EXHIBIT 10.8
EMPLOYEE OPTION AGREEMENT
under the
Hexcel Corporation Incentive Stock Plan
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:
WHEREAS, the Corporation has adopted the Hexcel Corporation Incentive Stock Plan
(the "Plan"); and
WHEREAS, the 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 its Subsidiaries shall not be considered
a termination of employment. 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. If the
Optionee's employment with the Corporation shall terminate other than by
reason of Retirement (as defined in the last Section hereof), Disability
(as defined in the last Section hereof), death or Cause, 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). The Option,
to the extent not then vested, shall immediately expire upon such
termination.
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 for Cause or Retirement, the Option (to the extent
then vested) 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 then vested, shall immediately expire upon such
death or disability.
If the Optionee's employment terminates by reason of Retirement, the Option
shall (A) become fully and immediately vested and exercisable and (B)
remain exercisable for three years from the date of such Retirement (but
not beyond the Term of the Option).
(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 periods of exercisability set forth in Section
4(c)(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 of
employment, if, within two years after a Change in Control, (A) the
Optionee's employment is terminated by the Company other than by reason of
Retirement, Cause, Disability or death or (B) the Optionee terminates the
Optionee's employment for Good Reason (as defined in the last Section
hereof).
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 Employee Option Agreement in the
event of
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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
transfer 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 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.
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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 "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 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) after a written demand for
substantial performance is delivered to the Optionee by the Corporation,
which demand 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 conduct which is
demonstrably and materially injurious to the Corporation or its
Subsidiaries, monetarily or otherwise. For purposes of clauses (A) and (B)
of this definition, 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 the reasonable belief that the Optionee's act, or
failure to act, was in the best interest of the Corporation;
(III) the term "Change in Control" shall mean any of the following events:
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(1) (a) any Person other than a Financial Buyer is or becomes the
Beneficial Owner, directly or indirectly, of 40% 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 Controlled Affiliates,
(B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any of its Controlled
Affiliates and (C) any Person who becomes such a Beneficial Owner in
connection with a transaction described in the exclusion within paragraph
(3) below, or
(b) (i) any Financial Buyer is or becomes the Beneficial Owner,
directly or indirectly, of 40% or more of either (A) the Outstanding Common
Stock or (B) 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 (any such transaction referred to hereinafter as a "Financial
Buyer Investment"), AND
(ii) on the date of the consummation of such Financial Buyer
Investment, or at any time on or before the one year anniversary date of
such Financial Buyer Investment, the Investors (as defined in the
Governance Agreement) Beneficially Own less than 75% of the number of
shares of Common Stock Beneficially Owned by the Investors on the date of
this Employee Option Agreement (without giving effect to any stock split,
combination, reorganization, recapitalization, reclassification or other
similar event involving the shares of Common Stock Beneficially Owned by
the Investors); 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 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
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all or substantially all of the assets of the Corporation ("Corporate
Transaction"); excluding, however,
(a) 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 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
(ii) 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),
and
(b) a Corporate Transaction with a Person which is a Financial Buyer
if, and only if, at the time such Corporate Transaction is consummated and
at all times on or before the one year anniversary date of such Corporate
Transaction, the Investors Beneficially Own at least 75% of the number of
shares of Common Stock Beneficially Owned by the Investors on the date of
this Employee Option Agreement (without giving effect to any stock split,
combination, reorganization, recapitalization, reclassification or other
similar event involving the shares of Common Stock Beneficially Owned by
the Investors); or
(4) the approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation;
(IV) 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;
(V) the term "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time;
(VI) the term "Financial Buyer" shall mean a Person which (i) is not
primarily engaged in making or selling products or providing services
(other than financial or investment products and services), and (ii) is not
a Controlled Affiliate of any Person primarily engaged in making or selling
products or providing services (other than financial or investment products
and services);
(VII) the term "Good Reason" for termination by the Optionee of the
Optionee's employment shall mean the occurrence (without the Optionee's
express written
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consent) of any one of the following acts by the Corporation, or failures
by the Corporation to act, unless, in the case of any act or failure to act
described in paragraphs (1), (5) or (6) below, such act or failure to act
is corrected prior to the date of termination of the Optionee's employment:
(1) a significant adverse alteration in the nature or status
of the Optionee's responsibilities, position or authority from those
in effect immediately prior to the Change in Control;
(2) a reduction by the Corporation in the Optionee's annual
base salary as in effect on the date hereof or as the same may be
increased from time to time;
(3) 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 immediately prior to the
Change in Control or the Corporation's requiring the Optionee to work
anywhere other than at such principal place of employment (or
permitted relocation thereof) except for required travel on the
Corporation's business to an extent substantially consistent with the
Optionee's present business travel obligations;
(4) the failure by the Corporation to pay to the Optionee
any portion of the Optionee's current compensation, or to pay to the
Optionee any portion of an installment of deferred compensation under
any deferred compensation program of the Corporation, within seven (7)
days of the date such compensation is due;
(5) the failure by the Corporation to continue in effect any
compensation plan in which the Optionee participates immediately prior
to the Change in Control which is material to the Optionee's total
compensation, or any substitute plans adopted prior to the Change in
Control, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such
plan, or the failure by the Corporation to continue the Optionee's
participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount or
timing of payment of benefits provided and the level of the Optionee's
participation relative to other participants, as existed immediately
prior to the Change in Control; or
(6) the 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 immediately prior to the Change in
Control (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), the taking of any other action
by the Corporation which would directly or indirectly materially
reduce any of such benefits or deprive the Optionee of any material
fringe benefit enjoyed by the Optionee at the time of the Change in
Control, or the failure by the Corporation to provide the Optionee
with the number of paid vacation days to which the Optionee is
entitled on the basis of years of service
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with the Corporation in accordance with the Corporation's normal
vacation policy in effect at the time of the Change in Control.
The Optionee's right to terminate the Optionee's employment for Good Reason
shall not be affected by the Optionee's incapacity due to physical or
mental illness. The Optionee's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to
act constituting Good Reason hereunder.
For purposes of any determination regarding the existence of Good Reason,
any claim by the Optionee that Good Reason exists shall be presumed to be
correct unless the Corporation establishes to the Board by clear and
convincing evidence that Good Reason does not exist;
(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, as
amended from time to time;
(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; and
(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).
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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 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.
Optionee
Address of Optionee
Employee Number
Employee ID Number
Foreign Sub Plan, if applicable
Grant Date
Purchase Price
Aggregate Number of Shares
Granted (the "Option Shares")
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.
HEXCEL CORPORATION
---------------------------------
Optionee
By:
-----------------------------
Xxx X. Xxxxxxxx
Xx. Vice President
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