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 77381-4232
281/367-5368
April 20, 1998
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 Wednesday, May 27,
1998, at Houston Advanced Research Center, 4800 Research Forest Drive, The
Woodlands, Texas 77381.
This year you will be asked to consider five proposals. Two proposals
concern the election of directors and the approval of an amendment to the
employee stock option plan to increase the number of shares available for
issuance under the plan. Three additional proposals relate to the approval of
amendments to the Company's certificate of incorporation to increase the number
of shares of Common Stock authorized for issuance, to amend the automatic
conversion provisions of the Series B Preferred Stock, and to amend the
provisions granting the holders of Series B Stock the right to elect directors.
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 77381-4232
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 27, 1998
Notice is hereby given that the Annual Meeting of the Stockholders of
LifeCell Corporation, a Delaware corporation (the "Company"), will be held on
Wednesday, May 27, 1998, 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 amend the Company's
Restated Certificate of Incorporation, as amended, to increase the number
of authorized shares of Common Stock from 25,000,000 shares to 48,000,000
shares;
(3) To consider and vote on a proposal to amend the Company's
Restated Certificate of Incorporation, as amended, to reduce the number of
directors that may be elected by the holders of Series B Preferred Stock
from three to (i) two directors if at least 60,000 shares of Series B
Preferred Stock are outstanding; (ii) one director if less than 60,000
shares but at least 10,000 shares of Series B Preferred Stock are
outstanding; and (iii) no director if less than 10,000 shares of Series B
Preferred Stock are outstanding;
(4) To consider and vote on a proposal to amend the Company's
Restated Certificate of Incorporation, as amended, to delete certain
conditions to automatic conversion so that the Series B Preferred Stock
shall automatically convert into Common Stock when the market price of the
Company's Common Stock averages or exceeds $9.30 per share for 30
consecutive trading days;
(5) To consider and vote on a proposal to amend the LifeCell
Corporation Amended and Restated 1992 Stock Option Plan to increase the
aggregate number of shares of Common Stock for which options may be
granted under the plan from 1,500,000 to 2,500,000 shares; and
(6) To transact such other business as may properly come before the
meeting or any adjournment thereof.
These proposals are described in further detail in the attached Proxy
Statement. The holders of record of shares of Common Stock and Series B
Preferred Stock of the Company at the close of business on March 31, 1998, will
be entitled to vote at the meeting.
By Order of the Board of Directors,
J. Donald Payne
Secretary
April 20, 1998
<PAGE>
LIFECELL CORPORATION
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 1998
This Proxy Statement is furnished to the stockholders of LifeCell
Corporation ("LifeCell" or the "Company"), 3606 Research Forest Drive, The
Woodlands, Texas 77381-4232 (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 Wednesday, May 27, 1998, 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, for the approval
of the three amendments to the Company's Restated Certificate of Incorporation,
as amended, and for the approval of the amendment to 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 22, 1998, to stockholders of record
on March 31, 1998 (the "Record Date").
At the close of business on the Record Date, there were outstanding and
entitled to vote 11,147,143 shares of Common Stock, par value $.001 per share
(the "Common Stock"), and 121,299 shares of Series B Preferred Stock, par value
$.001 per share (the "Series B Preferred Stock"). Only the holders of record on
the 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 a 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 series (or class),
are entitled to elect two of the seven director nominees.
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 directors. The holders of
Series B Preferred Stock, voting as a separate class, are entitled to elect two
directors. 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 directors to be elected by the
holders of Common Stock and Series B Preferred Stock, voting together as a
<PAGE>
class, and (ii) the holders of a majority of the shares of Series B Preferred
Stock in the case of the directors 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.
NOMINEES FOR ELECTION BY HOLDERS OF 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.
NOMINEE AGE POSITION WITH THE COMPANY DIRECTOR SINCE
------- --- ------------------------- --------------
Paul M. Frison 61 Chairman of the Board, President
Chief Executive Officer and Director 1986
Stephen A. Livesey, M.D.,
Ph.D. 45 Executive Vice President, Chief
ScienceOfficer and Director 1993
Michael E. Cahr 58 Director 1991
James G. Foster 51 Director 1995
David A. Thompson 56 Director 1997
NOMINEES FOR ELECTION BY HOLDERS OF SERIES B PREFERRED STOCK
The persons listed below have been nominated for election to fill the two
director positions to be elected by the holders of Series B Preferred Stock,
voting as a separate class.
NOMINEE AGE POSITION WITH THE COMPANY DIRECTOR SINCE
------- --- ------------------------- --------------
Lori G. Koffman 39 Director 1996
K. Flynn McDonald 45 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, including 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, Mr. Frison
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 Science 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.
2
<PAGE>
MICHAEL E. CAHR. Mr. Cahr has been a director of the Company since July
1991. Mr. Cahr has been the Chairman of Allscripts, Inc., a medication
management firm, since June 1994, and also served as its President and Chief
Executive Officer from June 1994 to October 1997. From 1987 to June 1994, he was
the Venture Group Manager in the Venture Capital Division of the Investment
Department of Allstate Insurance Company, formerly a principal stockholder of
the Company. Mr. Cahr is a director of Optek Technologies, Inc., an
optoelectronic company, and Alarmguard Holdings, Inc., an electronic security
monitoring 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.
LORI G. KOFFMAN. Ms. Koffman was elected a director of the Company in
November 1996. Ms. Koffman is a Managing Director of CIBC Capital Partners, the
merchant banking arm of the Canadian Imperial Bank of Commerce, and CIBC Wood
Gundy Ventures, Inc., where she has been employed since April 1995. From August
1984 to December 1994, Ms. Koffman was employed at Lehman Brothers Inc., most
recently as a Senior Vice President in the Merchant Banking Group. Ms. Koffman
is a director of R.P. Scherer Corporation, Sinclair Montrose Healthcare plc,
Mulberry Childcare Centers, Inc., Collegiate Health Care, Inc., Village Inc.,
Nursefinders Corporation and Datamedic Holdings Corp.
K. FLYNN MCDONALD. Ms. McDonald was elected a director of the Company in
November 1996. Ms. McDonald is a Managing Director of Vector Fund Management,
L.P., the general partner of Vector Later-Stage Equity 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 of 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, Pilot Network Services, Inc., a provider
of security services to the Internet, Digirad, Inc., a private company focusing
on solid-state, semiconductor gamma detector technology, and Decibel
Instruments, Inc., a hearing device company.
DAVID A. THOMPSON. Mr. Thompson was elected a director of the Company in
June 1997. Mr. Thompson has been Chief Executive Officer of Diagnostic Marketing
Strategies, a private consulting firm, since June 1995. From 1964 through June
1995, Mr. Thompson was employed by Abbott Laboratories, a healthcare company,
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.
ARRANGEMENTS REGARDING THE NOMINATION AND ELECTION OF DIRECTORS
Pursuant to a voting agreement entered into November 1996 between the
Company, the holders of Series B Preferred Stock and a former principal
stockholder of the company (the "Voting Agreement"), the holders of shares 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 "Series B Directors"). Ms. Koffman and Ms. McDonald have been
submitted as nominees for election to the Board of Directors by the holders of
the Series B Preferred Stock, voting as a separate class, pursuant to such
provisions of the Voting Agreement.
The stockholder parties to the Voting Agreement also agreed to vote their
shares of Common Stock or Series B Preferred Stock for the election to the
Company's Board of Directors of Paul M. Frison and Stephen A. Livesey, executive
officers of the Company (the "Company Directors"), and Michael E. Cahr.
The stockholder parties to the Voting Agreement also agreed to vote their
shares of Common Stock or Series B Preferred Stock for the election of up to two
persons to the Company's Board of Directors designated by the Series B Directors
and the Company Directors, which designees are neither members of the Company's
management nor employees or officers of the Company. Mr. Thompson has been
submitted as a nominee for
3
<PAGE>
election to the Board of Directors pursuant to such provisions of the Voting
Agreement.
Mr. Foster was nominated for election as a director of the Company
pursuant to Medtronic's right under an agreement entered into in March 1994
between LifeCell and Medtronic to designate one nominee for election to the
Company's Board of Directors. The stockholder parties to the Voting Agreement
have agreed to vote their shares of Common Stock or Series B Preferred Stock for
the election of the person designated by Medtronic.
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,
1997, the Board of Directors met ten times, the Audit Committee met once, the
Compensation Committee met once and the Stock Option Committee met three times.
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. The Audit Committee comprises Mr. Foster, Ms. McDonald and
Mr. Thompson. 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. The Compensation Committee comprises Mr. Cahr, Mr.
Foster, Ms. Koffman, Ms. McDonald and Mr. Thompson. The Compensation Committee
reviews, approves and makes recommendations to the Board of Directors on matters
regarding the compensation of the Company's officers, directors, employees and
agents.
STOCK OPTION COMMITTEE. Mr. Cahr, Ms. Koffman, Ms. McDonald and Mr.
Thompson, none of whom is an employee of the Company, are the current members of
the Stock Option Committee, which administers the Company's stock option plans.
PROPOSAL 2: APPROVAL OF AN AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
GENERAL
At the meeting, the stockholders of the Company will be asked to vote upon
a proposal to approve an amendment (the "Authorized Share Amendment") to the
LifeCell Corporation Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"). Pursuant to the Authorized Share Amendment, the
number of shares of Common Stock that the Company shall have authority to issue
would be increased from 25,000,000 shares to 48,000,000 shares. The proposed
Authorized Share Amendment is set forth in full in ANNEX A to this proxy
statement.
REASONS FOR THE AUTHORIZED SHARE AMENDMENT
The Company currently is authorized under the Certificate of Incorporation
to issue 25,000,000 shares of Common Stock, of which 11,147,143 shares were
issued and outstanding as of the Record Date and approximately 10,830,000
additional shares were reserved for issuance upon conversion of the Series B
Preferred Stock, upon exercise of outstanding warrants, under director and
employee benefit plans, upon conversion of shares of Series B Preferred Stock
that may be issued as dividends on the Series B Preferred Stock and pursuant to
other rights to acquire Common Stock. After subtracting such reserved shares
from the total number of authorized but unissued shares, a balance of
approximately 3,023,000 authorized but unissued shares of Common Stock is
available for other purposes. The Company also is authorized to issue 2,000,000
shares of Preferred Stock, par value $.001, of which 182,205 are designated as
Series B Preferred Stock. There were 121,299 shares of Series B Preferred Stock
outstanding as of the Record Date.
The Board of Directors has approved, and has directed that there be
submitted to stockholders for their approval, a proposed amendment to the
Certificate of Incorporation that would increase the number of authorized shares
of
4
<PAGE>
Common Stock from 25,000,000 to 48,000,000. The number of shares of
authorized Preferred Stock would remain unchanged at 2,000,000 shares. The
proposed increase in the number of authorized shares of Common Stock has been
recommended by the Board of Directors to assure that an adequate supply of
authorized unissued shares of Common Stock is available for general corporate
needs, such as future financing, acquisitions, stock dividends or stock splits
and employee benefit plans. The additional shares being authorized by the
Authorized Share Amendment will permit the Company to engage in future financing
activities without the delay and expense associated with the holding of a
special meeting or soliciting the consent or approval of stockholders at the
time such additional shares are needed. The availability of additional shares of
Common Stock for issue, without the need for a special meeting of the
stockholders, will afford the Company greater flexibility in acting upon
proposed financing or acquisition transactions. If the proposed Authorized Share
Amendment is approved by the stockholders, the additional shares of authorized
Common Stock will be available for issuance from time to time by action of the
Board of Directors and for such consideration as the Board of Directors may
determine, without further authorization by vote of stockholders, unless
required by law or regulatory authorities.
CERTAIN CONSIDERATIONS
Stockholders should note that certain disadvantages may result from the
adoption of the proposed Authorized Share Amendment. Such disadvantages may
include a reduction in their interest of the Company with respect to earnings
per share, voting, liquidation value and book and market values per share if and
when the additional authorized shares of Common Stock are issued.
Additionally, while not having such purpose, the Authorized Share
Amendment could have the effect of deterring a future takeover attempt of the
Company that the majority of stockholders may deem to be in their best interest.
Such event would arise if the Board of Directors deemed it in the best interest
of the Company to issue an option to purchase Common Stock, a security
convertible into shares of Common Stock or shares of Common Stock to a party
friendly to management in an amount that would make it less likely for an
unfriendly purchaser to attempt an acquisition of shares by tender offer or
other purchase. If a majority in voting power of the current stockholders desire
a takeover or change in control of the Company, and if such takeover or change
is opposed by the Board of Directors, the additional shares of Common Stock
could possibly be used by the Company to thwart the desires of the majority.
The additional shares of Common Stock for which authorization is sought
would be identical to the shares of Common Stock of the Company now authorized.
The holders of the Common Stock do not have preemptive or other rights to
subscribe for additional shares of capital stock of the Company or any security
convertible into such shares.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AUTHORIZED
SHARE AMENDMENT. Approval of the Authorized Share Amendment requires the
affirmative vote of the holders of a majority of the votes represented by the
shares of Common Stock and Series B Preferred Stock that are outstanding as of
the Record Date, voting together as a class. If not otherwise provided, proxies
will be voted "FOR" approval of the Authorized Share Amendment. 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 has the same effect as a vote against the
proposal.
PROPOSAL 3: APPROVAL OF AMENDMENT TO THE CERTIFICATE OF DESIGNATION OF SERIES
B PREFERRED STOCK REGARDING DIRECTORS ELECTED BY HOLDERS OF
SERIES B PREFERRED STOCK
GENERAL
At the meeting, the stockholders of the Company will be asked to vote upon
a proposal to approve an amendment (the "Series B Director Amendment") to the
terms of the Certificate of Designation of Series B Preferred Stock (the
"Certificate of Designation") that forms a part of the Certificate of
Incorporation.
Pursuant to the Series B Director Amendment, the number of directors that
may be elected solely by the holders of Series B Preferred Stock, voting
separately as a series, at any meeting of stockholders held for the election of
directors would be reduced from three to (i) two directors if at least 60,000
shares of Series B Preferred Stock are issued and
5
<PAGE>
outstanding on the record date for such meeting, (ii) one director, if less than
60,000 shares but at least 10,000 shares of Series B Preferred Stock are issued
and outstanding on the record date for such meeting, and (iii) no directors if
less than 10,000 shares of Series B Preferred Stock are issued and outstanding
on the record date for such meeting. The proposed Series B Director Amendment is
set forth in full in ANNEX B to this proxy statement.
CIBC Wood Gundy Ventures, Inc ("CIBC") and Vector Later-Stage Equity Fund,
L.P ("Vector") have advised the Company of their intent to cast the votes
attributable to the shares of Series B Preferred Stock held by each entity as of
the Record Date in favor of the Series B Director Amendment. CIBC and Vector
collectively account for 19% of the votes represented by the shares of Common
Stock and Series B Preferred Stock, voting together as a class, and 75% of the
votes represented by the shares of Series B Preferred Stock, voting as a
separate class, that are outstanding as of the Record Date and entitled to vote
thereon.
REASONS FOR THE SERIES B DIRECTOR AMENDMENT
The Board of Directors believes that it is in the best interests of the
stockholders to decrease the number of directors that may be elected by the
holders of Series B Preferred Stock, voting separately as series, as the number
of shares of Series B Preferred Stock that are issued and outstanding decreases
so that the representation of the directors designated by the holders of Series
B Preferred Stock is more closely aligned with the ownership interest held by
the holders of Series B Preferred Stock. Accordingly, the Board of Directors has
approved, and has directed that there be submitted to the stockholders for their
approval, the proposed Series B Director Amendment.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED SERIES B
DIRECTOR AMENDMENT. Approval of the Series B Director Amendment requires the
affirmative vote of the holders of a majority of the votes represented by (i)
the shares of Common Stock and Series B Preferred Stock that are outstanding as
of the Record Date, voting together as a class, and (ii) the shares of Series B
Preferred Stock that are outstanding as of the Record Date, voting as a separate
class. If not otherwise provided, proxies will be voted "FOR" approval of the
Series B Director Amendment. 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
has the same effect as a vote against the proposal.
PROPOSAL 4: APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF DESIGNATION OF
SERIES B PREFERRED STOCK REGARDING AUTOMATIC CONVERSION OF SERIES
B PREFERRED STOCK INTO COMMON STOCK
GENERAL
At the meeting, the stockholders of the Company will be asked to vote upon
a proposal to approve an amendment (the "Series B Conversion Amendment") to the
Certificate of Designation.
Pursuant to the Series B Conversion Amendment, the outstanding shares of
the Series B Preferred Stock would automatically be converted into shares of
Common Stock at the then applicable conversion price on the date on which the
Current Market Price (as defined in the Certificate of Designation) of the
Common Stock equals or exceeds $9.30 (as equitably adjusted to reflect stock
dividends, stock splits and similar events). The proposed Series B Conversion
Amendment is set forth in full in ANNEX B to this proxy statement.
CIBC and Vector have advised the Company of their intent to cast the votes
attributable to the shares of Series B Preferred Stock held by each entity as of
the Record Date in favor of the Series B Conversion Amendment. CIBC and Vector
collectively account for 19% of the votes represented by the shares of Common
Stock and Series B Preferred Stock, voting together as a class, and 75% of the
votes represented by the shares of Series B Preferred Stock, voting as a
separate class, that are outstanding as of the Record Date and entitled to vote
thereon.
REASONS FOR THE SERIES B CONVERSION AMENDMENT
The Certificate of Designation currently provides that the outstanding
shares of Series B Preferred Stock will convert automatically into shares of
Common Stock on the earlier to occur of (i) the date of the closing of an
underwritten
6
<PAGE>
public offering under the Securities Act of 1933, as amended (the "Securities
Act"), covering the offering and sale of Common Stock, or of any equity security
that as a part of a unit includes Common Stock, for the account of the Company,
in which the aggregate gross proceeds received by the Company, net of any
underwriter discounts or commissions, equals or exceeds $20,000,000, and in
which the public offering price per share of Common Stock equals or exceeds
$9.30 (as equitably adjusted to reflect stock dividends, stock splits and
similar events), and (ii) the date first occurring after the closing of an
underwritten public offering under the Securities Act covering the offering and
sale of Common Stock, or of any equity security that as a part of a unit
includes Common Stock, for the account of the Corporation, in which the
aggregate gross proceeds received by the Corporation, net of any underwriter
discounts or commissions, equals or exceeds $20,000,000, on which the Current
Market Price of the Common Stock equals or exceeds $9.30 (as equitably adjusted
to reflect stock dividends, stock splits and similar events).
In December 1997, the Company completed an underwritten public offering of
shares of Common Stock under the Securities Act in which the public offering
price per share was $4.50 and aggregate gross proceeds to the Company, net of
any underwriter discounts or commissions, was $16,740,000. The Board of
Directors believes it is in the best interests of the Company to decrease the
requirements for automatic conversion of the Series B Preferred Stock into
shares of Common Stock to facilitate increased liquidity in and stability of the
market for the Common Stock. The Board of Directors further believes that in
view of the Company's completion of the offering in December 1997, the most
relevant threshold for causing the automatic conversion remains the market price
for the Common Stock.
Accordingly, the Board of Directors has approved, and has directed that
there be submitted to the stockholders for their approval, the Series B
Conversion Amendment that would remove the other, current requirements for
automatic conversion and provide that the automatic conversion of the Series B
Preferred Stock into shares of Common Stock shall occur on the date on which the
Current Market Price of the Common Stock equals or exceeds $9.30 (as equitably
adjusted to reflect any stock dividends, stock splits and similar events)
without the attainment of any other thresholds.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED SERIES B
CONVERSION AMENDMENT. Approval of the Series B Conversion Amendment requires the
affirmative vote of the holders of a majority of the votes represented by (i)
the shares of Common Stock and Series B Preferred Stock that are outstanding as
of the Record Date, voting together as a class, and (ii) the shares of Series B
Preferred Stock that are outstanding as of the Record Date, voting as a separate
series. If not otherwise provided, proxies will be voted "FOR" approval of the
Series B Conversion Amendment. 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
has the same effect as a vote against the proposal.
PROPOSAL 5: APPROVAL OF AMENDMENT 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 an Amendment (the "Stock Plan Option Amendment") to the
LifeCell Corporation Amended and Restated 1992 Stock Option Plan (the "Amended
and Restated Stock Option Plan") to increase the aggregate number of shares of
Common Stock for which options may be granted under the plan from 1,500,000 to
2,500,000.
REASONS FOR THE STOCK OPTION PLAN AMENDMENT
The Board of Directors believes that it is in the best interests of the
Company to encourage ownership of the Company's stock by its directors, key
employees 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.
There are 417,356 shares of Common Stock currently available for grant as
options under the Amended and Restated Stock Option Plan. During December 1997,
the Board of Directors authorized a review of its compensation plans by an
independent consultant. While such review has not yet been completed, the Board
of Directors of the Company has determined that, to continue to
7
<PAGE>
provide performance-based incentives to the Company's management and key
employees and further to align their interests with those of the Company's
Stockholders, it is in the best interests of the Company to increase the number
of shares of Common Stock available for the grant of options under the Amended
and Restated Stock Option Plan.
The Board of Directors has approved the Stock Option Plan Amendment to
provide additional shares of Common Stock for which options may be granted under
the Amended and Restated Stock Option Plan and has directed that the amendment
be presented to the stockholders for their approval.
CERTAIN CONSIDERATIONS
Stockholders should note that certain disadvantages may result from the
approval of the Stock Option Plan Amendment, including a reduction in their
interest in 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.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE STOCK
OPTION PLAN AMENDMENT. Approval of the Stock Option Plan Amendment requires the
affirmative vote of the holders of a majority of the votes represented by the
shares of Common Stock and Series B Preferred Stock that are outstanding as of
the Record Date, voting together as a class. If not otherwise provided, proxies
will be voted "FOR" approval of the Stock Option Plan Amendment. 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.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 1, 1998, 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 and
directors of the Company and (iii) all executive officers and directors of the
Company as a group.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
--------------------------------------------
SERIES B PREFERRED
COMMON STOCK STOCK
------------ -----
BENEFICIAL OWNER SHARES % SHARES %
---------------- ------ - ------ -
CIBC Wood Gundy Ventures, Inc.(2)
425 Lexington Avenue
New York, New York 10017 .............. 2,553,707 18.6 47,805 39.4
Vector Later-Stage Equity Fund,
L.P.(3)
1751 Lake Cook Road, Suite 350
Deerfield, Illinois 60015 ............. 2,305,031 17.1 42,681 35.2
The Kaufmann Fund(4)
140 East 45th Street, 43rd Floor
New York, NY 10017 .................... 1,000,000 9.0 -- --
The Woodlands Venture Capital
Company(5)
2201 Timberloch Place
The Woodlands, Texas 77380 ............ 733,757 6.5 2,666 2.2
S.B.S.F. Biotechnology Fund,
L.P.(6)
c/o Spears, Benzak, Salomon &
Farrell
45 Rockefeller Plaza, 33rd Floor
New York, New York 10111 .............. 512,966 4.4 9,602 7.9
Paul M. Frison(7)
Chairman of the Board, President
and Chief
Executive Officer ................... 334,299 3.0 -- --
Michael E. Cahr
Director(8) ........................... 103,869 * 531 *
James G. Foster
Director(9) ........................... -- -- -- --
Lori Koffman(10)
Director .............................. -- -- --
Stephen A. Livesey, M.D., Ph.D.(11)
Executive Vice President, Chief
Science Officer and Director ........ 224,357 2.0 264 *
K. Flynn McDonald(12)
Director .............................. 25,000 * -- --
David A. Thompson
Director .............................. 1,700 * -- --
John R. Harper, Ph.D.(13)
Vice President, Clinical
Development ........................... 14,415 * -- --
Jane Lea Hicks(14)
Vice President, Business
Development ........................... 80,460 * -- --
J. Donald Payne(15)
Vice President and Chief
Financial Officer ..................... 7,133 * -- --
Ronald J. Schwartz(16)
Vice President, Sales and
Marketing ............................. 21,007 * -- --
Charles M. Schiff(17)
Vice President, Operations ............ 7,062 *
All executive officers and
directors
as a group (12 persons)(18) ........... 819,302 6.9 795 *
- ----------------
* Less than 1%.
9
<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 of March 1, 1998 have been exercised or
converted. Options, warrants and other convertible securities that are not
exercisable within 60 days of March 1, 1998 have been excluded. 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 1,542,096 shares of Common Stock issuable upon conversion of
shares of Series B Preferred Stock and 1,011,611 shares of Common Stock
issuable upon exercise of a warrant. Lori Koffman, a director of the
Company, is a Managing Director of CIBC Wood Gundy Ventures, Inc. ("CIBC").
(3) Includes 1,376,806 shares of Common Stock issuable upon conversion of
shares of Series B Preferred Stock, 903,225 shares of Common Stock issuable
upon exercise of a warrant and 25,000 shares underlying an option granted
under the LifeCell Corporation Second Amended and Restated 1993
Non-Employee Director Stock Option Plan, as amended (the "Director Stock
Option Plan") to K. Flynn McDonald and beneficially owned by Vector
Later-Stage Equity Fund, L.P. 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 its report
on Schedule 13G dated as of December 31, 1997, as received by the Company,
and the Company's stock records.
(5) Total number of shares of Common Stock includes 86,000 shares of Common
Stock issuable upon conversion of shares of Series B Preferred Stock and
56,451 shares of Common Stock issuable upon 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 shares
of Common Stock beneficially 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. 4 to their joint
report on Schedule 13G dated February 6, 1998, as received by the Company,
and the Company's stock records.
(6) Includes 309,741 shares of Common Stock issuable upon conversion of shares
of Series B Preferred Stock and 203,225 shares of Common Stock issuable
upon exercise of warrants.
(7) Total number of shares of Common Stock includes 158,684 shares underlying
options granted under the Amended and Restated Stock Option Plan and 507
shares held for Mr. Frison's account by the LifeCell Corporation Employee
Stock Purchase Plan (the "Stock Purchase Plan").
(8) Total number of shares of Common Stock includes 75,000 shares underlying
options granted under Director Stock Option Plan, 17,129 shares of Common
Stock issuable upon conversion of shares of Series B Preferred Stock and
11,290 shares of Common Stock issuable upon exercise of a warrant.
(9) Mr. Foster is the Vice President and General Manager of Medtronic Heart
Valves, a division of Medtronic, and because of such position may be deemed
the beneficial owner of the 345,191 shares of Common Stock held by
Medtronic. Mr. Foster disclaims any such beneficial ownership. 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. 2 to its report on Schedule 13G dated February 12, 1998,
as received by the Company, and the Company's stock records.
(10) Ms. Koffman is a Managing Director of CIBC and because of such position may
be deemed the beneficial owner of the 2,553,707 shares of Common Stock and
the 47,805 shares of Series B Preferred Stock beneficially owned by CIBC.
Ms. Koffman disclaims any such beneficial ownership.
(11) Total number of shares of Common Stock includes 108,710 shares underlying
options granted under the Amended and Restated Stock Option Plan, 8,516
shares of Common Stock issuable pursuant to the conversion of shares of
Series B Preferred Stock, 5,645 shares of Common Stock issuable upon
exercise of a warrant and 957 shares of Common Stock held for Mr. Livesey's
account by the Stock Purchase Plan.
(12) Total number of shares of Common Stock includes 25,000 shares underlying
options granted under the Director Stock Option Plan. Ms. McDonald is
required under the terms of her employment with Vector Fund Management,
L.P. to transfer to Vector Fund Management, L.P. any net gain received upon
sale of the shares of Common Stock underlying such options. Ms. McDonald is
a Vice President of Vector Fund Management, L.P., the general partner of
Vector Later-Stage Equity Fund, L.P., and because of such position may be
deemed the beneficial owner of the 2,280,031 shares of Common Stock and the
42,681 shares of Series B Preferred Stock beneficially owned by Vector
Later-Stage Equity Fund, L.P. Ms. McDonald disclaims any such beneficial
ownership.
(13) Total number of shares of Common Stock includes 14,160 shares underlying
options granted under the Amended and Restated Stock Option Plan and 255
shares of Common Stock held for Mr. Harper's account by the Stock Purchase
Plan.
(14) Total number of shares of Common Stock includes 67,201 shares underlying
options granted under the Amended and Restated Stock Option Plan and 957
shares of Common Stock held for Ms. Hicks' account by the Stock Purchase
Plan.
(15) Total number of shares of Common Stock includes 5,000 shares underlying
options granted under the Amended
10
<PAGE>
and Restated Stock Option Plan and 133 shares of Common Stock held for Mr.
Payne's account by the Stock Purchase Plan.
(16) Total number of shares of Common Stock includes 20,410 shares underlying
options granted under the Amended and Restated Stock Option Plan and 597
shares of Common Stock held for Mr. Schwartz's account by the Stock
Purchase Plan.
(17) Total number of shares of Common Stock includes 6,250 shares underlying
options granted under the Amended and Restated Stock Option Plan and 112
shares of Common Stock held for Mr. Schiff's account by the Stock Purchase
Plan.
(18) See notes (7) through (17).
EXECUTIVE OFFICERS AND COMPENSATION
The following section sets forth certain information regarding the
Company's executive officers.
BACKGROUND OF EXECUTIVE OFFICERS
DATE OF
FIRST
NAME OFFICES HELD ELECTION AGE
---- ------------ -------- ---
Paul M. Frison.... Chairman of the Board, President and
Chief Executive Officer May 1986 61
Executive Vice President and Chief
Stephen A. Livesey Science Officer and Director June 1991 45
John R. Harper, November
Ph.D.............. Vice President, Clinical Development 1994 45
Jane Lea Hicks.... Vice President, Business Development March 1992 47
J. Donald Payne... Vice President, Chief Financial
Officer and Secretary March 1997 42
Ronald J. Schwartz Vice President, Sales and Marketing April 1994 38
September
Charles M. Schiff. Vice President, Operations 1997 54
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 has served as Vice President, Clinical
Development since June 1997 He served as Vice President of Research and
Development from November 1994 until June 1997. He is responsible for directing
LifeCell's clinical research development activities for AlloDerm(R) and future
products. 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. 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.
11
<PAGE>
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.
RONALD J. SCHWARTZ. Mr. Schwartz was elected Vice President, Sales and
Marketing of the Company in April 1995 and directs LifeCell's sales and
marketing activities. 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.
CHARLES M. SCHIFF: Mr. Schiff was elected Vice President, Operations of the
Company in September 1997 and directs the manufacturing activities of LifeCell.
From June 1996 until September 1997, Mr. Schiff served as Director of
Manufacturing for the Company. Prior to joining LifeCell, from 1994 to 1996, Mr.
Schiff was Vice President of Operations of EyeSys Technologies, Inc. Mr. Schiff
was Vice President of Operations of EndoSonics Inc. from 1989 to 1994. Mr.
Schiff received his bachelor of science in mechanical engineering from Ohio
Northern University in 1967.
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.
12
<PAGE>
SUMMARY OF COMPENSATION
Set forth in the following table is certain compensation information
concerning the Chief Executive Officer and the Company's four most highly
compensated executive officers for the fiscal year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
NAME AND OTHER SECURITIES
PRINCIPAL ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(1) COMPENSATION
-------- ---- ------ ----- ------------- ---------- -----------
Paul M. Frison,
Chairman of the
Board,
President
and Chief .......... 1997 $231,133 $43,000 $6,000(2) -- $4,962(3)
Executive .......... 1996 220,723 44,400 6,000(2) 165,000 3,920(3)
Officer .............. 1995 210,417 27,500 6,000(2) 75,000(5) 3,672(3)
Stephen A ............
Livesey,
M.D., Ph.D.,
Executive Vice
President and ...... 1997 176,042 36,000 -- -- 640(4)
Chief Science ...... 1996 165,417 34,000 -- 120,000 448(4)
Officer ............ 1995 150,625 20,000 -- 50,000(5) 200(4)
John R. Harper,
Ph.D .................
Vice President, 1997 115,592 10,000 -- -- 420(4)
Clinical ........... 1996 105,723 15,000 -- 27,500 448(4)
Development ........ 1995 100,208 5,000 -- -- 200(4)
Jane Lea Hicks,
Vice President, 1997 115,492 10,000 3,600(2) -- 640(4)
Business ........... 1996 109,953 15,000 3,600(2) 20,000 448(4)
Development ........ 1995 105,208 10,000 3,600(2) 30,000(5) 200(4)
Ronald J .............
Schwartz,
Vice President, 1997 120,925 20,000 -- -- 640(4)
Sales and .......... 1996 105,907 18,000 -- 35,000 448(4)
Marketing .......... 1995(6) 75,208 7,000 -- 20,000 200(4)
(1) Represents shares issuable pursuant to stock options granted under the
Amended and Restated Stock Option Plan.
(2) Represents amounts paid for automobile allowance.
(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 1995, 1996 and 1997
of $400, $200 and $400, respectively, by the Company under the Company's
401(k) plan and (iii) contributions in 1996 and 1997 of $48 and $240,
respectively, by the Company under the Stock Purchase Plan.
(4) Represents contributions by the Company under the Company's 401(k) plan and
the Stock Purchase Plan.
(5) Represents options granted in 1995 in exchange for 1993 options
surrendered.
(6) Employment began April 1, 1995.
13
<PAGE>
OPTION GRANTS AND EXERCISES
No options were granted during 1997 to the executive officers named in the
Summary Compensation Table. The following table sets forth information
concerning options exercised during 1997 and the value of unexercised options
held by each of the executive officers named in the Summary Compensation Table
at December 31, 1997.
<TABLE>
<CAPTION>
OPTION VALUES AT DECEMBER 31, 1997
NUMBER OF
SECURITIES UNDERLYING
SHARES UNEXERCISED OPTIONS VALUE OF UNEXERCISED
ACQUIRED AT DECEMBER 31, 1997 IN-THE-MONEY OPTIONS AT
ON (# SHARES) DECEMBER 31, 1997 ($)(1)
EXERCISE VALUE ---------------------- --------------------------
NAME (# SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ---------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Paul M. Frison -- -- 158,684 119,635 $254,153 $111,865
Stephen A .....
Livesey,
M.D., Ph.D .... -- -- 108,710 86,290 171,684 80,191
John R. Harper,
Ph.D .......... 7,500 $31,875 14,160 20,840 19,187 19,876
Jane Lea Hicks -- -- 67,201 23,340 120,524 27,923
Ronald J ......
Schwartz ...... -- -- 20,410 34,590 33,640 45,110
</TABLE>
(1) Based on $4.625 per share, the closing price of the Common Stock, as
reported by the Nasdaq SmallCap Market, on December 31, 1997.
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.
The terms of the LifeCell Corporation 1993 Non-Employee Director Stock
Option Plan (the Director Stock Option Plan) provide that each eligible director
who was a director on March 5, 1996, was granted an option to purchase 50,000
shares of Common Stock at an exercise price equal to the fair market value of a
share of Common Stock on the date of the Director Stock Option Plan. Pursuant to
the plan, an option to purchase 25,000 shares of Common Stock will be granted to
each newly elected directors at an exercise price equal to the fair and market
value of a share of Common Stock on such election date. The provisions of the
Director Stock Option Plan provide for an annual grant of an option to purchase
10,000 shares of Common Stock to each non-employee director. Options granted
under the Director Stock Option Plan generally vest one year after the date of
grant and expire ten years after the date of grant.
Pursuant to such provisions, on June 1, 1997, Mr. Cahr and Ms. McDonald
were granted options to purchase 10,000 shares of Common Stock at an exercise
price of $6.125 per share. Ms. McDonald is required under the terms of her
employment with Vector Fund Management, L.P., to transfer to Vector Fund
Management L.P. any net gain received upon sale of shares of Common Stock
underlying any options granted. On June 19, 1997, Mr. Thompson was granted an
option to purchase 25,000 shares of Common Stock at an exercise price of $5.50
per share. Mr. Foster is an employee of Medtronic and under the policies of
Medtronic he is not permitted to accept or hold such options. Ms. Koffman is an
employee of CIBC and under the policies of CIBC she is not permitted to accept
or hold such options. Accordingly, Mr. Foster and Ms. Koffman have surrendered
any options granted under the Director Stock Option Plan to the Company.
14
<PAGE>
CERTAIN 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 were due December
31, 1997. In December 1997, the loans were renewed in notes due December 31,
1999. Such notes bear interest at the prime rate, payable quarterly.
The Company leases its facilities pursuant to a lease agreement from an
entity which, prior to 1998, was an affiliate of The Woodlands Venture Capital
Company, a principal stockholder of the Company, and paid an aggregate of
approximately $223,000 in rent during 1997, 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 to develop jointly the Company's heart valve product. James G. Foster,
a director of the Company, is Vice President and General Manager for Medtronic
Heart Valves, a division of Medtronic. Pursuant to the license agreement,
Medtronic paid LifeCell a $1.5 million licensing fee, funds in part the cost of
research and development, under a mutually agreed upon budget and will pay
royalties of up to $25 million on sales of products covered by the license
agreement. In 1997, LifeCell recorded revenue of approximately $218,000,
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, the
$1.5 million licensing fee paid by Medtronic will convert into shares of Common
Stock, subject to certain limitations, at the then fair market value, and any
unconverted portion of the fee will be refunded to Medtronic.
In December 1997, the Company completed a public offering of shares of
Common Stock in which Vector Securities International, Inc. acted as a lead
underwriter. Vector Later-Stage Equity Fund, L.P., a principal stockholder of
the Company is an affiliate of such underwriter. In addition, K. Flynn McDonald,
a director of the Company, is a Managing Director of Vector Fund Management,
L.P., an affiliate of such underwriter. Pursuant to an underwriting agreement
entered into in November 1997 between the Company and such underwriter, the
underwriter purchased 1,728,000 shares of Common Stock from the Company in the
offering pursuant to which an underwriting discount totaling $544,320 was
allocable.
In April 1998, the company entered into an agreement with Vector Securities
International, Inc. engaging such investment banking firm as a financial advisor
for a one-year period. Pursuant to the agreement, LifeCell paid such firm a
non-refundable retainer fee of $100,000. Vector Later-Stage Equity Fund, L.P., a
principal stockholder of the Company is an affiliate of such investment banking
firm. In addition, K. Flynn McDonald, a director of the Company is a Managing
Director of Vector Fund Management, L.P., and affiliate of such investment
banking firm.
15
<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 5: Approval of Amendment 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 Amended and Restated Stock Option Plan and is qualified in its
entirety by reference to the plan.
GENERAL
The Board of Directors approved the Amended and Restated Stock Option Plan
on April 22, 1997, and the stockholders of the Company approved the plan on June
19, 1997. 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 Section 422 ("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 100 full-time employees, including seven
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.
FEDERAL TAX CONSEQUENCES
Options granted under the Amended and Restated 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.
ISOS
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.
16
<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.
NON-ISOS
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.
17
<PAGE>
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.
AMENDED AND RESTATED 1992 STOCK OPTION PLAN
PLAN BENEFITS
DOLLAR NUMBER OF
NAMES AND POSITION VALUE $ SHARES (1)
------------------ ------- ----------
Paul M. Frison,
Chairman of the Board, President and
Chief Executive Officer.................. (2) 278,319
Stephen A. Livesey,
Executive Vice President and Chief
Scientific Officer....................... (2) 195,000
Jane Lea Hicks,
Vice President, Business Development..... (2) 90,541
John R. Harper, Ph.D.
Vice President, Clinical Development..... (2) 42,500
J. Donald Payne
Vice President and Chief Financial Officer (2) 30,000
Ronald J. Schwartz
Vice President, Sales and Marketing...... (2) 55,000
Charles M. Schiff
Vice President, Operations (2) 25,000
Executive Officers as a Group (7 persons,
including
the executive officers named above)..... (2) 716,360
Non-Executive Officer Employee Group..... (2) 366,284
- ----------------
(1) 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 13, 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
13, 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 13, 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; options granted to Mr. Payne to purchase 10,000 and
20,000 shares of Common Stock on March 17, 1997 and June 19, 1997,
respectively; 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
16, 1996, respectively; options granted to Mr. Schiff to purchase 25,000
shares of Common Stock on June 13, 1996; and options granted to members of
the Non-Executive Officer Employee Group to purchase an aggregate of
366,284 shares of Common Stock on various dates between February 27, 1992
and December 18, 1997.
(2) 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 Amended and Restated Stock Option Plan on January 27, 1992, have
an exercise price of $4.00 per share. Options granted to Ms. Hicks and the
Non-Executive Employee Officer Group under the Amended and Restated 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 Amended and Restated Stock Option Plan on April
3, 1995, June 20, 1995, December 13, 1995, May 20, 1996, June 13, 1996,
August 16, 1996 March 20, 1997, June 19, 1997 and December 18, 1997 have an
exercise price of $2.13, $2.38, $2.50, $3.88, $4.38, $3.75, $5.88, $5.50
and $3.63, respectively. Options granted to members of the Non-Executive
Officer Employee Group under the Amended and Restated Stock Option Plan
have exercise prices ranging from $0.73 to $5.88. The closing price of the
Common Stock on April 17, 1998, as reported by the Nasdaq Small Cap Market,
was $8.00.
18
<PAGE>
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as the Company's principal independent
accountants for the fiscal year ended December 31, 1997, 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 1997, 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 required to file a Form 5 by February 16, 1998, for an
option granted in June 1997, under the Director Stock Option Plan. Ms. McDonald
filed a Form 5 on April 2, 1998. Mr. Cahr was required to file a Form 5 by
February 16, 1998, for an option granted in June 1997 under the Director Stock
Option Plan. Mr. Cahr filed a Form 5 on April 2, 1998. Vector Later-Stage Equity
Fund, L.P., was required to file a Form 4 by November 10, 1997, for the transfer
to Vector Later-Stage Equity Fund, L.P., of beneficial ownership of options
granted to Ms. McDonald under the Director Stock Option Plan. Vector Later-Stage
Equity Fund, L.P. filed a Form 5 on April 2, 1998. Woodlands Venture Capital
Company was required to file a Form 4 by April 10, 1997, for the conversion of
Series A Preferred Stock. Woodlands Venture Capital Company filed a Form 5
reporting the transaction on February 13, 1998.
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 1999 must be received by
the Company at its principal executive offices, 3606 Research Forest Drive, The
Woodlands, Texas 77381, no later than December 31, 1998, 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.
19
<PAGE>
ANNEX A
LIFECELL CORPORATION
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED
LifeCell Corporation, a Delaware corporation (the "Corporation"), does
hereby certify:
That the amendment set forth below to the Corporation's Restated
Certificate of Incorporation, as amended, was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware:
1. The first paragraph of Article Fourth of the Restated Certificate of
Incorporation, as amended, is hereby amended in its entirety to read as follows:
"FOURTH: The total number of shares of capital stock that the
Corporation shall have authority to issue is 50,000,000, of which
2,000,000 shares of the par value of $.001 per share shall be a class
designated Preferred Stock ("Preferred Stock"), and 48,000,000 shares of
the par value of $.001 per share shall be a class designated Common Stock
("Common Stock")."
IN WITNESS WHEREOF, LifeCell Corporation has caused this Certificate of
Amendment to be signed by its duly authorized officer this _____ day of
__________, 1998.
LIFECELL CORPORATION
By:____________________________________________
Paul M. Frison, President
A-1
<PAGE>
ANNEX B
LIFECELL CORPORATION
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED
LifeCell Corporation, a Delaware corporation (the "Corporation"), does
hereby certify:
That the amendments set forth below to the Corporation's Restated
Certificate of Incorporation, as amended, were duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware:
1. Paragraph 3(b) of the Certificate of Designation of Series B Preferred
Stock is hereby amended in its entirety to read as follows:
"(b) DIRECTORS. At any meeting of the stockholders of the
Corporation held for the election of directors, (i) if at least 60,000
shares of Series B Preferred Stock are issued and outstanding on the
record date for such meeting, the holders of Series B Preferred Stock,
voting separately as a series, shall be entitled to elect two members of
the Board of Directors of the Corporation, (ii) if less than 60,000 shares
but at least 10,000 shares of Series B Preferred Stock are issued and
outstanding on the record date for such meeting, the holders of Series B
Preferred Stock, voting separately as a series, shall be entitled to elect
one member of the Board of Directors of the Corporation and (iii) if less
than 10,000 shares of Series B Preferred Stock are issued and outstanding
on the record date for such meeting, the holders of Series B Preferred
Stock, voting separately as a series, shall not be entitled to elect any
members of the Board of Directors of the Corporation."
2. Paragraph 5(b) of the Certificate of Designation of Series B Preferred
Stock is hereby amended in its entirety to read as follows:
"(b) AUTOMATIC CONVERSION. Each outstanding share of Series B
Preferred Stock shall automatically be converted, without any further act
of the Corporation or its stockholders, at the Conversion Price then in
effect, into fully paid and nonassessable shares of Common Stock on the
date first occurring after the effectiveness of the Certificate of
Amendment, including this sentence, on which the Current Market Price (as
defined in the first sentence of Section 5(j) below) of the Common Stock
equals or exceeds $9.30 (as equitably adjusted to reflect any stock
dividend, stock distribution, stock split or reverse stock split,
combination of shares, subdivision of shares or reclassification of
shares)."
IN WITNESS WHEREOF, LifeCell Corporation has caused this Certificate of
Amendment to be signed by its duly authorized officer this _____ day of
__________, 1998.
LIFECELL CORPORATION
By:_______________________________________
Paul M. Frison, President
B-1
<PAGE>
FRONT SIDE OF PROXY
LIFECELL CORPORATION PROXY
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 May 27, 1998
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.,
Wednesday, May 27, 1998, and at any adjournment thereof. The proposals set forth
below are more fully described in the LifeCell Corporation Proxy Statement dated
April 20, 1998 (the Proxy Statement).
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.)
- --------------------------------------------------------------------------------
2. Proposal to approve an amendment to the LifeCell Corporation Amended and
Restated Certificate of Incorporation, as amended, to increase the number of
authorized shares of Common Stock from 25 million to 48 million, as more fully
described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve an amendment to the LifeCell Corporation Amended and
Restated Certificate of Incorporation, as amended, to amend the provisions for
election of directors by holders of Series B Preferred Stock, as more fully
described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on other side)
<PAGE>
BACK SIDE OF PROXY
(Continued from other side)
4. Proposal to approve an amendment to the LifeCell Corporation Amended and
Restated Certificate of Incorporation, as amended, to amend the provisions for
the automatic conversion of Series B Preferred Stock into Common Stock, as more
fully described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Proposal to approve an amendment to the LifeCell Corporation Amended and
Restated 1992 Stock Option Plan to increase the number of shares of Common Stock
authorized for issuance for which options may be granted under the plan from
1,500,000 to 2,500,000 shares, as more fully described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. 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
proposals as set forth in Items 2, 3, 4, and 5.
Please sign exactly as name Dated: _______________________ , 1998
appears hereon. Joint owners should ______________________________________
each sign. When signing as attorney, ______________________________________
executor, administrator, trustee or (Signature of Stockholder(s))
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 May 27, 1998
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.,
Wednesday, May 27, 1998, and at any adjournment thereof. The proposals set forth
below are more fully described in the LifeCell Corporation Proxy Statement dated
April 20, 1998 (the Proxy Statement).
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 an amendment to the LifeCell Corporation Amended and
Restated Certificate of Incorporation, as amended to increase the number of
authorized shares of Common Stock from 25 million to 48 million, as more fully
described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve an amendment to the LifeCell Corporation Amended and
Restated Certificate of Incorporation, as amended, to amend the provisions for
election of directors by holders of Series B Preferred Stock, as more fully
described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on other side)
<PAGE>
BACK SIDE OF PROXY
(Continued from other side)
4. Proposal to approve an amendment to the LifeCell Corporation Amended and
Restated Certificate of Incorporation, as amended, to amend the provisions for
the automatic conversion of Series B Preferred Stock into Common Stock, as more
fully described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Proposal to approve an amendment to the LifeCell Corporation Amended and
Restated 1992 Stock Option Plan to increase the number of shares of Common Stock
authorized for issuance for which options may be granted under the plan from
1,500,000 to 2,500,000 shares, as more fully described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. 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
proposals as set forth in Items 2, 3, 4, and 5.
Please sign exactly as name Dated: _______________________ , 1998
appears hereon. Joint owners should ______________________________________
each sign. When signing as attorney, ______________________________________
executor, administrator, trustee or (Signature of Stockholder(s))
guardian, please give full title as
it appears hereon.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
