Exhibit 10.16
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 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 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 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 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
three years 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 Compensation Committee (the "Committee") of
the Board 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.
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(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.
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,
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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.
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) any Person is or becomes the Beneficial Owner, directly or
indirectly, of 40% or more of either (a) the then outstanding Common
Stock of the Corporation (the "Outstanding Common Stock") or (b) 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: (i) any
acquisition by the Corporation or any of its Controlled Affiliates,
(ii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any of its Controlled
Affiliates and (iii) any Person who becomes such a Beneficial Owner in
connection with a transaction described in the exclusion within
paragraph (3) below; 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
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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 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) there is consummated a merger or consolidation of the
Corporation or any direct or indirect Subsidiary of the Corporation or
a 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
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 company 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, and (b) immediately following which
the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of the company
resulting from such Corporate Transaction (including, without
limitation, a company 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); or
(4) the approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation;
(III) the term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time;
(IV) the term "Governance Agreement" shall mean the Governance Agreement,
dated December 19, 2000, among LXH, L.L.C., LXH II, L.L.C., Hexcel
Corporation and the other parties listed on the signature pages thereto;
and
(V) 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.
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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 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
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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 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.
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____________________________ HEXCEL CORPORATION
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Optionee
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By: _____________________________
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Xxx X. Xxxxxxxx
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Senior Vice President
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