Employment Agreement
This
Employment Agreement (“Agreement”),
dated
September 21, 2005, is entered into between LIFECELL CORPORATION, a Delaware
corporation, having its principal place of business at Xxx Xxxxxxxxx Xxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 (“Employer”),
and
XXXX X. XXXXXX, an individual residing at 0 XxXxx Xxxxx, Xxxxxxxxxxx, Xxx Xxxxxx
00000 (“Employee”).
WHEREAS,
Employer desires to continue to employ Employee; and
WHEREAS,
Employee is willing to accept such continued employment on the terms and
conditions set forth in this Agreement.
NOW,
THEREFORE,
in
consideration of the mutual agreements set forth herein, Employer and Employee
hereby agree as follows:
ARTICLE
I
EMPLOYMENT;
POSITION, DUTIES AND RESPONSIBILITIES
1.01
Employment.
Employer agrees to, and does hereby, continue to employ Employee, and Employee
agrees to, and does hereby accept, such continued employment, upon the terms
and
subject to the conditions set forth in this Agreement.
1.02
Position,
Duties and Responsibilities.
During
the Term (as defined in Section 2.01 below), and prior to a Change in Control
(as defined in Section 4.02(D)(iv) below), Employee shall serve as President
and
Chief Executive Officer of Employer and shall have such responsibilities, duties
and authority consistent with such position as may, from time to time, be
assigned by the Board of Directors of Employer (the “Board”).
During the Term, and after a Change in Control, Employee shall serve as
President and Chief Executive Officer of Employer and/or in such other executive
level position or capacity that is consistent with Employee’s education,
background and experience as Employer shall reasonably request and shall have
such responsibilities, duties and authority consistent with such position(s)
as
may, from time to time, be assigned by the Board. Employee’s employment by
Employer shall be full-time and exclusive to Employer, Employee shall serve
Employer faithfully and to the best of Employee’s ability, and Employee shall
devote all of Employee’s business time, attention, skill and efforts exclusively
to the business and affairs of Employer (including its affiliates) and the
promotion of its interests.
ARTICLE
II
TERM
2.01
Term
of Employment.
Employee’s continued employment under this Agreement shall commence as of the
date of this Agreement (the “Commencement
Date”)
and
shall continue until terminated by either Employer or Employee pursuant to
Article IV hereof (the “Term”).
ARTICLE
III
COMPENSATION
AND EXPENSES
3.01
Compensation
and Benefits.
For all
services rendered by Employee in any capacity during the Term, including,
without limitation, services as an officer, director or member of any committee
of Employer, or any affiliate or division thereof, Employee shall be compensated
as follows (subject, in each case, to the provisions of Article IV
below):
(A)
Base
Salary.
During
the Term (and retroactive to June 1, 2005), Employer shall pay to Employee
a
base salary at the rate of $455,000 on an annualized basis (the “Base
Salary”).
Employee’s Base Salary shall be subject to periodic adjustments (but not
decreases) as the Board and/or the Compensation Committee of Employer
(“Compensation
Committee”)
shall,
in its discretion, deem appropriate. As used in this Agreement, the term “Base
Salary” shall refer to Base Salary as may be adjusted from time to
time.
Base
Salary shall be payable in accordance with the customary payroll practices
of
Employer.
(B)
Annual
Bonus.
During
the Term, Employee also will be eligible to participate in Employer’s incentive
compensation plan in place from time to time and applicable to executive level
employees. Employer reserves the right to amend or rescind the incentive
compensation plan at any time in its discretion. In connection with Employee’s
participation in the incentive compensation plan, Employee will be eligible
to
receive an annual discretionary bonus (the “Annual
Bonus”).
The
amount of the Annual Bonus, if any, will be determined by the Board and/or
the
Compensation Committee in its discretion and will be related to the achievement
of agreed upon management objectives, which objectives shall be subject to
Board
and/or Compensation Committee approval. Employee’s target Annual Bonus for
calendar year 2005 is 60% of the annualized Base Salary in effect as of the
Commencement Date. The Annual Bonus, if any, will be determined as of the end
of
each calendar year during the Term and shall be payable within thirty (30)
days
following the end of such calendar year. Except as otherwise specifically set
forth in Section 4.02 below, to be eligible to receive the Annual Bonus, or
any
portion thereof, Employee must be employed by Employer both at the time the
amount of the Annual Bonus, if any, is determined, and at the time the Annual
Bonus, if any, is to be paid.
(C)
Equity
Compensation.
(i)
During the Term, pursuant to the terms and conditions of the LifeCell
Corporation Equity Compensation Plan adopted on July 19, 2005 (the “2005
Plan”)
or any
successor equity compensation plan as may be in place from time to time,
Employee shall be eligible to receive, from time to time, Awards in amounts,
and
subject to such terms, conditions and restrictions, as determined by the
Compensation Committee in its sole discretion. Awards granted to Employee,
if
any, will be subject the terms and conditions established within the 2005 Plan
(as amended from time to time) or any successor equity compensation plan as
may
be in place from time to time, as applicable, and the separate option agreement,
restricted stock purchase agreement or stock award agreement between Employer
and Employee that sets forth the terms and conditions of the Award (e.g.,
exercise price, expiration date and vesting schedule of Options; the restricted
period and/or other restrictions such as performance objectives relating to
Stock Awards). Capitalized terms used in this Section 3.01(C)(i) and not
otherwise defined in this Agreement shall have the meanings assigned thereto
in
the 2005 Plan.
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(ii)
Notwithstanding any provision of the (a) 2005 Plan or any predecessor plan
thereto, including clause (iii) of Section 16(b) of the 2005 Plan, (b) terms
of
any outstanding Nonstatutory Stock Options granted to Employee prior to the
Commencement Date under the 2005 Plan or any predecessor plan thereof, or (c)
terms of any Options (whether Nonstatutory Stock Options or Incentive Stock
Options) that may be granted to Employee under the 2005 Plan on or subsequent
to
the Commencement Date to the contrary, Nonstatutory Stock Options granted to
Employee under the 2005 Plan or any predecessor plan prior to the Commencement
Date and Options (whether Nonstatutory Stock Options or Incentive Stock Options)
granted to Employee under the 2005 Plan on or subsequent to the Commencement
Date shall not be canceled pursuant to the 2005 Plan in connection with a
Corporate Transaction Event, unless Employee has been provided an opportunity
to
exercise such Options (whether or not then exercisable) for a period of no
less
than three days prior to the date of such Corporate Transaction Event. For
purposes of this Section 3.01(C)(ii), capitalized terms used in the preceding
sentence and not otherwise defined in this Agreement shall have the meanings
assigned thereto in the 2005 Plan.
(iii)
Except as otherwise may be specifically set forth in a separate option
agreement, restricted stock purchase agreement or stock award agreement entered
into between Employer and Employee after the Commencement Date, upon the
occurrence of a Change in Control (as defined in Section 4.02(D)(iv) below)
during the Term, all stock options and any other equity-based compensation
shall
become vested immediately and, if applicable, exercisable by Employee for a
period of the longer of the exercise period in effect immediately prior to
the
Change in Control or the period ending ninety (90) days after the effective
date
of the Change in Control. Notwithstanding the foregoing, with respect to the
restricted stock award consisting of a retention stock award and a performance
stock award granted to Employee pursuant to the restricted stock award agreement
between Employer and Employee dated as of July 20, 2005 (the “Special
2005 Restricted Stock Award Agreement”),
in
the event of a Change in Control on or prior to the Vesting Date, the
restrictions applicable to all of the Retention Shares and the restrictions
applicable to only 75,862 of the Performance Shares shall lapse. For purposes
of
the preceding sentence only, capitalized terms that are otherwise not defined
in
this Agreement shall have the meanings assigned thereto in the Special 2005
Restricted Stock Award Agreement.
(D)
Benefits.
During
the Term, Employee shall be entitled to participate in all Employer's employee
benefit plans and programs (excluding severance plans, if any) as Employer
generally maintains from time to time during the Term for the benefit of its
employees, in each case subject to the eligibility requirements, enrollment
criteria and the other terms and provisions of such plans or programs. Employer
may amend, modify or rescind any employee benefit plan or program and/or change
employee contribution amounts to benefit costs without notice in its
discretion.
(E)
Vacation
Sick and Personal Days.
During
the Term, Employee shall be entitled to paid sick days and other paid time
off
in accordance with Employer's policies with respect to such sick days and other
paid time off in place from time to time.
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(F)
Automobile
Allowance.
During
the Term (and retroactive to June 1, 2005), Employee will receive an automobile
allowance of $15,000 on an annualized basis (or $1,250 monthly).
3.02
Expenses.
Employee shall be entitled to receive reimbursement from Employer for reasonable
out-of-pocket expenses incurred by Employee during the Term in connection with
the performance of Employee’s duties and obligations under this Agreement,
according to Employer's expense account and reimbursement policies in place
from
time to time and provided that Employee shall submit reasonable documentation
with respect to such expenses.
ARTICLE
IV
TERMINATION
4.01
Events
of Termination.
This
Agreement and Employee’s employment hereunder shall terminate upon the
occurrence of any one or more of the following events:
(A)
Death.
In the
event of Employee’s death, this Agreement and Employee’s employment hereunder
shall automatically terminate on the date of death.
(B)
Disability.
To the
extent permitted by law, in the event of Employee’s physical or mental
disability that prevents Employee from performing Employee’s duties under this
Agreement for a period of at least 90 consecutive days in any 12-month period
or
120 non-consecutive days in any 12-month period, Employer may terminate this
Agreement and Employee’s employment hereunder upon giving notice of termination
to Employee.
(C)
Termination
by Employer for Cause.
Employer may, at its option, terminate this Agreement and Employee’s employment
hereunder for Cause (as defined below) upon giving notice of termination to
Employee. Except as set forth in Section 4.02(D) below, as used in this
Agreement, “Cause”
shall
mean that the Board in its good faith opinion concludes that any of the
following events has occurred: (i) Employee has been convicted of a crime
involving moral turpitude, including, but not limited to fraud, theft,
embezzlement or any crime that results in or is intended to result in personal
enrichment at the expense of Employer, (ii) there has been a material breach
by
Employee of this Agreement or of the Covenants Agreement that substantially
impairs Employer’s interest in this Agreement or the Covenants Agreement, or
(iii) Employee has committed acts that in the judgment of the Board constitutes
willful misconduct to the material detriment of Employer.
(D)
Without
Cause by Employer.
Employer may, at its option, at any time terminate this Agreement and Employee’s
employment hereunder for no reason or for any reason whatsoever (other than
for
Cause or as a result of Employee’s death or Disability) by giving written notice
of termination to Employee.
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(E)
Termination
By Employee.
Employee
may terminate this Agreement and Employee’s employment hereunder with or without
Good Reason (as defined below) by giving thirty (30) days prior written notice
of termination to Employer; provided, however, that Employer reserves the right
to accept Employee's notice of termination and to accelerate such notice and
make Employee's termination effective immediately, or on any other date prior
to
Employee's intended last day of work as Employer deems appropriate. Except
with
respect to actions by Employer (or its successor) occurring during the period
beginning six (6) months prior to the effective date of a Change in Control
and
ending eighteen (18) months after the Change in Control (in which case the
definition of “Good Reason” set forth in Section 4.02(D)(iii) below shall
control), “Good
Reason”
means
Employer shall, without Employee’s consent (i) assign to Employee any duties
inconsistent with Employee’s positions (including offices, titles, and reporting
requirements), authority, duties or responsibilities with Employer, (ii) remove
Employee from, or fail to re-elect or appoint Employee to, any duties or
positions with Employer or any of its affiliates that were assigned or held
by
Employee immediately after the Commencement Date, except that (a) provided
that
Employee has been nominated or re-nominated by the Board (or a committee thereof
with the power to so nominate or re-nominate) to a position on the Board, the
failure of the shareholders to elect Employee to a position on the Board shall
not constitute “Good Reason,” and (b) a nominal change in Employee’s title that
is merely descriptive and does not affect rank or status shall not constitute
“Good Reason,” (iii)
reduce Employee’s annual Base Salary as in effect immediately after the
Commencement Date or as Employee’s annual Base Salary may be increased from time
to time thereafter, (iv) fail to continue to provide Employee with benefits
substantially similar to those enjoyed by Employee under any of Employer’s
employee benefits plans, policies, programs and arrangements, including, but
not
limited to, life insurance, medical, dental, health, hospital, accident or
disability plans, in which Employee was a participant immediately after the
Commencement Date, unless such benefits changes are applicable with respect
to
all executive level employees, (v) fail to continue to provide Employee with
office space, related facilities and support personnel (including, but not
limited to, administrative and secretarial assistance) (a) that are both
commensurate with Employee’s responsibilities to and position with Employer
immediately after the Commencement Date and not materially dissimilar to the
office space, related facilities and support personnel provided to other
employees of Employer having comparable responsibility to Employee, or (b)
that
are physically located at Employer’s principal executive offices, or (vi)
require Employee to be relocated to an office that will require Employee to
commute more than 25 miles more each way than Employee commutes immediately
prior to the relocation.
(F)
Mutual
Agreement.
This
Agreement and Employee's employment hereunder may be terminated at any time
by
the mutual agreement of Employer and Employee.
4.02
Employer’s
Obligations Upon Termination.
(A)
Termination
by Employer for Cause; Termination by Employee without Good Reason; Mutual
Agreement.
In the
event of a termination of this Agreement and Employee’s employment hereunder
pursuant to Sections 4.01(C), 4.01(E) (other than a termination for Good
Reason), or 4.01(F) above, then this Agreement and Employee’s employment with
Employer shall terminate and Employer’s sole obligation under this Agreement or
otherwise shall be to (i) pay to Employee any Base Salary earned, but not yet
paid, prior to the effective date of such termination, (ii) reimburse Employee
for any expenses incurred by Employee through the effective date of such
termination in accordance with Section 3.02 hereof, and (iii) pay and/or provide
any amounts or benefits that are vested amounts or vested benefits or that
Employee is otherwise entitled to receive under any plan, program, policy or
practice (with the exception of those, if any, relating to severance) on the
date of termination, in accordance with such plan, program, policy, or practice
(clauses (i), (ii) and (iii) of this sentence are collectively referred to
herein as the “Accrued
Obligations”).
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(B)
Death;
Disability.
In the
event of a termination of this Agreement and Employee’s employment hereunder
pursuant to Sections 4.01(A) or 4.01(B), then this Agreement and Employee’s
employment with Employer shall terminate and Employer’s sole obligation under
this Agreement or otherwise shall be to (i) pay and/or provide, as applicable,
the Accrued Obligations, and (ii) subject to Employee’s or Employee’s estate’s,
as applicable, execution, delivery, and non-revocation of a general release
in a
form satisfactory to Employer (the “Release”)
(which
Release, among other things, will include a general release of Employer, its
affiliates and their respective officers, directors, managers, members,
shareholders, partners, employees and agents from all liability and other terms
deemed necessary by Employer for its protection; provided, however, the Release
will preserve (a) Employee’s rights, if any, to indemnification by Employer, (b)
Employee’s rights, if any, as a shareholder of Employer, and (c) Employee’s
rights, if any, under the terms of this Agreement that are intended to survive
the termination of this Agreement and Employee’s employment hereunder), pay to
Employee or Employee’s estate, as applicable, the Prorata Bonus (as defined
below). The Prorata Bonus shall be payable in equal installments over an
eighteen (18)-month period in accordance with Employer’s customary payroll
practices, commencing on the next regular paydate following 180 days after
the
date of Employee’s termination of employment with Employer; provided, however,
Employer will commence installment payments of the Prorata Bonus on the next
regular paydate following the eighth (8th)
day
after Employee’s or Employee’s estate’s, as applicable, execution and delivery
of the Release if commencement of payment at such time will not violate the
applicable requirements of Section 409(A) of the Internal Revenue Code (the
“Code”).
As
used in this Agreement, “Prorata
Bonus”
shall
mean the product of: (i) the greater of (a) the Annual Bonus that Employee
received attributable to performance during the full fiscal year immediately
prior to the date of Employee’s termination of employment with Employer, or (b)
Employee’s target Annual Bonus for the fiscal year in which the date of
termination of Employee’s employment occurred; and (ii) a fraction, the
numerator of which is the number of days in the fiscal year in which the date
of
termination occurs through the effective date of Employee’s termination of
employment , and the denominator of which is 365.
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(C)
Termination
by Employer without Cause; Termination by Employee for Good
Reason.
In the
event of a termination of this Agreement and Employee’s employment hereunder by
Employer pursuant to Section 4.01(D) or a termination of this Agreement and
Employee’s employment hereunder by Employee for Good Reason (as defined in
Section 4.01(E) above) pursuant to Section 4.01(E), then this Agreement and
Employee’s employment with Employer shall terminate and Employer’s sole
obligation under this Agreement or otherwise shall be to (i) pay and/or provide,
as applicable, the Accrued Obligations, (ii) subject to Employee’s execution,
delivery, and non-revocation of the Release, (a) pay to Employee an aggregate
amount equal to the Salary Continuation Payment (as defined below) and the
Prorata Bonus (collectively, the “Severance
Payment”),
and
(b) if Employee timely elects COBRA coverage and provided Employee continues
to
make contributions to such continuation coverage equal to Employee’s
contribution in effect immediately preceding the date of Employee’s termination
of employment with Employer, Employer shall pay the remaining portion of
Employee’s healthcare continuation payments under COBRA for an eighteen
(18)-month period following the date of Employee’s termination of employment
with Employer. In the event that Employee becomes eligible to obtain healthcare
coverage from a new employer, Employer’s obligation to pay its portion of
Employee’s healthcare continuation payments shall cease. Employee understands
and acknowledges that Employee is obligated to inform Employer (or its
successor) if Employee becomes eligible to obtain healthcare coverage from
a new
employer before the eighteen (18)-month anniversary of Employee’s termination of
employment The Severance Payment shall be payable in equal installments over
an
eighteen (18) month period in accordance with Employer’s customary payroll
practices, commencing on the next regular paydate following 180 days after
the
date of Employee’s termination of employment with Employer; provided, however,
Employer will commence installment payments of the Severance Payment on the
next
regular paydate following the eighth (8th)
day
after Employee’s execution and delivery of the Release if commencement of
payment at such time will not violate the applicable requirements of Section
409(A) of the Code. As used in this Section 4.02(C), the term “Salary
Continuation Payment”
shall
mean an amount equal to the product of: (i) one and one-half (1.5); and (ii)
the
sum of (a) Employee’s annualized Base Salary in effect immediately prior to the
date of termination of Employee’s employment, and (b) the greater of (x) the
Annual Bonus that Employee received attributable to performance during the
full
fiscal year immediately prior to the date of Employee’s termination of
employment with Employer, or (y) Employee’s target Annual Bonus for the fiscal
year in which the date of termination of Employee’s employment
occurred
(D)
Trigger
Event Termination.
Notwithstanding the provisions of Section 4.02(C) above, upon the occurrence
of
a Trigger Event (as defined below) and in lieu of any payments or benefits
pursuant to Sections 4.02(C) above, this Agreement and Employee’s employment
with Employer shall terminate and Employer’s sole obligations shall be to (i)
pay and/or provide, as applicable, the Accrued Obligations, and (ii) subject
to
Employee’s execution, delivery and non-revocation of the Release, (a) pay to
Employee an aggregate amount equal to the Trigger Event Amount (as defined
below), and (b) if Employee timely elects COBRA coverage and provided that
Employee continues to make contributions to such continuation coverage equal
to
Employee’s contribution amount to medical insurance in effect immediately
preceding the Trigger Event, Employer or its successor shall pay the remaining
portion of Employee’s healthcare continuation payments under COBRA during the
18-month period following the Trigger Event (unless Employee becomes eligible
to
obtain healthcare coverage from a new employer before the 18-month anniversary
of the Trigger Event, in which case Employer’s or its successor’s obligation to
pay its portion of Employee’s health care coverage shall cease). Employee
understands and acknowledges that Employee is obligated to inform Employer
(or
its successor) if Employee becomes eligible to obtain healthcare coverage from
a
new employer before the eighteen (18)-month anniversary of the Trigger Event.
The Trigger Event Amount shall be payable on the next regular paydate following
180 days after the date of Trigger Event; provided, however, Employer will
pay
the Trigger Event Amount on the next regular pay date following the expiration
of the revocation period set forth in the Release, if payment at such time
will
not violate the applicable requirements of Section 409(A) of the Code. As used
in this Agreement, the following terms shall have the meaning set forth
below:
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(i)
“Trigger
Event”
shall
mean either (a) termination of Employee’s employment with Employer or any
successor at any time during the period beginning six (6) months prior to the
effective date of a Change in Control and ending eighteen (18) months after
the
Change in Control, other than (y) a termination by Employer for Cause (as
defined in this Section 4.02(D) below), or (z) a termination by Employee without
Good Reason (as defined in this Section 4.02(D) below) pursuant to Section
4.01(E) above, (b) termination of Employee’s employment with Employer as a
result of the failure, upon a Change in Control, of either Employer or any
successor to all or a substantial portion of Employer’s business and/or or
assets to continue Employee’s employment as an executive officer of Employer or
such successor for a period of at least eighteen (18) 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 not less than the Annual
Bonus
that Employee received attributable to performance during the full fiscal year
immediately preceding the effective date of the Change in Control, or (c)
following a Change in Control, termination of employment by Employee after
failure of Employer or its successor to acknowledge or assume in writing the
obligations to Employee set forth in this Agreement after request by Employee.
(ii)
For purposes of the definition of “Trigger Event” only “Cause”
shall
mean (a) conviction of any crime that constitutes a felony or a criminal offense
involving moral turpitude, or (b) intentionally engaging in conduct that is
materially injurious to Employer or its successor that is not cured within
a
reasonable period of time after notice from Employer.
(iii)
With respect to actions taken by Employer (or its successor) during the period
beginning six (6) months prior to a Change in Control and ending eighteen (18)
months following a Change in Control, “Good
Reason”
shall
mean (a) the failure of Employer or its successor, without Employee’s prior
consent, to pay any amounts due to Employee or to fulfill any other material
obligations to Employee under this Agreement, other than failures that are
remedied by Employer or its successor within 15 days after receipt of written
notice thereof given by Employee, (b) the failure of Employer or its successors,
without Employee’s consent, to maintain Employee’s position as an executive
officer with duties consistent with that of an executive officer, and given
the
overall size and structure of Employer or its successor, Employee neither is
the
functional head of the functional business unit to which Employee is assigned
nor reports to the functional head of the functional business unit to which
Employee is assigned, (c) any decrease, without Employee’s consent, in the Base
Amount, the Annual Bonus (based upon the Annual Bonus that Employee received
attributable to performance during the full fiscal year immediately preceding
the effective date of the Change in Control), or in the level or in the value
of
Employee’s benefits (unless the benefit(s) changes are applicable to all
executive level employees), (d) any move of the offices of Employer or its
successor, without Employee’s consent, such that Employee would be required to
commute more than 25 miles more each way than Employee commutes immediately
prior to the relocation, or (e) continued employment of Employee by Employer
or
its successor would be substantially likely to cause Employee to breach a
material obligation that Employee reasonably believes is owed by Employee to
any
prior employer or any other third party. Notwithstanding anything set forth
in
this Agreement to the contrary, placing Employee on a paid leave for up to
90
days, pending a determination of whether there is a basis to terminate Employee
for “Cause,” (as defined in either Section 4.01(C) or this Section 4.02(D))
shall not constitute a “Good Reason.” (as defined in either Section 4.01(E) or
this Section 4.02(D)). Employee shall be deemed to have consented to any act
or
event that would otherwise give rise to “Good Reason”(as defined in either
Section 4.01(E) or this 4.02(D)), unless Employee provides written notice of
termination for Good Reason to Employer within ninety (90) days following the
action or event constituting Good Reason.
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(iv)
a “Change
in Control”
shall
be deemed to have occurred if:
(a)
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 Employer 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 Employer; or
(b)
The individuals (x) who, as of the date hereof constitute the Board (the
"Original
Directors")
or (y)
who thereafter are elected to the Board and whose election, or nomination for
election, to the 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 (z)
who are elected to the Board and whose election or nomination for election
to
the 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 Board; or
(c)
The stockholders of Employer 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 Employer 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
(d)
The stockholders of Employer shall approve a plan of complete liquidation of
Employer or an agreement for the sale, lease or disposition by Employer of
all
or a substantial portion of Employer’s assets (i.e.,
50% or
more in value of the total assets of Employer) other than to a subsidiary or
affiliate.
(v)
“Trigger
Event Amount”
shall
mean two and nine-tenths (2.9) times the sum of (a) the Base Amount (as defined
below), and (b) the Bonus Amount (as defined below); provided, however, in
the
event that the Trigger Event occurs on or after July 1 of any calendar year,
the
Trigger Event Amount also shall include an amount equal only to 50% of
Employee’s target Annual Bonus for the fiscal year in which the Trigger Event
occurred.
(vi)
“Base
Amount”
shall
mean the annualized Base Salary in effect immediately prior to the Trigger
Event.
(vii)
“Bonus
Amount”
shall
mean either (a) the Annual Bonus that Employee received attributable to
performance during the full fiscal year immediately preceding the Trigger Event;
or (b) Employee’s target Annual Bonus for the fiscal year in which the Trigger
Event occurred, whichever is higher.
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ARTICLE
V
MISCELLANEOUS
5.01
Benefit
of Agreement and Assignment.
This
Agreement shall inure to the benefit of Employer, its affiliates and their
respective successors and assigns (including, without limitation, the purchaser
of all or substantially all of the assets) and shall be binding upon Employer
and its successors and assigns. This Agreement shall also inure to the benefit
of and be binding upon Employee and Employee’s heirs, administrators, executors
and assigns. Employee may not assign or delegate Employee’s duties under this
Agreement, without the prior written consent of Employer.
5.02
Notices.
All
notices, requests, demands and other communications required or permitted
hereunder shall be given in writing and shall be deemed to have been duly given
(i) on the date delivered if personally delivered, (ii) upon receipt by the
receiving party of any notice sent by registered or certified mail (first-class
mail, postage pre-paid, return receipt requested) or (iii) on the date targeted
for delivery if delivered by nationally recognized overnight courier or similar
courier service, addressed in the case of Employer to:
|
LifeCell
Corporation.
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with
a copy to:
|
|
One
Millenium Way
|
Xxxxxxxxxx
Xxxxxxx PC
|
|
Xxxxxxxxxx,
Xxx Xxxxxx 00000
|
00
Xxxxxxxxxx Xxxxxx
|
|
Xxxxxxxx,
Xxx Xxxxxx 00000
|
|
|
Attn:
Chair, Compensation Committee
|
Attn:
Xxxxxx X. Xxxxxx, Esq.
|
and
in
the case of Employee to:
|
Xxxx
X. Xxxxxx
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with
a copy to:
|
|
0
XxXxx Xxxxx
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Xxxxxx
Xxxxx
|
|
Xxxxxxxxxxx,
XX 00000
|
0000
Xxxxxx Xxxxxx
|
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Xxxxxxxxxxxx,
XX 00000
|
|
|
Attn:
Xxxxxx Xxxxxxxxxxxx, Esq.
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Any
party
may notify the other party in writing of the change in address by giving notice
in the manner provided in this Section 5.02. Service of process in connection
with any suit, action or proceeding (whether arbitration or otherwise) may
be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement.
5.03
Confidentiality,
Assignment of Contributions and Inventions, Non-Competition and Non-Solicitation
Agreement.
Employee acknowledges and confirms that the Confidentiality, Assignment of
Contributions and Inventions, Non-Competition and Non-Solicitation Agreement
executed by Employee in favor of Employer on July 20, 2005 (“Covenants
Agreement”),
the
terms of which are incorporated herein by reference, remains in full force
and
effect and binding upon Employee. The Covenants Agreement shall survive the
termination of this Agreement and Employee’s employment by Employer for the
applicable period(s) set forth therein.
-10-
5.04
Entire
Agreement.
Except
with respect to the terms of any outstanding agreements relating to equity
compensation grants not modified by the terms of this Agreement, this Agreement
and the Covenants Agreement contain the entire agreement of the parties hereto
with respect to the terms and conditions of Employee's employment during the
Term and activities following termination of this Agreement and Employee’s
employment with Employer and supersedes any and all prior agreements and
understandings, whether written or oral, between the parties with respect to
the
subject matter of this Agreement or the Covenants Agreement, including, without
limitation, the offer letter from Employee to Employee dated September 8, 1998,
as amended by the letter dated September 9, 1998, the agreement between Employer
and Employee dated October 5, 1998, and the letter agreement re: change in
control dated December 14, 2000. Neither this Agreement nor the Covenants
Agreement may be changed or modified except by an instrument in writing, signed
by both the Chairman
of the Compensation Committee and Employee.
5.05
Indemnification;
D&O Insurance.
Employer shall indemnify Employee against all claims arising out of Employee’s
actions or omissions occurring during Employee’s employment with Employer to the
fullest extent provided (A) by Employer’s Certificate of Incorporation and/or
Bylaws, (B) under Employer’s Directors and Officers Liability and general
insurance policies, and (C) under the Delaware General Corporation Law, as
each
may be amended from time to time. Employer agrees it will continue to maintain
Directors and Officers Liability and general insurance policies to fund the
indemnity described above in the same amount and to the same extent it maintains
such coverage for the benefit of its other officers and directors.
5.06.
Representation
and Warranties.
Employee represents and warrants to Employer that (i) Employee has the legal
capacity to execute and perform this Agreement, (ii) this Agreement and the
Covenants Agreement are valid and binding agreements enforceable against
Employee according to their terms, and (iii) the execution and performance
of
this Agreement by Employee does not violate or conflict with the terms of any
existing agreement or understanding to which Employee is a party or by which
Employee may be bound.
5.07
No
Attachment.
Except
as required by law, no right to receive payments under this Agreement shall
be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no effect;
provided, however, that nothing in this Section 5.07 shall preclude the
assumption of such rights by executors, administrators or other legal
representatives of Employer or his estate and their assigning any rights
hereunder to the person or persons entitled thereto.
5.08
Source
of Payment.
All
payments provided for under this Agreement shall be paid in cash from the
general funds of Employer. Employer shall not be required to establish a special
or separate fund or other segregation of assets to assure such payments, and,
if
Employer shall make any investments to aid it in meeting its obligations
hereunder, Employee shall have no right, title or interest whatever in or to
any
such investments except as may otherwise be expressly provided in a separate
written instrument relating to such investments. Nothing contained in this
Agreement, and no action taken pursuant to its provisions, shall create or
be
construed to create a trust of any kind, or a fiduciary relationship, between
Employer and Employee or any other person. To the extent that any person
acquires a right to receive payments from Employer hereunder, such right,
without prejudice to rights which employees may have, shall be no greater than
the right of an unsecured creditor of Employer.
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5.09
Limitation
as to Amounts Payable.
Notwithstanding anything set forth in this Agreement to the contrary, if any
payment or benefit Employee would receive from Employer (or its successor)
pursuant to a Change in Control or otherwise (“Payment”)
would
(i) constitute a “parachute payment” within the meaning of Section 280G of the
Code and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise
Tax”),
then
such Payment shall be reduced to the Reduced Amount. The “Reduced
Amount”
shall
be either (x) the largest portion of the Payment that would result in no portion
of the Payment being subject to the Excise Tax or (y) the largest portion,
up to
and including the total, of the Payment, whichever amount, after taking into
account all applicable federal, state and local employment taxes, income taxes,
and the Excise Tax (all computed at the highest applicable marginal rate),
results in Employee’s receipt, on an after-tax basis, of the greater amount of
the Payment notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax. If a reduction in payments or benefits (or a
cancellation of the acceleration of vesting of stock options or equity awards)
constituting “parachute payments” is necessary so that the Payment equals the
Reduced Amount, such reduction and/or cancellation of acceleration shall occur
in the order that provides the maximum economic benefit to Employee. In the
event that acceleration of vesting of stock option or equity award compensation
is to be reduced, such acceleration of vesting also shall be canceled in the
order that provides the maximum economic benefit to Employee. The accounting
firm engaged by Employer for general audit purposes as of the day prior to
the
effective date of the Change in Control shall perform the foregoing
calculations. If the accounting firm so engaged by Employer is also serving
as
accountant or auditor for the individual, entity or group effecting the Change
in Control or is otherwise unwilling or unable to make such determinations,
Employer shall appoint a nationally recognized accounting firm to make the
determinations required under this Section 5.09. Employer shall bear all
expenses with respect to the determinations by such accounting firm required
to
be made under this Section 5.09. The accounting firm engaged to make the
determinations under this Section 5.09 shall provide its calculations, together
with detailed supporting documentation, to Employer and Employee as soon as
practicable after the date on which Employee’s right to a Payment is triggered
(if requested at that time by Employer (or its successor) or Employee) or such
other time as requested by Employer or Employee. If the accounting firm
determines that no Excise Tax is payable with respect to a Payment, either
before or after the application of the Reduced Amount, it shall furnish Employer
(or its successor) with an opinion reasonably acceptable to Employee that no
Excise Tax will be imposed with respect to such Payment. Any good faith
determinations of the accounting firm made under this Section 5.09 shall be
final, binding, and conclusive upon Employer (or its successor) and Employee.
5.10
No
Waiver.
The
waiver by other party of a breach of any provision of this Agreement shall
not
operate or be construed as a continuing waiver or as a consent to or waiver
of
any subsequent breach hereof.
-12-
5.11
Headings.
The
Article and Section headings in this Agreement are for the convenience of
reference only and do not constitute a part of this Agreement and shall not
be
deemed to limit or affect any of the provisions hereof.
5.12
Governing
Law and Dispute Resolution.
Any and
all actions or controversies arising out of this Agreement, Employee’s
employment or the termination hereof or thereof, including, without limitation,
tort claims, shall be construed and enforced in accordance with the internal
laws of the State of New Jersey, without regard to the choice of law principles
thereof. Except
with respect to Employer’s and Employee’s right to seek injunctive or other
equitable relief (including, without limitation, pursuant to the Covenants
Agreement), any dispute, controversy or claim based on, arising out of or
relating to the interpretation and performance of this Agreement, Employee’s
employment or any termination hereof or thereof or any matter relating to the
foregoing shall be solely submitted to and finally settled by arbitration by
a
single arbitrator in accordance with the then-current rules of the American
Arbitration Association (“AAA”),
including without limitation any claims for discrimination under any applicable
federal, state or local law or regulation. Any such arbitration shall be
conducted in the New Jersey office of the AAA located closest to Employer’s New
Jersey office. The single arbitrator shall be appointed from the AAA’s list of
arbitrators by the mutual consent of the parties or, in the absence of such
consent, by application of any party to the AAA. A decision of the arbitrator
shall be final end binding upon the parties. The parties agree that this Section
5.12 shall be grounds for dismissal of any court action commenced by either
party with respect to this Agreement, other than (i) post-arbitration actions
seeking to enforce an arbitration award and (ii) actions seeking appropriate
equitable or injunctive relief , including, without limitation, pursuant to
the
Covenants Agreement. Employer shall pay the pay the fees of the arbitrator
and
each party shall be responsible for its own legal fees, costs of its experts
and
expenses of its witnesses. The arbitrator’s remedial authority shall equal the
remedial power that a court with competent jurisdiction over the parties and
their dispute would have. Any
award
rendered shall be final, binding and conclusive (without the right to an appeal,
unless such appeal is based on fraud by the other party in connection with
the
arbitration process) upon the parties and any judgment on such award may be
enforced in any court having jurisdiction, unless otherwise provided by
law.
Employer
and Employee acknowledge that it is the intention of the parties that this
Section 5.12 shall
apply to all disputes, controversies and claims, including, without limitation,
any rights or claims Employee may have under the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act, Title VII of the
Civil Rights Act of 1964, the Equal Pay Act, the New Jersey Law Against
Discrimination, the Conscientious Employee Protection Act, the New Jersey Civil
Rights Act, and all other federal, state or local laws, rules or regulations
relating to employment discrimination or otherwise pertaining to this Agreement,
Employee’s employment or termination thereof. Employer
and Employee knowingly and voluntarily agree to this arbitration provision
and
acknowledge that arbitration shall be instead of any civil litigation, meaning
that Employee and Employer are each waiving
any rights to a jury trial.
5.13
Validity.
The
invalidity or enforceability of any provision or provisions of this Agreement
or
the Covenants Agreement shall not affect the validity or enforceability of
any
other provision or provisions of this Agreement or the Covenants Agreement,
which shall remain in full force and effect.
-13-
5.14
Employee
Withholdings and Deductions.
All
payments to Employee hereunder shall be subject to such withholding and other
employee deductions as may be required by law.
5.15
Counterparts.
This
Agreement may be executed in one more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and
the
same instrument.
5.16
Agreement
to Take Actions.
Each
party to this Agreement shall execute and deliver such documents, certificates,
agreements and other instruments, and shall take all other actions, as may
be
reasonably necessary or desirable in order to perform his/her or its obligations
under this Agreement.
5.17
Survival.
The
terms of Section 4.02 and Article V of this Agreement shall survive the
termination of this Agreement and Employee’s employment hereunder.
IN
WITNESS WHEREOF, Employer and Employee have duly executed this Agreement as
of
the date first written above.
|
EMPLOYER:
|
|||
|
LIFECELL
CORPORATION.
|
|||
|
BY:
|
/s/
Xxxxxxx Xxxx
|
||
|
Xxxxxxx
Xxxx, Chair
|
|||
|
Compensation
Committee
|
|||
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EMPLOYEE:
|
|||
|
/s/
Xxxx X. Xxxxxx
|
|||
|
Xxxx
X. Xxxxxx
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|||
-14-
