Attached files
Exhibit
10.50
EMPLOYMENT
AGREEMENT
This
Employment Agreement (“Agreement”), dated April 7, 2008 is entered into by and
between LIFECELL CORPORATION, a Delaware corporation, having its principal place
of business at One Millenium Way, Branchburg, New Jersey 08876 (“Employer”), and
LISA COLLERAN (“Employee”). Capitalized terms used but not defined herein shall
have the respective meanings ascribed to them in the Merger Agreement (as
defined below).
WHEREAS,
Employer and Employee are currently parties to an Employment Agreement, dated
September 21, 2005 (the “Prior Agreement”); and
WHEREAS,
Employer expects to enter into an AGREEMENT AND PLAN OF MERGER (the “Merger
Agreement”), with KINETIC CONCEPTS, INC., a Texas corporation (“Purchaser”), and
LEOPARD ACQUISITION SUB, INC., a Delaware corporation and a wholly-owned
subsidiary of Purchaser; and
WHEREAS,
the transactions contemplated by the Merger Agreement are expected to constitute
a change in the ownership or effective control of Employer under
Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended
(the “Code”), and regulations thereunder; and
WHEREAS,
as an owner of options, restricted stock and restricted stock units, in each
case covering Employer common stock, Employee will receive valuable
consideration as a direct result of the transactions contemplated by the Merger
Agreement (the “Sale Consideration”); and
WHEREAS,
in addition to her receipt of the Sale Consideration, Employee will receive
substantial economic and other benefits (as set forth in more detail in Sections
3.01(C) and 3.01(D)(i) below) pursuant to the terms of this Agreement;
and
WHEREAS,
in order to induce Purchaser to enter into the Merger Agreement, Employee is
entering into this Employment Agreement and the Confidentiality, Assignment of
Contributions and Inventions, Non-Competition, and Non-Solicitation Agreement
(the “Covenants Agreement”) attached hereto as Exhibit 1 and incorporated by
reference herein, superseding as of the closing of the Offer any previous
employment agreement or arrangement that Employee may have had with Employer,
including without limitation, the Prior Agreement; and
WHEREAS,
Employee is willing to accept continued employment with Employer on the terms
and conditions set forth herein.
NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Employer and Employee, intending to
be legally bound, hereby agree as follows:
ARTICLE
I
EMPLOYMENT; POSITION, DUTIES
AND RESPONSIBILITIES
Section
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.
Section
1.02 Position, Duties
and Responsibilities. During the Term (as defined in Section 2.01
below), Employee shall serve as the Senior Vice President, Commercial Operations
of Employer and shall have such responsibilities, duties and authority
consistent with such position as may, from time to time, be assigned by the
President of Employer. 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; TERMINATION OF PRIOR
AGREEMENT
Section
2.01 Term of
Employment. Subject to the closing of the Offer contemplated by the
Merger Agreement, this Agreement shall be effective as of the date of the
closing of such Offer (the “Commencement Date”) and shall continue until
terminated by either Employer or Employee pursuant to Article IV hereof (the
“Term”).
Section
2.02 Termination of
Prior Agreement. As of the Commencement Date, Employee acknowledges and
agrees that the Prior Agreement shall be terminated in full and that she shall
not be entitled to any rights or benefits thereunder, including any rights to
claim Good Reason (as defined in Section 4.02(d)(ii) below) with respect to
actions, failures or other events that occurred prior to the Commencement
Date.
ARTICLE
III
COMPENSATION AND
EXPENSES
Section
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 $299,000
on an annualized basis (the “Base Salary”). Employee’s Base Salary shall be
subject to periodic adjustments (but not decreases) as the President of Employer
in consultation with the Chief Executive Officer of Purchaser shall, in their
sole discretion, deem appropriate. As used in this Agreement, the term “Base
Salary” shall refer to Base Salary as it 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 President of
Employer in consultation with the Chief Executive Officer of Purchaser in their
discretion and will be related to the achievement of agreed upon management
objectives, which objectives shall be determined by the President of Employer in
consultation with the Chief Executive Officer of Purchaser. Employee’s target
Annual Bonus for calendar year 2008 is 40% of Base Salary on an annualized basis
in effect as of the Commencement Date and such Annual Bonus for 2008 will
otherwise be calculated and determined in accordance with the 2008 bonus
objectives, goals and/or matrices in place immediately prior to 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 seventy-five
(75) 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 at
the time the amount of the Annual Bonus, if any, is determined.
(c) Retention Bonus.
Except as otherwise specifically set forth in Section 4.02 below, Employee
shall be paid a retention bonus in the aggregate amount of $837,200 (the
“Retention Bonus”), of which fifty percent (50%) shall be payable as a lump
sum cash payment on the first anniversary of the Commencement Date, and the
remaining fifty percent (50%) shall be payable as a lump sum cash payment
on the second anniversary of the Commencement Date, in each case, subject to
Employee’s continued employment with Employer on such dates.
(d) Equity
Compensation.
(i) Initial Grants. As of the
Commencement Date, Employee shall receive a one-time initial equity grant, which
will be at a Black-Scholes value of approximately $1,400,000, divided
approximately sixty percent (60%) in
stock options, and forty percent (40%) in shares of restricted stock, in
each case covering Purchaser common stock (which allocation of stock options and
restricted stock will be conclusively determined by the Compensation Committee
of Purchaser) pursuant to Purchaser’s 2004 Equity Plan (the “2004 Plan”) or any
successor equity compensation plan as may be in place from time to time. Such
stock options will have a per share exercise price equal to the fair market
value of Purchaser common stock as of the date of grant. Subject to Employee’s
continued employment with the Employer, the stock options shall vest in four
equal annual installments, commencing as of the Commencement Date; and the
restricted stock award shall vest in full on the third anniversary of the
Commencement Date. Except as otherwise provided in this Agreement, the stock
options and restricted stock awards shall be subject to the terms and conditions
of the form stock option and restricted stock award agreements approved by the
Compensation Committee of Purchaser.
(ii)
Additional Grants. In
addition to the initial equity grant set forth above, during the Term, pursuant
to the terms and conditions of the 2004 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
of Purchaser in its sole discretion. Awards granted to Employee, if any, will be
subject the terms and conditions established within the 2004 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 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 restricted
stock and restricted stock unit awards).
(e) 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.
(f) 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; provided, however,
in no event shall Employee be entitled to fewer than thirty three (33) days
of sick and other paid time off per calendar year Section 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
Section
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. In the
event Employee becomes “Disabled” within the meaning of
Section 409A(a)(2)(C) of the Code, 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. For purposes hereof, “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, 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)(ii) 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.
(f) Mutual Agreement.
This Agreement and Employee’s employment hereunder may be terminated at any time
by the mutual agreement of Employer and Employee.
Section
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) pay to Employee any Annual Bonus that was determined, but not yet
paid, prior to the effective date of such termination, (iii) pay to
Employee any Retention Bonus that was due and payable pursuant to
Section 3.01(c) above as of the effective date of termination, but not yet
paid, (iv) reimburse Employee for any expenses incurred by Employee through
the effective date of such termination in accordance with Section 3.02
hereof, and (v) 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), (iii), (iv) and
(v) of this sentence are collectively referred to herein as the “Accrued
Obligations”).
(b) Death; Disability.
Subject to Section 5.18, 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 within twenty-one (21) days (or forty-five days
(45) for a group termination) following receipt by Employee or Employee’s
estate, as applicable, 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) and, if such
termination occurs prior to the two (2) year anniversary of the
Commencement Date, the Prorata Retention Payment (as defined below). Employer
agrees that it shall deliver the Release to Employee (or her estate, if
applicable), within five (5) calendar days following the effective date of
termination. The Prorata Bonus and the Prorata Retention Payment shall be
payable in a lump sum on the next regular paydate following six (6) months
after the date of Employee’s termination of employment with Employer; provided,
however, Employer will pay the Prorata Bonus and the Prorata Retention Payment
in a lump sum 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 making the payment at such time will not cause Employee (or
Employee’s estate, if applicable) to incur an “additional tax” as defined in
Section 409A(a)(1)(B) of the Code; provided further, that if Employee’s
termination of employment with Employer occurs on or within 34 calendar days (or
in the case of a group termination, 58 calendar days) prior to the end of a
calendar year, none of the Prorata Bonus or the Prorata Retention Payment shall
be paid prior to the first business day of the immediately following calendar
year. As used in this Agreement: (i) “Prorata Bonus” shall mean the product
of: (A) 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 with Employer occurred; and (B) 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; and
(ii) “Prorata Retention Payment” shall mean the product of: (A) that
amount equal to fifty percent (50%) of the aggregate amount of the
Retention Bonus; and (B) a fraction, the numerator of which is the number
of days Employee was employed since the Commencement Date (in the case of a
termination of employment on or before the first anniversary of the Commencement
Date) or since the first anniversary of the Commencement Date (in the case of a
termination of employment following the first anniversary of the Commencement
Date), and the denominator of which is 365.
(c) Termination by Employer
without Cause. Subject to Section 5.18, 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, and (ii) subject to Employee’s execution, delivery within
twenty-one (21) days (or forty-five days (45) for a group termination)
following receipt by Employee, 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) if such termination occurs prior to the second anniversary of the
Commencement Date, pay to Employee the Unpaid Retention Payment (as defined
below), and (c) 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, 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 with
Employer, 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. Employer agrees that it
shall deliver the Release to Employee within five (5) calendar days
following the effective date of termination. As used in this Agreement, “Unpaid
Retention Payment” shall mean an amount equal to (i) the aggregate amount
of the Retention Bonus, less (ii) an amount equal to the portion of the
Retention Bonus previously paid to Employee, if any. The Severance Payment and
the Unpaid Retention Payment shall be payable in a lump sum on the next regular
paydate following six (6) months after the date of Employee’s termination
of employment with Employer; provided, however, Employer will pay the Severance
Payment and the Unpaid Retention Payment in a lump sum on the next regular
paydate following the eighth (8th) day
after Employee’s execution and delivery of the Release if making the payment at
such time will not cause Employee to incur an “additional tax” as defined in
Section 409A(a)(1)(B) of the Code; provided further, that if Employee’s
termination of employment with Employer occurs on or within 34 calendar days (or
in the case of a group termination, 58 calendar days) prior to the end of a
calendar year, none of the Severance Payment or the Unpaid Retention Payment
shall be paid prior to the first business day of the immediately following
calendar year. 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.
(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,
subject to Section 5.18, 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 within twenty-one days (or
forty-five days for a group termination) following receipt by Employee, and
non-revocation of the Release, (a) pay to Employee an aggregate amount
equal to the Trigger Event Amount (as defined below), (b) pay to Employee
the Unpaid Retention Payment, and (c) 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. Employee agrees that is shall
deliver the Release to Employee within five (5) calendar days following the
effective date of termination. The Trigger Event Amount and the Unpaid Retention
Payment shall be payable in a lump sum on the next regular paydate following six
(6) months after the date of Employee’s termination of employment with
Employer; provided, however, Employer will pay the Trigger Event Amount and the
Unpaid Retention Payment in a lump sum on the next regular paydate following the
eighth (8th) day
after Employee’s execution and delivery of the Release if making the payment at
such time will not cause Employee to incur an “additional tax” as defined in
Section 409A(a)(1)(B) of the Code ; provided further, that if the Trigger
Event occurs on or within 34 calendar days (or in the case of a group
termination, 58 calendar days) prior to the end of a calendar year, none of the
Trigger Event Amount nor the Unpaid Retention Payment shall be paid prior to the
first business day of the immediately following calendar year. As used in this
Agreement, the following terms shall have the following meanings:
(i)
“Trigger Event” shall mean termination of Employee’s employment with Employer or
any successor at any time during the period beginning as of the Commencement
Date and ending on the twelve (12)- month anniversary of the Commencement Date,
other than (x) a termination by Employer for Cause pursuant to
Section 4.01(c) above, (y) a termination as a result of Employee’s
death or Disability pursuant to Sections 4.01(a) or 4.01(b) above, or (z) a
termination by Employee without Good Reason (as defined below) pursuant to
Section 4.01(E) above.
(ii)
“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 30 days after receipt of written notice thereof given by
Employee;
(B)
action by Employer or its successor that results in a material diminution,
without Employee’s prior consent, in Employee’s duties and responsibilities
(other than isolated
actions not taken in bad faith and that are remedied by Employer or its
successor within 30 days after receipt of written notice therefor given by
Employee), as determined by balancing (x) any increase or decrease in the
scope of Employee’s duties and responsibilities against (y) any increase or
decrease in the relative sizes of the business, activities or functions (or
portions thereof) for which Employee has responsibility; provided, however, that
none of (I) a change in Employee’s title, or (II) a change in the
hierarchy, either individually or in the aggregate, shall be considered Good
Reason;
(C) any
material decrease in Employee’s Base Amount (as defined below); or
(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.
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.
(iii)
“Trigger Event Amount” shall mean: two (2) times the sum of (1) the
Base Amount, and (2) the Bonus Amount; 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.
(iv)
“Base Amount” shall mean the annualized Base Salary in effect immediately prior
to the Trigger Event.
(v)
“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
Section
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.
Section
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
One
Millenium Way
Branchburg,
New Jersey 08876
Attn:
President
and, in
the case of Employee, to Employee’s most recent address as reflected in
Employer’s payroll records.
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.
Section
5.03 Confidentiality,
Assignment of Contributions and Inventions, Non-Competition and Non-Solicitation
Agreement. Employee acknowledges and confirms that the terms of the
Covenants Agreement, executed by Employee simultaneously herewith, are
incorporated herein by reference. The Covenants Agreement shall survive the
termination of this Agreement and Employee’s employment by Employer for the
applicable period(s) set forth therein.
Section
5.04 Entire
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 (except as provided in Section 7(e) of the Covenants Agreement),
including, without limitation, the offer letter from Employer to Employee dated
November 22, 2002, and the Prior Agreement. Neither this Agreement nor the
Covenants Agreement may be changed or modified except by an instrument in
writing, signed by both Employer and
Employee.
Section
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 that 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.
Section
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.
Section
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.
Section
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.
Section
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) (“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. For greater clarity, for purposes of such reductions, if
applicable, cash payments will be reduced prior to the reduction of any equity
acceleration, and any later cash payments will be reduced prior to the reduction
of any earlier cash payments. The accounting firm engaged by Employer for
general audit purposes as of the day prior to the Commencement Date shall
perform the foregoing calculations and shall make any and all determinations
regarding the order in which payments or benefits shall be reduced, if
applicable. If the accounting firm so engaged by Employer is 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.
Section
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.
Section
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.
Section
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 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.
Section
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.
Section
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.
Section
5.15 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.
Section
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.
Section 5.17
Survival. The
terms of Section 4.02 and Article V of this Agreement and the terms of the
Covenants Agreement shall survive the termination of this Agreement and
Employee’s employment hereunder.
Section
5.18 Section 409A.
Notwithstanding anything contained herein to the contrary, Employee shall not be
considered to have terminated employment with Employer for purposes of
Section 4.02 of this Agreement unless Employee would be considered to have
incurred a “termination of employment” from Employer within the meaning of
Treasury Regulation §1.409A-1(h)(1)(ii). This Agreement is intended to comply
with the requirements of Section 409A of the Code (“Section 409A”) and
Treasury Regulations thereunder. To the extent that any provision in this
Agreement is ambiguous as to its compliance with Section 409A, the
provisions shall be interpreted in a manner so that no payment made pursuant to
this Agreement shall be subject to an “additional tax” within the meaning of
Section 409(A)(a)(1)(B) of the Code. For purposes of Section 409A,
each payment made under this Agreement shall be treated as a separate payment.
In no event may Employee, directly or indirectly, designate the calendar year of
payment.
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/
Paul G. Thomas
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Name:
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Paul
G. Thomas
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Title:
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President
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EMPLOYEE:
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/s/
Lisa Colleran
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Lisa
Colleran
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