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
One Millennium Way
Branchburg, New Jersey 08876
(908) 947-1100
April 28, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
LifeCell Corporation to be held at 1:00 p.m., EDT, Friday, June 2, 2000, at the
Somerset Hills Hotel, 200 Liberty Corner Road, Warren, New Jersey, 07059.
This year you will be asked to consider two proposals. The first proposal
concerns the election of directors. The second proposal concerns the adoption of
the LifeCell Corporation Year 2000 Stock Option Plan. These matters are
explained more fully in the attached proxy statement, which you are encouraged
to read.
The Board of Directors recommends that you approve these proposals 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
One Millennium Way
Branchburg, New Jersey 08876
Notice of Annual Meeting of Stockholders to Be Held June 2, 2000
Notice is hereby given that the Annual Meeting of the Stockholders of
LifeCell Corporation, a Delaware corporation (the "Company"), will be held on
Friday, June 2, 2000, at 1:00 p.m. EDT, at the Somerset Hills Hotel, 200 Liberty
Corner Road, Warren, New Jersey, 07059 for the following purposes:
(1) 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 adopt the LifeCell Corporation Year 2000 Stock Option Plan;
and
(3) 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 April 5, 2000 will be
entitled to vote at the meeting.
By Order of the Board of Directors,
/s/ Fenel M. Eloi
--------------------
Fenel M. Eloi
Secretary
April 28, 2000
<PAGE>
LIFECELL CORPORATION
Proxy Statement
for Annual Meeting of Stockholders
to Be Held June 2, 2000
This Proxy Statement is furnished to the stockholders of LifeCell
Corporation ("LifeCell" or the "Company"), One Millennium Way, Branchburg, New
Jersey, 08876, telephone (908) 947-1100, 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 Friday, June 2, 2000 at 1:00 p.m. EDT, at
the Somerset Hills Hotel, 200 Liberty Corner Road, Warren, New Jersey 07059, 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 and in favor of
adoption of the Year 2000 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 secretary of 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 28, 2000, to stockholders of record on April 5, 2000
(the "Record Date").
At the close of business on the Record Date, there were outstanding and
entitled to vote 13,772,442 shares of Common Stock, par value $.001 per share
(the "Common Stock"), and 104,530 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 or
approximately 3,371,935 votes in the aggregate). 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 one of the
seven director nominees.
All expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be borne by the Company. In addition to
solicitation by use of the mail, proxies may be solicited by telephone,
telegraph or personally by the directors, officers and employees of the Company,
who will receive no extra compensation for their services. The Company will
reimburse banks, brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy soliciting materials
to beneficial owners of shares of Common Stock and Series B Preferred Stock.
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 six directors. The holders of
Series B Preferred Stock, voting as a separate series, are entitled to elect one
director. 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.
1
<PAGE>
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 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 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. Voting requirements for Proposal Two are described in that proposal
below.
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 and restated in
April 2000 (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"). Per the provisions of the Voting Agreement, both Vector
Later-Stage Equity Fund, L.P. ("Vector") and CIBC WMV, Inc. ("CIBC") have the
right to designate a nominee for Series B Director positions. CIBC has declined
to designate a nominee. Ms. McDonald has been submitted as nominee 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.
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
three 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. Dr. Costantino,
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.
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 six
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 44 Chairman of the Board, President and 1998
Chief Executive Officer
Stephen A. Livesey, M.D., Ph.D. 47 Executive Vice President, Chief Science 1993
Officer and Director
Michael E. Cahr 60 Director 1991
Peter D. Costantino 41 Director 1999
James G. Foster 53 Director 1995
David A. Thompson 58 Director 1997
</TABLE>
2
<PAGE>
NOMINEE FOR ELECTION BY HOLDERS OF SERIES B PREFERRED STOCK
The person listed below has been nominated for election to fill the one
director position eligible 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>
K. Flynn McDonald 47 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. Mr. Thomas was elected
Chairman of the Board in June 1999. Prior to joining LifeCell, Mr. Thomas was
President of the Pharmaceutical Products Division of Ohmeda Inc., a world leader
in inhalation anesthetics and acute care pharmaceuticals. Mr. Thomas was
responsible for the overall operations of Ohmeda's Pharmaceutical Division,
which had worldwide sales of approximately $200 million in 1997. Mr. Thomas
received his MBA degree with an emphasis in Marketing and Finance from Columbia
University Graduate School of Business and completed his postgraduate studies in
Chemistry at the University of Georgia Graduate School of Arts and Science. He
received his B.S. degree in Chemistry from St. Michael's College in Vermont,
where he graduated Cum Laude.
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.
Dr. Livesey received his medical degree from the University of Melbourne,
Australia and a Ph.D. in biological chemistry from the University of Melbourne,
Australia.
Michael E. Cahr. Mr. Cahr has been a director of the Company since July
1991. Mr. Cahr is currently President and Chief Executive Officer of IKADEGA,
Inc., a Northbrook, Illinois server technology company developing products and
services for the healthcare, data storage and hospitality fields. Mr. Cahr was
Chairman of Allscripts, Inc., a publicly traded prescription management company
from September 1997 through March 1999 and President, CEO and Chairman from June
1994 to September 1997. Prior to Allscripts, Mr. Cahr was Venture Group Manager
for Allstate Venture Capital where he oversaw investments in technology,
healthcare services, biotech and medical services from 1987 to June 1994. Mr.
Cahr is a director of Metropolitan Health, a Boca Raton, Florida based public
healthcare network management company and Notify MD, a Nashville, Tennessee
based physician communication technology firm.
Peter D. Costantino, MD, FACS. Dr. Costantino has served as the chairman
of the Company's Surgical Advisory Board since 1998 and as a director of the
Company since November 1999. Dr. Costantino has served as the Co-Director of the
Cranial Base Surgery Program and Associate Professor of the Departments of
Otolaryngology, Neurosurgery and Oral/Maxillofacial Surgery at the Mount Sinai
School of Medicine and Mount Sinai Medical Center in New York since 1996. Dr.
Costantino also has been Product Development and Scientific Consultant for
Stryker-Howmedica, Inc. and its predecessor companies, since 1994. During 1998,
Dr. Costantino served as Chief Executive Officer of Medical Device Alliance,
Inc., Lysonix, Inc. and Parallax Medical Inc. Dr. Costantino co-founded
OsteoGenics, Inc in 1988 and served as its Chief Executive Officer from 1988 to
1991 and as Product Development and Scientific Consultant from 1991 to 1994. Dr.
Costantino completed Medical School and his Residency training in Otolaryngology
- - Head and Neck Surgery at Northwestern University School of Medicine. Upon
completion of his residency, he was specially trained in head and neck cancer
and reconstructive surgery at Northwestern University School of Medicine and
cranial base surgery at the University of Pittsburgh Medical School.
3
<PAGE>
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.
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 is retired. 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, TriPath, Inc., an automated medical images company, and St. Jude
Medical Inc., a medical device company.
Committees of the Board of Directors and Meeting Attendance
The Board of Directors has established an Audit Committee, a Compensation
Committee and a Stock Option Committee. The Board of Directors has not
established a nominating committee. During the fiscal year ended December 31,
1999, the Board of Directors met six times, the Audit Committee met once, the
Compensation Committee met twice and the Stock Option Committee met four 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. Cahr, Mr. Foster 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 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 and Mr. Thompson, neither of who 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 March 31, 2000, 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)
--------------------------------
SERIES B
COMMON STOCK PREFERRED STOCK
---------------- -------------
BENEFICIAL OWNER SHARES % SHARES %
- ---------------------------------------- --------- ----- ------ -----
<S> <C> <C> <C> <C>
CIBC WMV, Inc.(2). . . . . . . . . . . . 2,553,707 15.6 47,805 45.7
425 Lexington Avenue
New York, New York 10017
Vector Later-Stage Equity Fund, L.P.(3). 2,284,999 14.2 41,440 39.6
1751 Lake Cook Road, Suite 350
Deerfield, Illinois 60015
The Woodlands Venture Capital Company(4) 750,337 5.4 2,666 2.5
2201 Timberloch Place
The Woodlands, Texas 77380
Paul G. Thomas(5). . . . . . . . . . . . 189,280 1.3 - -
Chairman of the Board, President
and Chief Executive Officer
Michael E. Cahr(6) . . . . . . . . . . . 123,869 * 531 *
Director
Peter J. Costantino, M.D., F.A.C.S.. . . 7,500 * - -
Director(7)
James G. Foster(8) . . . . . . . . . . . - - - -
Director
Stephen A. Livesey, M.D., Ph.D.(9) . . . 365,523 2.6 264 *
Executive Vice President, Chief
Science Officer and Director
K. Flynn McDonald(10). . . . . . . . . . 45,000 * - -
Director
David A. Thompson(11). . . . . . . . . . 36,700 * - -
Director
Fenel M. Eloi. . . . . . . . . . . . . . 1,000 * - -
Senior Vice President and
Chief Financial Officer
Patrick N. Bergstedt . . . . . . . . . . 370 * - -
Vice President, Sales and Marketing
William E. Barnhart. . . . . . . . . . . 338 * - -
Senior Vice President, Operations
All executive officers and directors . . 769,580 5.4 795 *
as a group (10 persons)(12)
<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 March 31, 2000 have been exercised or converted. Options, warrants
and other convertible securities that are not exercisable within 60
days of March 31, 2000 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.
5
<PAGE>
(3) Includes 1,336,774 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 45,000 shares underlying
options granted under the LifeCell Corporation Second Amended and
Restated 1993 Non-Employee Director Stock Option Plan, as amended (the
"Director Stock Option Plan") 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. 6 to their joint report on Schedule
13G dated February 2, 2000, as received by the Company, and the
Company's stock records.
(5) Total number of shares of Common Stock includes 187,500 shares
underlying options granted under the LifeCell Corporation Amended and
Restated 1992 Stock Option Plan (the "Amended and Restated Stock
Option Plan") and 1,780 shares of Common Stock held for Mr. Thomas'
account by the LifeCell Corporation Employee Stock Purchase Plan (the
"Stock Purchase Plan").
(6) Total number of shares of Common Stock includes 30,000 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.
(7) Total number of shares of Common Stock includes 7,500 shares
underlying options granted under the Employee Stock Option Plan.
(8) 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 the Company's stock records.
(9) Total number of shares of Common Stock includes 248,750 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 2,083 shares of Common Stock
held for Mr. Livesey's account by the Stock Purchase Plan.
(10) Total number of shares of Common Stock includes 45,000 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 2,284,999 shares of Common Stock and the 41,440 shares of
Series B Preferred Stock beneficially owned by Vector Later-Stage
Equity Fund, L.P. Ms. McDonald disclaims any such beneficial
ownership.
(11) Total number of shares includes 35,000 shares underlying options
granted under the Director Stock Option Plan.
(12) See notes (5) through (11).
</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 . . . Chairman of the Board, President and October 1998 44
Chief Executive Officer
Stephen A. Livesey, Executive Vice President and Chief Science June 1991 47
M.D., Ph.D. . . . . Officer and Director
Fenel M. Eloi. . . . Senior Vice President and June 1999 42
Chief Financial Officer
Patrick N. Bergstedt Vice President, Sales and Marketing June 1999 40
William E. Barnhart. Senior Vice President, Operations August 1999 57
</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."
Fenel M. Eloi joined LifeCell in May 1999 as Senior Vice President and
Chief Financial Officer. Prior to joining LifeCell, Mr. Eloi was senior vice
president and chief financial officer of Genome Therapeutics Corp, where he
served in various positions from 1989 to 1999. Mr. Eloi has served in various
financial management positions of increasing responsibility for several
companies, including GTE Corporation, Haemonetics Corp. and Simplex Corp. Mr.
Eloi received his Bachelor of Science degree in accounting and finance from Lee
University and his Masters in Business Administration with a concentration in
economics and finance from Anna Maria College. He currently serves on the board
of directors of a privately-held computer software company.
Patrick N. Bergstedt joined LifeCell in June 1999, as Vice President,
Marketing and Business Development. Mr. Bergstedt has served in management
positions of increasing responsibility for multinational pharmaceutical
companies throughout Europe, South Africa and the U.S. Most recently, he served
as vice president and general manager of the Wound Healing and APi Business Unit
of Centeon LLC, a joint venture of Hoechst and Rhone Poulenc and $1 billion
manufacturer of plasma proteins. Mr. Bergstedt received his Bachelor of Arts
degree from Rand Afrikaans University in Johannesburg, South Africa.
William E. Barnhart. Mr. Barnhart has served as the Sr. Vice President,
LifeCell Operations since September 1999. He has over twenty five years
experience in a variety of increasingly responsible management roles in drug and
device manufacturing and quality assurance. From March 1997 to September 1999,
Mr. Barnhart was Sr. Vice President, Quality Assurance for Centeon, LLC., a
multinational provider of pharmaceuticals and plasma derived biologics. From
1993 to 1997, Mr. Barnhart was Vice President, Quality Assurance for Ohmeda,
Inc. Prior to joining Ohmeda, Mr. Barnhart was Vice President of Operations,
Allergan U.S. Operations. In this capacity he was responsible for general
management for five operations manufacturing prescription ophthalmics, biologics
and medical devices. Mr. Barnhart graduated from Miami University with a
Bachelor of Science degree and a Masters of Science degree in chemistry.
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 officer and the Company's four most
highly compensated executive officers for the fiscal year ended December 31,
1999, other than the chief executive officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- -------------
NAME AND PRINCIPAL SECURITIES
POSITION AT UNDERLYING ALL OTHER
DECEMBER 31, 1999 YEAR SALARY BONUS OPTIONS(1) COMPENSATION
- ------------------------- ---- --------------------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Paul G. Thomas, . . . . . 1999 $ 275,000 $ 119,625 - $ 31,942(6)
Chairman of the Board,. 1998 $ 83,671(2) - 500,000 $ 450(6)
President and Chief. . 1997 - - - -
Executive Officer
Stephen A. Livesey, . . . 1999 $ 216,191 $ 46,800 175,000 $ 23,296(6)
M.D., Ph.D.,. . . . . . 1998 $ 200,000 - 40,000 $ 700(6)
Executive Vice. . . . . 1997 $ 176,042 $ 36,000 - $ 640(6)
President and
Chief Science Officer
Fenel M. Eloi,. . . . . . 1999 $ 116,238(3) $57,535(7) 100,000 $ 7,604(6)
Sr. Vice President, . . 1998 - - - -
Chief Financial Officer 1997 - - - -
Patrick N. Bergstedt, . . 1999 $ 102,133(5) $52,000(7) 95,000 $ 575(6)
Vice President, . . . . 1998 - - - -
Sales and . . . . . . . 1997 - - - -
Marketing
William E. Barnhart,. . . 1999 $ 69,321(4) $ 34,125 125,000 $ 500(6)
Vice President, . . . . 1998 - - - -
Operations. . . . . . . 1997 - - - -
<FN>
(1) Represents shares issuable pursuant to stock options granted under the
Amended and Restated 1992 Stock Option Plan and the proposed Year 2000
Stock Option Plan.
(2) Employment began September 8, 1998. Annual salary was $275,000.
(3) Employment began May 24, 1999. Annual salary was $191,600.
(4) Employment began August 9, 1999. Annual salary was $175,000.
(5) Employment began June 1, 1999. Annual salary was $175,000.
(6) Represents (i) contributions in each of 1997, 1998 and 1999 of $400,
$400 and $400 ($240 for Mr. Eloi during 1999), respectively, by the
Company under the Company's 401(k) plan and (ii) contributions in
1997, 1998 and 1999 of $240, $125 and $300 ($100 for Mr. Barnhart,
$175 for Mr. Bergstedt and $0 for Mr. Eloi during 1999), respectively,
by the Company under the Stock Purchase Plan and (iii) relocation
related costs paid during 1999 by the Company for Mr. Thomas, Mr.
Livesey and Mr. Eloi of $31,242, $22,596 and $7,364 respectively.
(7) Includes $15,000 and $10,000 of hiring bonus for Messrs. Eloi and
Bergstedt, respectively.
</TABLE>
8
<PAGE>
OPTION GRANTS IN 1999
The following table provides certain information with respect to options
granted to the Company's chief executive officer and to each of the executive
officers named in the Summary Compensation Table during the fiscal year ended
December 31, 1999:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
PERCENT OF POTENTIAL REALIZABLE VALUE
TOTAL AT ASSUMED ANNUAL RATES OF
NUMBER OF OPTIONS EXERCISE MARKET STOCK PRICE APPRECIATION
SECURITIES GRANTED TO PRICE PRICE ON FOR OPTION TERM(1)
UNDERLYING EMPLOYEES PER SHARE ($) DATE OF -----------------------
OPTIONS IN GRANT EXPIRATION
NAME GRANTED FISCAL YEAR ($) DATE 5% 10%
- -------------------- ---------- ------------ ------------- --------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen A. Livesey, 175,000 23.60% 4.125 4.125 1/21/09 453,970 1,150,465
M.D., Ph.D.
Fenel M. Eloi. . . . 100,000 13.49%(2) 4.031 4.031 6/2/09 253,431 642,261
Patrick N. Bergstedt 95,000 12.81%(2) 4.031 4.031 6/2/09 240,759 610,147
William E. Barnhart. 125,000 16.86%(2) 5.000 5.000 8/18/09 393,046 996,072
============================================================================================================
<FN>
- ------------------
(1) The Securities and Exchange Commission (the "SEC") requires disclosure
of the potential realizable value or present value of each grant. The
disclosure assumes the options will be held for the full ten-year term
prior to exercise. Such options may be exercised prior to the end of
such ten-year term. The actual value, if any, an executive officer may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised. There can be no assurance
that the stock price will appreciate at the rates shown in the table.
(2) Reflects options granted as hiring incentives for Messrs. Eloi,
Bergstedt and Barnhart.
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning options exercised
during 1999 and the value of unexercised options held by each of the executive
officers named in the Summary Compensation Table at December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
SHARES UNEXERCISED OPTIONS VALUE OF
ACQUIRED AT DECEMBER 31, 1999 IN-THE-MONEY OPTIONS AT
ON VALUE (# OF SHARES) DECEMBER 31, 1999 ($)(1)
---------------------- ------------------------
NAME (# SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ---------- -------- ---------------------- ------------------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul G. Thomas . . . - - 125,000 375,000 156,250 468,750
Stephen A. Livesey,
M.D., Ph.D.. . . . - - 205,000 205,000 349,375 175,000
Fenel M. Eloi. . . . - - - 100,000 - 109,400
Patrick N. Bergstedt - - - 95,000 - 103,930
William E. Barnhart. - - - 125,000 - 15,625
========================================================================================================================
<FN>
- -----------------
(1) Based on $5.125 per share, the closing price of the Common Stock, as
reported by the Nasdaq National Market, on December 31, 1999.
</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. Directors receive an additional $600
for each meeting attended of any committee of the Board or $300 for
participation in telephone meetings of any committee in excess of 30 minutes in
length. In no event does the compensation for any day exceed $1,000 for all
meetings attended. Ms. McDonald has declined such fees. Directors of the
Company who are employees receive no directors' fees. 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 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 3,
1999, Mr. Cahr, Ms. McDonald and Mr. Thompson were granted options to purchase
10,000 shares of Common Stock at an exercise price of $4.031 per share. On June
3, 1999, Mr. Foster was granted an option to purchase 25,000 shares of Common
Stock at an exercise price of $4.031 per share. On October 21, 1999, Dr.
Costantino was granted an option to purchase 25,000 shares of Common Stock at an
exercise price of $4.625. Ms. McDonald is required under the terms of her
employment with Vector Fund Management, L.P., to transfer to Vector Fund
Management L.P. any net gain received upon sale of shares of Common Stock
underlying any options granted. Dr. Costantino's and Mr. Foster's option grants
were initial grants for newly elected outside directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview
The function of the Compensation Committee is to advise the Board regarding
overall compensation policies and recommend specific compensation for the
Company's senior executives and Board remuneration. The Compensation Committee
is responsible for providing guidance to the Board of Directors and the chief
executive officer regarding broad compensation issues. The Committee is
composed of K. Flynn McDonald and David A. Thompson
The Company applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the premises
that the success of the Company results from the efforts of each employee and
that a cooperative, team-oriented environment is an essential part of the
Company's culture. The Company believes in the importance of rewarding employees
for the Company's successes. Particular emphasis is placed on broad employee
equity participation through the use of stock options and annual cash bonuses
linked to achievement of the Company's performance goals and the employees'
personal objectives.
Executive Officer Compensation
The Company's compensation package consists of three major components: base
compensation, performance bonuses, and stock options. Together these elements
comprise total compensation value. The total compensation paid to the Company's
executive officers is influenced significantly by the need to attract management
employees with a high level of expertise and to motivate and retain key
executives for the long-term success of the Company and its stockholders. The
Committee establishes annual base salary levels for executives based on
competitive data, level of experience, position, responsibility, and individual
and Company performance. The Company has sought to align base compensation
levels comparable to its competitors and other companies in similar stages of
development. Cash bonuses are paid to executive officers based upon achievement
of annually set Company goals and personal performance objectives.
The Company believes that stock options are an important long-term
incentive for its executive officers and that the Company's stock option program
has been effective in aligning officer and employee interests with that of the
Company and its shareholders. The Company uses stock options to attract key
executive talent and stock option grants are generally part of employment
packages for key management positions. The Company reviews the stock option plan
annually and employees may also be eligible for annual stock option grants.
10
<PAGE>
During 1999, key executive officers and employees were granted stock options as
an incentive to relocate with the Company from Texas to New Jersey, the
Company's new headquarters. In addition, several key executive officers were
hired during the year and options were granted to these officers as part of
their employment packages. During 1999, the Company granted stock options for
741,500 shares to officers and employees of the Company (of which 495,000 were
granted to executive officers of the Company).
Chief Executive Officer Compensation
The Compensation Committee recommends base salary levels and annual cash
bonuses of the Company's senior management for approval by the Board. Mr.
Thomas, Chief Executive Officer, had a base salary in 1999 of $275,000, which
was unchanged from the base salary approved by the committee in September 1998.
The Compensation Committee recommended, and the Board approved, a cash bonus of
$119,625 for Mr. Thomas reflecting achievement of and progress towards the
Company's overall 1999 and future goals and objectives.
K. Flynn McDonald
David A. Thompson
11
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
The graph below summarizes the total cumulative return experienced by
LifeCell's stockholders during the five-year period ended December 31, 1999,
compared to the Nasdaq Stock Market Index and the Nasdaq Pharmaceuticals Index.
The changes for the periods shown in the graph and table are based on the
assumption that $100.00 had been invested in LifeCell Corporation common stock
and in each index below on January 1, 1995 and that all cash dividends were
reinvested.
[Performance graph appears here]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Indexed Performance 1/1/95 12/95 12/96 12/97 12/98 12/99
LifeCell. . . . . . $ 100 $ 125 $ 156 $ 231 $ 219 $ 256
Nasdaq. . . . . . . $ 100 $ 141 $ 174 $ 213 $ 300 $ 556
Nasdaq Pharma Index $ 100 $ 183 $ 184 $ 190 $ 242 $ 450
</TABLE>
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
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 November 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.
PROPOSAL 2: APPROVAL OF THE LIFECELL CORPORATION YEAR 2000 STOCK OPTION PLAN
On March 2, 2000, the Board of Directors adopted the Year 2000 Stock Option
Plan (the "2000 Plan"), subject to shareholder approval. The Company's existing
Amended and Restated 1992 Stock Option Plan (the "1992 Plan"), reserved
2,500,000 shares of the Company's Common Stock for issuance thereunder. As of
April 1, 2000, no shares remained available for issuance under the 1992 Plan.
12
<PAGE>
Approval of the 2000 Plan is intended to ensure that the Company can continue to
provide stock options at levels determined appropriate by the Board of
Directors. The following is a brief description of the material features of
the 2000 Plan. Such description is qualified in its entirety by reference to
the 2000 Plan, a copy of which is set forth as Exhibit A to this Proxy
Statement.
Purpose
The purpose of the 2000 Plan is to provide long-term incentives to select
employees, officers, consultants and other individuals who have substantial
responsibility for the Company's management and growth to encourage them to
devote their abilities and industry to the success of the Company.
Shares and Incentives Available Under the 2000 Plan
The 2000 Plan provides for grants of incentive stock options and
non-qualified stock options. An aggregate of 1,500,000 shares of Common Stock
are authorized for issuance under the 2000 Plan, which amount will be
proportionately adjusted in the event of certain changes in the Company's
capitalization, a merger, or a similar transaction. Such shares may be treasury
shares or newly issued shares or a combination thereof. As of April 19, 2000,
the closing sale price per share of the Common Stock on the Nasdaq National
Market was $5.25.
Eligibility
The persons eligible to receive incentive stock options under the 2000 Plan
are employees, including officers and directors if they are employees, of the
Company or any of its subsidiaries. The Company estimates that, as of April 1,
2000, there were approximately 166 individuals eligible to receive options under
the 2000 Plan. The persons eligible to receive nonqualified stock options shall
be any individuals, as the Stock Option Committee determines from time to time.
The Committee has issued an aggregate of 125,000 Options subject to approval of
the 2000 Plan. The following table shows certain information with respect to
options granted subject to shareholder approval. The Company cannot determine
at this time the recipients of other benefits under the 2000 Plan.
<TABLE>
<CAPTION>
YEAR 2000 STOCK OPTION PLAN
PLAN BENEFITS
NAME AND POSITION DOLLAR VALUE ($) NUMBER OF UNITS
<S> <C> <C>
William E. Barnhart (1) 125,000
Senior VP, Operations
Executive Group (1) 125,000
Non-Executive Officer Employee Group --- ---
<FN>
- -----------------
(1) The actual dollar value, if any, Mr. Barnhart 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. The option granted to Mr.
Barnhart has an exercise price of $5.00.
</TABLE>
Determination of Eligibility; Administration of the 2000 Plan
The 2000 Plan is administered by a stock option committee of the Board of
Directors (the "Committee") appointed by the Board of Directors. The Committee
must consist of at least two outside directors of the Company and shall consist
only of outside directors. The 2000 Plan provides that the Committee has full
discretion and authority to (i) select eligible persons to receive options, (ii)
determine the type, number, and terms and conditions of options to be granted
and the number of shares of Common Stock to which options will relate, (iii)
specify times at which options may be exercised and prescribe forms of option
agreements, (iv) accelerate the time at which any outstanding option may be
exercised, (v) define the effect, if any, on an option of the death, disability,
retirement or other termination of employment of the Optionee, (vi) construe,
interpret and specify rules and regulations relating to the 2000 Plan and (vii)
make all other determinations that may be necessary or advisable for the
administration of the 2000 Plan.
13
<PAGE>
Any action of the Committee is final, conclusive and binding on all
parties, including the Company, its stockholders and its employees. The 2000
Plan provides that members of the Committee will not be liable for any act or
determination taken or made in good faith in their capacities as such members
and will be fully indemnified by the Company with respect to such acts and
determinations.
Types of Stock Options
The Committee is authorized to grant stock options to employees of the
Company or to consultants and advisors of the Company. The Committee may grant
incentive stock options ("ISOs"), as defined under Section 422 of the Internal
Revenue Code (the "Code"), which can result in potentially favorable tax
treatment, only to employees, and non-qualified stock options. The terms and
conditions of grants of stock options granted under the 2000 Plan will be set
forth in a written agreement (the "Option Agreement").
The purchase price per share subject to an ISO will not be less than the
fair market value of a share of Common Stock on the date of grant, except that
it will be 110% of the fair market value on the date of grant with respect to
ISO grants to a 10% stockholder. The purchase price per share subject to a
non-qualified stock option may be less than the fair market value of a share of
Common Stock on the date of grant. If options are granted with exercise prices
below fair market value, however, deductions for compensation attributable to
the exercise of such options could be limited by Code Section 162(m). See "--
Federal Income Tax Consequences." The term "fair market value" on any date
means the closing sales price per share at 4:00 p.m. on such date on the Nasdaq
National Market.
The maximum term of each option, the times at which each option will be
exercisable, and the vesting schedule, if any, associated with a stock option
grant generally are fixed by the Committee, except that no option may have a
term exceeding ten years, or five years in the case of an ISO granted to a 10%
stockholder. Options will become fully vested and exercisable from time to time
in whole or in part, in such manner and subject to such conditions as the
Committee may provide in the Option Agreement.
Options may be exercised by providing written notice to the Secretary of
the Company, specifying the number of shares to be purchased and accompanied by
payment for such shares, and otherwise in accordance with the applicable Option
Agreement. Payment may be made, in the discretion of the Committee, in cash,
other shares of Common Stock or through cashless exercise procedures approved by
the Committee.
Transferability of Options
Grants of stock options and other awards are generally not transferable
except by will or by the laws of descent and distribution, or to a designated
beneficiary upon the participant's death, except that the Committee may, in its
discretion, permit transfers of nonqualified stock options to the trustee of a
trust for the primary benefit of the optionee's spouse or lineal descendants for
estate planning or other purposes, subject to any applicable restrictions under
federal securities laws.
Award Limitations
The maximum number of shares of Common Stock subject to Options that an
individual may receive may not exceed 500,000 shares in a three-year period.
The maximum fair market value of stock (determined as of the time that an ISO is
granted) with respect to which ISO's first become exercisable by an Optionee in
any calendar year cannot exceed $100,000.
Change in Control
If the Company merges or consolidates with another corporation, whether or
not the Company is a surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of substantially all its assets while unexercised
Options remain outstanding under this Plan, or if any person is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
14
<PAGE>
representing greater than 50% of the combined voting power of the Company's then
outstanding securities, then (i) subject to the provisions of clause (iii)
below, after the effective date of such merger, consolidation, liquidation, sale
or other disposition, or change in beneficial ownership, as the case may be,
each holder of an outstanding Option shall be entitled, upon exercise of such
Option, to receive, in lieu of shares of Stock, the number and class of shares
of such stock or other securities or property to which such holder would have
been entitled if, immediately prior to such merger, consolidation, liquidation,
sale or other disposition, or change in beneficial ownership, such holder had
been the holder of record of a number of shares of Stock equal to the number of
shares as to which such Option may be exercised; (ii) the Board of Directors may
waive any limitations set forth in or imposed pursuant hereto so that all
Options, from and after a date prior to the effective date of such merger,
consolidation, liquidation, sale or other disposition, or change in beneficial
ownership, as the case may be, specified by the Board of Directors, shall be
exercisable in full; and (iii) all outstanding Options may be canceled by the
Board of Directors as of the effective date of any such merger, consolidation,
liquidation, sale or other disposition or change in beneficial ownership.
Effect of Termination of Employment
Except as otherwise provided in the Option Agreement, in the event that a
participant's employment or service with the Company terminates due to death,
all Options of such participant will lapse unless exercised, to the extent
exercisable at the date of death, within six months following such date of
termination. In the event that a participant's employment or service with the
Company terminates for any other reason, for or without cause, all Options of
such participant will lapse unless exercised, to the extent exercisable at the
date of termination, within the earlier of one day less than three months
following such date of termination or the expiration date of such Options.
Amendment, Suspension or Termination of the 2000 Plan
The 2000 Plan will terminate on March 1, 2010. Prior to that date, the
Board of Directors may amend, modify, suspend or terminate the Plan, subject to
stockholder approval when required by law. No amendment, modification,
suspension or termination may adversely affect the rights of participants,
without their consent, under any outstanding grants of Options.
Federal Income Tax Consequences
The following is a brief description of the federal income tax consequences
generally arising with respect to the grant of Options pursuant to the 2000
Plan. This summary is based on the Code, regulations, rulings and decisions now
in effect, all of which are subject to change by legislation, administrative
action or judicial decision. This discussion is intended for the information of
stockholders considering how to vote at the Annual Meeting and not as tax
guidance to individuals who participate in the 2000 Plan.
ISOs. In general, an optionee granted an ISO will not recognize taxable
income upon the grant or the exercise of the ISO (assuming the ISO continues to
qualify as such at the time of exercise). The excess of the fair market value
of shares of Common Stock received upon exercise of the ISO over the exercise
price is, however, a tax preference item, which can result in imposition of the
alternative minimum tax. The optionee's "tax basis" in the shares of Common
Stock acquired upon exercise of the ISO generally will be equal to the exercise
price paid by the optionee, except in the case in which the optionee pays the
exercise price by delivery of the shares of Common Stock otherwise owned by the
optionee (as discussed below).
If the shares acquired upon the exercise of an ISO are held by the optionee
for the "ISO holding period" of at least two years after the date of grant and
one year after the date of exercise, the optionee will recognize long-term
capital gain or loss upon the sale of the ISO Shares equal to the amount
realized upon such sale minus the optionee's tax basis in the shares, and such
optionee will not recognize any taxable ordinary income with respect to the ISO.
As a general rule, if an optionee disposes of the shares acquired upon exercise
of an ISO before satisfying both holding period requirements (a "disqualifying
disposition"), the gain recognized on the disposition will be taxed as ordinary
income equal to the lesser of (i) the fair market value of the shares at the
date of exercise of the ISO minus the optionee's tax basis in the shares, or
(ii) the amount realized upon the disposition minus the optionee's tax basis in
the shares. If the amount realized upon a disqualifying disposition is greater
than the amount treated as ordinary income, the excess amount will be treated as
capital gain for federal income tax purposes. Certain transactions are not
considered disqualifying dispositions including certain exchanges, transfers
resulting from the optionee's death, and pledges and hypothecations of ISO
Shares.
15
<PAGE>
Non-qualified stock options. In general, an optionee granted a
non-qualified stock option will not recognize taxable income upon the grant of
the non-qualified stock option. Upon the exercise of the non-qualified stock
option (including an option intended to be an ISO but which has not continued to
so qualify at the time of exercise), the optionee generally will recognize
taxable ordinary income in an amount equal to the fair market value of the
shares at the time of exercise minus the exercise price, and the optionee will
have a tax basis in the shares equal to the fair market value of the shares at
the time of exercise. A subsequent sale of the shares by the optionee generally
will result in short-term or long-term capital gain or loss equal to the sale
price of such shares minus the optionee's tax basis in such shares.
In the event that an optionee forfeits an unexercised ISO or a
non-qualified stock option (or portion of such option), the optionee will not
recognize a loss for federal income tax purposes.
Compensation Deduction Limitation. Code Section 162(m) generally disallows
a public company's tax deduction for compensation paid to the Chief Executive
Officer, or to the other four most highly compensated officers, in excess of
$1.0 million in any tax year. Compensation that qualifies as "performance-based
compensation" is excluded from the $1.0 million deductibility cap, if various
requirements are satisfied. The Company intends that Options (other than
non-qualified stock options with respect to which the exercise price is less
than the fair market value of the shares subject to such options on the date of
grant) granted to employees whom the Committee expects to be covered employees
at the time a deduction arises in connection with such Options, qualify as
"performance-based compensation," so that such Options will not be subject to
the deductibility cap.
Withholding. The Company has the right to deduct from other compensation
payable to an employee of the Company, any federal, state, or local taxes
required by law to be withheld with respect to Options, or the employee or other
person receiving shares under the 2000 Plan will be required to pay to the
Company the amount of any such taxes which the Company is required to withhold
with respect to such shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE COMPANY'S
YEAR 2000 STOCK OPTION PLAN. Approval of the Stock Option Plan requires the
affirmative vote of the holders of a majority of the shares of Common Stock and
Series B Preferred Stock that are voted at the meeting, voting together as a
class. If not otherwise provided, proxies will be voted "FOR" approval of the
Stock Option Plan. Abstentions and broker non-votes will be counted as shares
entitled to vote on the proposal, but will not be treated as either a vote for
or against the proposal.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as the Company's principal independent
accountants for the fiscal year ended December 31, 1999, 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 1999, was subject to the reporting requirements
of Section 16(a) with respect to the Company failed to meet such requirements on
a timely basis.
16
<PAGE>
Mr. Cahr, Mr. Foster, Ms. McDonald and Mr. Thompson were each required to
file a Form 5 by February 15, 2000 for options granted under the Director Stock
Option Plan. Mr. Cahr, Mr. Foster, Ms. McDonald and Mr. Thompson each filed a
Form 5 on April 24, 2000. Dr. Costantino was required to file a Form 3 by
October 31, 1999 upon his election to the Board of Directors. Dr. Costantino
filed a Form 3 on April 24, 2000. Dr. Livesey was required to file a Form 5 by
February 15, 2000 for an option granted under the Employee Stock Option Plan and
for shares of common stock purchased during 1999. Dr. Livesey filed a Form 5 on
April 24, 2000. Mr. Barnhart was required to file a Form 3 by August 29, 1999
upon election as an executive officer of the Company. Mr. Barnhart filed a Form
3 on April 24, 2000. Mr. Bergstedt was required to file a Form 3 by June 13,
1999 upon election as an executive officer of the Company and a Form 5 by
February 15, 2000. Mr. Bergstedt filed a Form 3 and Form 5 on April 24, 2000.
Mr. David Platt was required to file a Form 3 by October 7, 1999 upon
appointment as the Company's controller and principal accounting officer. Mr.
Platt filed a Form 3 on April 24, 2000. Vector Later-Stage Equity Fund, L.P.
was required to file a Form 5 by February 15, 2000 for an option granted to Ms.
McDonald under the Director Stock Option Plan of which beneficial ownership of
such option was assigned by Ms. McDonald to Vector Later-Stage Equity Fund, L.P.
Vector Later-Stage Equity Fund, L.P. filed a Form 5 on April 24, 2000.
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 2001 must be received by
the Company at its principal executive offices, One Millennium Way, Branchburg,
New Jersey 08876, no later than December 31, 2000, 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.
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.
17
<PAGE>
EXHIBIT A
LIFECELL CORPORATION
YEAR 2000 STOCK OPTION PLAN
1. Purpose. This Year 2000 Stock Option Plan (this "Plan") of LifeCell
-------
Corporation, a Delaware corporation (the "Company") is adopted for the benefit
of certain individuals who have substantial responsibility for the Company's
management and growth, and is intended to advance the interests of the Company
by providing these individuals with additional incentive by increasing their
proprietary interest in the success of the Company and thereby encouraging them
to remain in its employ or affiliation.
2. Administration. This Plan shall be administered by a committee to
--------------
be appointed by the Board of Directors of the Company (the "Committee"), which
Committee shall consist of not less than two members of the Board of Directors
and shall be comprised solely of members of the Board of Directors who qualify
as both non-employee directors as defined in Rule 16b-3(b)(3) of the Securities
Exchange Act of 1934, as amended (the "Securities Exchange Act") and outside
directors within the meaning of Department of Treasury Regulations issued under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
The Board of Directors of the Company shall have the power to add or remove
members of the Committee, from time to time, and to fill vacancies thereon
arising; by resignation, death, removal, or otherwise. Meetings shall be held
at such times and places as shall be determined by the Committee. A majority of
the members of the Committee shall constitute a quorum for the transaction of
business, and the vote of a majority of those members present at any meeting
shall decide any question brought before that meeting. No member of the
Committee shall be liable for any act or omission of any other member of the
Committee or for any act or omission on his own part, including but not limited
to the exercise of any power or discretion given to him under this Plan, except
those resulting from his own gross negligence or willful misconduct. All
questions of interpretation and application of this Plan, or as to options
granted hereunder (the "Options"), shall be subject to the determination, which
shall be final and binding, of a majority of the whole Committee. In carrying
out its authority under this Plan, the Committee shall have full and final
authority and discretion, including but not limited to the rights, powers and
authorities, to: (a) determine the persons to whom and the time or times at
which Options will be made, (b) determine the number of shares and the purchase
price of stock covered in each Option, subject to the terms of this Plan, (c)
determine the terms, provisions and conditions of each Option, which need not be
identical, (d) accelerate the time at which any outstanding Option may be
exercised, (e) define the effect, if any, on an Option of the death, disability,
retirement, or other termination of employment of the Optionee, (f) prescribe,
amend and rescind rules and regulations relating to administration of the Plan,
and (g) make all other determinations and take all other actions deemed
necessary, appropriate, or advisable for the proper administration of this Plan.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties. When appropriate, this Plan shall be administered in
order to qualify certain of the Options granted hereunder as "incentive stock
options" described in Section 422 of the Code ("Incentive Stock Options").
3. Dedicated Shares. The stock subject to the Options and other
-----------------
provisions of this Plan shall be shares of the Company's Common stock, $.001 par
value (the "Stock"). Such shares may be treasury shares or authorized but
unissued shares. The total number of shares of Stock with respect to which
Incentive Stock Options may be granted shall be 1,500,000 shares. The maximum
number of shares subject to Options which may be issued to any Optionee under
this Plan during any period of three consecutive years is 500,000 shares. The
class and aggregate number of shares which may be subject to the Options granted
hereunder shall be subject to adjustment in accordance with the provisions of
Paragraph 17 hereof
In the event that any outstanding Option expires or is surrendered for any
reason or terminates by reason of the death or other severance of employment of
the Optionee, the shares of Stock allocable to the unexercised portion of such
Option may again be subject to an Option under this Plan.
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<PAGE>
4. Authority to Grant Options. The Committee may grant the following
----------------------------
Options from time to time to such eligible individuals of the Company as it
shall from time to time determine:
(a) "Incentive Stock Options". The Committee may grant to an eligible
--------------------------
employee an Option, or Options, to buy a stated number of shares of Stock under
the terms and conditions of this Plan, so that the Option will be an "incentive
stock option" within the meaning of Section 422 of the Code.
(b) "Nonqualified Stock Options". The Committee may grant to an
----------------------------
eligible individual an Option, or Options, to buy a stated number of shares of
Stock under the terms and conditions of this Plan, even though such Option or
Options would not constitute an "incentive stock option" within the meaning of
Section 422 of the Code.
Each Option granted shall be approved by the Committee. Subject only to any
applicable limitations set forth in this Plan, the number of shares of Stock to
be covered by an Option shall be as determined by the Committee.
5. Eligibility. The individuals who shall be eligible to receive
-----------
Incentive Stock Options under this Plan shall be such employees, including
officers and directors if they are employees, of the Company, or of any parent
or subsidiary corporation, as the Committee shall determine from time to time,
provided, that no such employee who owns stock possessing more than ten percent
of the total combined voting power of all classes of stock of the corporation
employing the employee or of its parent or subsidiary corporation shall be
eligible to receive an incentive stock option unless at the rime that it is
granted the option price is at least 110% of the fair market value of Stock at
the time the Option is granted and the Option by its own terms is not
exercisable after the expiration of five years from the date such Option is
granted.
For the purposes of the preceding paragraph, an employee will be considered
as owning the stock owned, directly or indirectly, by or for his brothers and
sisters (whether by the whole or half blood), spouse, ancestors, and lineal
descendants; and stock owned, directly or indirectly, by or for a corporation,
partnership, estate or trust will be considered as being owned proportionately
by or for its shareholders, partners or beneficiaries. Except as otherwise
provided, for all purposes of this Plan, the term "parent corporation" shall
mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if on the date of grant of the Option in
question, each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain; and the term "subsidiary corporation"
shall mean any corporation in an unbroken chain of corporations beginning with
the Company if, on the date of grant of the Option in question, each of the
corporations, other than the last corporation in the chain, owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
The individuals who shall be eligible to receive Nonqualified Stock Options
shall be such individuals as the Committee shall determine from time to time.
No individual shall be eligible to receive an Option under this Plan while
the individual is a member of the Committee.
6. Option Price. The price at which shares of Stock may be purchased
-------------
pursuant to an Option shall be determined by the Committee and set forth in the
Option agreement; provided, however, that the purchase price of shares of Stock
subject to any Incentive Stock Option shall not be less than 100% of the fair
market value of the shares of Stock on the date such Option is granted (110% in
the case of any employee described in Paragraph 5 who owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
the corporation employing the employee or of its parent or subsidiary
corporation (described in Paragraph 5). "Fair market value" shall mean the fair
market value of the Common Stock on the date of grant or other relevant date.
If on such date the Common Stock is listed on a stock exchange or is quoted on
the automated quotation system of NASDAQ, the fair market value shall be the
closing sale price at 4:00 p.m. (or if such price is unavailable, the average of
the high bid price and the low asked price) on such date. If no such closing
sale price or bid and asked prices are available, the fair market value shall be
determined in good faith by the Committee in accordance with generally accepted
valuation principles and such other factors as the Committee reasonably deems
relevant.
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<PAGE>
7. Duration of Options. No Option which is an Incentive Stock Option
-------------------
shall be exercisable after the expiration of ten years from the date such Option
is granted; and the Committee in its discretion may provide that such Option
shall be exercisable throughout such ten-year period or during any lesser period
of time commencing on or after the date of grant of such Option and ending upon
or before the expiration of such ten-year period. In the case of any employee
who owes stock possessing more than ten percent of the total combined voting
power of all classes of stock of the corporation employing the employee or of
its parent or subsidiary corporation (described in Paragraph 5), no Option which
is an Incentive Stock Option shall be exercisable after the expiration of five
years from the date such Option is granted. No Option which is a Nonqualified
Stock Option shall be exercisable after the expiration of ten years from the
date such Option is granted; and the Committee in its discretion may provide
that such Option shall be exercisable throughout such ten-year period or during
arty lesser period of time commencing on or after the date of grant of such
option and ending upon or before the expiration of such ten-year period.
8. $100,000 Limitation on Incentive Stock Options. To the extent that
-----------------------------------------------
the aggregate fair market value (determined as of the time an Incentive Option
is granted) of the Stock with respect to which Incentive Options first become
exercisable by the Optionee during any calendar year (under this Plan and any
other incentive stock option plan(s) of the Company or any parent corporation or
subsidiary corporation) exceeds $100,000, the Incentive Options shall be treated
as Nonqualified Options. In making this determination, Incentive Options shall
be taken into account in the order in which they were granted.
9. Amount Exercisable. Each Option may be exercised, so long as it is
-------------------
valid and outstanding, from time to time in part or as a whole, in such manner
and subject to such conditions as the Committee in its discretion may provide in
the Option agreement. However, the Committee in its absolute discretion may
accelerate the time at which any outstanding Option may be exercised.
10. Exercise of Options. Options shall be exercised by the delivery of
-------------------
written notice to the Company setting forth the number of shares with respect to
which the Option is to be exercised, together with: (i) cash, certified check,
bank draft, or postal or express money order payable to the order of the Company
for an amount equal to the option price of such shares, (ii) Stock at the fair
market value on the date of exercise, or (iii) any other form of payment which
is acceptable to the Committee, and specifying the address to which the
certificates for such shares are to be mailed. In addition, Options may be
exercised through a registered broker-dealer pursuant to such cashless exercise
procedures which are, from time to time, deemed acceptable to the Committee, and
the Committee may authorize that the purchase price payable upon exercise of an
Option may be paid by having shares of Stock withheld that otherwise would be
acquired upon such exercise. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to the Optionee
certificates for the number of shares with respect to which such Option has been
so exercised, issued in the Optionee's name; provided that such delivery shall
be deemed effected for all purposes when a stock transfer agent of the Company
shall have deposited such certificates in the United States mail, addressed to
the Optionee, at the address specified pursuant to this Paragraph 10. If shares
of Stock are used in payment of the exercise price, the aggregate fair market
value of the shares of Stock tendered must be equal to or less than the
aggregate exercise price of the shares being purchased upon exercise of the
Option, and any difference must be paid by cash, certified check, bank draft, or
postal or express money order payable to the Company. Delivery of the shares
shall be deemed effected for all purposes when a stock transfer agent of the
Company shall have deposited the certificates in the United States mail,
addressed to the Optionee, at the address specified by the Optionee.
Whenever an Option is exercised by exchanging shares of Stock owned by the
Optionee, the Optionee shall deliver to the Company certificates registered in
the name of the Optionee representing a number of shares of Stock legally and
beneficially owned by the Optionee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates, (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition of an Option.
A3
<PAGE>
11. Tax Withholding. The Company shall be entitled to deduct from
----------------
other compensation payable to each employee any sums required by federal, state
or local tax law to be withheld with respect to the grant or exercise of an
Option. In the alternative, the Company may require the employee (or other
individual exercising the Option) to pay the sum directly to the Company. If
the Optionee (or other individual exercising the Option) is required to pay the
sum directly, payment in cash or by check of such sums for taxes shall be
delivered within ten days after the date of exercise. The Company shall have no
obligation upon exercise of any Option until payment has been received, unless
withholding (or offset against a cash payment) as of or prior to the date of
exercise is sufficient to cover all sums due with respect to that exercise, the
Company shall not be obligated to advise an employee of the existence of the tax
or the amount which the employer corporation will be required to withhold.
12. Transferability of Options. Options shall not be transferable by
----------------------------
the Optionee otherwise than by will or under the laws of descent and
distribution. Notwithstanding the foregoing, an Optionee may, at any time prior
to death, assign all or any Nonqualified Options granted to him to the trustee
of a trust for the primary benefit of the Optionee's spouse or lineal
descendants. If such assignment is made, the spouse or lineal descendants shall
be entitled to all of the rights of the Optionee with respect to the assigned
Options, and such Options shall continue to be subject to all of the terms,
conditions and restrictions applicable to the Options, as set forth in the
applicable Option agreement. Any such assignment shall be permitted only if (i)
the Optionee does not receive any consideration therefore, and (ii) the
assignment is expressly permitted by the applicable Option agreement as approved
by the Committee. Any such assignment shall be evidenced by such written
documentation executed by the Optionee as the Committee may approve, and a copy
thereof shall be delivered to the Committee on or prior to the effective date of
the assignment.
13. Termination of Employment or Affiliation or Death of Optionee.
------------------------------------------------------------------
Except as may be otherwise expressly provided herein or in the Option agreement,
Options shall terminate on the earlier of the date of the expiration of the
Option or one day less than three months after the date of the severance, upon
severance of the employment or affiliation relationship between the Company and
the Optionee for any reason, for or without cause, other than death. Whether
authorized leave of absence, or absence on military or government service, shall
constitute severance of the employment or affiliation relationship between the
Company and the Optionee shall be determined by the Committee at the time
thereof. Unless the Optionee's Option agreement specifically addresses the
matter and expressly provides otherwise, after the severance of the employment
or affiliation relationship between the Company and the Optionee, the Optionee
shall have the right, at any time prior to the termination of the Option, to
exercise the Option solely to the extent the Optionee was entitled to exercise
it immediately prior to the date of such severance. In the event of the death
of the holder of an Option while in the employ or affiliation of the Company and
before the date of expiration of such Option, such Option shall terminate on the
earlier of such date of expiration or six months following the date of such
death. After the death of the Optionee, his executors, administrators or any
person or persons to whom his Option may be transferred by will or by the laws
of descent and distribution, shall have the right, at any time prior to such
termination, to exercise the Option, in whole (subject to the provisions of
Paragraph 8 hereof, but without regard to any limitation set forth in or imposed
pursuant to Paragraph 9 hereof) or in part. An employment or affiliation
relationship between the Company and the Optionee shall be deemed to exist
during any period in which the Optionee is employed by or affiliated with the
Company, by any parent or subsidiary corporation, by a corporation issuing or
assuming a common stock option in a transaction to which Section 424(a) of the
Code, applies, or by a parent or subsidiary corporation of such corporation
issuing or assuming a stock option (and for this purpose, the phrase
"corporation issuing or assuming a stock option" shall be substituted for the
word "Company" in the definitions of parent and subsidiary corporations
specified in Paragraph 5 of this Plan, and the parent-subsidiary relationship
shall be determined at the time of the corporate action described in Section
424(a) of the Code).
14. Requirements of Law. The Company shall not be required to sell or
--------------------
issue any shares under any Option if the issuance of such shares shall
constitute a violation by the Optionee or the Company of any provisions of any
law or regulation of any governmental authority. Each Option granted under this
Plan shall be subject to the requirement that, if at any time the Committee
shall determine that the listing, registration or qualification of the shares
subject thereto upon any securities exchange or under any state or federal law
of the United States or of any other country or governmental subdivision
thereof, or the consent or approval of any governmental, regulatory body, or
investment or other representations, are necessary or desirable in connection
A4
<PAGE>
with the issue or purchase of shares subject thereto, no such Option may be
exercised in whole or in part unless such listing, registration, qualification,
consent, approval or representation shall have been effected or obtained free of
any conditions not acceptable to the Committee. In connection with any
applicable statute or regulation relating to the registration of securities,
upon exercise of any Option, the Company shall not be required to issue any
Stock unless the Committee has received evidence satisfactory to it to the
effect that the holder of that Option will not transfer the Stock except in
accordance with applicable law, including, receipt of an opinion of counsel
satisfactory to the Company to the effect that any proposed transfer complies
with applicable law. Any determination by the Committee on these matters shall
be final, binding and conclusive. In the event the shares issuable on exercise
of an Option are not registered under applicable securities laws of any country,
or any political subdivision the Company may imprint on the certificate for such
shares the following legend or any other legend which counsel for the Company
considers necessary or advisable to comply with applicable law:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities
laws of any state and may not be sold or transferred except upon such
registration or upon receipt by the Company of an opinion of counsel
satisfactory to the Company, in form and substance satisfactory to the
Company, that registration is not required for such sale or transfer."
The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to applicable securities laws of any country
or any political subdivision (as now in effect or as hereafter amended) and, in
the event any shares are so registered, the Company may remove any legend on
certificates representing such shares. The Company shall not be obligated to
take any other affirmative action in order to cause the exercise of an Option or
the issuance of shares pursuant thereto to comply with any law or regulation or
any governmental authority.
15. No Rights as Stockholder. No Optionee shall have rights as a
---------------------------
stockholder with respect to shares covered by his Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 17 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date therefor is prior to the date of issuance of
such certificate.
16. Employment or Affiliation Obligation. The granting of any Option
---------------------------------------
shall not impose upon the Company any obligation to employ or affiliate with or
continue to employ or affiliate with any Optionee; and the right of the Company
to terminate the employment or affiliation of any officer, employee or other
individual shall not be diminished or affected by reason of the fact that an
Option has been granted to him.
17. Changes in the Company's Capital Structure. The existence of
-----------------------------------------------
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any transfer or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of Stock outstanding, without receiving
compensation therefore in money, services or property, then (a) the number,
class and per share price of shares of stock subject to outstanding Options
hereunder shall be appropriately adjusted in such a manner as to entitle an
Optionee to receive upon exercise of an Option, for the same aggregate cash
consideration, the same total number and class or classes of shares as he would
have received had he exercised his Option in full immediately prior to the event
requiring the adjustment, disregarding any fractional shares; and (b) the number
and class of shares then reserved for issuance under this Plan shall be adjusted
by substituting for the total number and class of shares of stock then reserved
for the number and class or classes of shares of stock that would have been
received by the owner of an equal number of outstanding shares of Stock as the
result of the event requiring the adjustment, disregarding any fractional
shares.
A5
<PAGE>
If the Company merges or consolidates with another corporation, whether or
not the Company is a surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of substantially all its assets while unexercised
Options remain outstanding under this Plan, or if any "person" (as that term is
used in Section 13(d) and 14(d)(2) of the Securities Exchange Act) is or becomes
the beneficial owner, directly or indirectly, of securities of the Company
representing greater than 50% of the combined voting power of the Company's then
outstanding securities (i) subject to the provisions of clause (iii) below,
after the effective date of such merger, consolidation, liquidation, sale or
other disposition, or change in beneficial ownership, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of such Option,
to receive, in lieu of shares of Stock, the number and class or classes of
shares of such stock or other securities or property to which such holder would
have been entitled if, immediately prior to such merger, consolidation,
liquidation, sale or other disposition, or change in beneficial ownership, such
holder had been the holder of record of a number of shares of Stock equal to the
number of shares as to which such Option may be exercised; (ii) the Board of
Directors may waive any limitations set forth in or imposed pursuant hereto so
that all Options, from and after a date prior to the effective date of such
merger, consolidation, liquidation, sale or other disposition, or change in
beneficial ownership, as the case may be, specified by the Board of Directors,
shall be exercisable in full; and (iii) all outstanding Options may be canceled
by the Board of Directors as of the effective date of any such merger,
consolidation, liquidation, sale or other disposition or change in beneficial
ownership.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into sub shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Stock then subject to
outstanding Options.
Notwithstanding anything contained in the Plan or any Option agreement to
the contrary, in the event of a transaction described in this Paragraph 17 which
is also intended to be treated as a "pooling of interests" under generally
accepted accounting principles, the Committee shall take such actions, if any,
as are specifically recommended by an independent accounting firm retained by
the Company to the extent reasonably necessary in order to assure that the
transaction will qualify as such, including but not limited to (i) deferring the
vesting, exercise, payment, settlement or lapsing of restrictions with respect
to any Option, (ii) providing that the payment or settlement in respect of any
Option be made in the form of cash, shares of Stock or securities of a successor
or acquirer of the Company, or a combination of the foregoing, and (iii)
providing for the extension of the term of any Option to the extent necessary to
accommodate the foregoing, but not beyond the maximum term permitted for any
Option.
18. Substitution Options. Options may be granted under this Plan from
---------------------
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of the Company, or whose employer
is about to become a parent or subsidiary corporation, conditioned in the case
of an incentive stock option upon the employee becoming an employee as the
result of a merger or consolidation of the Company with another corporation, or
the acquisition by the Company of substantially all the assets of another
corporation, or the acquisition by the Company of at least 50% of the issued and
outstanding stock of another corporation as the result of which it becomes a
subsidiary of the Company. The terms and conditions of the substitute Options so
granted may vary from the terms and conditions set forth in this Plan to such
extent as the Board of Directors of the Company at the time of grant may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted, but with respect to stock
options which are incentive stock options, no such variation shall be such as to
affect the status of any such substitute option as an "incentive stock option"
under Section 422 of the Code.
19. Amendment or Termination of Plan. The Board of Directors may
-----------------------------------
modify, revise or terminate this Plan at any time and from time to time, subject
to the approval of the Company's stockholders to the extent required by
applicable laws, regulations or rules. All Options ;ranted under this Plan shall
be subject to the terms and provisions of this Plan and any amendment,
modification or revision of this Plan shall be deemed to amend, modify or revise
all Options outstanding under this Plan at the time of such amendment,
modification or revision. In the event this Plan is terminated by action of
the Board of Directors, all Options outstanding under this Plan may be
terminated.
A6
<PAGE>
20. Written Agreement. Each Option granted hereunder shall be embodied in a
-----------------
written agreement, which shall be subject to the terms and conditions prescribed
above, and shall be signed by the Optionee and by an officer of the Company on
behalf of the Committee and the Company. Such an Option agreement shall contain
such other provisions as the Committee in its discretion shall deem advisable
which are not inconsistent with the terms of this Plan, including without
limitation transfer restrictions, repurchase rights, rights of first refusal,
non-compete, non-solicitation and confidentiality covenants, forfeiture
provisions, representations and warranties of the Optionee and provisions to
ensure compliance with applicable laws, regulations and rules.
21. Indemnification of the Committee and the Board of Directors. The
------------------------------------------------------------
Company will, to the fullest extent permitted by law, indemnify, defend and hold
harmless any person who at any time is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative or investigative) in any way relating
to or arising out of this Plan or any Option or Options granted hereunder by
reason of the fact that such person is or was at any time a director of the
Company or a member of the Committee against judgments, fines, penalties,
settlements and reasonable expenses (including attorneys fees) actually incurred
by such person in connection with such action, suit or proceeding. This right
of indemnification will inure to the benefit of the heirs, executors and
administrators of each such person and is in addition to all other rights to
which such person may be entitled by virtue of the by-laws of the Company or as
a matter of law, contract or otherwise.
22. No Rights as Stockholder. No Optionee shall have any rights as a
-------------------------
stockholder with respect to stock covered by his Option until the date a stock
certificate is issued for the Stock.
23. Gender. If the context requires, words of one gender when used in This
------
Plan shall include the others and words used in the singular or plural shall
include the other.
24. Headings. Headings of Sections are included for convenience of
--------
reference only and do not constitute part of this Plan and shall not be used in
construing the terms of this Plan.
25. Other Options. The grant of an Option shall not confer upon an Optionee
-------------
the right to receive any future or other Option under this Plan, whether or not
Options may be granted to similarly situated Optionees, or the right to receive
future Options upon the same terms or conditions as previously granted.
26. Arbitration of Disputes. Any controversy arising out of or relating to
-----------------------
this Plan or an Option Agreement shall be resolved by arbitration conducted
pursuant to the arbitration rules of the American Arbitration Association. The
arbitration shall be final and binding on the parties.
27. Governing Law. The provisions of this Plan shall be construed,
--------------
administered, and governed under the laws of the State of Delaware.
28. Effective Date. This Plan shall become effective and shall be deemed to
--------------
have been adopted on March 2, 2000 if within one year of that date it shall have
been approved by the requisite holders of the outstanding shares of voting stock
of the Company under the provisions of the corporate charter, by-laws or
applicable law. No options shall be granted pursuant to this Plan after March 1,
2010.
Adopted by the Board of Directors on the 2nd day of March, 2000, and
approved by the stockholders on the ___ day of June, 2000.
A7
<PAGE>
PROXY
LIFECELL CORPORATION
THIS PROXY FOR HOLDERS OF SERIES B PREFERRED STOCK IS SOLICITED BY THE BOARD
OFDIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 2, 2000
The stockholder of LifeCell Corporation (the "Company") whose signature
appears on the reverse side hereof hereby appoints Paul G. Thomas and Fenel M.
Eloi, 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 The Somerset Hills Hotel,
200 Liberty Corner Road, Warren, New Jersey 07059 at 1:00 p.m., Friday, June 2,
2000, and at any adjournment thereof. The proposals set forth below are more
fully described in the LifeCell Corporation Proxy Statement dated April 28, 2000
(the Proxy Statement).
1(a). ELECTION OF DIRECTORS: [ ] FOR all of the 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): Paul G. Thomas, Stephen A. Livesey, Michael
E. Cahr, Peter D. Costantino, James G. Foster, 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 DIRECTOR: [ ] FOR the nominee 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 Series B Preferred Stock, voting as a
separate class): K. Flynn McDonald.
(Instruction: To withhold authority to vote for the nominee, write that
nominee's name in the space provided below.)
________________________________________________________________________________
2. Proposal to approve the adoption of the LifeCell Corporation Year 2000 Stock
Option Plan, as more fully described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 nominee named in Item 1(b) or if the nominee becomes unavailable, FOR
another nominee to be selected by the holders of a majority of the shares of
Series B Preferred Stock and FOR the proposal as set forth in Item 2.
Dated:____________________________________________, 2000
___________________________________________________
___________________________________________________
(Signature of Stockholder(s))
Please sign name exactly as it appears hereon. Joint owners should each
sign.
When signing as an attorney, executor, administrator, trustee or
guardian, please give full title as it appears.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
<PAGE>
PROXY
LIFECELL CORPORATION
THIS PROXY FOR HOLDERS OF COMMON STOCK IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 2, 2000
The stockholder of LifeCell Corporation (the "Company") whose signature
appears on the reverse side hereof hereby appoints Paul G. Thomas and Fenel M.
Eloi, 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 The Somerset Hills Hotel,
200 Liberty Corner Road, Warren, New Jersey 07059 at 1:00 p.m., Friday, June 2,
2000, and at any adjournment thereof. The proposals set forth below are more
fully described in the LifeCell Corporation Proxy Statement dated April 28, 2000
(the Proxy Statement).
1. ELECTION OF DIRECTORS: [ ] FOR all of the nominees listed below
(except as indicated to the contrary below)
[ ] WITHHOLD AUTHORITY
to vote for election of directors
NOMINEES: Paul G. Thomas, Stephen A. Livesey, Michael E. Cahr, Peter D.
Costantino, James G. Foster, David A. Thompson
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
________________________________________________________________________________
2. Proposal to approve the adoption of the LifeCell Corporation Year 2000 Stock
Option Plan, as more fully described in the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the above named proxies are authorized to vote upon
such other business as may properly come before the meeting or any adjournment
thereof and upon matters incident to the conduct of the meeting.
This proxy will be voted as directed. If not otherwise specified, this proxy
will be voted FOR the election of the director nominees named in Item 1, 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 proposal as
set forth in Items 2.
Dated:___________________________________________, 2000
________________________________________________________
________________________________________________________
(Signature of Stockholder(s))
Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as an attorney, executor, administrator, trustee or
guardian, please give full title as it appears.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY
<PAGE>
