EXHIBIT 10.11
RETAINER FEE OPTION AGREEMENT
For
Non-Employee Directors
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:
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WHEREAS, the Corporation has adopted the Hexcel Corporation Incentive Stock
Plan (the "Plan"); and
WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined that it is desirable and in the best interests 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
fifth anniversary of the Grant Date. The five-year period from the
Grant Date to its fifth anniversary shall constitute the "Term" of the
Option.
(b) VESTING PERIOD; EXERCISABILITY. Subject to Section 4(c) and 4(d)
below, the Option shall vest in proportion to the time elapsed between
the Grant Date and the first anniversary of the Grant Date.
(c) CHANGE OF CONTROL. In the event of a Change in Control (as defined
in the last Section hereof), the Option shall immediately become fully
vested and exercisable.
(d) TERMINATION OF SERVICE AS DIRECTOR. (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 (other than death or disability),
the Option (to the extent vested on the date of termination) may be
exercised at any time within ninety days 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 the Optionee's service as a member of the Board is
terminated because of death or disability, the Option (to the extent
vested on the date of termination) may be exercised at any time within
one year after the Optionee's death or disability (but not beyond the
Term of the Option). The Option, to the extent not vested, shall
immediately expire upon such termination.
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.
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(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.
(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.
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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.
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.
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16. DEFINITIONS. For purposes of this 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 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
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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;
(III) the term "Ciba" shall mean Ciba Specialty Chemicals Holding Inc.,
a Swiss corporation, together with its 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, and
any of their respective permitted successors or assigns thereunder.
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ANNEX A
NOTICE OF GRANT
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STOCK OPTION
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HEXCEL CORPORATION INCENTIVE STOCK PLAN
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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 per share, in accordance
with the terms of this Notice of Grant and the Retainer Fee 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
[Non-employee director]
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Address of Optionee
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Grant Date
December 9, 1998
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Purchase Price
$4.1875
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Aggregate Number of Shares
Granted (the "Option Shares")
7,164*
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IN WITNESS WHEREOF, the parties hereby agree to the terms of this Notice
of Grant and the Retainer Fee 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
Optionee
By:
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Name:
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Title:
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*Number of options for each non-employee director. Each committee chairman
received an additional 716 options.
