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 240.14a-11(c) or 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 19, 1999
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., Thursday, June 3, 1999, at
Houston Advanced Research Center, 4800 Research Forest Drive, The Woodlands,
Texas 77381.
This year you will be asked to consider one proposal. This proposal
concerns the election of directors. This matter is explained more fully in the
attached proxy statement, which you are encouraged to read.
The Board of Directors recommends that you approve this proposal and urges
you to return your signed proxy card, or cards, at your earliest convenience,
whether or not you plan to attend the annual meeting.
Thank you for your cooperation.
Sincerely,
/s/ Paul G. Thomas
---------------------
Paul G. Thomas
President and Chief Executive Officer
<PAGE>
LIFECELL CORPORATION
3606 Research Forest Drive
The Woodlands, Texas 77381-4232
Notice of Annual Meeting of Stockholders to Be Held June 3, 1999
Notice is hereby given that the Annual Meeting of the Stockholders of
LifeCell Corporation, a Delaware corporation (the "Company"), will be held on
Thursday, June 3, 1999, at 1:00 p.m. C.D.T., 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 transact such other business as may properly come before the
meeting or any adjournment thereof.
This proposal is 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 April 6, 1999, will
be entitled to vote at the meeting.
By Order of the Board of Directors,
/s/ Lynne P. Hohlfeld
------------------------
Lynne P. Hohlfeld
Secretary
April 19, 1999
<PAGE>
LIFECELL CORPORATION
Proxy Statement
for Annual Meeting of Stockholders
to Be Held June 3, 1999
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, June 3, 1999 at 1:00
p.m. C.D.T., at Houston Advanced Research Center, 4800 Research Forest Drive,
The Woodlands, Texas 77381 or any adjournment thereof.
Proxies in the form or forms 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. 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 or forms of proxy are to be mailed on or
about April 19, 1999, to stockholders of record on April 6, 1999 (the "Record
Date").
At the close of business on the Record Date, there were outstanding and
entitled to vote 11,753,239 shares of Common Stock, par value $.001 per share
(the "Common Stock"), and 118,424 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, are
entitled to elect two of the seven director nominees.
MATTERS TO COME BEFORE THE MEETING
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 series, 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
1
<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 series. 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 series, 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. 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 G. Thomas 43 President and Chief Executive Officer 1998
Stephen A. Livesey, M.D., Ph.D. 46 Executive Vice President, Chief Science 1993
Officer and Director
Michael E. Cahr 59 Director 1991
James G. Foster 52 Director 1995
David A. Thompson 57 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 series.
<TABLE>
<CAPTION>
NOMINEE AGE POSITION WITH THE COMPANY DIRECTOR SINCE
- ----------------- --- ------------------------- --------------
<S> <C> <C> <C>
Lori G. Koffman 40 Director 1996
K. Flynn McDonald 46 Director 1996
</TABLE>
INFORMATION REGARDING NOMINEES AND DIRECTORS
Background of Nominees for Director
Paul G. Thomas. Mr. Thomas has served as Director, President and Chief
Executive Officer of LifeCell since October 1998. Prior to joining LifeCell,
Mr. Thomas was President and Chief Operating Officer for the Pharmaceutical
Products Division of Ohmeda Inc., a company engaged in the development,
manufacturing and marketing of inhalation anesthetics and acute care
pharmaceuticals used in operating room and intensive care areas of hospitals.
Since joining Ohmeda in 1982, Mr. Thomas progressed through numerous management
positions of increasing responsibility covering strategic areas such as global
product management and planning, commercial development, worldwide marketing and
business development. In his most recent position, Mr. Thomas was responsible
for the overall operations of Ohmeda's Pharmaceutical Products Division, which
included the day-to-day management of 550 employees engaged in manufacturing,
sales, marketing, and research and development in North America, Puerto Rico and
the United Kingdom. Mr. Thomas received his MBA degree with an emphasis in
Marketing and Finance from Columbia University Graduate School of Business in
1982 and completed his Research/Teaching Fellowship in Chemistry at the
University of Georgia Graduate School of Arts and Science in 1979. He received
his B.S. degree in Chemistry from St. Michael's College in Vermont in 1977.
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 is the Chairman of Metabolic Technologies, Inc., a company
engaged in research geared toward developing products to overcome various
addictions by optimizing cellular health, nutritionally. Mr. Cahr was the
Chairman or President and Chief Executive Officer of Allscripts, Inc., a
medication management firm, from June 1994 to December 1998. 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.
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") a medical device company,
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, 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 Sinclair Montrose
Healthcare plc and several privately held companies.
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 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, Decibel Instruments, Inc.,
a hearing device company, and Spinal Concepts, Inc., a manufacturer of spinal
implants.
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, NeoPath, Inc., an automated medical
images company, and St. Jude Medical Inc., a medical device company.
Arrangements Regarding the Nomination and Election of Directors
Pursuant to a voting agreement entered into November 1996 between the
Company and the holders of Series B Preferred Stock, as amended in December 1998
(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 series, 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 G. Thomas and Stephen A. Livesey, executive
officers of the Company (the "Company Directors"), and Michael E. Cahr.
3
<PAGE>
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. Foster and Mr.
Thompson have been submitted as nominees for election to the Board of Directors
pursuant to such provisions of the Voting Agreement.
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,
1998, the Board of Directors met six 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 meeting 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, Ms.
Koffman and Ms. McDonald. 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 and Ms. Koffman, neither 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.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of February 28, 1999, 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 18.0 47,805 40.4
425 Lexington Avenue
New York, New York 10017
Vector Later-Stage Equity Fund, L.P.(3) 2,315,031 16.6 42,681 36.0
1751 Lake Cook Road, Suite 350
Deerfield, Illinois 60015
The Woodlands Venture Capital Company(4) 782,570 6.6 2,666 2.2
2201 Timberloch Place
The Woodlands, Texas 77380
Medtronic, Inc.(5) 655,962 5.6 __ __
7000 Central Avenue, N.E.
Minneapolis, MN 55432
S.B.S.F. Biotechnology Fund, L.P.(6) 512,966 4.2 9,602 8.1
c/o Spears, Benzak, Salomon & Farrell
45 Rockefeller Plaza, 33rd Floor
New York, New York 10111
Paul G. Thomas(7) 62,913 * __ __
President, Chief Executive Officer and Director
Paul M. Frison(8) 398,892 3.4 __ __
Chairman of the Board
Michael E. Cahr(9) 113,869 * 531 *
Director
James G. Foster10) - - - -
Director
Lori Koffman(11) - - -
Director
Stephen A. Livesey, M.D., Ph.D.(12) 270,977 2.3 264 *
Executive Vice President, Chief
Science Officer and Director
K. Flynn McDonald(13) 35,000 * - -
Director
David A. Thompson(14) 26,700 * - -
Director
John R. Harper, Ph.D.(15) 24,825 * - -
Vice President, Clinical Development
All executive officers and directors 1,113,733 8.9 795 *
as a group (13 persons)(16)
<FN>
_______________
* Less than 1%.
(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 February 28, 1999 have been exercised or
converted. Options, warrants and other convertible securities that are not
exercisable within 60 days of February 28, 1999 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.
5
<PAGE>
(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 35,000 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) 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. 5 to their joint
report on Schedule 13G dated February 12, 1999, as received by the Company,
and the Company's stock records.
(5) Information with respect to such stockholder was obtained from Amendment
No. 3 to its report on Schedule 13G dated February 12, 1999, 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 62,500 shares underlying
options granted under the LifeCell Corporation Amended and Restated 1992
Stock Option Plan (the "Amended and Restated Stock Option Plan") and 413
shares of Common Stock held for Mr. Thomas' account by the LifeCell
Corporation Employee Stock Purchase Plan (the "Stock Purchase Plan").
(8) Total number of shares of Common Stock includes 223,209 shares underlying
options granted under the Amended and Restated Stock Option Plan.
(9) Total number of shares of Common Stock includes 85,000 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.
(10) 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 655,962 shares of Common Stock held by
Medtronic. Mr. Foster disclaims any such beneficial ownership. Information
with respect to the ownership of such stockholder was obtained from
Amendment No. 3 to its report on Schedule 13G dated February 12, 1999, as
received by the Company, and the Company's stock records.
(11) 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.
(12) Total number of shares of Common Stock includes 154,920 shares underlying
options granted under the Amended and Restated Stock Option Plan,
8,516shares 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 1,367 shares of Common Stock held for Mr.
Livesey's account by the Stock Purchase Plan.
(13) Total number of shares of Common Stock includes 35,000 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.
(14) Total number of shares includes 25,000 shares underlying options granted
under the Director Stock Option Plan.
(15) Total number of shares of Common Stock includes 24,570 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.
(16) See notes (7) through (15).
</TABLE>
6
<PAGE>
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 G. Thomas President and Chief Executive Officer October 1998 43
Stephen A. Livesey, Executive Vice President and Chief Science June 1991 46
M.D., Ph.D. Officer and Director
Paul M. Frison Chairman of the Board May 1986 62
John R. Harper, Ph.D. Vice President, Clinical Development November 1994 46
Charles M. Schiff Vice President, Operations September 1997 55
</TABLE>
For further information regarding Mr. Thomas's background, see "Background
of Nominees for Director."
For further information regarding Dr. Livesey's background, see "Background
of Nominees for Director."
Paul M. Frison. Mr. Frison has served as Chairman of the Board of LifeCell
since May 1986. Mr. Frison formerly served as President and Chief Executive
Officer of LifeCell from May 1986 to September 1998. 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, Inc. 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.
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 of the Company from November 1994 until June 1997. He is
responsible for directing LifeCell's clinical research development activities
for AlloDerm products 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.
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.
7
<PAGE>
SUMMARY OF COMPENSATION
Set forth in the following table is certain compensation information
concerning the Company's chief executive officers and the Company's four most
highly compensated executive officers for the fiscal year ended December 31,
1998, other than the chief executive officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ------------
OTHER SECURITIES
NAME AND PRINCIPAL POSITION AT ANNUAL UNDERLYING ALL OTHER
DECEMBER 31, 1998 YEAR SALARY BONUS COMPENSATION OPTIONS(1) COMPENSATION
- ------------------------------- ---- ---------- ------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Paul G. Thomas, 1998 $83,671(2) $ - $ - 500,000 $ 450(3)
President and Chief 1997 - - - -
Executive Officer 1996 - - - -
Paul M. Frison, 1998 247,519 - 4,545(5) 65,000 4,285(6)
Chairman of the 1997 231,133 43,000 6,000(5) - 4,962(6)
Board(4) 1996 220,723 44,400 6,000(5) 165,000 3,920(6)
Stephen A. Livesey, 1998 200,000 - - 40,000 700(6)
M.D., Ph.D., 1997 176,042 36,000 - - 640(6)
Executive Vice 1996 165,417 34,000 - 120,000 448(6)
President and
Chief Science
Officer
John R. Harper, Ph.D. 1998 127,641 - - 20,000 400(6)
Vice President, 1997 115,592 10,000 - - 420(6)
Clinical 1996 105,723 15,000 - 27,500 448(6)
Development
Jane Lea Hicks, 1998 122,300 - 3,600(5) 20,000 700(6)
Vice President, 1997 115,492 10,000 3,600(5) - 640(6)
Business 1996 109,953 15,000 3,600(5) 20,000 448(6)
Development
Ronald J. Schwartz, 1998 135,250 - - 20,000 300(6)
Vice President, 1997 120,925 20,000 - - 640(6)
Sales and 1996 105,907 18,000 - 35,000 448(6)
Marketing
<FN>
__________________
(1) Represents shares issuable pursuant to stock options granted under the
Amended and Restated Stock Option Plan.
(2) Employment began September 8, 1999. Annual salary is $275,000.
(3) Represents contributions by the Company under the Company's 401(k) plan and
the Stock Purchase Plan.
(4) Mr. Frison served as the Company's Chief Executive Officer through October
4, 1998.
(5) Represents amounts paid for automobile allowance.
(6) 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 1996, 1997 and 1998
of $200, $400 and $400, respectively, by the Company under the Company's
401(k) plan and (iii) contributions in 1996, 1997 and 1998 of $48, $240 and
$125, respectively, by the Company under the Stock Purchase Plan.
</TABLE>
8
<PAGE>
OPTION GRANTS IN 1998
The following table provides certain information with respect to options
granted to the Company's chief executive officers and to each of the executive
officers named in the Summary Compensation Table during the fiscal year ended
December 31, 1998:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
PERCENT OF POTENTIAL REALIZABLE VALUE
TOTAL AT ASSUMED ANNUAL RATES OF
NUMBER OF OPTIONS EXERCISE MARKET STOCK PRICE APPRECIATION
SECURITIES GRANTED TO PRICE PRICE ON FOR OPTION TERM(1)
UNDERLYING EMPLOYEES PER DATE OF ------------------------
OPTIONS IN SHARE GRANT EXPIRATION
NAME GRANTED FISCAL YEAR ($) ($) DATE 5% 10%
- ------------------- ---------- ------------ ------ -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul G. Thomas 500,000 53.38% 3.875 3.875 9/8/08 $1,218,483 $3,087,876
Stephen A. Livesey,
M.D., Ph.D. 40,000 4.27% 6.625 6.625 6/5/08 166,657 422,342
Paul M. Frison 65,000 6.94% 6.625 6.625 6/5/08 270,818 686,305
John R. Harper,
Ph.D. 20,000 2.14% 6.625 6.625 6/5/08 88,329 211,171
Jane Lea Hicks 20,000 2.14% 6.625 6.625 6/5/08 88,329 211,171
Ronald J. Schwartz 20,000 2.14% 6.625 6.625 6/5/08 88,329 211,171
<FN>
(1) The Securities and Exchange Commission (the "SEC") requires disclosure of
the potential realizable value or present value of each grant. The
disclosure assume the options will be held for the full ten-year term prior
to exercise. Such options may be exercised prior to the end of such
ten-year term. The actual value, if any, an executive officer may realize
will depend on the excess of the stock price over the exercise price on the
date the option is exercised. There can be no assurance that the stock
price will appreciate at the rates shown in the table.
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning options exercised
during 1998 and the value of unexercised options held by each of the executive
officers named in the Summary Compensation Table at December 31, 1998.
<TABLE>
<CAPTION>
OPTION VALUES AT DECEMBER 31, 1998
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED OPTIONS VALUE OF
SHARES AT DECEMBER 31, 1998 IN-THE-MONEY OPTIONS AT
ACQUIRED (# OF SHARES) DECEMBER 31, 1998 ($)(1)
ON VALUE -------------------------- --------------------------
NAME (# SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ---------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul G. Thomas - - - 500,000 - 250,000
Paul M. Frison - - 223,209 55,110 261,995 34,444
Stephen A. Livesey,
M.D., Ph.D. - - 154,950 40,080 178,075 25,050
John R. Harper, Ph.D. - - 24,570 10,430 24,263 6,050
Jane Lea Hicks - - 83,861 6,680 121,636 4,175
Ronald J. Schwartz - - 35,820 19,180 45,825 19,175
<FN>
__________________
(1) Based on $4.625 per share, the closing price of the Common Stock, as
reported by the Nasdaq SmallCap Market, on December 31, 1998.
</TABLE>
9
<PAGE>
COMPENSATION OF DIRECTORS
Directors of the Company, other than employees of the Company, receive a
quarterly retainer of $2,000 and directors' fees of $1,000 per meeting attended
in person or $500 per meeting 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 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.
The plan also provides that an option to purchase 25,000 shares of Common Stock
will be granted to each newly elected director at an exercise price equal to the
fair and market value of a share of Common Stock on such election date. The plan
provides 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 the provisions of the Director Stock Option Plan, on June 1,
1998, Mr. Cahr, Ms. McDonald and Mr. Thompson 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 grantedMr.
Foster is an employee of Medtronic and pursuant to Medtronic policy is not
permitted to accept or hold such options. Ms. Koffman is an employee of CIBC
and pursuant to the policy of CIBC 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.
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
In December, 1997 the Company made loans of approximately $56,600, $26,150
and $17,740 to Paul M. Frison, a director and executive officer of the Company,
Stephen A. Livesey, a director and executive officer of the Company, and
Jane-Lea Hicks, a former executive officer of the Company, respectively, in
renewal and consolidation of certain loans made by the Company to each person at
various times since 1995 in respect of Mr. Frison and Ms. Hicks and since
February 1996 in respect of Dr. Livesey 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 are due
December 31, 1999, and bear interest at the prime rate, payable quarterly.
In August 1998, the Company entered into an agreement with Mr. Frison
regarding the terms of his employment with the Company in connection with the
Company's executive succession plan pursuant to which Paul G. Thomas succeeded
Mr. Frison as President and Chief Executive Officer in October 1998. The
agreement provides that subsequent to such election of Mr. Thomas, the Company
will continue to employ Mr. Frison to serve the Company in such advisory
capacities as may be designated by the Board of Directors through October 2002.
In consideration of such services, the agreement provides that the Company will
pay Mr. Frison a monthly salary of $19,833.33 through October 2000 and a monthly
salary of $1,000 from October 2000 through October 2002. The agreement also
provides that Mr. Frison will continue to participate in the Company's employee
benefit plans and the Company will continue to fund certain life insurance
policies for the benefit of Mr. Frison through October 2000.
In 1994, the Company entered into certain agreements 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 in 1994 and funded in part the cost
of research and development through December 1998, under a mutually agreed upon
budget. In 1998, Medtronic and LifeCell mutually agreed to terminate the
agreement, and pursuant to the terms thereof the $1.5 million licensing fee paid
by Medtronic to LifeCell in 1994 converted into 310,771 shares of Common Stock.
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. In March 1999, the Company paid Vector
Securities International, Inc., a fee of $300,000 related to the distribution
agreement entered into with Boston Scientific Corporation. 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., an affiliate of
such investment banking firm.
10
<PAGE>
In September 1998, the Company entered into certain agreements with Paul G.
Thomas regarding the terms of his employment as the Company's President and
Chief Executive Officer. Pursuant to the agreements, the Company agreed to pay
Mr. Thomas a minimum annual base salary of $275,000, and granted him a stock
option exercisable for 500,000 shares of Common Stock. In addition, in October
1998, the Company also entered into a severance agreement with Mr. Thomas
pursuant to which in the event of the termination of the employment of Mr.
Thomas without cause, the Company agreed to pay Mr. Thomas on a monthly basis
for 12 months or an aggregate amount equal to his then current annual base
salary plus the amount of any bonus paid to him for the final year immediately
preceding his termination.
In January 1999, the Company entered into a severance agreement with Ms.
Hicks regarding the terms of her termination of employment with the Company.
Pursuant to the agreement the Company agreed to pay Ms. Hicks $10,166.67 per
month through January 2000 and accelerate the vesting of the stock options and
extended the termination date of the stock options to January 15, 2003, then
held by her so that such options become immediately exercisable.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as the Company's principal independent
accountants for the fiscal year ended December 31, 1998, 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 no person who, at any time during
1998, was subject to the reporting requirements of Section 16(a) with respect to
the Company failed to meet such requirements on a timely basis.
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 2000 must be received by
the Company at its principal executive offices, 3606 Research Forest Drive, The
Woodlands, Texas 77381, no later than December 31, 1999, in order to be included
in the proxy statement and form of proxy relating to that meeting.
According to the bylaws of the Company, at the annual meeting of
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. For business to be properly brought before the 2000
Annual Meeting of Stockholders by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Company. To be timely,
a stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not less than 120 days nor more than
180 days prior to the meeting.
11
<PAGE>
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.
12
<PAGE>
LIFECELL CORPORATION PROXY
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY FOR HOLDERS OF COMMON STOCK IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 3, 1999
The stockholder of LifeCell Corporation (the "Company") whose signature
appears on the reverse side hereof hereby appoints Paul G. Thomas and Lynne P.
Hohlfeld 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 to be held at Houston Advanced Research Center, 4800
Research Forest Drive, The Woodlands, Texas 77381 at 1:00 p.m., Thursday, June
3, 1999, and at any adjournments thereof. The proposal set forth below is more
fully described in the LifeCell Corporation Proxy Statement dated April 19,
1999 (the Proxy Statement).
1. ELECTION OF DIRECTORS |_| FOR all nominees listed below
(except as indicated to the contrary below)
|_| WITHHOLD AUTHORITY to
vote for election of directors
NOMINEES: Michael E. Cahr, James G. Foster, Stephen A. Livesey, M.D.,
Ph.D., Paul G. Thomas, 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. In their discretion, the above names 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.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
This proxy will be voted as directed. IF NOT OTHERWISE SPECIFIED, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF 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.
DATED:
---------------------------------------------------
---------------------------------------------------------
(Signature)
---------------------------------------------------------
(Signature if held jointly)
Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
full title as it appears.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
<PAGE>
LIFECELL CORPORATION PROXY
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY FOR HOLDERS OF SERIES B PREFERRED STOCK IS SOLICITED BY THE BOARD OF
DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 3, 1999
The stockholder of LifeCell Corporation (the "Company") whose signature
appears on the reverse side hereof hereby appoints Paul G. Thomas and Lynne P.
Hohlfeld 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 to be held at Houston Advanced Research Center, 4800
Research Forest Drive, The Woodlands, Texas 77381 at 1:00 p.m., Thursday, June
3, 1999, and at any adjournments thereof. The proposal set forth below is more
fully described in the LifeCell Corporation Proxy Statement dated April 19,
1999 (the Proxy Statement).
1(a).ELECTION OF DIRECTORS |_| FOR all nominees listed below
(except as indicated to the contrary below)
|_| WITHHOLD AUTHORITY to
vote for election of directors
NOMINEES (to be elected by the holders of Common Stock and Series B Preferred
Stock, voting together as a class): Michael E. Cahr, James G. Foster,
Stephen A. Livesey, M.D., Ph.D., Paul G. Thomas, 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 nominees listed below
WITHHOLD AUTHORITY to
(except as indicated to the contrary below) vote for
election of directors
NOMINEES (to be elected by the holders of Series B Preferred Stock, voting as
a separate class): K. Flynn McDonald and Lori G. Koffman
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
2. In their discretion, the above names 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 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
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.
DATED:
---------------------------------------------------
---------------------------------------------------------
(Signature)
---------------------------------------------------------
(Signature if held jointly)
Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
full title as it appears.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
<PAGE>
