SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
LIFECELL CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies: N/A
2. Aggregate number of securities to which transaction applies: N/A
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
4. Proposed maximum aggregate value of transaction: N/A
5. Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid: N/A
2. Form, Schedule or Registration Statement No.: N/A
3. Filing Party: N/A
4. Date Filed: N/A
<PAGE>
LIFECELL CORPORATION
3606 Research Forest Drive
The Woodlands, Texas 77381
281/367-5368
April 30, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
LifeCell Corporation to be held at 1:00 p.m., C.D.T., on Thursday, June 19,
1997, at Houston Advanced Research Center, 4800 Research Forest Drive, The
Woodlands, Texas 77381.
This year you will be asked to consider two proposals. The proposals
concern the election of directors and the approval of an amended and restated
employee stock option plan. These matters are explained more fully in the
attached proxy statement, which you are encouraged to read.
The Board of Directors recommends that you approve the proposals and urges
you to return your signed proxy card at your earliest convenience, whether or
not you plan to attend the annual meeting.
Thank you for your cooperation.
Sincerely,
Paul M. Frison
Chairman of the Board
<PAGE>
LIFECELL CORPORATION
3606 Research Forest Drive
The Woodlands, Texas 77381
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 19, 1997
Notice is hereby given that the Annual Meeting of the Stockholders of
LifeCell Corporation, a Delaware corporation (the "Company"), will be held on
Thursday, June 19, 1997 at 1:00 p.m. at Houston Advanced Research Center, 4800
Research Forest Drive, The Woodlands, Texas 77381 for the following purposes:
(l) To elect seven directors of the Company to hold office until the
next Annual Meeting of Stockholders or until their respective successors
are duly elected and qualified;
(2) To consider and vote on a proposal to approve the LifeCell
Corporation Amended and Restated 1992 Stock Option Plan pursuant to which
the Company's Second Amended and Restated 1992 Stock Option Plan, as
amended, would be amended to (i) increase the aggregate number of shares
of Common Stock for which options may be granted under the plan from
1,000,000 to 1,500,000 shares and (ii) amend certain provisions of the
plan to bring the plan into compliance with recently amended federal
securities and tax laws; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The holders of record of shares of Common Stock and Series B Preferred
Stock of the Company at the close of business on April 22, 1997 will be entitled
to vote at the meeting.
By Order of the Board of Directors,
J. Donald Payne
Secretary
April 30, 1997
<PAGE>
LIFECELL CORPORATION
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 19, 1997
This Proxy Statement is furnished to the stockholders of LifeCell
Corporation (the "Company"), 3606 Research Forest Drive, The Woodlands, Texas
77381 (Tel. No. 281/367-5368), in connection with the solicitation by the Board
of Directors of the Company of proxies to be used at the Annual Meeting of
Stockholders to be held on Thursday, June 19, 1997, at 1:00 p.m. at Houston
Advanced Research Center, 4800 Research Forest Drive, The Woodlands, Texas 77381
or any adjournment thereof.
Proxies in the form enclosed, properly executed by stockholders and
received in time for the meeting, will be voted as specified therein. If a
stockholder does not specify otherwise, the shares represented by his or her
proxy will be voted for the director nominees listed therein and for the
approval of the Amended and Restated 1992 Stock Option Plan. The giving of a
proxy does not preclude the right to vote in person should the person giving the
proxy so desire, and the proxy may be revoked at any time before it is exercised
by written notice delivered to the Company at or prior to the meeting. This
Proxy Statement and accompanying form of proxy are to be mailed on or about
April 30, 1997, to stockholders of record on April 22, 1997 (the "Record Date").
At the close of business on the Record Date, there were outstanding and
entitled to vote 6,615,457 shares of Common Stock, par value $.001 per share
(the "Common Stock"), and 120,420 shares of Series B Preferred Stock, par value
$.001 per share (the "Series B Preferred Stock"). Only the holders of record on
Record Date are entitled to vote at the meeting.
The holders of record of Common Stock on the Record Date will be entitled to
one vote per share on each matter presented to the holders of Common Stock at
the meeting. The holders of record of Series B Preferred Stock on the Record
Date will be entitled to one vote per share for each share of Common Stock into
which such share of Series B Preferred Stock is convertible on the Record Date
on each matter presented to the holders of Series B Preferred Stock at the
meeting (or approximately 32.26 votes per share of Series B Preferred Stock).
The presence at the meeting, in person or by proxy, of the holders of a majority
of the total outstanding shares of Common Stock and Series B Preferred Stock is
necessary to constitute a quorum for the transaction of business at the meeting.
The holders of Series B Preferred Stock, voting as a separate class, are
entitled to elect two of the seven director nominees.
<PAGE>
MATTERS TO COME BEFORE THE MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
At the meeting, seven directors constituting the entire Board of Directors
are to be elected. The holders of Common Stock and Series B Preferred Stock,
voting together as a class, are entitled to elect five of the seven nominees for
election to the Board of Directors. The holders of Series B Preferred Stock,
voting as a separate class, are entitled to elect two of the seven nominees. All
directors of the Company hold office until the next annual meeting of
stockholders or until their respective successors are duly elected and qualified
or their earlier resignation or removal.
It is the intention of the persons named in the proxies for the holders of
Common Stock and Series B Preferred Stock to vote the proxies for the election
of the nominees named below, unless otherwise specified in any particular proxy.
The management of the Company does not contemplate that any of the nominees will
become unavailable for any reason, but if that should occur before the meeting,
proxies will be voted for another nominee, or other nominees, to be selected by
(i) the Board of Directors in the case of the nominees to be elected by the
holders of Common Stock and Series B Preferred Stock, voting together as a
class, and (ii) the holders of a majority of the shares of Series B Preferred
Stock in the case of the nominees to be elected by the holders of Series B
Preferred Stock, voting as a separate class. In accordance with the Company's
by-laws and Delaware law, a stockholder entitled to vote for the election of
directors may withhold authority to vote for certain nominees for directors or
may withhold authority to vote for all nominees for directors. The director
nominees receiving a plurality of the votes of the holders of shares of Common
Stock and Series B Preferred Stock, voting together as a class, or the Series B
Preferred Stock, voting as a separate class, as the case may be, present in
person or by proxy at the meeting and entitled to vote on the election of
directors will be elected directors. Abstentions and broker non-votes will not
be treated as a vote for or against any particular director nominee and will not
affect the outcome of the election.
COMMON STOCK AND SERIES B PREFERRED STOCK
The persons listed below have been nominated for election to fill the five
director positions to be elected by the holders of the Common Stock and Series B
Preferred Stock, voting together as a class.
DIRECTOR
NOMINEE AGE POSITION WITH THE COMPANY SINCE
------- --- ------------------------- --------
Paul M. Frison 60 Chairman of the Board, President, 1986
Chief Executive Officer
and Director
Stephen A. Livesey, M.D., Ph.D. 44 Executive Vice President, 1993
Chief Scientific Officer
and Director
Michael E. Cahr 57 Director 1991
James G. Foster 51 Director 1995
David A. Thompson 55 -- --
SERIES B PREFERRED STOCK
Pursuant to the Company's Restated Certificate of Incorporation, as
amended, the holders of Series B Preferred Stock, voting together as a separate
class, are entitled to elect three members of the Board of Directors. Pursuant
to a voting agreement among the Company, the holders of Series B Preferred Stock
and a principal stockholder of the Company, the holders of Series B Preferred
Stock agreed to vote their shares of Series B Preferred Stock for the persons
designated by the holders of a majority of the shares of Series B Preferred
Stock to be submitted as nominees for election to the Board of Directors. The
holders of a majority of the outstanding shares of Series B Preferred Stock have
designated only the two persons listed below as nominees for election to the
Board of Directors by the holders of Series B Preferred Stock, voting as a
separate class, and have not designated a third director nominee at this time.
2
<PAGE>
NOMINEE AGE POSITION WITH THE COMPANY DIRECTOR SINCE
------- --- ------------------------- --------------
Lori G. Koffman 38 Director 1996
K. Flynn McDonald 44 Director 1996
INFORMATION REGARDING NOMINEES AND DIRECTORS
BACKGROUND OF NOMINEES FOR DIRECTOR
PAUL M. FRISON. Mr. Frison has served as Chairman of the Board, President
and Chief Executive Officer of LifeCell since May, 1986. His background includes
over 30 years of experience in the health care industry. He spent 13 years with
American Hospital Supply Corporation, where he was responsible for all corporate
activities in Western Europe and Latin America. From 1975 to 1984, he was
president, chief operating officer and a director of LifeMark Corporation, a
Houston-based hospital management corporation. He joined LifeMark in September
1975 and remained until its merger with American Medical International in 1984.
Prior to joining LifeCell in 1986, Mr. Frison was chairman of the board,
president and chief executive officer of ComputerCraft, Inc. Mr. Frison received
his bachelor's degree in 1958 from Occidental College in Los Angeles.
STEPHEN A. LIVESEY, M.D., PH.D. Dr. Livesey has served as Executive Vice
President, Chief Scientific Officer and as a director of the Company since March
1993. He served as Executive Vice President, Scientific Development of the
Company from June 1991 until March 1993. He is also a co-developer of the
Company's initial technology and was involved in the formation of the Company
and the licensing of such technology to the Company from The University of Texas
Health Science Center in Houston. Dr. Livesey served as a consultant to the
Company from its inception until June 1991, when he became a full-time employee.
He holds an adjunct instructorship position at Baylor College of Medicine,
Houston, Texas. Dr. Livesey received his medical degree from the University of
Melbourne, Australia in 1977 and a Ph.D. in biological chemistry in 1985 from
the University of Melbourne, Australia.
MICHAEL E. CAHR. Mr. Cahr has been a director of the Company since July
1991. Mr. Cahr has been the president and chief executive officer of Allscrips
Pharmaceuticals, Inc., a pharmaceutical distributor, since June 1994. From 1987
to June 1994, he was the venture group manager in the Venture Capital Division
of the Investment Department of Allstate Insurance Company, a principal
stockholder of the Company. Mr. Cahr is a director of Optek Technologies, Inc.,
an optoelectronic company, and Triton Group, Ltd., a diversified holding
company.
JAMES G. FOSTER. Mr. Foster has been a director of the Company since March
1995. Mr. Foster has been vice president and general manager of Medtronic Heart
Valves, a division of Medtronic, Inc. ("Medtronic"), since December 1994. From
February 1984 to December 1994, Mr. Foster held various officer positions with
Medtronic. Mr. Foster was named to the Board of Directors pursuant to
Medtronic's right under its investment agreement with LifeCell to designate one
member of the Company's Board of Directors.
LORI G. KOFFMAN. Ms. Koffman was elected a director of the Company in
November 1996. Ms. Koffman is a managing director of CIBC Wood Gundy Ventures,
Inc., the merchant banking arm of the Canadian Imperial Bank of Commerce, where
she has been employed since April 1995. From August 1984 to December 1994, Ms.
Koffman was employed at Lehman Brothers, most recently as a senior vice
president in the Merchant Banking Group. Ms. Koffman is a director of R.P.
Scherer Corporation, a pharmaceutical company, and Sinclair Montrose Healthcare
plc, a health care services and personnel company in the United Kingdom. Ms.
Koffman was named to the Board of Directors pursuant to the right of the holders
of the Series B Preferred Stock under the terms of the Company's Restated
Certificate of Incorporation, as amended, to elect up to three members of the
Board of Directors.
K. FLYNN MCDONALD. Ms. McDonald was elected a director of the Company in
November 1996. Ms. McDonald is vice president of Vector Fund Management, L.P.,
the general partner of the Vector Later-Stage Equity
3
<PAGE>
Fund, L.P., where she has been employed since November 1995. From December 1993
through October 1995, she was a vice president of Technology Funding, investing
in both the technology and health care sectors. From 1986 through 1993, Ms.
McDonald was employed at Raychem Corporation where her last position was vice
president Raychem Ventures and controller/director of business development,
technology sector. Ms. McDonald is a director of MaterniCare, Inc., an
obstetrics and gynecology physician practice management company, and Pilot
Network Services, Inc., a provider of security services to the Internet. Ms.
McDonald was named to the Board of Directors pursuant to the right of the
holders of the Series B Preferred Stock under the terms of the Company's
Restated Certificate of Incorporation, as amended, to elect up to three members
of the Board of Directors.
DAVID A. THOMPSON. Mr. Thompson has been Chief Executive Officer of
Strategic Improvement Processes, a private consulting firm, since June 1995.
From 1964 through June 1995, Mr. Thompson was employed by Abbott Laboratories, a
healthcare company ("Abbott"), where he served in various capacities, including
Senior Vice President, Diagnostic Operations, President, Diagnostic Division,
Vice President, Human Resources and Vice President, Corporate Materials
Management. Mr. Thompson is a director of HYCOR Biomedical, Inc., a medical
diagnostic company, NABI, a biopharmaceutical company, and NeoPath, Inc., an
automated medical images company.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors has established an Audit Committee, a Compensation
Committee and a Stock Option Committee. The Board of Directors has not
established a nominating committee. During the fiscal year ended December 31,
1996, the Board of Directors met seven times, the Audit Committee met once, the
Compensation Committee met two times and the Stock Option Committee did not
meet. No director attended less than 75% of the combined number of Board
meetings and meetings of committees of which he or she is a member.
AUDIT COMMITTEE. Prior to November 1996, the Audit Committee comprised Dr.
P. William Curreri, Dr. Christopher C. Kraft, Jr. and Mr. Thomas G. Ricks, all
of whom resigned from the Board in November 1996 in connection with the private
placement offering of the Company's Series B Preferred Stock. From November 1996
to the present, the Audit Committee comprises Mr. Cahr, Ms. Koffman and Ms.
McDonald. The Audit Committee recommends the independent public accountants
appointed by the Board of Directors to audit the financial statements of the
Company and reviews issues raised by such accountants as to the scope of their
audit and their report thereon, including any questions and recommendations that
may arise relating to such audit and report or the Company's internal accounting
and auditing procedures.
COMPENSATION COMMITTEE. Prior to November 1996, the Compensation Committee
comprised Mr. Cahr, Mr. Foster and Dr. Kraft, and reviewed, approved and made
recommendation to the Board of Directors on matters regarding compensation of
the Company's officers, directors, employees and agent and administered certain
of the Company's stock option plans. From November 1996 to the present, the
Compensation Committee comprises Mr. Cahr, Mr. Foster, Ms. Koffman and Ms.
McDonald. Since November 1996, the function of the Compensation Committee has
been to review, approve and make recommendations to the Board of Directors on
matters regarding the compensation of the Company's officers, directors,
employees and agents.
STOCK OPTION COMMITTEE. In November 1996, the Board of Directors created
the Stock Option Committee to administer the Company's stock option plans. Mr.
Cahr, Ms. Koffman and Ms. McDonald, none of whom is an employee of the Company,
are the current members of the Stock Option Committee.
PROPOSAL 2: APPROVAL OF THE LIFECELL CORPORATION AMENDED AND RESTATED 1992 STOCK
OPTION PLAN
GENERAL
At the meeting, the stockholders of the Company will be asked to vote upon
a proposal to approve the LifeCell Corporation Amended and Restated 1992 Stock
Option Plan (the "Amended and Restated Stock Option
4
<PAGE>
Plan"). Approval of the Amended and Restated Stock Option Plan requires the
affirmative vote of the holders of a majority of the votes of the shares of
Common Stock and Series B Preferred Stock that are outstanding as of the Record
Date, voting as a single class. The text of the proposed Amended and Restated
Stock Option Plan is set forth in full in ANNEX A to this proxy statement. The
Amended and Restated Stock Option Plan amends the Second Amended and Restated
1992 Stock Option Plan, as amended (the "1992 Stock Option Plan"), to (i)
increase the aggregate number of shares of Common Stock for which options may be
granted under the plan from 1,000,000 to 1,500,000 and (ii) amend certain
provisions of the plan to bring the plan into compliance with recently amended
federal securities and tax laws.
REASONS FOR THE AMENDED AND RESTATED STOCK OPTION PLAN
The Board of Directors believes that it is in the best interest of the
Company to encourage ownership of the Company's stock by its employees,
directors and consultants. Providing an opportunity to hold an equity interest
in the Company assists the Company in attracting and retaining key management
and consulting personnel, which is critical to the Company's long-term success.
The number of shares of Common Stock available under the 1992 Stock Option Plan
was depleted in early 1997, and the Board of Directors of the Company has
determined that, to continue to provide performance-based incentive to the
Company's management and key employees, it is in the best interest of the
Company to increase the number of shares of Common Stock available for grant of
options under the 1992 Stock Option Plan.
To provide additional shares of Common Stock for which options may be
granted under the 1992 Stock Option Plan and to amend certain provisions of the
plan to bring the plan into compliance with recently amended federal securities
and tax laws, the Board of Directors has approved the Amended and Restated Stock
Option Plan and has directed that the same be presented to the stockholders for
their approval.
CERTAIN CONSIDERATIONS
Stockholders should note that certain disadvantages may result from the
adoption of the Amended and Restated Stock Option Plan, including a reduction in
their interest of the Company with respect to earnings per share, voting,
liquidation value and book and market value per share if options to acquire
shares of Common Stock are granted and subsequently exercised.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDED AND
RESTATED STOCK OPTION PLAN. Approval of the Amended and Restated Stock Option
Plan requires the affirmative vote of the holders of a majority of the votes of
the shares of Common Stock and Series B Preferred Stock that are outstanding as
of the Record Date, voting together as a single class. If not otherwise
provided, proxies will be voted "FOR" approval of the Amended and Restated Stock
Option Plan. Abstentions and broker non-votes will be counted as shares entitled
to vote on the proposal, but will not be treated as either a vote for or against
the proposal. Therefore, an abstention or broker non-vote will have the same
effect as a vote against the proposal.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 1, 1997, with
respect to (i) persons known to the Company to be beneficial holders of five
percent or more of either the outstanding shares of Common Stock or the
outstanding shares of Series B Preferred Stock, (ii) executive officers named in
the Summary Compensation Table and directors of the Company and (iii) all
executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
--------------------------------------------
SERIES B
NAME AND ADDRESS OF BENEFICIAL COMMON PREFERRED
OWNER STOCK % STOCK %
- --------------------------------------------- --------- ---- --------- ---
<S> <C> <C> <C> <C>
CIBC Wood Gundy Ventures, Inc.(2) ........... 2,473,740 26.6 45,326 37.0
425 Lexington Avenue
New York, New York 10017
Vector Later-Stage Equity Fund, L.P.(3) ..... 2,208,676 24.5 40,469 33.1
1751 Lake Cook Road, Suite 350
Deerfield, Illinois 60015
Allstate Insurance Company(4) ............... 1,595,286 23.4 -- --
Allstate Plaza South G5D
Northbrook, Illinois 60062
The Woodlands Venture Capital ............... 729,337 10.5 2,529 *
Company(5)
2201 Timberloch Place
The Woodlands, Texas 77380
S.B.S.F. Biotechnology Fund, L.P.(6) ........ 496,934 6.8 9,105 7.4
c/o Spears, Benzak, Salomon & Farrell
45 Rockefeller Plaza, 33rd Floor
New York, New York 10111
Medtronic, Inc.(7) .......................... 344,791 5.1 -- --
Corporate Center
7000 Central Avenue N.E .....................
Minneapolis, Minnesota 55432
Paul M. Frison(8) ........................... 250,790 3.6 -- --
Chairman of the Board, President and Chief
Executive Officer
Michael E. Cahr ............................. 93,030 1.3 505 *
Director(9)
James G. Foster ............................. -- -- -- --
Director(10)
Lori Koffman(11) ............................ -- -- --
Director
Stephen A. Livesey, M.D., Ph.D.(12) ......... 164,832 2.4 252 *
Executive Vice President, Chief
Scientific Officer and Director
K. Flynn McDonald(13) ....................... -- -- -- --
Director
David A. Thompson ........................... -- -- -- --
Director Nominee
John R. Harper, Ph.D.(14) ................... 7,755 * -- --
Vice President,
Research and Development
Jane Lea Hicks(15) .......................... 55,872 * -- --
Vice President, Business
Development
Ronald J. Schwartz(16) ...................... 5,324 * -- --
Vice President, Sales and
Marketing
All executive officers, directors and ....... 577,153 8.1 757 *
nominees as a group (10 persons)(17)
</TABLE>
- ---------------
* Less than 1%.
6
<PAGE>
(l) Each beneficial owner's percentage ownership is determined by assuming that
options, warrants and other convertible securities that are held by such
person (but not those held by any other person) and that are exercisable or
convertible within 60 days have been exercised or converted. Unless
otherwise noted, the Company believes that all persons named in the above
table have sole voting and investment power with respect to all shares of
Common Stock and/or Series B Preferred Stock beneficially owned by them.
(2) Includes 2,473,740 shares of Common Stock issuable upon conversion of
shares of Series B Preferred Stock and exercise of a warrant. Lori Koffman,
a director of the Company, is a managing director of CIBC Wood Gundy
Ventures, Inc. ("CIBC").
(3) Includes 2,208,676 shares of Common Stock issuable upon conversion of
shares of Series B Preferred Stock and exercise of a warrant. K. Flynn
McDonald, a director of the Company, is a vice president of Vector Fund
Management, L.P., the general partner of Vector Later-Stage Equity Fund,
L.P.
(4) Information with respect to such stockholder was obtained from Amendment
No. 6 to its report on Schedule 13G dated February 5, 1997, as received by
the Company, and the Company's stock records.
(5) Total number of shares of Common Stock includes 138,031 shares of Common
Stock issuable upon conversion of shares of Series B Preferred Stock and
exercise of a warrant. The Woodlands Venture Capital Company is a wholly
owned subsidiary of Mitchell Energy & Development Corp. George P. Mitchell
owns the majority of the issued and outstanding shares of Mitchell Energy &
Development Corp. Because of these relationships, Mitchell Energy &
Development Corp. and George P. Mitchell may be deemed to be the beneficial
owners of the 729,337 shares of Common Stock held directly or indirectly by
The Woodlands Venture Capital Company. Certain information with respect to
the ownership of such stockholders was obtained from Amendment No. 3 to
their joint report on Schedule 13G dated February 13, 1997, as received by
the Company, and the Company's stock records.
(6) Includes 496,934 shares of Common Stock issuable upon conversion of shares
of Series B Preferred Stock and exercise of warrants.
(7) Does not include shares of Common Stock issuable upon exercise of an option
to convert a $1.5 million licensing fee into shares of Common Stock
pursuant to a license and development agreement between LifeCell and
Medtronic. Information with respect to the ownership of such stockholder
was obtained from Amendment No. 1 to its report on Schedule 13G dated
February 14, 1997, as received by the Company, and the Company's stock
records. James G. Foster, a director of the Company, is the Vice
President/General Manager of Medtronic Heart Valves, a division of
Medtronic.
(8) Total number of shares of Common Stock includes 75,409 shares underlying
options granted under the 1992 Stock Option Plan and 273 shares held for
Mr. Frison's account by the Employee Stock Purchase Plan (the "Stock
Purchase Plan").
(9) Total number of shares of Common Stock includes 65,000 shares underlying
options granted under the LifeCell Corporation Second Amended and Restated
1993 Non-Employee Director Stock Option Plan, as amended (the "Director
Stock Option Plan"), and 27,580 shares of Common Stock issuable upon
conversion of shares of Series B Preferred Stock and exercise of a warrant.
(10) Mr. Foster is the Vice President/General Manager of Medtronic Heart Valves,
a division of Medtronic, and because of such position may be deemed the
beneficial owner of the 344,791 shares of Common Stock held by Medtronic.
Mr. Foster disclaims any such beneficial ownership.
(11) Ms. Koffman is a Managing Director of CIBC and because of such position may
be deemed the beneficial owner of the 2,473,740 shares of Common Stock and
the 45,236 shares of Series B Preferred Stock beneficially owned by CIBC.
Ms. Koffman disclaims any such beneficial ownership.
7
<PAGE>
(12) Total number of shares of Common Stock includes 50,000 shares underlying
options granted under the 1992 Stock Option Plan, 13,774 shares of Common
Stock issuable pursuant to the conversion of shares of Series B Preferred
Stock and exercise of a warrant and 529 shares of Common Stock held for Mr.
Livesey's account by the Stock Purchase Plan.
(13) Ms. McDonald is a vice president of Vector Fund Management, L.P., the
general partner of Vector LaterStage Equity Fund, L.P., and because of such
position may be deemed the beneficial owner of the 2,208,726 shares of
Common Stock and the 40,469 shares of Series B Preferred Stock beneficially
owned by Vector Later-Stage Equity Fund, L.P. Ms. McDonald disclaims any
such beneficial ownership.
(14) Total number of shares of Common Stock includes 7,500 shares underlying
option granted under the 1992 Stock Option Plan and 255 shares of Common
Stock held for Mr. Harper's account by the Stock Purchase Plan.
(15) Total number of shares of Common Stock includes 42,500 shares underlying
options granted under the 1992 Stock Option Plan, 541 shares underlying
options granted under the 1992 Stock Option Plan in substitution for
options previously granted under a terminated stock option plan and 529
shares of Common Stock held for Ms. Hicks' account by the Stock Purchase
Plan.
(16) Total number of shares of Common Stock includes 5,000 shares underlying
options granted under the 1992 Stock Option Plan and 324 shares of Common
Stock held for Mr. Schwartz's account by the Stock Purchase Plan.
(17) See notes (8) through (16).
8
<PAGE>
EXECUTIVE OFFICERS AND COMPENSATION
The following section sets forth the names and background of the Company's
executive officers.
BACKGROUND OF EXECUTIVE OFFICERS
DATE OF
NAME OFFICES HELD FIRST ELECTION AGE
- ---------------------- ------------------------------- -------------- ---
Paul M. Frison........ Chairman of the Board, President May 1986 60
and Chief Executive Officer
Stephen A. Livesey.... Executive Vice President and June 1991 44
Chief Scientific Officer
John R. Harper, Ph.D.. Vice President, Research and November 1994 44
Development
Jane Lea Hicks........ Vice President, Business March 1992 46
Development
J. Donald Payne....... Vice President, Chief March 1997 41
Financial Officer and Secretary
Ronald J. Schwartz.... Vice President, Sales and April 1994 37
Marketing
For further information regarding Mr. Frison's background, see "Background
of Nominees for Director".
For further information regarding Dr. Livesey's background, see "Background
of Nominees for Director".
JOHN R. HARPER, PH.D. Dr. Harper joined LifeCell in November 1994 as Vice
President of Research and Development. He is responsible for directing
LifeCell's research programs and leading the Company's research and development
efforts into new product areas. Prior to joining LifeCell, Dr. Harper was
director of Fibrosis Research at Telios Pharmaceuticals, La Jolla, California,
from 1989 to 1994. He was an assistant professor at the Scripps Clinic and
Research Foundation, La Jolla, California from 1986 to 1989. Dr. Harper received
his Ph.D. in Biomedical Sciences from the Graduate School of Biomedical Sciences
at the University of Texas, Health Science Center in Houston, Texas in 1981 and
completed post-doctoral studies at Scripps Clinic and Research Foundation and
the National Cancer Institute.
JANE LEA HICKS. As Vice President, Business Development, Ms. Hicks is
responsible for the development of corporate partnerships and strategic
alliances for LifeCell. Prior to becoming Vice President, Business Development
in March 1992, Ms. Hicks served LifeCell as Director of Business Development
since 1991. Ms. Hicks joined LifeCell in 1986 as Technical Marketing Manager
responsible for the development and implementation of sales and marketing
programs and the ultimate sublicensing of LifeCell's electron microscopy
equipment business. Prior to joining LifeCell, Ms. Hicks spent five years in
sales and marketing management with Warner Lambert Company, two years in medical
supply sales, and eight years in clinical laboratory management. Ms. Hicks
received her bachelor's degree in 1972 from the University of North Carolina at
Greensboro.
J. DONALD PAYNE. Mr. Payne joined LifeCell in March 1997 as Vice President,
Chief Financial Officer and Secretary. Prior to joining LifeCell, from 1992 to
1997, Mr. Payne was Vice President, Finance, Chief Financial Officer and a
director of Aprogenex, Inc. From 1980 to 1990, Mr. Payne was Vice President,
Finance, Corporate Treasurer, Corporate Secretary and Chief Financial Officer of
UMC Petroleum Corporation. Mr. Payne received his bachelor's degree in business
administration from Texas A&M University in 1976 and his master's degree in
business administration from Rice University in 1992.
9
<PAGE>
RONALD J. SCHWARTZ. Mr. Schwartz was elected Vice President, Sales and
Marketing of the Company in April 1995 and is responsible for the direction of
the sales and marketing activities for LifeCell. Prior to joining LifeCell, from
August 1984 to March 1995, Mr. Schwartz held various positions with Sherwood
Medical (a division of American Home Products), most recently as group marketing
manager, where he was responsible for the sales and marketing programs for
Sherwood Medical's wound care product line. Mr. Schwartz received his bachelor's
degree in business administration from the University of South Florida in Tampa,
Florida in 1981.
All officers of the Company hold office until the regular meeting of
directors following the annual meeting of stockholders or until their respective
successors are duly elected and qualified or their earlier resignation or
removal.
10
<PAGE>
SUMMARY OF COMPENSATION
Set forth in the following table is certain compensation information
concerning the Chief Executive Officer and each of the Company's most highly
compensated executive officers as to whom the total annual salary and bonus for
the fiscal year ended December 31, 1996, exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
OTHER SECURITIES
NAME AND PRINCIPAL ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(2) COMPENSATION
- ------------------ ---- -------- ------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Frison, 1996 $220,723 $44,400 $6,000(1) 165,000 $3,920(3)
Chairman of the 1995 210,417 27,500 6,000(1) 75,000(5) 3,672(3)
Board, President 1994 195,625 31,000 6,000(1) 38,319 3,307(3)
and Chief
Executive Officer
Stephen A. Livesey, 1996 165,417 34,000 -- 120,000 448(4)
M.D., Ph.D., 1995 150,625 20,000 -- 50,000(5) 200(4)
Executive Vice 1994 130,833 21,000 -- 25,000 200(4)
President and
Chief Scientific
Officer
Jane Lea Hicks, 1996 109,953 15,000 3,600(1) 20,000 448(4)
Vice President, 1995 105,208 10,000 3,600(1) 30,000(5) 200(4)
Business 1994 95,417 12,000 3,600(1) 40,000 200(4)
Development
John R. Harper, 1996 105,723 15,000 -- 27,500 448
Ph.D. 1995 100,208 5,000 -- -- 200
Vice President, 1994(6) 15,176 -- -- 15,000 --
Research and
Development
Ronald J. Schwartz, 1996 105,907 18,000 -- 35,000 448(4)
Vice President, 1995(7) 75,208 7,000 -- 20,000 200(4)
Sales and
Marketing
</TABLE>
- ------------
(1) Represents amounts paid for automobile allowance.
(2) Represents shares issuable pursuant to stock options granted under the 1992
Stock Option Plan.
(3) Represents (i) the aggregate amount of premiums paid by the Company on a
life insurance policy in an aggregate amount of $700,000 and one accidental
death policy in the amount of $700,000 for Mr. Frison for which his family
trust is the beneficiary, (ii) contributions in each of 1994, 1995 and 1996
of $200, $200 and $400, respectively, by the Company under the Company's
401(k) plan and (iii) contribution in 1996 of $48 by the Company under its
employee stock purchase plan
(4) Represents contributions by the Company under the Company's 401(k) plan and
employee stock purchase plan.
(5) Represents options granted in 1995 in exchange for 1993 options
surrendered.
(6) Employment began November 7, 1994.
(7) Employment began April 1, 1995.
11
<PAGE>
OPTION GRANTS AND EXERCISES
The following table sets forth information concerning individual grants of
stock options made during the year ended December 31, 1996, to each of the
executive officers named in the Summary Compensation Table.
OPTION GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZED
INDIVIDUAL GRANTS VALUE AT ASSUMED
- ----------------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ------------------ ---------- ------------ --------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Frison 165,000 29.6 3.75 August 2006 389,129 986,128
Stephen A. Livesey, 120,000 21.5 3.75 August 2006 283,003 717,182
M.D., Ph.D.
Jane Lea Hicks 20,000 3.6 3.75 August 2006 47,167 119,531
John R. 7,500 1.3 3.88 May 2006 18,277 46,318
Harper, Ph.D. 20,000 3.6 3.75 August 2006 47,167 119,531
Ronald J. Schwartz 15,000 2.7 3.88 May 2006 36,555 92,636
20,000 3.6 3.75 August 2006 47,167 119,531
</TABLE>
The following table sets forth information concerning the value of
unexercised options held by each of the executive officers named in the Summary
Compensation Table at December 31, 1996. None of such executive officers
exercised any stock options during the year ended December 31, 1996.
OPTION VALUES AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
AT DECEMBER 31, 1996 IN-THE-MONEY OPTIONS AT
(# SHARES) DECEMBER 31, 1996 ($)(1)
-------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C>
Paul M. Frison 75,409 202,910 37,551 14,114
Stephen A. Livesey, M.D., Ph.D. 50,000 145,000 25,000 9,375
Jane Lea Hicks 43,041 47,500 17,947 7,188
John R. Harper, Ph.D. 7,500 35,000 4,688 4,688
Ronald J. Schwartz 5,000 50,000 5,000 15,000
</TABLE>
- ------------
(1) Based on $3.125 per share, the closing price of the Common Stock, as
reported by the Nasdaq SmallCap Market, on December 31, 1996.
12
<PAGE>
COMPENSATION OF DIRECTORS
Directors of the Company, other than employees of the Company, receive
directors' fees of $500 per meeting attended in person or by telephone. Mr.
Foster, Ms. Koffman and Ms. McDonald have declined such fees. Directors of the
Company who are employees receive no directors' fees. No additional amounts are
paid to members of the Board of Director committees for their services as such.
Directors of the Company are reimbursed their expenses for attendance at such
meetings.
On March 15, 1996, pursuant to the LifeCell Corporation 1993 Non-Employee
Director Stock Option Plan, each of Mr. Cahr and Mr. Foster was granted an
option to purchase 50,000 shares of Common Stock at an exercise price of $2.875
per share, the fair market value of such stock on the date of grant. Mr. Foster
is an employee of Medtronic and under the policies of Medtronic he is not
permitted to accept or hold such option. Therefore, he surrendered such option
to the Company. On November 18, 1996, each of Ms. Koffman and Ms. McDonald was
granted an option to purchase 25,000 shares of Common Stock at an exercise price
of $3.88 per share, the fair market value of such stock on the date of grant.
Ms. Koffman is an employee of CIBC and under the policies of CIBC she is not
permitted to accept or hold such option. Therefore, she surrendered such option
to the Company.
TRANSACTIONS
In February 1994, to enable Paul M. Frison and Stephen A. Livesey,
executive officers and directors of the Company, to satisfy their respective
federal income tax liabilities incurred in connection with awards of Common
Stock granted to them pursuant to an employee benefit plan, the Company
purchased 21,929 shares and 21,144 shares of Common Stock from Mr. Frison and
Dr. Livesey, respectively, at a per share purchase price of $7.00, the fair
market value of such shares on the date of purchase. In February 1995, the
Company loaned $29,000, $29,100 and $12,600 to Mr. Frison, Dr. Livesey and Jane
Lea Hicks, also an executive officer of the Company, respectively, to enable
them to satisfy their respective federal income tax liability in connection with
awards of Common Stock granted to them pursuant to an employee benefit plan. The
loans were due December 29, 1995, and bore interest at an annual rate of 9%. The
Company extended the due date of such loans to Mr. Frison, Dr. Livesey and Ms.
Hicks to December 31, 1996. Dr. Livesey repaid the loan to him in full in
January 1996. In February 1996, the Company loaned approximately $27,600,
$20,150 and $2,240 to Mr. Frison, Dr. Livesey and Ms. Hicks, respectively, to
enable them to satisfy their respective federal income tax liabilities in
connection with awards of Common Stock granted to them pursuant to an employee
benefit plan. All of the loans made by the Company to Mr. Frison, Dr. Livesey
(except the $29,100 loan to Dr. Livesey, which he repaid in January 1996) and
Ms. Hicks were consolidated in December 1996 into loans that are due December
31, 1997, and bear interest at the prime rate, payable quarterly.
The Company leases its facilities pursuant to a lease agreement from an
affiliate of The Woodlands Venture Capital Company, a principal stockholder of
the Company, and paid an aggregate of approximately $139,000, $129,000 and
$142,000 in rent during 1994, 1995 and 1996, respectively, thereunder. The
Company believes that the terms of the lease are no less favorable to the
Company than those that could be obtained from unaffiliated third parties.
In 1994, the Company entered into a license and development agreement with
Medtronic, a principal stockholder of the Company, to develop jointly the
Company's heart valve product. Pursuant to the license agreement, Medtronic paid
LifeCell a $1.5 million licensing fee, will fund all costs of research and
development, including clinical trials, and will pay royalties of up to $25
million on sales of products covered by the license agreement. In 1994, 1995 and
1996, LifeCell recorded revenue of approximately $358,000, $825,000 and
$546,000, respectively, received from Medtronic to fund research and development
costs pursuant to the license agreement. If the license agreement is terminated
under certain circumstances, including Medtronic's right to terminate at any
time if in its sole business judgment it deems the development and
commercialization of products thereunder not to be in its best interests or
otherwise imprudent, Medtronic has the option to convert the $1.5 million
licensing fee into shares of Common Stock, subject to certain limitations, at
the then current market price. At the same time, Medtronic made a $500,000
equity investment in LifeCell by purchasing approximately 64,000 shares of
Common Stock at $7.77 per share in exchange for rights of first refusal to
negotiate licenses to universal vascular conduit products. Under the terms of an
investment agreement between Medtronic and the Company, Medtronic has the right
to designate one member of the Company's Board of Directors. Pursuant to the
investment agreement, James G. Foster currently is serving as a director of the
Company and has been nominated to be elected a director at the meeting. See
"Matters to Come Before the Meeting - Proposal 1: Election of Directors".
13
<PAGE>
AMENDED AND RESTATED STOCK OPTION PLAN
Pursuant to applicable federal securities laws, the Company is required to
furnish to its stockholders in this proxy statement certain information with
respect to the Amended and Restated Stock Option Plan. For information
concerning this plan, see "Proposal 2: Approval of the LifeCell Corporation
Amended and Restated 1992 Stock Option Plan" and the summary set forth below.
The following summary does not purport to be a complete summary of the
Company's management stock plans and is qualified in its entirety by reference
to the plans.
GENERAL
The Board of Directors approved the Amended and Restated Stock Option Plan
on April 22, 1997, subject to the approval by the stockholders of the Company.
The Amended and Restated Stock Option Plan authorizes a committee of the Board
of Directors to issue options intended to qualify as incentive stock options
("ISOs"), as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and stock options that are not intended to conform to the
requirements of the Code Section ("Non-ISOs"). Under the terms of the Amended
and Restated Stock Option Plan, the exercise price of each ISO cannot be less
than 100% of the fair market value of the Common Stock at the time of grant,
and, in the case of a grant to a 10% stockholder, the exercise price may not be
less than 110% of the fair market value on the date of grant. The exercise price
of each Non-ISO may not be less than the fair market value of the Common Stock
on the date of grant. Options granted under the Amended and Restated Stock
Option Plan may not be exercised after the tenth anniversary (or the fifth
anniversary in the case of an option granted to a 10% stockholder) of their
grant. Payments by option holders upon exercise of an option may be made by
delivering cash, shares of stock or a combination of cash and stock. The Amended
and Restated Stock Option Plan authorizes: (i) options to acquire up to an
aggregate of 1,500,000 shares of Common Stock to be granted; (ii) grants of ISOs
to eligible employees and grants of Non-ISOs to any individual with substantial
responsibility for the Company's management and growth, as determined by a
committee of the Board of Directors; (iii) adjustments to the number and class
of shares outstanding pursuant to granted options and reserved under the Amended
and Restated Stock Option Plan in the event of a capital adjustment; (iv) an
opportunity for outstanding options to be exercised subsequent to a merger or
disposition of all of the Company's assets and for the optionee to receive
shares to which he would have been entitled prior to such merger or disposition;
and (v) grant of options in substitution for options held by employees of other
corporations who are about to become Company employees or whose employer is
about to become a parent or subsidiary of the Company. The Company currently has
approximately 70 full-time employees, including six executive officers, each of
whom may be eligible to receive grants under the Amended and Restated Stock
Option Plan. Other persons with substantial responsibility for the Company's
management and growth may be eligible to receive grants under the Amended and
Restated Stock Option Plan at the discretion of a committee of the Board of
Directors. A complete copy of the Amended and Restated Stock Option Plan is
attached to this proxy statement as ANNEX A. The foregoing description of the
Amended and Restated Stock Option Plan is qualified in its entirety by reference
to ANNEX A, which is incorporated herein by reference as if fully set forth
herein.
The Amended and Restated Stock Option Plan supersedes the 1992 Stock Option
Plan, under which an aggregate of 1,000,000 shares of Common Stock were reserved
for issuance.
FEDERAL TAX CONSEQUENCES
AMENDED AND RESTATED STOCK OPTION PLAN. Options granted under the 1992
Stock Option Plan may be either ISOs which satisfy the requirements of Section
422 of the Code or Non-ISOs which are not intended to meet these requirements.
The federal income tax treatment for the two types of options differs as
follows.
In general, no tax consequences should result from the grant to or exercise
by an employee of an ISO under the Amended and Restated Stock Option Plan. The
optionee will, however, recognize taxable income in the year in which the
purchased shares are sold or otherwise made the subject of a disposition.
For federal tax purposes, dispositions are either qualifying or
disqualifying. An optionee makes a qualifying disposition of the purchased
shares if he sells or otherwise disposes of the shares after holding them for
more than two years after the date the option was granted and more than one year
after the exercise date. If the optionee fails to satisfy either of these two
holding periods prior to the sale or other disposition, a disqualifying
disposition will result.
14
<PAGE>
Upon a qualifying disposition of the shares, the optionee will recognize
long-term capital gain in an amount equal to the excess of (i) the amount
realized upon the sale or other disposition of the purchased shares over (ii)
the exercise price paid for such shares. If there is a disqualifying disposition
of the shares, the excess of (i) the fair market value of those shares on the
date the option was exercised over (ii) the exercise price paid for the shares
generally will be taxable as ordinary income. Any additional gain recognized
upon the disposition will be a capital gain. If, however, the disqualifying
disposition is a sale or exchange with respect to which a loss (if sustained)
would be recognized, the amount of ordinary income realized by the optionee
cannot exceed the amount realized on the sale or exchange over the exercise
price paid for the shares.
If the optionee makes a disqualifying disposition of the purchased shares,
the Company will be entitled to an income tax deduction for the taxable years in
which the disposition occurs, equal to the excess of (i) the fair market value
of such shares on the date the option was exercised over (ii) the exercise price
paid for the shares. In no other instance will the Company be allowed a
deduction with respect to the optionee's disposition of the purchased shares.
No taxable income is recognized by an optionee upon the grant of a Non-ISO.
The optionee will in general recognize ordinary income, in the year in which the
option is exercised, equal to the excess of the fair market value of the
purchased shares on the date of exercise over the exercise price paid for the
shares. The Company is entitled to a deduction in the same amount as the income
recognized by the optionee, provided that the Company withholds income tax with
respect to that amount if the optionee is an employee.
The following table sets forth information concerning the determinable
benefits and amounts that have been received by or allocated to the individuals
and groups identified below under the Amended and Restated Stock Option Plan.
NEW PLAN BENEFITS(1)
DOLLAR NUMBER OF
NAMES AND POSITION PLAN NAME VALUE $ SHARES (2)
------------------ --------- ------- ----------
Paul M. Frison,
Chairman of the Board,
President and Chief Executive
Officer .......................................... (3) (4) 278,319
Stephen A. Livesey,
Executive Vice President and
Chief Scientific Officer ......................... (3) (4) 195,000
Jane Lea Hicks,
Vice President, Business Development ............... (3) (4) 90,541
John R. Harper, Ph.D ...............................
Vice President, Research and Development ........... (3) (4) 42,500
J. Donald Payne
Vice President and Chief Financial Officer ......... (3) (4) 10,000
Ronald J. Schwartz
Vice President, Sales and Marketing ................ (3) (4) 55,000
Executive Officers as a Group
(6 persons, including the executive
officers named above) ............................ (3) (4) 671,360
Non-Executive Officer Employee Group ............... (3) (4) 294,335
(1) Includes benefits granted pursuant to the 1992 Stock Option Plan and the
Amended and Restated Stock Option Plan.
(2) Includes options granted to Mr. Frison to purchase 38,319 and 75,000 and
165,000 shares of Common Stock on June 8, 1994, and December 15, 1995 and
August 16, 1996, respectively; options granted to Dr. Livesey to purchase
25,000, 50,000 and 120,000 shares of Common Stock on June 8, 1994, December
15, 1995 and August 16, 1996, respectively; options granted to Ms. Hicks to
purchase 541, 40,000, 30,000 and 20,000 shares of Common Stock on February
27, 1992, June 8, 1994, December 15, 1995 and August 16, 1996,
respectively; options granted to Dr. Harper to purchase 15,000, 7,500 and
20,000 shares of Common Stock on November 7, 1994, May 20, 1996 and August
16, 1996, respectively; an option granted to Mr. Payne to purchase 10,000
shares of Common Stock on March 17, 1997; options granted to Mr. Schwartz
to purchase 20,000, 15,000 and 20,000 shares of Common Stock on April 3,
1995, May 20, 1996 and August
15
<PAGE>
16, 1996, respectively; and options granted to members of the Non-Executive
Officer Employee Group to purchase an aggregate of 294,335 shares of Common
Stock on various dates between February 27, 1992 and March 17, 1997.
(3) 1992 Stock Option Plan.
(4) The actual dollar value, if any, a person may realize will depend on the
excess of the per share market price of the Common Stock over the per share
exercise price on the date the option is exercised. All options granted
under the 1992 Stock Option Plan on January 27, 1992, have an exercise
price of $4.00 per share. Options granted to Ms. Hicks and Non-Executive
Officer Group under the 1992 Stock Option Plan on February 27, 1992, in
substitution for options outstanding under a prior terminated stock option
plan have per share exercise prices of $.07 as to options to purchase 336
shares, $.73 as to options to purchase 792 shares and $7.38 as to options
to purchase 15 shares. All options granted under the 1992 Stock Option Plan
on June 8, 1994, have an exercise price of $3.00 per share. All options
granted under the 1992 Stock Option Plan on November 7, 1994, have an
exercise price of $2.50 per share. All options granted under the 1992 Stock
Option Plan on April 3, 1995, have an exercise price of $2.13 per share.
All options granted under the 1992 Stock Option Plan on December 15, 1995,
have an exercise price of $2.50 per share. All options granted under the
1992 Stock Option Plan on May 20, 1996 have an exercise price of $3.88 per
share. All options granted under the 1992 Stock Option Plan on June 13,
1996 have an exercise price of $4.38 per share. All options granted under
the 1992 Stock Ooption Plan on August 16, 1996 have an exercise price of
$3.75 per share. All options granted under the 1992 Stock Option Plan on
March 17, 1997 have an exercise price of $5.88 per share. Options granted
to members of the Non-Executive Officer Employee Group under the 1992 Stock
Option Plan have exercise prices ranging from $1.88 to $4.38. The closing
price of the Common Stock on April 1, 1997, was $6.38.
16
<PAGE>
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as the Company's principal independent
accountants for the fiscal year ended December 31, 1996 and has been recommended
by the Audit Committee to so serve for the current year. Representatives of
Arthur Andersen LLP are expected to be present at the annual meeting of
stockholders, will have the opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16(a)")
requires the Company's officers, directors and persons who own more than 10% of
a registered class of the Company's equity securities to file statements on Form
3, Form 4, and Form 5 of ownership and changes in ownership with the Securities
and Exchange Commission. Officers, directors and greater than 10% stockholders
are required by the regulation to furnish the Company with copies of all Section
16(a) reports which they file.
Based solely on a review of reports on Form 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, reports on Form 5
and amendments thereto furnished to the Company with respect to its most recent
fiscal year and written representations from reporting persons that no report on
Form 5 was required, the Company believes that, except as set forth below, no
person who, at any time during 1996, was subject to the reporting requirements
of Section 16(a) with respect to the Company failed to meet such requirements on
a timely basis. Ms. McDonald was elected to the Board of Directors of the
Company on November 18, 1996. A Form 3 was required to be filed by November 29,
1996. A Form 3 was filed on December 5, 1996.
PROPOSALS FOR NEXT ANNUAL MEETING
Any proposals of stockholders intended to be presented at the annual
meeting of stockholders of the Company to be held in 1998 must be received by
the Company at its principal executive offices, 3606 Research Forest Drive, The
Woodlands, Texas 77381, no later than December 31, 1997, in order to be included
in the proxy statement and form of proxy relating to that meeting.
OTHER MATTERS
The management of the Company knows of no other matters that may come
before the meeting. However, if any matters other than those referred to above
should properly come before the meeting, it is the intention of the persons
named in the enclosed proxy to vote such proxy in accordance with their best
judgment.
The cost of solicitation of proxies in the accompanying form will be paid
by the Company. In addition to solicitation by use of the mails, certain
directors, officers or employees of the Company may solicit the return of
proxies by telephone, telegram or personal interview.
17
<PAGE>
ANNEX A
LIFECELL CORPORATION
AMENDED AND RESTATED 1992 STOCK OPTION PLAN
1. PURPOSE. This Amended and Restated 1992 Stock Option Plan (this "Plan")
of LifeCell Corporation, a Delaware corporation (the "Company"), amends and
restates the LifeCell Corporation Second Amended and Restated 1992 Stock Option
Plan, as amended, as of April 22, 1997, and 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
and shall be comprised solely of members of the Board of Directors who qualify
as both non-employee directors as defined in Rule 16b-3(b)(3) of the Securities
Exchange Act of 1934, as amended (the "Securities Exchange Act") and outside
directors within the meaning of Department of Treasury Regulations issued under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
The Board of Directors of the Company shall have the power to add or remove
members of the Committee, from time to time, 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. In carrying
out its authority under this Plan, the Committee shall have full and final
authority and discretion, including but not limited to the rights, powers and
authorities, to: (a) determine the persons to whom and the time or times at
which Options will be made, (b) determine the number of shares and the purchase
price of stock covered in each Option, subject to the terms of this Plan, (c)
determine the terms, provisions and conditions of each Option, which need not be
identical, (d) accelerate the time at which any outstanding Option may be
exercised, (e) define the effect, if any, on an Option of the death, disability,
retirement, or other termination of employment of the Optionee, (f) prescribe,
amend and rescind rules and regulations relating to administration of this Plan,
and (g) make all other determinations and take all other actions deemed
necessary, appropriate, or advisable for the proper administration of this Plan.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties. 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 Code ("Incentive Stock Options").
3. DEDICATED 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
"Stock"). Such shares may be treasury shares or authorized but unissued shares.
The total number of shares of Stock with respect to which Incentive Stock
Options may be granted shall be 1,500,000 shares. The maximum number of shares
subject to Options which may be issued to any Optionee under this Plan during
any period of three consecutive years is 500,000 shares. 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.
In the event that any outstanding Option expires or is surrendered for any
reason or terminates by reason of the death or other severance of employment of
the Optionee, the shares of 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-1
<PAGE>
(a) "Incentive Stock Options". The Committee may grant to an eligible
employee an Option, or Options, to buy a stated number of shares of 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 Code.
(b) "Nonqualified Stock Options". The Committee may grant to an eligible
individual an Option, or Options, to buy a stated number of shares of 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 Code.
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 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 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 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 Nonqualified 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 Nonqualified Stock Option,
shall be not less than the fair market value of the shares of 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 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 Nonqualified
Stock Option shall be exercisable after the expiration of ten years from the
date such Option is granted; and the Committee in its discretion
A-2
<PAGE>
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. $100,000 LIMITATION ON INCENTIVE STOCK OPTIONS. To the extent that the
aggregate fair market value (determined as of the time an Incentive Option is
granted) of the Stock with respect to which Incentive Options first become
exercisable by the Optionee during any calendar year (under this Plan and any
other incentive stock option plan(s) of the Company or any parent corporation or
subsidiary corporation) exceeds $100,000, the Incentive Options shall be treated
as Nonqualified Options. In making this determination, Incentive Options shall
be taken into account in the order in which they were granted.
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.
Notwithstanding any provision of this Plan or an Option agreement to the
contrary, no Option awarded under this Plan after April 22, 1997, may be
exercised before this amendment and restatement of this Plan is approved by the
stockholders of the Company.
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) 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. If shares of Stock are used in payment of the exercise price, the aggregate
fair market value of the shares of Stock tendered must be equal to or less than
the aggregate exercise price of the shares being purchased upon exercise of the
Option, and any difference must be paid by cash, certified check, bank draft, or
postal or express money order payable to the Company. Delivery of the shares
shall be deemed effected for all purposes when a stock transfer agent of the
Company shall have deposited the certificates in the United States mail,
addressed to the Optionee, at the address specified by the Optionee.
Whenever an Option is exercised by exchanging shares of Stock owned by the
Optionee, the Optionee shall deliver to the Company certificates registered in
the name of the Optionee representing a number of shares of Stock legally and
beneficially owned by the Optionee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates, (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition of an Option.
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 Optionee
(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 or in the Option agreement,
Options shall terminate on the earlier of the date of the
A-3
<PAGE>
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 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 Code, 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) of the Code).
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 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 Committee. In connection with any applicable statute or
regulation relating to the registration of securities, upon exercise of any
Option, the Company shall not be required to issue any Stock unless the
Committee has received evidence satisfactory to it to the effect that the holder
of that Option will not transfer the Stock except in accordance with applicable
law, including receipt of an opinion of counsel satisfactory to the Company to
the effect that any proposed transfer complies with applicable law. Any
determination by the Committee on these matters shall be final, binding and
conclusive. In the event the shares issuable on exercise of an Option are not
registered under applicable securities laws of any country or any political
subdivision 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 applicable law:
"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 Company of an opinion of counsel satisfactory to the
Company, in form and substance satisfactory to the Company, 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 applicable securities laws of any country or any
political subdivision (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.
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
A-4
<PAGE>
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 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 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 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 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, or change in beneficial ownership, such
holder had been the holder of record of a number of shares of 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 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
A-5
<PAGE>
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 Code.
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 votes
of the outstanding shares of voting stock present in person or by proxy and
entitled to vote thereon, 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 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 Code, 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 agreement, which shall be subject to the terms and conditions prescribed
above, and shall be signed by the Optionee and by an officer of the Company on
behalf of the Committee and the Company. Such an Option agreement shall contain
such other provisions as the Committee in its discretion shall deem advisable
which are not inconsistent with the terms of this Plan.
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. NO RIGHTS AS STOCKHOLDER. No Optionee shall have any rights as a
stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.
23. GENDER. If the context requires, words of one gender when used in this
Plan shall include the others and words used in the singular or plural shall
include the other.
24. HEADINGS. Headings of Sections are included for convenience of
reference only and do not constitute part of this Plan and shall not be used in
construing the terms of this Plan.
25. OTHER OPTIONS. The grant of an Option shall not confer upon an Optionee
the right to receive any future or other Options under this Plan, whether or not
Options may be granted to similarly situated Optionees, or the right to receive
future Options upon the same terms or conditions as previously granted.
26. ARBITRATION OF DISPUTES. Any controversy arising out of or relating to
this Plan or an Option Agreement shall be resolved by arbitration conducted
pursuant to the arbitration rules of the American Arbitration Association. The
arbitration shall be final and binding on the parties.
27. GOVERNING LAW. The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.
A-6
<PAGE>
28. EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT OF PLAN. This Plan shall
become effective and shall be deemed to have been adopted on April 22, 1997, if
within one year of that date it shall have been approved by the holders of at
least a majority of the votes of the outstanding shares of voting stock of the
Company 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.
A-7
<PAGE>
FRONT SIDE OF PROXY
PROXY
LIFECELL CORPORATION
THIS PROXY FOR HOLDERS OF SERIES B PREFERRED STOCK IS SOLICITED BY THE BOARD OF
DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 19, 1997
The stockholder of LifeCell Corporation (the "Company") whose signature
appears on the reverse side hereof hereby appoints Paul M. Frison and J. Donald
Payne, and each of them, attorneys and proxies of the undersigned, with full
power of substitution, to vote, as designated below, the number of votes which
the undersigned would be entitled to cast if personally present at the Annual
Meeting of Stockholders of the Company to be held at Houston Advanced Research
Center, 4800 Research Forest Drive, The Woodlands, Texas 77381 at 1:00 p.m.,
Thursday, June 19, 1997, and at any adjournment thereof.
1(a). ELECTION OF DIRECTORS:
[ ] FOR all of the nominees listed below [ ] WITHHOLD AUTHORITY
(except as indicated to the contrary to vote for election of
below) directors
NOMINEES (to be elected by the holders of Common Stock and Series B Preferred
Stock, voting together as a class): Michael E. Cahr, Paul M. Frison, James
G. Foster, Stephen A. Livesey, M.D., Ph.D., and David A. Thompson.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
1(b). ELECTION OF DIRECTORS:
[ ] FOR all of the nominees listed below [ ] WITHHOLD AUTHORITY
(except as indicated to the contrary to vote for election of
below) directors
NOMINEES (to be elected by the holders of Series B Preferred Stock, voting as
a separate class): K. Flynn McDonald and Lori Koffman.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(Continued on other side)
BACK SIDE OF PROXY
(Continued from other side)
2. Proposal to approve the LifeCell Corporation Amended and Restated 1992 Stock
Option Plan, which increases the number of shares for which options may be
granted under such plan and amends certain provisions of the plan to bring it
into compliance with recently amended federal securities and tax laws.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the above named proxies are authorized to vote upon
such other business as may properly come before the meeting or any adjournment
thereof and upon matters incident to the conduct of the meeting.
This proxy will be voted as directed. If not otherwise specified, this proxy
will be voted FOR the election of the director nominees named in Item 1(a), or
if any one or more of the nominees becomes unavailable, FOR another nominee or
other nominees to be selected by the Board of Directors, FOR the election of the
director nominees named in Item 1(b) or if any one or more of the nominees
becomes unavailable, FOR another nominee or other nominees to be selected by the
holders of a majority of the shares of Series B Preferred Stock and FOR the
Second Amended and Restated 1992 Stock Option Plan set forth in Item 2.
Dated: _______________________ , 1997
______________________________________
______________________________________
(Signature of Stockholder(s))
Please sign exactly as name
appears hereon. Joint owners should
each sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as it
appears hereon.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
<PAGE>
FRONT SIDE OF PROXY
PROXY
LIFECELL CORPORATION
THIS PROXY FOR HOLDERS OF COMMON STOCK IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 19, 1997
The stockholder of LifeCell Corporation (the "Company") whose signature
appears on the reverse side hereof hereby appoints Paul M. Frison and J. Donald
Payne, and each of them, attorneys and proxies of the undersigned, with full
power of substitution, to vote, as designated below, the number of votes which
the undersigned would be entitled to cast if personally present at the Annual
Meeting of Stockholders of the Company to be held at Houston Advanced Research
Center, 4800 Research Forest Drive, The Woodlands, Texas 77381 at 1:00 p.m.,
Thursday, June 19, 1997, and at any adjournment thereof.
1. ELECTION OF DIRECTORS:
[ ] FOR all of the nominees listed below [ ] WITHHOLD AUTHORITY
(except as indicated to the contrary to vote for election of
below) directors
NOMINEES: Michael E. Cahr, Paul M. Frison, James G. Foster, Stephen A.
Livesey, M.D., Ph.D., and David A. Thompson.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. Proposal to approve the LifeCell Corporation Amended and Restated 1992 Stock
Option Plan, which increases the number of shares for which options may be
granted under such plan and amends certain provisions of the Plan to bring it
into compliance with recently amended federal securities and tax laws.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on other side)
BACK SIDE OF PROXY
(Continued from other side)
3. In their discretion, the above named proxies are authorized to vote upon
such other business as may properly come before the meeting or any adjournment
thereof and upon matters incident to the conduct of the meeting.
This proxy will be voted as directed. If not otherwise specified, this proxy
will be voted FOR the election of the director nominees named in Item 1, or if
any one or more of the nominees becomes unavailable, FOR another nominee or
other nominees to be selected by the Board of Directors, and FOR the Amended and
Restated 1992 Stock Option Plan set forth in Item 2.
Dated: _______________________ , 1997
______________________________________
______________________________________
(Signature of Stockholder(s))
Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as it appears
hereon.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
