Exhibit 10.26
LIFECELL CORPORATION
Xxx Xxxxxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
____________________ __, 2000
NAME
LifeCell Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Re: Change in Control Agreement
Dear:
We are currently parties to a severance agreement dated October 5, 1998.
We believe that it is imperative that the Company be able to rely upon you to
continue in your position in the event the Company receives any proposal from a
third party concerning a possible business combination with, or acquisition of
equity securities of, the Company, and for the Company to be able to receive and
rely upon your advice as to the best interests of the Company and its
shareholders without concern that you might be distracted by the personal
uncertainties and risks created by such a proposal. Accordingly, we believe
that it is desirable to supplement the provisions of the severance agreement to
govern your rights upon a change in control of LifeCell Corporation ("LifeCell"
or the "Company"). It is not intended to change your employment agreement or
severance arrangements in any way except as expressly set forth herein.
Accordingly, your benefits upon severance under your current severance agreement
would be superseded and enhanced by the following provision if you become
entitled to payment hereunder upon severance after a change of control. Your
severance agreement will continue to be binding upon any severance of your
employment which does not result in your obtaining the benefits of this
Agreement.
CHANGE IN CONTROL. (a) Upon the occurrence of a "Trigger Event" (as
defined below), you shall be entitled to receive a lump sum payment equal to the
"Payment Amount".
(b) "Trigger Event" shall mean either (i) termination of your
employment with the Company or any successor at any time during the period
beginning three (3) months prior to the effective date of a Change in Control
and ending twelve (12) months after the Change in Control, other than a
"Termination for Cause" by the Company or termination of your employment by you
without "Good Reason" during such period , or (ii) failure, upon a Change in
Control, of either the Company or any successor to all or a substantial portion
of the Company's business and/or assets to continue your employment as an
executive officer of the Company or such successor for a period of at least
twelve (12) months after the effective date of the Change in Control, with a
salary at least equal to the Base Amount (as defined below) and a bonus each
year equal to no less than the Bonus Amount (as defined below), or (iii)
termination of employment by you after failure of the Company or such successor
to acknowledge or assume in writing the obligations to you set forth in your
severance agreement and this letter agreement after request by you. Payment of
the Payment Amount shall be due in a lump sum in full upon the date of
termination of employment.
(c) (i) The "Payment Amount" shall mean two and nine tenths (2.9)
times the sum of the Base Amount and the Bonus Amount. The "Base Amount" shall
mean the annualized base salary which you are earning immediately prior to the
Change in Control. The "Bonus Amount" shall mean the annual bonus you received
attributable to your performance during the full fiscal year immediately prior
to the effective date of the Change in Control.
(d) Upon a Change in Control, all stock options or (to the extent
not prohibited by tax or other law) other unvested benefits under any
compensation or employee benefit plan of the Company shall immediately become
vested and exercisable by you for a period of the longer of the exercise period
in effect immediately prior to the Change in Control or the period ending (90)
days after the effective date of the Change in Control.
(e) During the 12-month period following the Trigger Date, the
Company or its successor shall either continue your health and medical benefits
and life insurance coverage as in effect immediately before the Trigger Date at
your same cost, if any, or, if a continuation of such coverages is not permitted
pursuant to the terms of a plan or other applicable instrument, the Company
shall provide you with substantially the same benefits (at your same cost) that
were provided under such coverages.
(f) Notwithstanding the foregoing, if the independent certified
accountants of the Company notify you in writing within 15 days of a Trigger
Date that payment of the Payment Amount and the other benefits hereunder would
cause such payments to be nondeductible by the Company because of Section 280G
of the Internal Revenue Code, the benefits and payments hereunder shall be
reduced to the minimum extent necessary so that all benefits payable hereunder
are deductible under Section 280G of the Code (with you having the election, in
your sole discretion, as to which and how much of the benefits hereunder shall
be reduced (or, with respect to the Payment Amount, returned)).
(g) A "Change in Control" shall be deemed to have occurred if:
(i) Any person, firm or corporation acquires directly or
indirectly the Beneficial Ownership (as defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) of any voting security of the
Company and immediately after such acquisition, the acquirer has Beneficial
Ownership of voting securities representing 50% or more of the total voting
power of all the then-outstanding voting securities of the Company; or
(ii) the individuals (A) who, as of the date hereof constitute
the Board of Directors of the Company (the "Original Directors") or (B) who
thereafter are elected to the Board of Directors of the Company (the "Company
Board") and whose election, or nomination for election, to the Company Board was
approved by a vote of at least 2/3 of the Original Directors then still in
office (such Directors being called "Additional Original Directors") or (C) who
are elected to the Company Board and whose election or nomination for election
to the Company Board was approved by a vote of at least 2/3 of the Original
Directors and Additional Original Directors then still in office, cease for any
reason to constitute a majority of the members of the Company Board; or
(iii) The stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization (or consummation of any such
transaction if stockholder approval is not sought or obtained), other than any
such transaction which would result in more than 66% of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction being Beneficially Owned by holders of
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder relative to
such other continuing holders being not altered substantially in the
transaction; or
(iv) The stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale, lease or
disposition by the Company of all or a substantial portion of the Company's
assets (i.e. 50% or more in value of the total assets of the Company) other than
to a subsidiary or affiliate.
(h) "Good Reason" means (i) a failure of the Company or its
successors without your prior consent to pay you any amounts due to you or to
fulfill any other material obligations to you (after 15 days written notice to
cure), (ii) a failure of the Company or its successors to maintain your position
as an executive officer of the Company or its successors, (iii) any decrease in
your annual compensation level or in the value of your benefits, (iv) any move
of the offices of the Company or its successor without your consent such that
you would be required to commute more than 25 miles more each way than you
currently commute, or (v) continued employment of you by the Company or its
successor would be substantially likely to cause you to breach a material
obligation which you reasonably believe is owed by you to a prior employer or
any other third party.
(i) "Termination for Cause" means a termination of your employment
by the Company or its successor for "cause". For purposes of this letter,
"cause" means (1) conviction of any crime that constitutes a felony or a
criminal offense involving moral turpitude or (2) intentionally engaging in
conduct that is materially injurious to the Company or its successor which is
not cured within a reasonable period of time after notice from the Company.
(j) The Company shall notify you in writing promptly after the
Company becomes aware or anticipates that a Change in Control is likely to take
place.
(k) This Agreement is binding on the Company and its successors
and assigns (including but not limited to any purchaser of all or substantially
all of the assets of the Company as defined in (g)(iv) above). If the Company
or its successors do not timely make all payments owed to you, whether due
hereunder or otherwise due to you, and you retain counsel to enforce your rights
to payment, the Company and its successors and assigns shall also be obligated
to reimburse you for all reasonable attorneys fees incurred in collecting
amounts due to you.
(l) This Agreement shall be effective as of the date first set
forth above and shall continue in full force and effect so long as you are
employed by the Company unless terminated by mutual consent of both parties in
writing.
(m) This Agreement shall not affect any rights of the Company or
you prior to a Change in Control or any of your rights granted in any other
agreement, plan or arrangements, except that if you receive all payments
hereunder, you shall not be entitled to receive any payments or benefits under
your severance agreement. The rights, duties and benefits provided hereunder
shall only become effective upon a Change in Control. If your employment by the
Company is terminated for any reason prior to the date three months prior to the
effective date of a Change in Control, this Agreement shall thereafter be of no
further force and effect.
Kindly sign your name at the end of this letter to signify your
understanding and acceptance of these terms.
Sincerely,
Xxxxx Xxxxxxxx, Chair,
Compensation Committee
Accepted:
__________________________
NAME
