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
XXXXXX X. XXXXXXXX, an individual residing at 0 Xxxxxx Xxxxx Xxxxx, Xxxxx Xxxx,
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)(ii) below), Employee shall serve as Chief
Financial 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”),
the
President/CEO of Employer and/or the President/CEO’s nominee. During the Term,
and after a Change in Control, Employee shall serve as Chief Financial 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, the President/CEO of Employer and/or the President/CEO’s
nominee. 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, Employer shall pay to Employee a base salary at the rate of $232,000
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 (the
“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 similarly
situated 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 35% of Base Salary on an annualized basis. 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.
-2-
(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)(ii) 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.
(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.
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.
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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 the term “Cause”
shall
mean Employee’s (i) conviction of, guilty plea to or confession of guilt of a
felony or a criminal act involving moral turpitude, (ii) commission of a
fraudulent, illegal or dishonest act in respect of Employer or its successors,
(iii) willful misconduct or gross negligence that reasonably could be expected
to be injurious to the business, operations or reputation of Employer or its
successors (monetarily or otherwise), (iv) material violation of Employer's
policies or procedures in effect from time to time; provided, however, to the
extent such violation is subject to cure, Employee will have a reasonable
opportunity to cure such violation after written notice thereof, (v) material
failure to perform Employee’s duties as assigned to Employee from time to time;
provided, however, to the extent such failure is subject to cure, Employee
will
have a reasonable opportunity to cure such non-performance after written notice
thereof, (vi) breach of the terms of the Covenants Agreement (as defined in
Section 5.03 below), or (vii) other material breach of Employee’s
representations, warranties, covenants and other obligation under this
Agreement; provided, however, to the extent such breach of a covenant or other
obligation is subject to cure, Employee will have a reasonable opportunity
to
cure such breach after written notice thereof.
(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.
(E)
Termination
By Employee.
Employee
may terminate this Agreement and Employee’s employment hereunder for any reason
or no reason by giving thirty (30) days prior written notice of termination
to
Employer; provided, however, that Good Reason (as defined in Section
4.02(D)(iii) below) only shall apply for purposes of Section 4.02(D) below.
Following Employee’s delivery of written notice of termination to Employer,
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.
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(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; 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), 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”).
(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) 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 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 a twelve
(12)-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 with Employer 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.
In the
event of a termination of this Agreement and Employee’s employment hereunder
pursuant to Section 4.01(D) 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 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”),
(b)
with respect to stock options granted to Employee prior to the Commencement
Date, such options will continue to vest in accordance with the vesting schedule
set forth in the applicable Stock Option Agreement between Employee and Employer
for a period of twelve (12) months following the termination of Employee’s
employment with Employer and Employee will have until the earlier of (1) the
10
year anniversary of the date of grant, or (2) the 12-month anniversary of the
termination of Employee’s employment, to exercise such options (to the extent
vested), (c) with respect to stock options granted to Employee on or after
the
Commencement Date, Employee shall have until the earlier of (1) the 10 year
anniversary of the date of grant, or (2) one day less than the 3 month
anniversary of the date of Employee’s termination of employment, to exercise
such number of options as would have become exercisable had Employee continued
to be employed by Employer for a period of 12-months following the date of
Employee’s termination of employment with Employer, (d) with respect to only the
restricted stock award covering 50,000 shares of Employer’s common stock granted
to Employee pursuant to the restricted stock award agreement dated July 20,
2005
between Employee and Employer (the “7/20/05
RSA Agreement”),
the
restrictions on the Restricted Stock (as defined in the 7/20/05 RSA Agreement)
that would have otherwise lapsed had Employee continued to be employed by
Employer for a period of 12-months following the date of Employee’s termination
of employment with Employer shall be deemed to have lapsed on the date of
termination, and (e) if Employee timely elects COBRA coverage and (1) 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 a twelve
(12)-month period following the date of Employee’s termination of employment
with Employer, and (2) provided that Employee’s COBRA coverage remains in
effect, during the period commencing on the twelve (12)-month anniversary and
ending on the eighteen (18)-month anniversary of Employee’s termination of
employment, Employer shall absorb the entire cost of Employee’s health care
continuation coverage under COBRA. In the event that Employee becomes eligible
to obtain healthcare coverage from a new employer, Employer’s obligation to pay
its portion or all, as applicable, 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 a twelve (12)-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 (1); and (ii) Employee’s
annualized Base Salary in effect immediately prior to the date of termination
of
Employee’s employment with Employer.
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(D)
Trigger
Event Termination.
Notwithstanding the provisions of Sections 4.02(A) and 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(A) or 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 Two Year Amount (as defined below), and (b) if Employee timely elects COBRA
coverage and (1) 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 twelve (12)-month period following the Trigger
Event, and (2) provided that Employee’s COBRA coverage remains in effect, during
the period commencing on the twelve (12)-month anniversary of the Trigger Event
and ending on the eighteen (18)-month anniversary of the Trigger Event, Employer
shall absorb the entire cost of Employee’s health care continuation coverage
under COBRA. In the event that Employee becomes eligible to obtain healthcare
coverage from a new employer prior to the eighteen (18)-month anniversary of
the
Trigger Event, Employer’s or its successor’s obligation to pay its portion or
all, as applicable, 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
the
Trigger Event. The Two Year Amount shall be payable on the next regular paydate
following 180 days after the date of the Trigger Event; provided, however,
Employer will pay the Two Year 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 following
meanings:
(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 twelve (12) 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 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 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
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. For
purposes of the definition of “Trigger Event” only, “Cause”
shall
mean (i) conviction of any crime that constitutes a felony or a criminal offense
involving moral turpitude, or (ii) 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.
-7-
(ii)
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.
(iii)
“Good
Reason”
means:
(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 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
no
longer reports to the functional head of the functional business unit to which
Employee is assigned;
-8-
(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 which
Employee reasonably believes is owed by Employee to any prior employer or any
other third party.
Notwithstanding
the foregoing, 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,”
shall not constitute a “Good Reason.” Employee shall be deemed to have consented
to any act or event that would otherwise give rise to “Good Reason,” unless
Employee provides written notice of termination for Good Reason to Employer
within ninety (90) days following the action or event constituting Good
Reason.
(iv)
“Two
Year Amount”
shall
mean two (2) times the sum of (a) the Base Amount, 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 Two Year 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..
(v)
“Base
Amount”
shall
mean the annualized Base Salary in effect immediately prior to the Trigger
Event.
(vi)
“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.
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.
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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.
|
with
a copy to:
|
|
One
Millenium Way
|
Xxxxxxxxxx
Xxxxxxx PC
|
|
Xxxxxxxxxx,
Xxx Xxxxxx 00000
|
00
Xxxxxxxxxx Xxxxxx
|
|
Attn:
President
|
Xxxxxxxx,
Xxx Xxxxxx 00000
|
|
Attn:
Xxxxxx X. Xxxxxx, Esq.
|
and
in
the case of Employee to:
|
Xxxxxx
X. Xxxxxxxx
|
with
a copy to:
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8
Yellow brook Drive
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Xxxxxx
Xxxxx
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Colts
Neck, New Jersey 07222
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0000
Xxxxxx Xxxxxx
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| Xxxxxxxxxxxx, XX 00000 | |
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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.
5.04
Entire
Agreement.
Except
with respect to the terms of any outstanding written 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 May 22,
2000, as amended by the letter dated May 12, 2003, 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 President/CEO of Employer or the Chairman of the
Compensation Committee and Employee.
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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.
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.
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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.
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.
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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.
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EMPLOYER:
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LIFECELL
CORPORATION.
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BY:
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/s/
Xxxx X. Xxxxxx
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Xxxx
X. Xxxxxx, President and CEO
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EMPLOYEE:
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/s/
Xxxxxx X. Xxxxxxxx
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Xxxxxx
X. Xxxxxxxx
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