LIFECELL CORPORATION One Millenium Way Branchburg, New Jersey 08876 August 17, 2006
LIFECELL
CORPORATION
Xxx
Xxxxxxxxx Xxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000
August
17, 2006
Young
X.
XxXxxxx, Vice President, Manufacturing Operations
LifeCell
Corporation
Xxx
Xxxxxxxxx Xxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000
|
Re:
|
Change
in Control Agreement
|
Dear
Xx.
XxXxxxx,
This
letter sets forth certain protections with respect to your employment with
LifeCell Corporation (“LifeCell” or the “Company”) being afforded to you in
connection with your employment. We believe that it is imperative that the
Company be able to rely upon you to continue in your position in the event
the
Company receives any proposal from a third party concerning a possible business
combination with, or acquisition of equity securities of, the Company, and
for
the Company to be able to receive and rely upon your advice as to the best
interests of the Company and its shareholders without concern that you might
be
distracted by the personal uncertainties and risks created by such a proposal.
Accordingly, we wish to provide you with certain benefits following your loss
of
employment after or by reason of a Change in Control.
Change
in Control.
(a)
Upon the occurrence of a “Trigger Event” (as defined below), you shall be
entitled to receive payments in an aggregate amount equal to the “Twelve Month
Amount” (as defined below). Payment of the Twelve Month
Amount shall be conditioned upon your execution, delivery, and non-revocation
of
a general release agreement in a form satisfactory to LifeCell (the “Release”).
Among other things, the Release shall include a general release of LifeCell,
its
affiliates and their respective officers, directors, managers, members,
shareholders, partners, employees and agents from all liability and such other
terms deemed necessary by LifeCell for its protection. The Twelve Month
Amount shall be payable in equal installments over a twelve (12) month period,
in accordance with LifeCell’s customary payroll practices, commencing on the
next regular paydate following the 8th
day
after your execution and delivery of the Release to LifeCell; provided, however,
if necessary to comply with the restriction in Section 409(A)(a)(2)(B) of the
Internal Revenue Code of 1986, as amended (the “Code”) concerning payments to
“specified employees,” the installment payments of the Twelve Month Amount will
commence on the first regular paydate of the seventh month following the date
of
the Trigger Event.
(b)
“Trigger Event” shall mean either (i) termination of your
employment with the Company or any successor at any time during the period
beginning (3) three months prior to the effective date of a Change in Control
and ending twelve (12) months after the Change in Control, other than a
“Termination for Cause” by the Company or termination of your employment by you
without “Good Reason” during such period, or (ii) termination of employment by
you after failure of the Company or such successor to acknowledge or assume
in
writing the obligations to you set forth in your severance arrangement and
this
letter agreement after request by you.
(c)
The “Twelve Month
Amount” shall mean one (1) times the Base Amount (less applicable withholdings
and customary payroll deductions). The “Base Amount” shall mean the annualized
base salary that you are earning immediately prior to the Change in Control.
(d)
Upon
a
Change in Control, all stock options shall immediately become vested and
exercisable by you for a period of the longer of the exercise period in effect
immediately prior to the Change in Control or the period ending (90) days after
the effective date of the Change in Control.
(e) Subject
to your execution, delivery, and non-revocation of the Release, if you timely
elect COBRA coverage and provided that you continue to make contributions to
such continuation coverage equal to your employee contribution amount to medical
insurance in effect immediately preceding the Trigger Event, LifeCell or its
successor shall waive the remaining portion of your healthcare continuation
payments under COBRA during the twelve (12) month period following the Trigger
Event, unless you become eligible to obtain alternate healthcare coverage from
a
new employer before the twelve (12) month anniversary of the Trigger Event,
in
which case LifeCell’s or its successor’s obligation under this subsection (e)
shall cease. You understand and affirm that you are obligated to inform LifeCell
(or its successor) if you become eligible to obtain alternate healthcare
coverage from a new employer before the twelve (12) month
anniversary of the Trigger Event.
(f)
Notwithstanding
the foregoing, if the independent certified accountants of the Company notify
you in writing within 15 days of a Trigger Event that payment of the Twelve
Month Amount and the other benefits hereunder would cause such payments to
be
nondeductible by the Company because of Section 280G of the Internal Revenue
Code, the benefits and payments hereunder shall be reduced to the minimum extent
necessary so that all benefits and payments payable hereunder are deductible
under Section 280G of the Code (with you having the election, in your sole
discretion, as to which and how much of the payments and benefits hereunder
shall be reduced (or, with respect to the Twelve Month Amount,
returned)).
(g)
A “Change in Control" shall be deemed to have occurred
if:
(i)
Any
person, firm or corporation acquires directly or indirectly the Beneficial
Ownership (as defined in Section 13(d) of the Securities Exchange Act of 1934,
as amended) of any voting security of the Company and immediately after such
acquisition, the acquirer has Beneficial Ownership of voting securities
representing 50% or more of the total voting power of all the then-outstanding
voting securities of the Company; or
(ii)
the
individuals (A) who, as of the date hereof constitute the Board of Directors
of
the Company (the "Original Directors") or (B) who thereafter are elected to
the
Board of Directors of the Company (the "Company Board") and whose election,
or
nomination for election, to the Company Board was approved by a vote of at
least
2/3 of the Original Directors then still in office (such Directors being called
"Additional Original Directors") or (C) who are elected to the Company Board
and
whose election or nomination for election to the Company Board was approved
by a
vote of at least 2/3 of the Original Directors and Additional Original Directors
then still in office, cease for any reason to constitute a majority of the
members of the Company Board; or
-2-
(iii)
The
stockholders of the Company shall approve a merger, consolidation,
recapitalization or reorganization (or consummation of any such transaction
if
stockholder approval is not sought or obtained), other than any such transaction
which would result in more than 66% of the total voting power represented by
the
voting securities of the surviving entity outstanding immediately after such
transaction being Beneficially Owned by holders of outstanding voting securities
of the Company immediately prior to the transaction, with the voting power
of
each such continuing holder relative to such other continuing holders being
not
altered substantially in the transaction; or
(iv)
The
stockholders of the Company shall approve a plan of complete liquidation of
the
Company or an agreement for the sale, lease or disposition by the Company of
all
or a substantial portion of the Company's assets (i.e.,
50% or
more in value of the total assets of the Company) other than to a subsidiary
or
affiliate.
(h)
“Good
Reason” means (i) a failure of the Company or its successors without your prior
consent to pay you any amounts due to you or to fulfill any other material
obligations to you (after 30 days written notice to cure), (ii) action by the
Company or its successor that results in a material diminution without your
prior consent in your duties and responsibilities (other than isolated actions
not taken in bad faith and that are remedied by LifeCell or its successor within
30 days after receipt of written notice thereof given by you), as determined
by
balancing (A) any increase or decrease in the scope of your duties and
responsibilities against (B) any increase or decrease in the relative sizes
of
the business, activities or functions (or portions thereof) for which you have
responsibility, provided, however, that none of (I) a change in your title,
or
(II) a change in the hierarchy, either individually or in the aggregate shall
be
considered Good Reason, (iii) any material decrease in your Base Amount, or
(iv)
any move of the offices of the Company or its successor without your consent
such that you would be required to commute more than 50 miles more each way
than
you currently commute.
(i)
“Termination
for Cause” means a termination of your employment by the Company or its
successor for “cause”. For purposes of this letter, “cause” means your (i)
conviction of, guilty plea to or confession of guilt of any crime that
constitutes a felony or a criminal act involving moral turpitude, (ii)
commission of a fraudulent, illegal, or dishonest act in respect of LifeCell,
(iii) willful misconduct or gross negligence that reasonably could be expected
to be injurious in the reasonable discretion of LifeCell or its successor to
the
business, operations, or reputation of LifeCell or its successor (monetarily
or
otherwise), (iv) material violation of LifeCell’s policies or procedures in
effect from time to time; provided, however, to the extent such violation is
subject to cure, such violation shall not constitute “cause” unless you fail to
cure such violation within a reasonable time after written notice thereof,
(v)
material failure to perform your duties as assigned to you from time to time;
provided, however, to the extent such failure is subject to cure, you will
have
a reasonable opportunity to cure such non-performance after written notice
thereof, (vi) a material violation of the terms of the Confidentiality,
Inventions and Discoveries and Non-Competition Agreement dated June __, 2006
or
any other agreement (now or hereafter in effect) pertaining to confidential
information, developments, inventions, discoveries, non-solicitation, or
non-competition, (vii) physical or mental disability that prevents your from
performing your duties to LifeCell or its successor for a period of at least
90
consecutive day an any 12-month period or 120 non-consecutive days in any
12-month period, or (viii) death.
-3-
(j)
The
Company shall notify you after the Company becomes aware or anticipates that
a
Change in Control is likely to take place.
(k)
This
Agreement is binding on the Company and its successors and assigns (including
but not limited to any purchaser of all or substantially all of the assets
of
the Company as defined in (g)(iv) above). If the Company or its successors
do
not timely make all payments owed to you, whether due hereunder or otherwise
due
to you, and you retain counsel to enforce your rights to payment, the Company
and its successors or assigns shall also be obligated to reimburse you for
all
reasonable attorneys fees incurred in collecting amounts due to you.
(l)
This
Agreement shall not affect any rights of the Company or you prior to a Change
in
Control or any of your rights granted in any other agreement, plan or
arrangements, except that if you receive all payments hereunder, you shall
not
be entitled to receive any payments or benefits under your severance arrangement
with the Company, if any. The rights, duties and benefits provided hereunder
shall only become effective upon a Change in Control. Nothing in this Agreement
shall alter your status as an “at-will” employee. If your employment by the
Company is terminated for any reason prior to the date three months prior to
the
effective date of a Change in Control, this Agreement shall thereafter be of
no
further force and effect.
Kindly
sign your name at the end of this letter to signify your understanding and
acceptance of these terms.
|
Sincerely,
|
|
|
/s/
Xxxxx X. Xxxxxx
|
|
|
Xxxxx
X. Xxxxxx, Chair
|
|
|
Compensation
Committee
|
Accepted:
/s/
Young X. XxXxxxx
Xxxxx
X.
XxXxxxx
-4-
