Directors, certificates for
shares of the corporation and any deeds, bonds, mortgages, contracts, checks,
notes, drafts or other instruments which the Board of Directors has authorized
to be executed, except in cases where the signing and execution thereof has been
expressly delegated by these by-laws or by the Board of Directors to some other
officer or agent of the corporation, or shall be required by law to be otherwise
executed. He shall vote, or give a proxy to any other officer of the corporation
to vote, all shares of stock of any other corporation standing in the name of
the corporation and in general he shall perform all other duties normally
incident to the office of President and such other duties as may be prescribed
by the stockholders, the Board of Directors or the Executive Committee from time
to time.
SECTION 6.09. VICE PRESIDENTS. In the absence of the President, or
in the event of his inability or refusal to act, the Executive Vice President
(or in the event there shall be no Vice President designated Executive Vice
President, any Vice President designated by the Board) shall perform the duties
and exercise the powers of the President. Any Vice President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the corporation.
The Vice Presidents shall perform such other duties as from time to time may be
assigned to them by the President, the Board of Directors or the Executive
Committee.
-10-
SECTION 6.10. SECRETARY. The Secretary shall (a) keep the minutes
of the meetings of the stockholders, the Board of Directors and committees of
directors; (b) see that all notices are duly given in accordance with the
provisions of these by-laws and as required by law; (c) be custodian of the
corporate records and of the seal of the corporation, and see that the seal of
the corporation or a facsimile thereof is affixed to all certificates for shares
prior to the issue thereof and to all documents, the execution of which on
behalf of the corporation under its seal is duly authorized in accordance with
the provisions of these bylaws; (d) keep or cause to be kept a register of the
post office address of each stockholder which shall be furnished by such
stockholder; (e) be authorized to sign with the President or any other officer
of the corporation thereunto authorized by the Board of Directors, certificates
for shares of the corporation, the issue of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general, perform all duties
normally incident to the office of Secretary and such other duties as from time
to time may be assigned to him by the President, the Board of Directors or the
Executive Committee.
SECTION 6.11. TREASURER. If required by the Board of Directors, the
Treasurer (if one is elected by the Board) shall give a bond for the faithful
discharge of his duties in such sum and with such surety or sureties as the
Board of Directors shall determine. He shall (a) have charge and custody of and
be responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Section 7.03 of these by-laws; (b) prepare, or cause to
be prepared, for submission at each regular meeting of the Board of Directors,
at each annual meeting of the stockholders, and at such other times as may be
required by the Board of Directors, the President or the Executive Committee, a
statement of financial condition of the corporation in such detail as may be
required; and (c) in general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the President, the Board of Directors or the Executive Committee.
SECTION 6.12. ASSISTANT SECRETARY OR TREASURER. The Assistant
Secretaries and Assistant Treasurers shall, in general, perform such duties as
shall be assigned to them by the Secretary or the Treasurer, respectively, or by
the President, the Board of Directors or the Executive Committee. The Assistant
Secretaries and Assistant Treasurers shall, in the absence of the Secretary or
Treasurer, respectively, perform all functions and duties which such absent
officers may delegate, but such delegation shall not relieve the absent officer
from the responsibilities and liabilities of his office. The Assistant
Secretaries and Assistant Treasurers may sign, with the President or a Vice
President or the Chairman or Vice Chairman, certificates for shares of the
corporation, the issue of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers shall respectively, if required
by the Board of Directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the Board of Directors shall determine.
-11-
ARTICLE VII
CONTRACTS, CHECKS AND DEPOSITS
SECTION 7.01. CONTRACTS. Subject to the provisions of Section 6.01,
the Board of Directors may authorize any officer, officers, agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation, and such authority may be general or confined to
specific instances.
SECTION 7.02. CHECKS, ETC. All checks, demands, drafts or other
orders for the payment of money, notes or other evidences of indebtedness issued
in the name of the corporation, shall be signed by such officer or officers or
such agent or agents of the corporation, and in such manner, as shall be
determined by the Board of Directors.
SECTION 7.03. DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VIII
CERTIFICATES OF STOCK
SECTION 8.01. ISSUANCE. Each stockholder of this corporation shall
be entitled to a certificate or certificates showing the number of shares of
stock registered in his name on the books of the corporation. The certificates
shall be in such form as may be determined by the Board of Directors, shall be
issued in numerical order and shall be entered in the books of the corporation
as they are issued. They shall exhibit the holder's name and number of shares
and shall be signed by the President or a Vice President and by the Secretary or
an Assistant Secretary. If any certificate is countersigned (a) by a transfer
agent other than the corporation or any employee of the corporation, or (b) by a
registrar other than the corporation or any employee of the corporation, any
other signature on the certificate may be a facsimile. If the corporation shall
be authorized to issue more than one class of stock or more than one series of
any class, the designations, preferences and relative participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and rights shall
be set forth in full or summarized on the face or back of the certificate which
the corporation shall issue to represent such class of stock; provided that,
except as otherwise provided by statute, in lieu of the foregoing requirements
there may be set forth on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, a statement
that the corporation will furnish to each stockholder who so requests the
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and rights. All certificates
surrendered to the corporation for transfer shall be canceled and no new
-12-
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in the case of a
lost, stolen, destroyed or mutilated certificate a new one may be issued
therefor upon such terms and with such indemnity, if any, to the corporation as
the Board of Directors may prescribe. Certificates shall not be issued
representing fractional shares of stock.
SECTION 8.02. LOST CERTIFICATES. The Board of Directors may direct
a new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate or certificates alleged to have been lost,
stolen or destroyed, or both.
SECTION 8.03. TRANSFERS. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Transfers of shares shall be made only on the books
of the corporation by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney and filed with the Secretary of the
corporation or the Transfer Agent.
SECTION 8.04. REGISTERED STOCKHOLDERS. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of the State of Delaware.
ARTICLE IX
DIVIDENDS
SECTION 9.01. DECLARATION. Dividends upon the capital stock of the
corporation, subject to the provisions of the Restated Certificate of
Incorporation, if any, may be declared by the Board of Directors at any regular
or special meeting, pursuant to law. Dividends may be paid in cash, in property
or in shares of capital stock, subject to the provisions of the Restated
Certificate of Incorporation.
-13-
SECTION 9.02. RESERVE. Before payment of any dividend, there may be
set aside out of any funds of the corporation available for dividends such sum
or sums as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interest of the corporation, and the Directors may modify or
abolish any such reserve in the manner in which it was created.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. THIRD PARTY ACTIONS. The corporation shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 10.02. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite
-14-
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
SECTION 10.03. MANDATORY INDEMNIFICATION. To the extent that a
director, officer, employee or agent of the corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Sections 10.01 and 10.02, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
SECTION 10.04. DETERMINATION OF CONDUCT. The determination that a
director, officer, employee or agent has met the applicable standard of conduct
set forth in Sections 10.01 and 10.02 (unless indemnification is ordered by a
court) shall be made (a) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (b) if such quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (c) by the stockholders.
SECTION 10.05. PAYMENT OF EXPENSES IN ADVANCE. Expenses incurred in
defending a civil or criminal action, suit or proceeding shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in this Article X.
SECTION 10.06. INDEMNITY NOT EXCLUSIVE. The indemnification and
advancement of expenses provided by or granted pursuant to, the other sections
of this Article X shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
the Restated Certificate of Incorporation, any other by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
SECTION 10.07. DEFINITIONS. For purposes of this Article X:
(a) "the corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would have had
power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another
-15-
corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this Article X with respect
to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence
had continued;
(b) "other enterprises" shall include employee benefit
plans;
(c) "fines" shall include any excise taxes assessed
on a person with respect to any employee benefit plan;
(d) "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of
the corporation which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an
employee benefit plan, its participants or beneficiaries; and
(e) a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interest of the
corporation" as referred to in this Article X.
SECTION 10.08. SURVIVAL OF INDEMNIFICATION. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article X
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. SEAL. The corporate seal shall have inscribed
thereon the name of the corporation, and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or otherwise reproduced.
SECTION 11.02. BOOKS. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at the offices of the corporation or at such other place or places as
may be designated from time to time by the Board of Directors.
-16-
ARTICLE XII
AMENDMENT
These by-laws may be altered, amended or repealed by a majority of
the number of directors then constituting the Board of Directors at any regular
meeting of the Board of Directors without prior notice, or at any special
meeting of the Board of Directors if notice of such alteration, amendment or
repeal be contained in the notice of such special meeting.
-17-
LIFECELL CORPORATION
SECOND AMENDED AND RESTATED 1992 STOCK OPTION PLAN
SEPTEMBER 19, 1994
1. PURPOSE. This Second Amended and Restated 1992 Stock Option Plan
(this "Plan") of LifeCell Corporation, a Delaware corporation (the "Company"),
is adopted for the benefit of certain individuals who have substantial
responsibility for the Company's management and growth, and is intended to
advance the interests of the Company by providing these individuals with
additional incentive by increasing their proprietary interest in the success of
the Company and thereby encouraging them to remain in its employ or affiliation.
2. ADMINISTRATION. This Plan shall be administered by a committee to be
appointed by the Board of Directors of the Company (the "Committee"), which
Committee shall consist of not less than two members of the Board of Directors,
who for a period of at least one year prior to being appointed to the Committee
and at all times during service on the Committee shall not have been granted or
awarded equity securities of the Company pursuant to this Plan or any other plan
of the Company (other than pursuant to a plan of the Company that would not
cause such Committee member to lose his status as a disinterested person as
defined in Rule 16b-3(c)(2)(i) of the Securities Exchange Act of 1934, as
amended (the "Securities Exchange Act")). The Board of Directors of the Company
shall have the power from time to time to add or remove members of the
Committee, and to fill vacancies thereon arising by resignation, death, removal,
or otherwise. Meetings shall be held at such times and places as shall be
determined by the Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business, and the vote of a majority
of those members present at any meeting shall decide any question brought before
that meeting. No member of the Committee shall be liable for any act or omission
of any other member of the Committee or for any act or omission on his own part,
including but not limited to the exercise of any power or discretion given to
him under this Plan, except those resulting from his own gross negligence or
willful misconduct. All questions of interpretation and application of this
Plan, or as to options granted hereunder (the "Options"), shall be subject to
the determination, which shall be final and binding, of a majority of the whole
Committee. When appropriate, this Plan shall be administered in order to qualify
certain of the Options granted hereunder as "incentive stock options" described
in Section 422 of the Internal Revenue Code of 1986, as amended.
3. OPTION SHARES. The stock subject to the Options and other provisions
of this Plan shall be shares of the Company's Common Stock, $.001 par value (the
"Common Stock"). The total amount of Common Stock with respect to which Options
may be granted shall not exceed in the aggregate 530,254 shares, PROVIDED that
the class and aggregate number of shares which may be subject to the Options
granted hereunder shall be subject to adjustment in accordance with the
provisions of Paragraph 17 hereof. Such shares may be treasury shares or
authorized but unissued shares.
-1-
In the event that any outstanding Option for any reason shall expire or
terminate by reason of the death or severance of employment of the optionee, the
surrender of any such Option, or any other cause, the shares of Common Stock
allocable to the unexercised portion of such Option may again be subject to an
Option under this Plan.
4. AUTHORITY TO GRANT OPTIONS. The Committee may grant the following
options from time to time to such eligible individuals of the Company as it
shall from time to time determine:
(a) "Incentive Stock Options". The Committee may grant to an
eligible employee an Option, or Options, to buy a stated number of
shares of Common Stock under the terms and conditions of this Plan, so
that the Option will be an "incentive stock option" within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended.
(b) "Non-incentive Stock Options". The Committee may grant to an
eligible individual an Option, or Options, to buy a stated number of
shares of Common Stock under the terms and conditions of this Plan, even
though such Option or Options would not constitute an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended.
Each option granted shall be approved by the Committee. Subject only to
any applicable limitations set forth in this Plan, the number of shares of
Common Stock to be covered by an Option shall be as determined by the Committee.
5. ELIGIBILITY. The individuals who shall be eligible to receive
incentive stock options under this Plan shall be such full-time key employees,
including officers and directors if they are employees, of the Company, or of
any parent or subsidiary corporation, as the Committee shall determine from time
to time, PROVIDED, that no such employee who owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
corporation employing the employee or of its parent or subsidiary corporation
shall be eligible to receive an incentive stock option unless at the time that
it is granted the option price is at least 110% of the fair market value of
Common Stock at the time the Option is granted and the Option by its own terms
is not exercisable after the expiration of five years from the date such Option
is granted.
For the purposes of the preceding paragraph, an employee will be
considered as owning the stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust will be considered as being owned
proportionately by or for its shareholders, partners or beneficiaries. Except as
otherwise provided, for all purposes of this Plan the term "parent corporation"
shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if, on the date of grant of the Option in
question, each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock
-2-
in one of the other corporations in such chain; and the term "subsidiary
corporation" shall mean any corporation in an unbroken chain of corporations
beginning with the Company if, on the date of grant of the Option in question,
each of the corporations, other than the last corporation in the chain, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
The individuals who shall be eligible to receive non-incentive stock
options shall be such individuals as the Committee shall determine from time to
time.
No individual shall be eligible to receive an Option under this Plan
while the individual is a member of the Committee.
6. OPTION PRICE. The price at which shares may be purchased pursuant to
an Option, whether it is an incentive stock option or a non-incentive stock
option, shall be not less than the fair market value of the shares of Common
Stock on the date such Option is granted and the Committee in its discretion may
provide that the price at which shares may be so purchased shall be more than
such fair market value. In the case of any employee described in Paragraph 5 who
owns stock possessing more than ten percent of the total combined voting power
of all classes of stock of the corporation employing the employee or of its
parent or subsidiary corporation (described in Paragraph 5), the option price at
which shares may be so purchased pursuant to any Option which is an incentive
stock option granted hereunder shall be not less than 110% of the fair market
value of the Common Stock on the date such Option is granted.
7. DURATION OF OPTIONS. No Option which is an incentive stock option
shall be exercisable after the expiration of ten years from the date such Option
is granted; and the Committee in its discretion may provide that such Option
shall be exercisable throughout such ten-year period or during any lesser period
of time commencing on or after the date of grant of such Option and ending upon
or before the expiration of such ten-year period. In the case of any employee
who owns stock possessing more than ten percent of the total combined voting
power of all classes of stock of the corporation employing the employee or of
its parent or subsidiary corporation (described in Paragraph 5), no Option which
is an incentive stock option shall be exercisable after the expiration of five
years from the date such Option is granted. No Option which is a non-incentive
stock option shall be exercisable after the expiration of ten years from the
date such Option is granted; and the Committee in its discretion may provide
that such Option shall be exercisable throughout such ten-year period or during
any lesser period of time commencing on or after the date of grant of such
Option and ending upon or before the expiration of such ten-year period.
8. MAXIMUM VALUE OF STOCK SUBJECT TO OPTIONS WHICH ARE INCENTIVE STOCK
OPTIONS. Notwithstanding any other provisions of this Plan to the contrary, the
aggregate fair market value (determined as of the date the Option is granted) of
the stock with respect to which incentive stock options are exercisable for the
first time by the optionee in any calendar year (under this Plan and any other
incentive stock option plan(s) of the Company and any parent and subsidiary
corporation(s) thereof) shall not exceed $100,000.
-3-
9. AMOUNT EXERCISABLE. Each Option may be exercised, so long as it is
valid and outstanding, from time to time in part or as a whole, in such manner
and subject to such conditions as the Committee in its discretion may provide in
the option agreement. However, the Committee in its absolute discretion may
accelerate the time at which any outstanding Option may be exercised.
10. EXERCISE OF OPTIONS. Options shall be exercised by the delivery of
written notice to the Company setting forth the number of shares with respect to
which the Option is to be exercised, together with: (i) cash, certified check,
bank draft, or postal or express money order payable to the order of the Company
for an amount equal to the option price of such shares, (ii) Common Stock at the
fair market value on the date of exercise, or (iii) any other form of payment
which is acceptable to the Committee, and specifying the address to which the
certificates for such shares are to be mailed. As promptly as practicable after
receipt of such written notification and payment, the Company shall deliver to
the optionee certificates for the number of shares with respect to which such
Option has been so exercised, issued in the optionee's name; provided that such
delivery shall be deemed effected for all purposes when a stock transfer agent
of the Company shall have deposited such certificates in the United States mail,
addressed to the optionee, at the address specified pursuant to this Paragraph
10.
11. TAX WITHHOLDING. The Company shall be entitled to deduct from other
compensation payable to each employee any sums required by federal, state or
local tax law to be withheld with respect to the grant or exercise of an Option.
In the alternative, the Company may require the employee (or other individual
exercising the Option) to pay the sum directly to the Company. If the employee
(or other individual exercising the Option) is required to pay the sum directly,
payment in cash or by check of such sums for taxes shall be delivered within ten
days after the date of exercise. The Company shall have no obligation upon
exercise of any Option until payment has been received, unless withholding (or
offset against a cash payment) as of or prior to the date of exercise is
sufficient to cover all sums due with respect to that exercise. The Company
shall not be obligated to advise an employee of the existence of the tax or the
amount which the employer corporation will be required to withhold.
12. TRANSFERABILITY OF OPTIONS. Options shall not be transferable by the
optionee otherwise than by will or under the laws of descent and distribution.
13. TERMINATION OF EMPLOYMENT OR AFFILIATION OR DEATH OF OPTIONEE.
Except as may be otherwise expressly provided herein, Options shall terminate on
the earlier of the date of the expiration of the Option or one day less than
three months after the date of the severance, upon severance of the employment
or affiliation relationship between the Company and the optionee for any reason,
for or without cause, other than death. Whether authorized leave of absence, or
absence on military or government service, shall constitute severance of the
employment or affiliation relationship between the Company and the optionee
shall be determined by the Committee at the time thereof. In the event of the
death of the holder of an Option while in the employ or affiliation of the
Company and before the date of expiration of such Option, such Option shall
terminate on the earlier of such date of expiration or six months following the
date of such death. After the death of the optionee, his executors,
administrators
-4-
or any person or persons to whom his Option may be transferred by will or by the
laws of descent and distribution, shall have the right, at any time prior to
such termination, to exercise the Option, in whole (subject to the provisions of
Paragraph 8 hereof, but without regard to any limitations set forth in or
imposed pursuant to Paragraph 9 hereof) or in part. An employment or affiliation
relationship between the Company and the optionee shall be deemed to exist
during any period in which the optionee is employed by or affiliated with the
Company, by any parent or subsidiary corporation, by a corporation issuing or
assuming a common stock option in a transaction to which Section 424(a) of the
Internal Revenue Code of 1986, as amended, applies, or by a parent or subsidiary
corporation of such corporation issuing or assuming a stock option (and for this
purpose, the phrase "corporation issuing or assuming a stock option" shall be
substituted for the word "Company" in the definitions of parent and subsidiary
corporations specified in Paragraph 5 of this Plan, and the parent-subsidiary
relationship shall be determined at the time of the corporate action described
in Section 424(a)).
14. REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any shares under any Option if the issuance of such shares shall
constitute a violation by the optionee or the Company of any provisions of any
law or regulation of any governmental authority. Each Option granted under this
Plan shall be subject to the requirements that, if at any time the Board of
Directors of the Company or the Committee shall determine that the listing,
registration or qualification of the shares subject thereto upon any securities
exchange or under any state or federal law of the United States or of any other
country or governmental subdivision thereof, or the consent or approval of any
governmental regulatory body, or investment or other representations, are
necessary or desirable in connection with the issue or purchase of shares
subject thereto, no such Option may be exercised in whole or in part unless such
listing, registration, qualification, consent, approval or representations shall
have been effected or obtained free of any conditions not acceptable to the
Board of Directors. Any determination in this connection by the Committee shall
be final, binding and conclusive. In the event the shares issuable on exercise
of an Option are not registered under the Securities Act of 1933, as amended,
(the "Securities Act") the Company may imprint on the certificate for such
shares the following legend or any other legend which counsel for the Company
considered necessary or advisable to comply with the Securities Act:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws
of any state and may not be sold or transferred except upon such
registration or upon receipt by the Corporation of an opinion of counsel
satisfactory to the Corporation, in form and substance satisfactory to
the Corporation, that registration is not required for such sale or
transfer."
The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act (as now in effect or as hereafter
amended) and, in the event any shares are so registered, the Company may remove
any legend on certificates representing such shares. The Company shall not be
obligated to take any other affirmative action in order to cause the exercise of
an Option or the issuance of shares pursuant thereto to comply with any law or
regulation or any governmental authority.
-5-
15. NO RIGHTS AS STOCKHOLDER. No optionee shall have rights as a
stockholder with respect to shares covered by his Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 17 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date therefor is prior to the date of issuance of
such certificate.
16. EMPLOYMENT OR AFFILIATION OBLIGATION. The granting of any Option
shall not impose upon the Company any obligation to employ or affiliate with or
continue to employ or affiliate with any optionee; and the right of the Company
to terminate the employment or affiliation of any officer, employee or other
individual shall not be diminished or affected by reason of the fact that an
Option has been granted to him.
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of Common Stock outstanding, without
receiving compensation therefor in money, services or property, then (a) the
number, class and per share price of shares of stock subject to outstanding
Options hereunder shall be appropriately adjusted in such a manner as to entitle
an optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class or classes of shares as he would
have received had he exercised his Option in full immediately prior to the event
requiring the adjustment, disregarding any fractional shares; and (b) the number
and class of shares then reserved for issuance under this Plan shall be adjusted
by substituting for the total number and class of shares of stock then reserved
for the number and class or classes of shares of stock that would have been
received by the owner of an equal number of outstanding shares of Common Stock
as the result of the event requiring the adjustment, disregarding any fractional
shares.
If the Company merges or consolidates with another corporation, whether
or not the Company is a surviving corporation, or if the Company is liquidated
or sells or otherwise disposes of substantially all its assets while unexercised
Options remain outstanding under this Plan, or if any "person" (as that term is
used in Section 13(d) and 14(d)(2) of the Securities Exchange Act) is or becomes
the beneficial owner, directly or indirectly, of securities of the Company
representing greater than 50% of the combined voting power of the Company's then
outstanding securities, (i) subject to the provisions of clause (iii) below,
after the effective date of such merger, consolidation, liquidation, sale or
other disposition, or change in beneficial ownership, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of such Option,
to receive, in lieu of shares of Common Stock, the number and class
-6-
or classes of shares of such stock or other securities or property to which such
holder would have been entitled if, immediately prior to such merger,
consolidation, liquidation, sale or other disposition, or change in beneficial
ownership, such holder had been the holder of record of a number of shares of
Common Stock equal to the number of shares as to which such Option may be
exercised; (ii) the Board of Directors may waive any limitations set forth in or
imposed pursuant hereto so that all Options, from and after a date prior to the
effective date of such merger, consolidation, liquidation, sale or other
disposition, or change in beneficial ownership, as the case may be, specified by
the Board of Directors, shall be exercisable in full; and (iii) all outstanding
Options may be canceled by the Board of Directors as of the effective date of
any such merger, consolidation, liquidation, sale or other disposition or change
in beneficial ownership.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock then
subject to outstanding Options.
18. SUBSTITUTION OPTIONS. Options may be granted under this Plan from
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of the Company, or whose employer
is about to become a parent or subsidiary corporation, conditioned in the case
of an incentive stock option upon the employee becoming an employee as the
result of a merger or consolidation of the Company with another corporation, or
the acquisition by the Company of substantially all the assets of another
corporation, or the acquisition by the Company of at least 50% of the issued and
outstanding stock of another corporation as the result of which it becomes a
subsidiary of the Company. The terms and conditions of the substitute Options so
granted may vary from the terms and conditions set forth in this Plan to such
extent as the Board of Directors of the Company at the time of grant may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted, but with respect to stock
options which are incentive stock options, no such variation shall be such as to
affect the status of any such substitute option as an "incentive stock option"
under Section 422 of the Internal Revenue Code of 1986, as amended.
19. AMENDMENT OR TERMINATION OF PLAN. The Board of Directors may modify,
revise or terminate this Plan at any time and from time to time, PROVIDED that
without the further approval of the holders of at least a majority of the
outstanding shares of voting stock, or if the provisions of the corporate
charter, by-laws or applicable state law prescribe a greater degree of
stockholder approval for this action, without the degree of stockholder approval
thus required, the Board of Directors may not (a) increase the aggregate number
of shares which may be issued under Options granted pursuant to the provisions
of this Plan; (b) materially increase the benefits accruing to participants
under this Plan; (c) change the class of employees eligible to receive incentive
stock options; or (d) materially modify the requirements as to eligibility for
-7-
participation in this Plan, PROVIDED, FURTHER, that the Board shall have the
power to make such changes in this Plan and in the regulations and
administrative provisions hereunder or in any outstanding Option as in the
opinion of counsel for the Company may be necessary or appropriate from time to
time to enable any Option granted pursuant to this Plan to qualify as incentive
stock options under Section 422 of the Internal Revenue Code of 1986, as
amended, and the regulations which may be issued thereunder as in existence from
time to time. All Options granted under this Plan shall be subject to the terms
and provisions of this Plan and any amendment, modification or revision of this
Plan shall be deemed to amend, modify or revise all Options outstanding under
this Plan at the time of such amendment, modification or revision. In the event
this Plan is terminated by action of the Board of Directors, all Options
outstanding under this Plan may be terminated.
20. WRITTEN AGREEMENT. Each Option granted hereunder shall be embodied
in a written option agreement, which shall be subject to the terms and
conditions prescribed above, and shall be signed by the optionee and by the
appropriate officer of the Company for and in the name and on behalf of the
Company. Such an option agreement shall contain such other provisions as the
Committee in its discretion shall deem advisable.
21. INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. The
Company will, to the fullest extent permitted by law, indemnify, defend and hold
harmless any person who at any time is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative or investigative) in any way relating
to or arising out of this Plan or any Option or Options granted hereunder by
reason of the fact that such person is or was at any time a director of the
Company or a member of the Committee against judgments, fines, penalties,
settlements and reasonable expenses (including attorneys' fees) actually
incurred by such person in connection with such action, suit or proceeding. This
right of indemnification will inure to the benefit of the heirs, executors and
administrators of each such person and is in addition to all other rights to
which such person may be entitled by virtue of the by-laws of the Company or as
a matter of law, contract or otherwise.
22. EFFECTIVE DATE OF PLAN. This Plan shall become effective and shall
be deemed to have been adopted on January 17, 1992, if within one year of that
date it shall have been approved by the holders of at least a majority of the
outstanding shares of voting stock of the Company voting in person or by proxy
at a duly held stockholders' meeting, or if the provisions of the corporate
charter, by-laws or applicable state law prescribe a greater degree of
stockholder approval for this action, the approval by the holders of that
percentage, at a duly held meeting of stockholders. No Options shall be granted
pursuant to this Plan after January 16, 2002.
-8-
FIRST AMENDMENT
TO
LIFECELL CORPORATION
SECOND AMENDED AND RESTATED 1992 STOCK OPTION PLAN
ADOPTED BY THE BOARD OF DIRECTORS MARCH 15, 1996
AND
BY THE STOCKHOLDERS MAY 20, 1996
1. Paragraph 3 of the LifeCell Corporation Second Amended and Restated
1992 Stock Option Plan is hereby deleted in its entirety and replaced by the
following:
3. OPTION SHARES. The stock subject to the Options and other
provisions of this Plan shall be shares of the Company's Common Stock,
$.001 par value (the "Common Stock"). The total amount of Common Stock
with respect to which Options may be granted shall not exceed in the
aggregate 750,000, PROVIDED that the class and aggregate number of shares
which may be subject to the Options granted hereunder shall be subject
to adjustment in accordance with the provisions of Paragraph 17 hereof.
Such shares may be treasury shares or authorized but unissued shares.
In the event that any outstanding Option for any reason shall expire
or terminate by reason of the death or severance of employment of the
optionee, the surrender of any such Option, or any other cause, the shares
of Common Stock allocable to the unexercised portion of such Option may
again be subject to an Option under this Plan.
2. Except as expressly amended by this First Amendment, the LifeCell
Corporation Second Amended and Restated 1992 Stock Option Plan shall continue in
full force and effect in accordance with its terms.
LIFECELL CORPORATION
SECOND AMENDED AND RESTATED 1993
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
MARCH 15, 1996
1. PURPOSE.
This Second Amended and Restated 1993 Non-Employee Director Stock Option
Plan (this "Plan") of LifeCell Corporation, a Delaware corporation (the
"Company"), is adopted, subject to stockholder approval, for the benefit of the
directors of the Company who at the time of their service are not employees of
the Company or any of its subsidiaries ("Non-Employee Directors"), and is
intended to advance the interests of the Company by providing the Non-Employee
Directors with additional incentive to serve the Company by increasing their
proprietary interest in the success of the Company.
2. ADMINISTRATION.
This Plan shall be administered by a committee to be appointed by the
Board of Directors of the Company (the "Committee"), the members of which shall
consist of not less than two members of the Board of Directors. For the purposes
of this Plan, a majority of the members of the Committee shall constitute a
quorum for the transaction of business, and the vote of a majority of those
members present at any meeting shall decide any question brought before that
meeting. No member of the Committee shall be liable for any act or omission of
any other member of the Committee or for any act or omission on his own part,
including (without limitation) the exercise of any power or discretion given to
him under this Plan, except those resulting from his own gross negligence or
willful misconduct. All questions of interpretation and application of this
Plan, or as to options granted hereunder (the "Options"), shall be subject to
the determination, which shall be final and binding, of a majority of the whole
Committee. Notwithstanding the above, the selection of Non-Employee Directors to
whom Options are to be granted, the number of shares subject to any Option, the
exercise price of any Option and the term of any Option shall be as hereinafter
provided and the Committee shall have no discretion as to such matters.
3. OPTION SHARES.
The stock subject to the Options and other provisions of this Plan shall
be shares of the Company's Common Stock, $.001 par value per share (or such
other par value as may be designated by act of the Company's stockholders, the
"Common Stock"). The total amount of Common Stock with respect to which Options
may be granted shall not exceed 300,000 shares in the aggregate; PROVIDED, that
the class and aggregate number of shares which may be subject to the Options
granted hereunder shall be subject to
-1-
adjustment in accordance with the provisions of Section 12 of this Plan. Such
shares may be treasury shares or authorized but unissued shares.
If any outstanding Option for any reason shall expire or terminate by
reason of the death of the optionee or the fact that the optionee ceases to be a
director, the surrender of any such Option, or any other cause, the shares of
Common Stock allocable to the unexercised portion of such Option may again be
subject to an Option under this Plan.
4. GRANT OF OPTIONS.
(a) DIRECTORS ON THE EFFECTIVE DATE OF THIS PLAN.
(i) Subject to the provisions of Section 16 hereof, there shall
be granted to each person who is a Non-Employee Director upon the
effective date of this Plan an Option to purchase 10,000 shares of
Common Stock at a per share Option Price equal to the fair market value
(as defined in Subsection 4(c) below) of a share of Common Stock on
such date.
(ii) For so long as this Plan is in effect and shares are
available for the grant of Options hereunder, on June 1 of each year
beginning June 1, 1996, there shall be granted to each person who is a
Non-Employee Director on the effective date of this Plan and on such
June 1 an Option to purchase 5,000 shares of Common Stock at a per share
Option Price equal to the fair market value of a share of the Company's
Common Stock on such date (such number of shares being subject to the
adjustments provided in Section 12 of this Plan).
(iii) Notwithstanding Subsections 4(a)(i) and 4(a)(ii) above,
subject to the adjustments provided in Section 12 of this Plan, the
aggregate number of shares of Common Stock for which Options may be
granted under this Plan to a person who is Non-Employee Director upon
the effective date of this Plan shall not exceed an amount which when
added to all prior options or awards relating to the equity securities
of the Company granted to such Non-Employee Director during the lifetime
of his service as a director to the Company (whether under this Plan,
another plan of the Company or a plan of a predecessor of the Company)
equals 50,000 shares, including but not limited to options and awards
granted to and exercised by such Non-Employee Director.
(b) DIRECTORS ELECTED AFTER THE EFFECTIVE DATE OF THIS PLAN.
(i) Subject to the provisions of Section 16, for so long as this
Plan is in effect and shares are available for the grant of Options
hereunder, each person who shall become a Non-Employee Director after
the effective date of this Plan shall be granted, on the date of his
election, an Option to purchase 10,000 shares of Common Stock at a per
share Option Price
-2-
equal to the fair market value of a share of Common Stock on such date
(such number of shares being subject to the adjustments provided in
Section 12 of this Plan).
(ii) For so long as this Plan is in effect and shares are
available for the grant of Options hereunder, on June 1 of each year
beginning June 1, 1996 there shall be granted to each person who shall
become a Non-Employee Director after the effective date of this Plan and
is a Non-Employee Director on such June 1 an Option to purchase 5,000
shares of Common Stock at a per share Option Price equal to the fair
market value of a share of Common Stock on such date (such number of
shares being subject to the adjustments provided in Section 12 of this
Plan).
(iii) Notwithstanding Subsections 4(b)(i) and 4(b)(ii), subject
to the adjustments provided in Section 12 of this Plan, the aggregate
number of shares of Common Stock for which Options may be granted under
this Plan to a person who shall become a Non-Employee Director after the
effective date of this Plan shall not exceed an amount which when added
to all prior options or awards relating to equity securities of the
Company granted to such Non-Employee Director during the lifetime of his
service as a director to the Company (whether under this Plan, another
plan of the Company or a plan of a predecessor to the Company) equals
50,000 shares, including but not limited to options or awards granted to
and exercised by such Non-Employee Director.
(c) FAIR MARKET VALUE. For purposes of this Section 4, the "fair market
value" of a share of Common Stock as of any particular date shall mean (i) if
the Common Stock is listed or admitted to trading on any securities exchange or
on the National Association of Securities Dealers (the "NASD") Automated
Quotation System ("Nasdaq") National Market, the closing price on such day on
the principal securities exchange or on the Nasdaq National Market on which the
Common Stock is traded or quoted, or if such day is not a trading day for such
securities exchange or the Nasdaq National Market, the closing price on the
first preceding day that was a trading day, (ii) if the Common Stock is not then
listed or admitted to trading on any securities exchange or on the Nasdaq
National Market, the closing bid price on such day as reported by the NASD, or
if no such price is reported by the NASD for such day, the closing bid price as
reported by the NASD on the first preceding day for which such price is
available, and (iii) if the Common Stock is not then listed or admitted to
trading on any securities exchange or on the Nasdaq National Market and no such
closing bid price is reported by the NASD, as determined by another reputable
quotation source selected by the Committee in good faith.
-3-
5. DURATION OF OPTIONS.
Each Option granted under this Plan shall be exercisable for a term of
nine years from the date such Option first becomes exercisable pursuant to
Section 6 hereof, subject to earlier termination as provided in Section 9 of
this Plan.
6. AMOUNT EXERCISABLE.
Each Option granted under this Plan may be exercised in whole or in part
at any time commencing one year after the grant thereof.
7. EXERCISE OF OPTIONS.
An optionee may exercise his Option by delivering to the Company a
written notice stating (a) that such optionee wishes to exercise such Option on
the date such notice is so delivered, (b) the number of shares of stock with
respect to which such Option is to be exercised and (c) the address to which the
certificate representing such shares of stock should be mailed. To be effective,
such written notice shall be accompanied by payment of the Option Price of each
of such shares of stock. Each such payment shall be made by cash, cashier's
check or bank draft drawn on a national banking association or postal or express
money order, payable to the order of the Company in United States dollars.
As promptly as practicable after the receipt by the Company of (a) such
written notice from the optionee and (b) payment, in the form required by the
foregoing provisions of this Section 7, of the Option Price of the shares of
stock with respect to which such Option is to be exercised, a certificate
representing the number of shares of stock with respect to which such Option has
been so exercised registered in the name of such optionee, shall be delivered to
such optionee, provided that such delivery shall be considered to have been made
when such certificate shall have been mailed, postage prepaid, to such optionee
at the address specified for such purpose in such written notice from the
optionee to the Company.
8. TRANSFERABILITY OF OPTIONS.
Options shall not be transferable by the optionee otherwise than by will
or under the laws of descent and distribution.
9. TERMINATION.
Except as may be otherwise expressly provided in this Plan, each Option,
to the extent it shall not have been exercised previously, shall terminate on
the earlier of the following:
-4-
(a) On the last day of the three-month period commencing on the
date on which the optionee ceases to be a member of the Company's Board
of Directors, for any reason other than the death or permanent
disability of the optionee, during which period the optionee shall be
entitled to exercise all Options held by the optionee on the date on
which the optionee ceased to be a member of the Company's Board of
Directors which could have been exercised on such date;
(b) On the last day of the six-month period commencing on the
date of the optionee's death while serving as a member of the Company's
Board of Directors, during which period the executor or administrator of
the optionee's estate or the person or persons to whom the optionee's
Option shall have been transferred by will or the laws of descent or
distribution, shall be entitled to exercise all Options in respect of
the number of shares that the optionee would have been entitled to
purchase had the optionee exercised such Options on the date of his
death; or
(c) Ten years after the date of grant of such Option.
10. REQUIREMENTS OF LAW.
The Company shall not be required to sell or issue any shares under any
Option if the issuance of such shares shall constitute a violation by the
optionee or the Company of any provisions of any law or regulation of any
governmental authority. Each Option granted under this Plan shall be subject to
the requirements that, if at any time the Board of Directors of the Company or
the Committee shall determine that the listing, registration or qualification of
the shares subject thereto upon any securities exchange or under any state or
federal law of the United States or of any other country or governmental
subdivision thereof, or the consent or approval of any governmental regulatory
body, or investment or other representations, are necessary or desirable in
connection with the issue or purchase of shares subject thereto, no such Option
may be exercised in whole or in part unless such listing, registration,
qualification, consent, approval or representation shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors. Any
determination in this connection by the Committee shall be final, binding and
conclusive. If the shares issuable on exercise of an Option are not registered
under the Securities Act of 1933, as amended (the "Securities Act"), the Company
may imprint on the certificate for such shares the following legend or any other
legend which counsel for the Company considers necessary or advisable to comply
with the Securities Act:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION, IN FORM AND SUBSTANCE SATISFACTORY TO
THE
-5-
CORPORATION, THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR
TRANSFER.
The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act (as now in effect or as hereafter
amended) and, if any shares are so registered, the Company may remove any legend
on certificates representing such shares. The Company shall not be obligated to
take any other affirmative action to cause the exercise of an Option or the
issuance of shares pursuant thereto to comply with any law or regulation of any
governmental authority.
11. NO RIGHTS AS STOCKHOLDER.
No optionee shall have rights as a stockholder with respect to shares
covered by his Option until the date of issuance of a stock certificate for such
shares; and, except as otherwise provided in Section 12 hereof, no adjustment
for dividends, or otherwise, shall be made if the record date therefor is prior
to the date of issuance of such certificate.
12. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
The existence of outstanding Options shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend or other increase or
reduction of the number of shares of Common Stock outstanding, without receiving
compensation therefor in money, services or property, then (a) the number, class
and per share price of shares of stock subject to outstanding Options hereunder
shall be appropriately adjusted in such a manner as to entitle an optionee to
receive upon exercise of an Option, for the same aggregate cash consideration,
the same total number and class or classes of shares as he would have received
had he exercised his Option in full immediately prior to the event requiring the
adjustment; and (b) the number and class of shares then reserved for issuance
under this Plan and the number of shares to be subject to the grants to be made
pursuant to Subsections 4(a)(ii), 4(b)(i) and 4(b)(ii) shall be adjusted by
substituting for the total number and class of shares of stock then reserved or
subject to grant the number and class or classes of shares of stock that would
have been received by the owner of an equal number of outstanding shares of
Common Stock as the result of the event requiring the adjustment, disregarding
any fractional shares.
-6-
If the Company merges or consolidates with another corporation, whether
or not the Company is a surviving corporation, or if the Company is liquidated
or sells or otherwise disposes of substantially all its assets while unexercised
Options remain outstanding under this Plan, or if any "person" (as that term is
used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Securities Exchange Act")) is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing greater than
50% of the combined voting power of the Company's then outstanding securities,
after the effective date of such merger, consolidation, liquidation, sale or
other disposition, as the case may be, each holder of an outstanding Option
shall be entitled, upon exercise of such Option, to receive, in lieu of shares
of Common Stock, the number and class or classes of shares of such stock or
other securities or property to which such holder would have been entitled if,
immediately prior to such merger, consolidation, liquidation, sale or other
disposition, such holder had been the holder of record of a number of shares of
Common Stock equal to the number of shares as to which such Option may be
exercised.
Except as otherwise expressly provided in this Plan, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of shares of
Common Stock then subject to outstanding Options.
13. AMENDMENT OR TERMINATION OF PLAN.
The Board of Directors may modify, revise or terminate this Plan at any
time and from time to time; PROVIDED, HOWEVER, that without the further approval
of the holders of at least a majority of the outstanding shares of voting stock,
or if the provisions of the corporate charter, bylaws or applicable state law
prescribes a greater degree of stockholder approval for this action, without the
degree of stockholder approval thus required, the Board of Directors may not (a)
materially increase the benefits accruing to participants under this Plan; (b)
materially increase the number of shares of Common Stock which may be issued
under this Plan; or (c) materially modify the requirements as to eligibility for
participation in this Plan, unless, in each such case, the Board of Directors of
the Company shall have obtained an opinion of legal counsel to the effect that
stockholder approval of the amendment is not required (x) by law, (y) by the
rules and regulations of, or any agreement with, the National Association of
Securities Dealers, Inc. or (z) to make available to the optionee with respect
to any option granted under this Plan, the benefits of Rule 16b-3 of the Rules
and Regulations under the Securities Exchange Act, or any similar or successor
rule. In addition, this Plan may not be amended more than once every six months
with respect to the plan provisions referred to in Rule 16b-3(c)(2)(ii)(A) of
the Rules and Regulations under the Securities Exchange Act other than to
comport with changes in the Internal Revenue Code of 1986, as amended, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder. All Options granted under this Plan shall be subject to the terms
and provisions of this Plan and any amendment,
-7-
modification or revision of this Plan shall be deemed to amend, modify or revise
all Options outstanding under this Plan at the time of such amendment,
modification or revision. If this Plan is terminated by action of the Board of
Directors, all outstanding Options may be terminated.
14. WRITTEN AGREEMENT.
Each Option granted hereunder shall be embodied in a written option
agreement, which shall be subject to the terms and conditions prescribed above,
and shall be signed by the optionee and by the appropriate officer of the
Company for and in the name and on behalf of the Company. Such an option
agreement shall contain such other provisions as the Committee in its discretion
shall deem advisable.
15. INDEMNIFICATION OF COMMITTEE AND BOARD OF DIRECTORS.
The Company shall, to the fullest extent permitted by law, indemnify,
defend and hold harmless any person who at any time is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative or investigative) in any way
relating to or arising out of this Plan or any Option or Options granted
hereunder by reason of the fact that such person is or was at any time a
director of the Company or a member of the Committee against judgments, fines,
penalties, settlements and reasonable expenses (including attorneys' fees)
actually incurred by such person in connection with such action, suit or
proceeding. This right of indemnification shall inure to the benefit of the
heirs, executors and administrators of each such person and is in addition to
all other rights to which such person may be entitled by virtue of the by-laws
of the Company or as a matter of law, contract or otherwise.
16. EFFECTIVE DATE OF PLAN.
This Plan restates and integrates, and also amends, the LifeCell
Corporation 1993 Non-Employee Director Stock Option Plan originally adopted
effective July 22, 1993, as amended.
This Plan shall become effective, subject to stockholder approval, on
March 15, 1996. This Plan, and all Options granted under this Plan on or after
March 15, 1996, and prior to stockholder approval, shall be void and of no
further force and effect unless this Plan shall have been approved by the
requisite vote of the stockholders entitled to vote at a meeting of the
stockholders of the Company called for such purpose prior to March 15, 1997.
No Option shall be granted pursuant to this Plan on or after July 22,
2003.
-8-
EXHIBIT 11.1
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
The following reflects the information used in calculating the number of
shares in the computation of net loss per share for each of the periods set
forth in the Statements of Operations.
2ND QUARTER ENDED JUNE 30, 1996
WEIGHTED AVERAGE SHARES OUTSTANDING:
1-Apr-96 4,403,shares X 30days = 132,109,740
1-May-96 4,403,shares X 31days = 136,513,398
1-Jun-96 4,403,shares X 30days = 132,109,740
---- -----------
91 400,732,878 4,403,658
==== =========== ==========
NET LOSS ($908,651)
DIVIDEND ($105,800.00)
AMORTIZATION OF INCREASING
DIVIDEND ($40,881)
ACCRETION OF SERIES A COSTS
($1,055,332.00)
EPS $ (0.24)
YEAR TO DATE ENDED JUNE 30, 1996
WEIGHTED AVERAGE SHARES OUTSTANDING:
35065 4,403,shares X 31days = 136,513,398
35096 4,403,shares X 29days = 127,706,082
35125 4,403,shares X 31days = 136,513,398
35156 4,403,shares X 30days = 132,109,740
35186 4,403,shares X 31days = 136,513,398
35217 4,403,shares X 30days = 132,109,740
----- -----------
182 801,465,756 4,403,658
===== =========== ===========
NET LOSS (1,857,755)
DIVIDEND (211,600.00)
AMORTIZATION OF INCREASING
DIVIDEND (81,762.00)
ACCRETION OF SERIES A COSTS 0.00
(2,151,117.00)
EPS $ (0.49)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM
[_________] AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 817,004
<SECURITIES> 0
<RECEIVABLES> 328,402
<ALLOWANCES> 0
<INVENTORY> 675,166
<CURRENT-ASSETS> 2,046,605
<PP&E> 475,594
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,822,511
<CURRENT-LIABILITIES> 1,066,454
<BONDS> 0
0
5,626,633
<COMMON> 4,404
<OTHER-SE> (5,374,980)
<TOTAL-LIABILITY-AND-EQUITY> 2,822,511
<SALES> 429,065
<TOTAL-REVENUES> 677,520
<CGS> 272,401
<TOTAL-COSTS> 1,599,434
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (908,651)
<INCOME-TAX> 0
<INCOME-CONTINUING> (908,651)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (908,651)
<EPS-PRIMARY> (0.24)
<EPS-DILUTED> 0
</TABLE>
