<PAGE> 1
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:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
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> 2
LIFECELL CORPORATION
3606 Research Forest Drive
The Woodlands, Texas 77381-4232
281/367-5368
April 10, 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 Thursday, 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> 3
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
Thursday, 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 10, 1998
<PAGE> 4
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 Thursday, 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 10, 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 [11,146,518] 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 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
<PAGE> 5
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.
<TABLE>
<CAPTION>
NOMINEE AGE POSITION WITH THE COMPANY DIRECTOR SINCE
------- --- ------------------------- --------------
<S> <C> <C> <C>
Paul M. Frison 61 Chairman of the Board, President, Chief 1986
Executive Officer and Director
Stephen A. Livesey, M.D., Ph.D. 45 Executive Vice President, Chief Science 1993
Officer and Director
Michael E. Cahr 57 Director 1991
James G. Foster 51 Director 1995
David A. Thompson 56 Director 1997
</TABLE>
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.
<TABLE>
<CAPTION>
NOMINEE AGE POSITION WITH THE COMPANY DIRECTOR SINCE
------- --- ------------------------- --------------
<S> <C> <C> <C>
Lori G. Koffman 38 Director 1996
K. Flynn McDonald 45 Director 1996
</TABLE>
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.
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<PAGE> 6
Michael E. Cahr. Mr. Cahr has been a director of the Company since
July 1991. Mr. Cahr has been the Chairman of Allscrips Pharmaceuticals, Inc.,
a medication management and distribution 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 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, 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
3
<PAGE> 7
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 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. 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. 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 and Ms. McDonald, 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 [11,146,518]
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 [3,023,482] 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.
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<PAGE> 8
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 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.
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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 by 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 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.
6
<PAGE> 10
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 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.
7
<PAGE> 11
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 provide
performance-based incentive to the Company's management and key employees, it
is in the best interests of the Company to increase the number of shares of
Common Stock available for 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> 12
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.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
----------------------------------------------------
COMMON STOCK SERIES B PREFERRED STOCK
---------------------- ------------------------
BENEFICIAL OWNER SHARES % SHARES %
----------------------------------------------- ---------- -------- ------------- ---------
<S> <C> <C> <C> <C>
CIBC Wood Gundy Ventures, Inc.(2) . . . . . . 2,553,707 18.6 47,805 39.4
425 Lexington Avenue
New York, New York 10017
Vector Later-Stage Equity Fund, L.P.(3) . . . 2,305,031 17.1 42,681 35.2
1751 Lake Cook Road, Suite 350
Deerfield, Illinois 60015
The Kaufmann Fund(4) . . . . . . . . . . . . 1,000,000 9.0 -- --
140 East 45th Street, 43rd Floor
New York, NY 10017
The Woodlands Venture Capital Company(5) . . 733,757 6.5 2,666 2.2
2201 Timberloch Place
The Woodlands, Texas 77380
S.B.S.F. Biotechnology Fund, L.P.(6) . . . . 512,966 4.4 9,602 7.9
c/o Spears, Benzak, Salomon & Farrell
45 Rockefeller Plaza, 33rd Floor
New York, New York 10111
Paul M. Frison(7) . . . . . . . . . . . . . . 334,299 3.0 -- --
Chairman of the Board, President and Chief
Executive Officer
Michael E. Cahr . . . . . . . . . . . . . . . 103,869 * 531 *
Director(8)
James G. Foster . . . . . . . . . . . . . . . -- -- -- --
Director(9)
Lori Koffman(10) . . . . . . . . . . . . . . -- -- --
Director
Stephen A. Livesey, M.D., Ph.D.(11) . . . . . 224,357 2.0 264 *
Executive Vice President, Chief
Science Officer and Director
K. Flynn McDonald(12) . . . . . . . . . . . . 25,000 * -- --
Director
David A. Thompson . . . . . . . . . . . . . . 1,700 * -- --
Director
John R. Harper, Ph.D.(13) . . . . . . . . . . 14,415 * -- --
Vice President, Research and Development
Jane Lea Hicks(14) . . . . . . . . . . . . . 80,460 * -- --
Vice President, Business Development
J. Donald Payne(15) . . . . . . . . . . . . . 7,133 * -- --
Vice President and Chief Financial Officer
Ronald J. Schwartz(16) . . . . . . . . . . . 21,007 * -- --
Vice President, Sales and Marketing
Charles M. Schiff(17) . . . . . . . . . . . . 7,062 *
Vice President, Operations
All executive officers and directors
as a group (12 persons)(18) . . . . . . . . 819,302 6.9 795 *
</TABLE>
9
<PAGE> 13
- -----------------
* Less than 1%.
(1) 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.
10
<PAGE> 14
(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 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).
11
<PAGE> 15
EXECUTIVE OFFICERS AND COMPENSATION
The following section sets forth certain information regarding the
Company's executive officers.
BACKGROUND OF EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
DATE OF
NAME OFFICES HELD FIRST ELECTION AGE
---- ------------ -------------- ---
<S> <C> <C> <C>
Paul M. Frison . . . . Chairman of the Board, President and Chief May 1986 61
Executive Officer
Stephen A. Livesey . . Executive Vice President and Chief Science June 1991 45
Officer and Director
John R. Harper, Ph.D. . Vice President, Research and Development November 1994 45
Jane Lea Hicks . . . . Vice President, Business Development March 1992 47
J. Donald Payne . . . . Vice President, Chief Financial Officer and March 1997 42
Secretary
Ronald J. Schwartz . . Vice President, Sales and Marketing April 1994 38
Charles M. Schiff . . . Vice President, Operations September 1997 53
</TABLE>
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. 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.
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,
12
<PAGE> 16
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.
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
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
OTHER SECURITIES
NAME AND PRINCIPAL ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(1) COMPENSATION
-------- ---- ------ ----- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Frison, 1997 $231,133 $43,000 $6,000(2) -- $ 4,962(3)
Chairman of the 1996 220,723 44,400 6,000(2) 165,000 3,920(3)
Board, President 1995 210,417 27,500 6,000(2) 75,000(5) 3,672(3)
and Chief
Executive Officer
Stephen A. Livesey, 1997 176,042 36,000 -- -- 640(4)
M.D., Ph.D., 1996 165,417 34,000 -- 120,000 448(4)
Executive Vice 1995 150,625 20,000 -- 50,000(5) 200(4)
President and
Chief Science
Officer
Jane Lea Hicks, 1997 115,492 10,000 3,600(2) -- 640(4)
Vice President, 1996 109,953 15,000 3,600(2) 20,000 448(4)
Business 1995 105,208 10,000 3,600(2) 30,000(5) 200(4)
Development
John R. Harper, Ph.D. 1997 115,592 10,000 -- -- 420(4)
Vice President, 1996 105,723 15,000 -- 27,500 448(4)
Research and 1995 100,208 5,000 -- -- 200(4)
Development
Ronald J. Schwartz, 1997 120,925 20,000 -- -- 640(4)
Vice President, 1996 105,907 18,000 -- 35,000 448(4)
Sales and 1995(6) 75,208 7,000 -- 20,000 200(4)
Marketing
</TABLE>
- ---------------
(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 $240, respectively, by the
13
<PAGE> 17
Company under the Stock Purchase Plan.
(4) Represents contributions by the Company under the Company's
401(k) plan and the Stock Purchase Plan.
(5) Represents options granted in 1995 in exchange for 1993
options surrendered.
(6) Employment began April 1, 1995.
14
<PAGE> 18
OPTION GRANTS AND EXERCISES
No options were granted during 1997 to the executive officers named in
the Summary Compensation Table. The following table sets forth information
concerning options exercised during 1997 and the value of unexercised options
held by each of the executive officers named in the Summary Compensation Table
at December 31, 1997.
OPTION VALUES AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
SHARES UNEXERCISED OPTIONS VALUE OF UNEXERCISED
ACQUIRED AT DECEMBER 31, 1997 IN-THE-MONEY OPTIONS AT
ON (# SHARES) DECEMBER 31, 1997 ($)(1)
EXERCISE VALUE ------------------------------------------------------------
NAME (# SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------- ---------- --------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <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
Jane Lea Hicks -- -- 67,201 23,340 120,524 27,923
John R. Harper, Ph.D. 7,500 $31,875 14,160 20,840 19,187 19,876
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. 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.
15
<PAGE> 19
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. 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.
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.
16
<PAGE> 20
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.
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.
17
<PAGE> 21
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.
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
<TABLE>
<CAPTION>
DOLLAR NUMBER OF
NAMES AND POSITION VALUE $ SHARES (1)
------------------ ------- ----------
<S> <C> <C>
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, Research and 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
</TABLE>
- ----------------
(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.
18
<PAGE> 22
(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 March 18, 1998, as
reported by the Nasdaq Small Cap Market, was $5.00.
19
<PAGE> 23
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 [March __, 1998]. Mr. Cahr was required to file a Form 5 by
February 15, 1998, for an option granted in June 1997 under the Director Stock
Option Plan. Mr. Cahr filed a Form 5 on [March 23, 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 [March __, 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 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.
20
<PAGE> 24
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> 25
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> 26
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.,
Thursday, 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 10, 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> 27
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
guardian, please give full title as -------------------------------------
it appears hereon. (Signature of Stockholder(s))
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
<PAGE> 28
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.,
Thursday, 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 10, 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> 29
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
guardian, please give full title as -------------------------------------
it appears hereon. (Signature of Stockholder(s))
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
