Exhibit 10.8
EMPLOYEE OPTION AGREEMENT
EMPLOYEE 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 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 Employee Option Agreement, and this Employee 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. TERM OF OPTION.
(a) EXPIRATION DATE; TERM. Subject to Section 4(c) 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) below, the
Option shall vest and become exercisable at the rate of 33-1/3% of the
Option Shares on each of the first three anniversaries of the Grant Date.
(c) TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.
(i) For purposes of the grant hereunder, any transfer of employment
by the Optionee among the Corporation and the Subsidiaries shall not
be considered a termination of employment. Except as set forth below
in this Section 4(c)(i), if the Optionee's employment with the
Corporation shall terminate for any reason, (a) the Option (to the
extent then vested) may be exercised at any time within ninety (90)
days after such termination (but not beyond the Term of the Option)
and (b) the Option, to the extent not then vested, shall immediately
expire upon such termination. Notwithstanding the foregoing, (a) if
the Optionee's employment with the Corporation is terminated for
Cause (as defined in the last Section hereof), the Option, whether
or not then vested, shall be automatically terminated as of the date
of such termination of employment, (b) if the Optionee's employment
terminates by reason of Retirement, the termination of the
Optionee's employment by the Company other than for Cause, or the
termination of the Optionee's employment by the Optionee for Good
Reason (as defined in the last Section hereof), the Option shall
remain exercisable for three years from the date of such termination
of employment (but not beyond the Term of the Option) and (c) if the
Optionee dies or becomes Disabled (A) while employed by the
Corporation or (B) within 90 days after the termination of his or
her employment (other than a termination described in clause (a) or
(b) of this sentence), the Option may be exercised at any time
within one year after the Optionee's death or Disability (but not
beyond the Term of the Option).
(ii) If the Optionee's employment terminates by reason of death,
Disability, Retirement, the termination of the Optionee's employment
by the Company other than for Cause, or the termination of the
Optionee's employment by the Optionee for Good Reason, the Option
shall become fully and immediately vested and exercisable. In the
event of a Change in Control (as defined in the last Section
hereof), the Option shall immediately become fully vested and
exercisable.
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
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Employee 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.
(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 EMPLOYMENT. Nothing contained herein shall be deemed to
confer upon the Optionee any right to remain as an employee of the Corporation.
10. GOVERNING LAW/JURISDICTION. This Employee 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 Employee 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 Employee 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 employment records, 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 Employee Option Agreement shall in no
way be construed to be a waiver of such provision or of any other provision
hereof.
14. COUNTERPARTS. This Employee 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 Employee Option Agreement cannot be changed or
terminated orally. This Employee 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 "Affiliate" of any Person shall mean any other Person
that directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such
first Person. The term "Control" shall have the meaning specified in
Rule 12b-2 under the Securities Exchange Act of 1934 as in effect on
the date of this Agreement;
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(II) the term "Beneficial Owner" shall have the meaning used in Rule
13d-3 promulgated under the Exchange Act;
(III) the term "Cause" shall mean (A) the willful and continued
failure by the Optionee to substantially perform the Optionee's
duties with the Corporation (other than any such failure resulting
from the Optionee's incapacity due to physical or mental illness or
any such actual or anticipated failure after the issuance of a
Notice of Termination by the Executive for Good Reason) after demand
for substantial performance is delivered to the Optionee by the
Corporation, that specifically identifies the manner in which the
Corporation believes that the Optionee has not substantially
performed the Optionee's duties, or (B) the willful engaging by the
Optionee in misconduct that is demonstrably and materially injurious
to the Corporation, monetarily or otherwise including, but not
limited to conduct that violates any written noncompetition covenant
between the Optionee and the Corporation. No act, or failure to act,
on the Optionee's part shall be deemed "willful" unless done, or
omitted to be done, by the Optionee not in good faith and without
reasonable belief that the Optionee's action or omission was in the
best interest of the Corporation. Notwithstanding the foregoing, the
Optionee shall not be deemed to have been terminated for Cause
without (i) reasonable notice from the Board to the Optionee setting
forth the reasons for the Corporation's intention to terminate for
Cause, (ii) delivery to the Optionee of a resolution duly adopted by
the affirmative vote two-thirds or more of the Board then in office
(excluding the Optionee if he is then a member of the Board) at a
meeting of the Board called and held for such purpose, finding that
in the good faith opinion of the Board, the Optionee was guilty of
conduct herein set forth and specifying the particulars thereof in
detail, (iii) an opportunity for the Optionee, together with his
counsel, to be heard before the Board, and (iv) delivery to the
Optionee of a Notice of Termination from the Board specifying the
particulars in detail.
(IV) 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 (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 Controlled Affiliates, (2) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its
Controlled Affiliates and (3) 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, on the date hereof, 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 date whose election, or nomination for
election by the Company's stockholders, was made or approved
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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
Company or any direct or indirect subsidiary of the Company or
a sale or other disposition of all or substantially all of the
assets of the Company ("Corporate Transaction"); excluding,
however, such a Corporate Transaction pursuant to which (x)
all or substantially all of the individuals and entities who
are the Beneficial Owners, respectively, of the Outstanding
Common Stock and the 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 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, and (y) 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 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); or
(4) the approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company;
(V) the term "Disability (or becoming Disabled)" shall mean that, as a result
of the Optionee's incapacity due to physical or mental illness or injury,
he or she shall not have performed all or substantially all of his or her
usual duties as an employee of the Corporation 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;
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(VII) the term "Good Reason" for termination by the Optionee of the Optionee's
employment shall mean:
(1) A diminution in the Optionee's position, duties, responsibilities or
authority (except during periods when the Executive is unable to perform
all or substantially all of his duties on account of illness (either
physical or mental) or other incapacity;
(2) A reduction in the Optionee's annual rate of base salary as in effect
on the date hereof or as the same may be increased from time to time;
(3) Failure by the Corporation to continue in effect any compensation plan
in which the Optionee participates which is material to the Optionee's
total compensation, unless an equitable arrangement (embodied in an
ongoing substitute plan) has been made with respect to such plan, or
failure by the Corporation to continue the Optionee's participation
therein (or in such substitute plan) on a basis not materially less
favorable to the Optionee;
(4) Failure by the Corporation to continue to provide the Optionee with
benefits substantially similar to those enjoyed by the Optionee under any
of the Corporation's pension, savings, life insurance, medical, health and
accident, or disability plans in which the Optionee was participating
(except for across-the-board changes similarly affecting all senior
executives of the Corporation and all senior executives of any Person in
control of the Corporation), or failure by the Corporation to continue to
provide the Optionee with the number of paid vacation days per year equal
to the greater 4 weeks and (b) the number to which the Optionee is
entitled in accordance with the Corporation's vacation policy;
(5) Failure to provide facilities or services which are suitable to the
Optionee's position;
(6) Failure of any successor (whether direct or indirect, by purchase of
stock or assets, merger, consolidation or otherwise) to the Corporation to
assume the Corporation's obligations hereunder or failure by the
Corporation to remain liable to the Optionee hereunder after such
assumption;
(7) Any termination by the Corporation of the Optionee's employment which
is not effected pursuant to a Notice of Termination satisfying the
requirements of a Notice of Termination contained in this Agreement;
(8) The relocation of the Optionee's principal place of employment to a
location more than fifty (50) miles from the Optionee's principal place of
employment as of the date hereof; or
(9) Failure to pay the Optionee any portion of current or deferred
compensation within seven (7) days of the date such compensation is due.
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The Optionee's continued employment shall not constitute consent to, or
waiver of rights with respect to, any circumstance constituting Good
Reason hereunder; provided, however, that the Optionee shall be deemed to
have waived his rights pursuant to circumstances constituting Good Reason
hereunder if he shall not have provided the Corporation a Notice of
Termination within ninety (90) days following his knowledge of the
occurrence of circumstances constituting Good Reason;
(VIII) 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;
(IX) 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;
(X) the term "Retirement" shall mean termination of the Optionee'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
Corporation (or a Subsidiary thereof); and
(XI) the term "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Optionee's employment
under the provision so indicated.
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ANNEX A
NOTICE OF GRANT
EMPLOYEE STOCK OPTION
HEXCEL CORPORATION INCENTIVE STOCK PLAN
The following employee of Hexcel Corporation, a Delaware corporation
("Hexcel") or a Subsidiary, 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 Employee 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 Employee Option Agreement.
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Optionee
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Address of Optionee
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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
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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 Employee Option Agreement to which this Notice of Grant is
attached and execute this Notice of Grant and Employee 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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Annex A-1
