PERFORMANCE ACCELERATED STOCK OPTION AGREEMENT
For
Director
OPTION AGREEMENT, dated as of the Grant Date, by and between the Optionee and
Hexcel Corporation (the "Corporation").
W I T N E S S E T H:
WHEREAS, the Corporation has adopted the Hexcel Corporation Incentive Stock
Plan (the "Plan"); and
WHEREAS, the Executive Compensation Committee (the "Committee") of the Board
of Directors of the Corporation (the "Board") has determined that it is
desirable and in the best interest of the Corporation to grant to the
Optionee a stock option as an incentive for the Optionee to advance the
interests of the Corporation;
NOW, THEREFORE, the parties agree as follows:
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 herein and set forth in such Notice
of Grant shall have the meanings ascribed to them in the Notice of Grant and
capitalized terms used herein 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 Option Agreement, and this Option 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 Option granted herein constitutes an Award
within the meaning of the Plan.
2. GRANT OF OPTION. Pursuant to the Plan and subject to the terms and
conditions set forth herein and therein, the Corporation hereby grants to the
Optionee the right and option (the "Option") to purchase all or any part of
the Option Shares of the Corporation's common stock, $.01 par value per share
(the "Common Stock"), which Option is not intended to qualify as an incentive
stock option, as defined in Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
3. PURCHASE PRICE. The purchase price per share of the Option Shares shall
be the Purchase Price.
4. TERMS OF OPTION.
(a) EXPIRATION DATE; TERM. Subject to Section 4(d) below, the Option
shall expire on, and shall no longer be exercisable following, the tenth
anniversary of the Grant Date. The ten-year period from the Grant Date to
its tenth anniversary shall constitute the "Term" of the Option.
(b) VESTING PERIOD; EXERCISABILITY. Subject to Sections 4(c) and 4(d)
below, the Option shall vest and become exercisable as to fifteen percent
(15%) of the Option Shares on the second anniversary of the Grant Date and
shall vest and become exercisable with respect to the additional
percentages of the Option Shares indicated below on each of the next seven
anniversaries of the Grant Date:
Grant Date Percentage
Anniversary Vested
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2nd 15%
3rd 15%
4th 15%
5th 15%
6th 15%
7th 10%
8th 10%
9th 5%
(c) ACCELERATED VESTING BASED ON SHARE PRICE. Notwithstanding Section
4(b) hereof, if, on or before the third anniversary of the Grant Date, the
closing price of Company common stock as reported on the New York Stock
Exchange Consolidated Transactions Tape shall have equalled or exceeded
Thirty-five Dollars ($35) per share for ten or more consecutive trading
days, the Option shall become totally vested and exercisable immediately
after the tenth such day.
(d) TERMINATION OF SERVICE AS DIRECTOR; CHANGE IN CONTROL. (i) Except as
provided in Section 4(d)(ii) hereof, if the Optionee's service as a member
of the Board is terminated for any reason, the Option (to the extent then
vested) may be exercised at any time within one year after such termination
(but not beyond the Term of the Option). The Option, to the extent not
then vested, shall immediately expire upon such termination.
(ii) In the event of a Change in Control (as defined in the last Section
hereof), the Option shall immediately become fully vested and exercisable
and the post-termination period of exercisability set forth in Section
4(d)(i) hereof shall apply, except that the post-termination period of
exercisability shall be extended and the Option shall remain exercisable
for a period of three years from the date of such termination, if the
Optionee's service as a member of the Board is terminated within two years
after the Change in Control for any reason.
5 ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) The aggregate number of Option Shares and the Purchase Price shall
be appropriately adjusted by the Committee 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 receipt of consideration by the Corporation, 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 Option
Agreement in the event of any other reorganization, recapitalization,
merger, consolidation, spin-off, extraordinary dividend or other
distribution or similar transaction involving the Corporation.
(b) Any adjustment under this Section 5 in the number of Option Shares and
the Purchase Price shall apply to only the unexercised portion of the
Option. If fractions of a share would result from any such adjustment, the
adjustment shall be rounded down to the nearest whole number of shares.
6 METHOD OF EXERCISING OPTION AND WITHHOLDING.
(a) The Option shall be exercised by the delivery by the Optionee to the
Corporation at its principal office (or at such other address as may be
established by the Committee) of written notice of the number of Option
Shares with respect to which the Option is exercised, accompanied by
payment in full of the aggregate Purchase Price for such Option Shares.
Payment for such Option Shares shall be made (i) in U.S. dollars by
personal check, bank draft or money order payable to the order of the
Corporation, or by money transfers or direct account debits to an account
designated by the Corporation; (ii) through the delivery of shares of
Common Stock with a Fair Market Value equal to the total payment due from
the Optionee; (iii) pursuant to a "cashless exercise" program if such a
program is established by the Corporation; or (iv) by any combination of
the methods described in (i) through (iii) above.
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(b) The Corporation's obligation to deliver shares of Common Stock upon
the exercise of the Option shall be subject to the payment by the Optionee
of applicable federal, state and local withholding tax, if any. The
Corporation shall, to the extent permitted by law, have the right to deduct
from any payment of any kind otherwise due to the Optionee any federal,
state or local taxes required to be withheld with respect to such payment.
7 TRANSFER. Except as provided in this Section 7, the Option is not
transferable otherwise than by will or the laws of descent and distribution,
and the Option may be exercised during the Optionee's lifetime only by the
Optionee. Any attempt to transfer the Option in contravention of this Section
7 is void AB INITIO. The Option shall not be subject to execution,
attachment or other process. Notwithstanding the foregoing, the Optionee
shall be permitted to transfer the Option to members of his 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 Option and the transferee of the Option shall be subject to
all conditions applicable to the Option prior to its transfer.
8 NO RIGHTS IN OPTION SHARES. The Optionee shall have none of the rights
of a stockholder with respect to the Option Shares unless and until shares of
Common Stock are issued upon exercise of the Option.
9 NO RIGHT TO CONTINUED SERVICE AS DIRECTOR. Nothing contained herein
shall be deemed to confer upon the Optionee any right to continue to serve as
a member of the Board.
10 GOVERNING LAW/JURISDICTION. This Option Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
reference to principles of conflict of laws.
11 RESOLUTION OF DISPUTES. Any disputes arising under or in connection with
this Option Agreement shall be resolved by binding arbitration before a
single arbitrator, to be held in New York in accordance with the commercial
rules and procedures of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator shall be final and subject to appeal
only to the extent permitted by law. Each party shall bear such party's own
expenses incurred in connection with any arbitration; PROVIDED, HOWEVER, that
the cost of the arbitration, including without limitation, reasonable
attorneys' fees of the Optionee, shall be borne by the Corporation in the
event the Optionee is the prevailing party in the arbitration. Anything to
the contrary notwithstanding, each party hereto has the right to proceed with
a court action for injunctive relief or relief from violations of law not
within the jurisdiction of an arbitrator.
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12 NOTICES. Any notice required or permitted under this Option Agreement
shall be deemed given when delivered personally, or when deposited in a United
States Post Office, postage prepaid, addressed, as appropriate, to the Optionee
at the last address specified in Optionee's records with the Corporation, or
such other address as the Optionee may designate in writing to the Corporation,
or to the Corporation, Attention: Corporate Secretary, or such other address as
the Corporation may designate in writing to the Optionee.
13 FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to
enforce at any time any provision of this Option Agreement shall in no way be
construed to be a waiver of such provision or of any other provision hereof.
14 COUNTERPARTS. This Option 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.
15 MISCELLANEOUS. This Option Agreement cannot be changed or terminated
orally. This Option 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.
16. DEFINITIONS. For purposes of this Employee Option 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 "Change in Control" shall mean any of the following events:
(1)(a) any Person (as defined in this Section) is or becomes the
Beneficial Owner of 20% or more of either (i) the then outstanding
Common Stock of the Corporation (the "Outstanding Common Stock") or
(ii) the combined voting power of the then outstanding securities
entitled to vote generally in the election of directors of the
Corporation (the "Total Voting Power"); excluding, however, the
following: (A) any acquisition by the Corporation or any of its
affiliates or (B) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Corporation or any of
its affiliates and (b) 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
(2) a change in the composition of the Board such that the
individuals who, as of the effective date of this Employee Option
Agreement, constitute the Board (such individuals shall be hereinafter
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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 Corporation'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
(3) the approval by the stockholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Corporation
("Corporate Transaction"); excluding, however, such a Corporate
Transaction (a) 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 Corporation or all or substantially all of the Corporation'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 (b) 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
(4) Ciba shall become the Beneficial Owner of more than 57.5% of
the Total Voting Power; or
(5) the approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation;
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(III) the term "Ciba" shall mean Ciba-Geigy Limited, a Swiss corporation,
or such corporation or corporations as are substituted for Ciba-Geigy
Limited, together with their respective affiliates and any former
affiliates holding Corporation voting securities pursuant to Section
4.01(b) of the Governance Agreement;
(IV) the term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time;
(V) the term "Governance Agreement" shall have the meaning given in the
Strategic Alliance Agreement (as defined in this Section);
(VI) 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; and
(VII) the term "Strategic Alliance Agreement" shall mean the Strategic
Alliance Agreement among the Corporation, Ciba-Geigy Limited and Ciba-Geigy
Corporation, dated as of September 29, 1995, as amended.
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ANNEX A
NOTICE OF GRANT
STOCK OPTION
HEXCEL CORPORATION INCENTIVE STOCK PLAN
The following member of the Board of Directors of Hexcel Corporation, a
Delaware corporation ("Hexcel"), has been granted an option to purchase shares
of the Common Stock of Hexcel, $.01 par value, in accordance with the terms of
this Notice of Grant and the Option Agreement to which this Notice of Grant is
attached.
The following is a summary of the principal terms of the option which has
been granted. The terms below shall have the meanings ascribed to them below
when used in the Option Agreement.
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Optionee
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Address of Optionee
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Grant Date
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Purchase Price
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Aggregate Number of Shares
Granted (the "Option Shares")
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IN WITNESS WHEREOF, the parties hereby agree to the terms of this Notice of
Grant and the Option Agreement to which this Notice of Grant is attached and
execute this Notice of Grant and Option Agreement as of the Grant Date.
HEXCEL CORPORATION
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Optionee By:
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Name:
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Title:
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