EXHIBIT 10.2
1998 PERFORMANCE ACCELERATED
RESTRICTED STOCK UNIT AGREEMENT
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 conditions 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, 2004, or (b) on an earlier date or dates to the extent certain
pre-determined performance criteria (the "PARS Goals") are achieved. The PARS
Goals shall be as follows: if earnings of the Company before taxes (determined
by reference to the Company's audited financial statements) ("EBT") equal or
exceed $110.6 million for any fiscal year of the Company, 33-1/3% (or, if
applicable, an additional 33 1/3%) of the total number of PARS shall become
vested; if EBT for any fiscal year of the Company equals or exceeds $150
million, 66-2/3% (or, if applicable, up to an additional 66 2/3%) of the total
number of PARS shall become vested; and if EBT for any fiscal year of the
Company equals or exceeds $180 million, 100% of the total number of PARS shall
become vested; PROVIDED, HOWEVER, that no more than 100% of the total number of
PARS may become vested. Upon the later to occur of (i) January 1, 2001 or (ii)
the vesting of a certain number of 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, 2000. 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").
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
termination 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, 2000, 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.
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 sub-
stantially 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
(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.
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.
Grantee
Address of Grantee
Employee Number
Employee ID Number
Foreign Sub Plan, if applicable
Grant Date
Aggregate Number of PARS
Granted
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:
------------------------
