Exhibit 10.19
PERFORMANCE ACCELERATED
RESTRICTED STOCK UNIT AGREEMENT
(Special Executive Grant)
December 2, 1999
This Performance Accelerated Restricted Stock Unit Agreement (the
"Agreement"), is entered into as of the Grant Date, by and between Hexcel
Corporation, a Delaware corporation (the "Company"), and the Grantee.
Pursuant to the Hexcel Corporation Incentive Stock Plan (the
"Plan"), the Executive Compensation Committee (the "Committee") of the Board of
Directors of the Company (the "Board") has determined that the Grantee shall be
granted Performance Accelerated Restricted Stock Units ("PARS") upon the terms
and subject to the conditions hereinafter contained. Capitalized terms used but
not defined herein shall have the meanings assigned to them in the Plan.
1. Notice of Grant; Incorporation of Plan. A Notice of Grant is
attached hereto as Annex A and incorporated by reference herein. Unless
otherwise provided herein, capitalized terms used in this Agreement and set
forth in the Notice of Grant shall have the meanings ascribed to them in the
Notice of Grant and capitalized terms used in this Agreement and set forth in
the Plan shall have the meanings ascribed to them in the Plan. The Plan is
incorporated by reference and made a part of this Agreement, and this Agreement
shall be subject to the terms of the Plan, as the Plan may be amended from time
to time, provided that any such amendment of the Plan must be made in accordance
with Section X of the Plan. The PARS granted herein constitute an Award within
the meaning of the Plan.
2. Terms of Restricted Stock. The grant of PARS provided in Section 1
hereof shall be subject to the following terms, --------------------------
conditions and restrictions:
(a) The Grantee shall not possess any incidents of ownership (including,
without limitation, dividend and voting rights) in shares of Common
Stock in respect of the PARS until such PARS have vested and been
distributed to the Grantee in the form of shares of Common Stock.
(b) Except as provided in this Section 2 (b), the PARS and any interest
therein may not be sold, assigned, transferred, pledged, hypothecated
or otherwise disposed of, except by will or the laws of descent and
distribution, prior to the distribution of the Common Stock in respect
of such PARS and subject to the condi-tions set forth in the Plan and
this Agreement. Any attempt to transfer PARS in contravention of this
Section is void ab initio. PARS shall not be subject to execution,
attachment or other process. Notwithstanding the foregoing, the
Grantee shall be permitted to transfer PARS to members of this or her
immediate family (i.e., children, grandchildren or spouse), trusts for
the benefit of such family members, and partnerships whose only
partners are such family members; provided, however, that no
consideration can be paid for the transfer of the PARS and the
transferee of the PARS shall be subject to all conditions applicable
to the PARS (including all of the terms and conditions of this
Agreement) prior to transfer.
3. Vesting and Conversion of PARS. The PARS shall vest on (a)
January 1, 2007, or (b) on an earlier date when the Company's Cumulative EBITDA
(as defined hereinafter) equals or exceeds $250 million at any time prior to the
end of fiscal year 2002. The term "Cumulative EBITDA" shall mean the sum of the
Company's earnings before interest (including amortization of discount on debt),
taxes, depreciation and amortization for the fiscal quarters beginning with the
first full fiscal quarter of 2000, but adjusted to exclude business
consolidation and acquisition expenses and gains or losses on divestitures. Upon
the later to occur of (i) January 1, 2003 or (ii) the vesting of the PARS, such
vested PARS shall be converted into an equivalent number of shares of Common
Stock that will be immediately distributed to the Grantee; provided, however,
that, to the extent that (and only to the extent that) the Company would be
precluded from deducting the associated compensation expense because of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), such PARS
shall be converted and distributed to the Grantee on the first business day of
the first year (or years, if the first deferred distribution shall not include
all of such PARS) in which the Company will not be so precluded; and provided
further, that no PARS shall be converted and distributed to the Grantee unless
the Grantee is an employee of the Company (or a Subsidiary) on December 31,
2002. On each dividend payment date with respect to the Common Stock subsequent
to any PARS becoming fully vested but not yet converted and distributed by
virtue of the immediately preceding proviso, the Company shall credit the
Grantee with an additional number of fully vested whole and partial PARS
(assuming each such PARS unit was a share of Common Stock) equal in value to the
amount of dividends which the Grantee would have received on such dividend
payment date if all such vested PARS (including PARS previously credited to the
Grantee pursuant to this section) which had not yet been converted into shares
had been so converted prior to the record date of such dividend. Such dividends
will be credited as vested PARS as of the payment date of such dividends and
such vested PARS shall thereafter be treated in the same manner as other PARS
under this Agreement (the foregoing method of dividend crediting being referred
to herein as being credited with the "Dividend Equivalent").
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Upon the distribution of the shares of Common Stock in respect of
the PARS, the Company shall issue to the Grantee or the Grantee's personal
representative a stock certificate representing such shares of Common Stock,
free of any restrictions.
4. Termination of Employment; Change of Control.
(a) For purposes of the grant hereunder, any transfer of employment
by the Grantee among the Company and its Subsidiaries shall not
be considered a termi-nation of employment. Notwithstanding any
other provision contained herein or in the Plan, (i) if the
Grantee dies or terminates employment due to Disability (as
defined in the last Section hereof), all PARS shall vest, be
converted into shares of Common Stock and be immediately
distributed to the Grantee, (ii) if the Grantee's employment with
the Company is involuntarily terminated other than for Cause (as
defined in the last Section hereof), all PARS shall vest, be
converted into shares of Common Stock and be immediately
distributed to the Grantee, (iii) if the Grantee voluntarily
terminates employment with the Company, all vested PARS shall be
converted into shares of Common Stock and be immediately
distributed to the Grantee, provided that the Grantee is an
employee of the Company (or a Subsidiary) on December 31, 2002,
and (iv) if the Grantee's employment with the Company terminates
due to the Grantee's Retirement (as defined in the last Section
hereof), all PARS shall vest, be converted in shares of Common
Stock and be immediately distributed to the Grantee; provided,
however, that in each case an appropriate number of such PARS
shall not be converted and distributed to the Grantee until the
first business day of the first year in which the Company is not
precluded from deducting the associated compensation expense
under Section 162(m) of the Code, but only to the extent such
number of PARS would not be deductible until such time; further,
provided, that the Grantee shall, if applicable, be credited with
the Dividend Equivalent with respect to such PARS.
If the Grantee's employment with the Company is involuntarily
terminated for Cause or the Grantee voluntarily terminates his employment with
the Company, the Grantee shall forfeit all PARS which have not yet become vested
as of the date of termination of employment.
(b) In the event of a Change in Control (as defined in the last
Section hereof), all PARS shall vest, be converted into shares of
Common Stock and be immediately distributed to the Grantee.
5. Equitable Adjustment.
The aggregate number of shares of Common Stock subject to the PARS shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without the receipt of
consideration by the Company, or other change in corporate or capital structure.
The Committee shall also make the foregoing changes and any other changes,
including changes in the classes of securities available, to the extent
reasonably necessary or desirable to preserve the intended benefits under this
Agreement in the event of any other reorganization, recapitalization, merger,
consolidation, spin-off, extraordinary dividend or other distribution or similar
transaction involving the Company.
6. Taxes. The Grantee shall pay to the Company promptly upon
request any taxes the Company reasonably determines it is required to withhold
under applicable tax laws with respect to the PARS. Such payment shall be made
as provided in Section IX(f) of the Plan.
7. No Guarantee of Employment. Nothing set forth herein or in the
Plan shall confer upon the Grantee any right of continued employment for any
period by the Company, or shall interfere in any way with the right of the
Company to terminate such employment.
8. Notices. Any notice required or permitted under this Agreement
shall be deemed given when delivered personally, or when deposited in a United
States Post Office, postage prepaid, addressed, as appropriate, to the Grantee
at the last address specified in Grantee's employment records, or such other
address as the Grantee may designate in writing to the Company, or to the
Company, Attention: Corporate Secretary, or such other address as the Company
may designate in writing to the Grantee.
9. Failure To Enforce Not a Waiver. The failure of either party
hereto to enforce at any time any provision of this Agreement shall in no way be
construed to be a waiver of such provision or of any other provision hereof.
10. Governing Law. This Agreement shall be governed by and
construed according to the laws of the State of Delaware, without regard to the
conflicts of laws provisions thereof.
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11. Incorporation of Plan. The Plan is hereby incorporated by
reference and made a part of this Agreement, and this Agreement shall be subject
to the terms of the Plan, as the Plan may be amended from time to time, provided
that any such amendment of the Plan must be made in accordance with Section X of
the Plan. The PARS granted herein constitute Awards within the meaning of the
Plan.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original but all of which together shall
represent one and the same agreement.
13. Miscellaneous. This Agreement cannot be changed or terminated
orally. This Agreement and the Plan contain the entire agreement between the
parties relating to the subject matter hereof. The section headings herein are
intended for reference only and shall not affect the interpretation hereof.
14. Definitions. For purposes of this Agreement:
(I) the term "Beneficial Owner" (and variants thereof) shall have the
meaning given in Rule 13d-3 promulgated under the Exchange Act;
(II) the term "Cause" shall mean (A) the willful and continued failure by
the Grantee to substantially perform the Grantee's duties with the Company
(other than any such failure resulting from the Grantee's incapacity due to
physical or mental illness) after a written demand for substantial
performance is delivered to the Grantee by the Company, which demand
specifically identifies the manner in which the Company believes that the
Grantee has not substantially performed the Grantee's duties, or (B) the
willful engaging by the Grantee in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (A) and (B) of this definition, no act,
or failure to act, on the Grantee's part shall be deemed "willful" unless
done, or omitted to be done, by the Grantee not in good faith and without
the reasonable belief that the Grantee's act, or failure to act, was in the
best interest of the Company;
(III) the term "Change in Control" shall mean any of the following events:
(A)(i) any Person (as defined in this Section), is or
becomes the Beneficial Owner of 20% or more of either (x) the then
outstanding Common Stock of the Company (the "Outstanding Common
Stock") or (y) the combined voting power of the then outstanding
securities entitled to vote generally in the election of directors
of the Company (the "Total Voting Power"); excluding, however, the
following: (1) any acquisition by the Company or any of its
affiliates or (2) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any of
its affiliates and (ii) Ciba (as defined in this Section)
beneficially owns, in the aggregate, a lesser percentage of the
Total Voting Power than such Person beneficially owns; or
(B) a change in the composition of the Board such that the
individuals who, as of the effective date of this Agreement,
constitute the Board (such individuals shall be hereinafter
referred to as the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided, however,
for purposes of this definition, that any individual who becomes a
director subsequent to such effective date, whose election, or
nomination for election by the Company's stockholders, was made or
approved pursuant to the Governance Agreement (as defined in this
Section) or by a vote of at least a majority of the Incumbent
Directors (or directors whose election or nomination for election
was previously so approved) shall be considered a member of the
Incumbent Board; but, provided, further, that any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies or consents
by or on behalf of a person or legal entity other than the Board
shall not be considered a member of the Incumbent Board; or
(C) the approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company ("Corporate Transaction"); excluding, however, such a
Corporate Transaction (i) pursuant to which all or substantially
all of the individuals and entities who are the beneficial owners,
respectively, of the Outstanding Common Stock and Total Voting
Power immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 50%,
respectively, of the outstanding common stock and the combined
voting power of the then outstanding securities entitled to vote
generally in the election of directors of the company resulting
from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company
or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such
Corporate Transaction of the Outstanding Common Stock and Total
Voting Power, as the case may be, or (ii) after which no Person
beneficially owns a greater percentage of the combined voting
power of the then outstanding securities entitled to vote
generally in the election of directors of such corporation than
does Ciba; or
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(D) Ciba shall become the Beneficial Owner of more than
57.5% of the Total Voting Power; or
(E) the approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(IV) the term "Ciba" shall mean Ciba Specialty Chemicals Holding Inc., a
Swiss corporation, together with its affiliates holding Company voting
securities pursuant to Section 4.01(b) of the Governance Agreement;
(V) the term "Disability" shall mean that, as a result of the Grantee's
incapacity due to physical or mental illness or injury, the Grantee shall
not have performed all or substantially all of the Grantee's usual duties
as an employee of the Company for a period of more than one-hundred-fifty
(150) days in any period of one-hundred-eighty (180) consecutive days;
(VI) the term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended;
(VII) the term "Governance Agreement" shall have the meaning given in the
Strategic Alliance Agreement (as defined in this Section);
(VIII) the term "Person" shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding Ciba for so long as Ciba is subject to the
restrictions imposed by the Governance Agreement;
(IX) the term "Retirement" shall mean termination of the Grantee's
employment, other than by reason of death or Cause, either (A) at or after
age 65 or (B) at or after age 55 after five (5) years of employment by the
Company (or a Subsidiary thereof); and
(X) the term "Strategic Alliance Agreement" shall mean the Strategic
Alliance Agreement among the Company, Ciba-Geigy Limited and Ciba-Geigy
Corporation, dated as of September 29, 1995, as amended, and any of their
respective permitted successors or assigns thereunder.
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Annex A
NOTICE OF GRANT
PERFORMANCE ACCELERATED RESTRICTED STOCK UNITS
HEXCEL CORPORATION INCENTIVE STOCK PLAN
The following employee of Hexcel Corporation, a Delaware corporation
(Hexcel) or a Subsidiary, has been granted performance accelerated restricted
stock units in accordance with the terms of this Notice of Grant and the
Agreement to which this Notice of Grant is attached.
The terms below shall have the meanings ascribed to them below when used in
the Agreement.
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Grantee
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Address of Grantee
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Employee Number
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Employee ID Number
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Foreign Sub Plan, if applicable
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Grant Date December 2, 1999
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Aggregate Number of PARS
Granted
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IN WITNESS WHEREOF, the parties hereby agree to the terms of this Notice of
Grant and the Agreement to which this Notice of Grant is attached and execute
this Notice of Grant and the Agreement as of the Grant Date.
__________________________ HEXCEL CORPORATION
Grantee
By:__________________________
Name:________________________
Title:_______________________
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