AGREEMENT
AGREEMENT (this "Agreement"), dated as of October 11,
2000, by and among Hexcel Corporation, a Delaware corporation (the
"Company"), LXH, L.L.C., a Delaware limited liability company ("LXH") and
LXH II, L.L.C., a Delaware limited liability company (together with LXH,
the "Investors").
W I T N E S S E T H :
WHEREAS, Ciba Specialty Chemicals Holding Inc., a
corporation organized under the laws of Switzerland ("Ciba SCH"), Ciba
Specialty Chemicals Inc., a corporation organized under the laws of
Switzerland and wholly-owned subsidiary of Ciba SCH ("Ciba SCI") and Ciba
Specialty Chemicals Corporation, a corporation organized under the laws of
Delaware and wholly-owned subsidiary of Ciba SCH (collectively with Ciba
SCH and Ciba SCI, "Ciba"), own beneficially and of record an aggregate of
18,021,748 shares of common stock, par value $0.01 per share (the "Common
Stock"), of the Company;
WHEREAS, simultaneously herewith, the Investors and Ciba
are entering into a stock purchase agreement attached as Exhibit A hereto
(the "Stock Purchase Agreement"), pursuant to which Ciba has agreed to sell
to the Investors and the Investors have agreed to purchase from Ciba up to
a number of shares of Common Stock owned beneficially and of record by Ciba
(the "Shares") constituting not more than 39.3% of the issued and
outstanding shares of Common Stock;
WHEREAS, certain independent directors of the board of
directors of the Company (the "Board") have approved and consented to the
sale of the Shares by Ciba to the Investors on the terms set forth in the
Stock Purchase Agreement;
WHEREAS, in connection with the transactions contemplated
by the Stock Purchase Agreement, the Company and the Investors will enter
into (i) a governance agreement in the form of Exhibit B hereto (the
"Governance Agreement") and (ii) a registration rights agreement in the
form of Exhibit C hereto (the "Registration Rights Agreement"); and
WHEREAS, in connection with the execution by the
Investors of the Stock Purchase Agreement, the Notes (as defined in the
Stock Purchase Agreement), the Pledge Agreements (as defined in the Stock
Purchase Agreement) and all other contracts, agreements, schedules,
certificates and other documents being delivered pursuant to or in
connection with the Stock Purchase Agreement or such other documents or the
transactions contemplated thereby (the "Stock Purchase Transaction
Documents"), and in order to induce the Investors and their Affiliates to
execute and deliver the Governance Agreement and the Registration Rights
Agreement, the Company is hereby making certain representations and
warranties and entering into certain agreements.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements set forth in
this Agreement, the parties hereto agree as follows:
ARTICLE I
PURPOSE OF AGREEMENTS
1.1. Purpose. The Company acknowledges and agrees that it
is executing and delivering this Agreement (i) in connection with the
execution and delivery by the Investors of the Stock Purchase Transaction
Documents and the consummation of the transactions contemplated thereby,
and (ii) to induce the Investors and their Affiliates to execute and
deliver the Governance Agreement and the Registration Rights Agreement and
to consummate the transactions contemplated thereby.
1.2. Closing. The closing of the transactions
contemplated hereby shall take place at the offices of Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
simultaneously with the Closing under the Stock Purchase Transaction
Documents, or at such other place, time and/or date as shall be mutually
agreed by the Company and the Investors.
1.3. Capitalized Terms. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to such terms in Section
8.1.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the
Investors, as of the date hereof and as of the Closing, as follows:
2.1. Organization; Subsidiaries. (a) The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to carry on its business as it is now being conducted. The
Company is duly qualified and licensed as a foreign corporation to do
business, and is in good standing (and has paid all relevant franchise or
analogous taxes), in each jurisdiction where the character of its assets
owned or held under lease or the nature of its business makes such
qualification necessary, except where the failure to so qualify or be
licensed would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. A correct and complete copy of
the bylaws of the Company as shall be in effect as of the Closing is
attached hereto as Exhibit D (the "By-Laws").
(b) Each Significant Subsidiary is a corporation, limited
liability company, limited partnership or other business entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has the power and authority to carry on
its business as it is now being conducted except where the failure to be in
good standing or to have such power and authority would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 2.1(b), (i) the Company owns,
either directly or indirectly through one or more Subsidiaries, all of the
capital stock or other equity interests of the Significant Subsidiaries
free and clear of all liens, charges, claims, security interests,
restrictions, options, proxies, voting trusts or other encumbrances
("Encumbrances") and (ii) there are no outstanding subscription rights,
options, warrants, convertible or exchangeable securities or other rights
of any character whatsoever relating to issued or unissued capital stock or
other equity interests of any Significant Subsidiary, or any contract,
agreement or other commitment of any character whatsoever relating to
issued or unissued capital stock or other equity interests of any
Significant Subsidiary or pursuant to which any Significant Subsidiary is
or may become bound to issue or grant additional shares of its capital
stock or other equity interests or related subscription rights, options,
warrants, convertible or exchangeable securities or other rights, or to
grant preemptive rights. Except for the Subsidiaries and except as set
forth on Schedule 2.1(b), the Company does not own, directly or indirectly,
any interest in any corporation, limited liability company, partnership,
business association or other Person.
2.2. Due Authorization. The Company has all right,
corporate power and authority to enter into this Agreement, the Ciba
Documents, the Governance Agreement and the Registration Rights Agreement
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by the Company of this Agreement, the Ciba
Documents, the Governance Agreement and the Registration Rights Agreement,
and the compliance by the Company with each of the provisions of this
Agreement, the Ciba Documents, the Governance Agreement and the
Registration Rights Agreement (a) are within the corporate power and
authority of the Company, and (b) have been duly authorized by all
necessary corporate action of the Company. This Agreement and the Consent
and Termination Agreement have been, and each of the Governance Agreement,
the Registration Rights Agreement and the Supplemental Indenture when
executed and delivered by the Company will be, duly and validly executed
and delivered by the Company, and each of this Agreement and each Ciba
Document constitutes, and each of such other agreements when executed and
delivered by the Company will constitute, a valid and binding agreement of
the Company enforceable against the Company in accordance with its terms
except as such enforcement is limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally and
for limitations imposed by general principles of equity. The By-Laws have
been duly adopted by the Board and will be effective upon the Closing.
2.3. Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of (i) 100,000,000 shares
of Common Stock, of which as of October 6, 2000, 36,950,954 shares were
issued and outstanding excluding 859,497 shares of Common Stock held in the
Company's treasury as of such date and (ii) 20,000,000 shares of Preferred
Stock, no par value per share, of which no shares are issued and
outstanding. All of the issued and outstanding shares of Common Stock,
including the Shares, have been duly authorized and are validly issued,
fully paid and nonassessable and not subject to the preemptive or other
similar rights of the stockholders of the Company other than such rights
held by Ciba. As of the date hereof, there is outstanding (i) $114,435,000
in aggregate principal amount of the Company's 7.0% Convertible
Subordinated Notes, due 2003, which notes are convertible into 7,238,140
shares of Common Stock and (ii) $25,625,000 in aggregate principal amount
of the Company's 7.0% Convertible Subordinated Debentures, due 2011, which
notes are convertible into 834,147 shares of Common Stock. Except as
described in the SEC Reports (as defined below) and other than pursuant to
stock incentive plans approved by the Board, there are no outstanding
subscription rights, options, warrants, convertible or exchangeable
securities or other rights of any character whatsoever relating to issued
or unissued capital stock of the Company, or any contract or agreement of
any character whatsoever relating to issued or unissued capital stock of
the Company or pursuant to which the Company is or may become bound to
issue or grant additional shares of its capital stock or related
subscription rights, options, warrants, convertible or exchangeable
securities or other rights, or to grant preemptive rights. Except as set
forth on Schedule 2.3, and other than with respect to Ciba, (i) the Company
has not agreed to register any securities under the Securities Act or under
any state securities law or granted registration rights to any Person or
entity and (ii) there are no voting trusts, stockholders agreements,
proxies or other contracts or agreements or understandings in effect to
which the Company is a party or of which it has Knowledge with respect to
the voting or transfer of any of the outstanding shares of Common Stock.
2.4. SEC Reports. The Company has timely filed all proxy
statements, reports and other documents required to be filed by it under
the Exchange Act since January 1, 1997 and made available to the Investors
complete copies of all annual reports, proxy statements and other reports
filed by the Company under the Exchange Act, each as filed with the SEC
(collectively, the "SEC Reports"). Each SEC Report was, on the date of its
filing, in compliance in all material respects with the requirements of its
respective report form and the Exchange Act and did not, on the date of its
filing, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
2.5. Financial Statements. The consolidated financial
statements of the Company (including any related schedules and/or notes)
included in the SEC Reports have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") consistently
followed throughout the periods involved (except as may be indicated in the
notes thereto) and fairly present in accordance with GAAP the consolidated
financial condition, results of operations, stockholders' equity,
comprehensive income and cash flows of the Company and the Subsidiaries as
of the respective dates thereof and for the respective periods then ended
(except as may be indicated in the notes thereto and except, in the case of
interim statements, for the absence of footnotes and as permitted by Form
10-Q and subject to changes resulting from year-end adjustments, none of
which are material in amount or effect). Except as disclosed in the SEC
Reports, neither the Company nor any Subsidiary has any liability or
obligation (whether accrued, absolute, contingent, unliquidated or
otherwise, whether known or unknown, whether due or to become due and
regardless of when asserted), except (i) liabilities and obligations
reflected or disclosed in the audited consolidated balance sheet of the
Company and the Subsidiaries as of December 31, 1999 or the unaudited
balance sheet as of June 30, 2000 and the footnotes thereto, (ii)
liabilities and obligations incurred in the ordinary course of business
since June 30, 2000 or (iii) liabilities and obligations which would not,
individually or in the aggregate, reasonably be expected to have or result
in a Material Adverse Effect.
2.6. Consents, No Violations. Except with respect to the
Governance Agreement, dated February 29, 1996, between the Company and Ciba
(the "Existing Governance Agreement"), the Credit Agreement, the Indenture,
dated February 29, 1996, between the Company and First Trust of California,
National Association, as amended through the date hereof (the "Ciba
Indenture") and the Company's or any of its Subsidiary's employee or
director benefit plans, arrangements or agreements, the execution, delivery
or performance (i) by the Company of this Agreement, the Ciba Documents,
the Governance Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated hereby and thereby, and (ii)
by Ciba and the Investors of the Stock Purchase Agreement and the
consummation of the transactions contemplated thereby, do not and will not
(a) conflict with, or result in a breach or a violation of, any provision
of the certificate of incorporation or by-laws or other organizational
documents of the Company or any of the Subsidiaries, (b) constitute, with
or without notice or the passage of time or both, a breach, violation or
default, create an Encumbrance, or give rise to any right of termination,
modification, cancellation, prepayment, suspension, limitation, revocation
or acceleration, under (A) any Law or (B) any provision of any agreement or
other instrument to which the Company or any of the Subsidiaries is a party
or pursuant to which any of them or any of their assets or properties is
subject, except where such breach, violation or default, creation of an
Encumbrance, or right of termination, modification, cancellation,
prepayment, suspension, limitation, revocation or acceleration would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or (c) except for any required filing under the HSR Act, the
German Act Against Restraints of Competition and any other foreign
governmental and regulatory filings, notices and approvals required to be
made or obtained as contemplated by Section 5.1(f), and filings, consents,
approvals or authorizations of, notifications to, or exemptions or waivers
by any Governmental Entity or any other Person which are not, individually
or in the aggregate material to the consummation of the transactions
contemplated hereby or thereby, require any consent, approval or
authorization of, notification to, filing with, or exemption or waiver by,
any Governmental Entity or any other Person on the part of the Company or
any of its Subsidiaries.
2.7. Compliance with Laws. Except as disclosed in the SEC
Reports, the Company and its Subsidiaries are, and since January 1, 1993,
have been, in compliance in all material respects with all Laws and the
Company and its Subsidiaries possess all material licenses, franchise
permits, consents, registrations, certificates, and other governmental or
regulatory permits, authorizations or approvals required for the operation
of the business as presently conducted and for the ownership, lease or
operation of the Company's and its Subsidiaries' properties (collectively,
"Licenses"), except where such noncompliance or failure to possess would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. All of such Licenses are valid and in full force
and effect, and the Company and its Subsidiaries have duly performed and
are in compliance in all material respects with all of their obligations
under such Licenses except where such suspension or cancellation of such
Licenses or the noncompliance with such Licenses would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
2.8. Absence of Certain Changes. Except as disclosed in
the SEC Reports, since June 30, 2000 neither the Company nor any of the
Subsidiaries has suffered any change, event or development or series of
changes, events or developments which individually or in the aggregate has
had or would reasonably be expected to have a Material Adverse Effect.
2.9. Litigation. (a) Except as set forth on Schedule
2.9(a) or as disclosed in the SEC Reports, there is no claim, action, suit,
investigation or proceeding ("Litigation") pending or, to the Knowledge of
the Company, threatened against the Company or any of its Subsidiaries or
involving any of their respective properties or assets by or before any
court, arbitrator or other Governmental Entity which (i) in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement or (ii) if resolved adversely
to the Company or a Subsidiary would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(b) Except as disclosed in the SEC Reports, neither the
Company nor any of its Subsidiaries is in default under or in breach of any
order, judgment or decree of any court, arbitrator or other Governmental
Entity, except for defaults or breaches, which would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
2.10. Employee Matters; ERISA. (a) All (i) "employee
benefit plans, as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") other than any "multiemployer
plan" as defined in Section 3(37)(A) of ERISA, maintained or contributed to
by the Company or any of its Subsidiaries and (ii) other plans, agreements
or arrangements relating to compensation or employee benefits pursuant to
which the Company or any of its Subsidiaries may have any material
liability (collectively, the "Plans"), are in compliance with all
applicable provisions of ERISA and the Code, and the Company and its
Subsidiaries do not have any liabilities or obligations (other than
liabilities and obligations for benefits payable in the ordinary course)
with respect to any Plan, whether or not accrued, contingent or otherwise,
except (a) as described in any of the SEC Reports or previously disclosed
in writing to the Investors and (b) for instances of noncompliance or
liabilities or obligations that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Except
as any of the following either individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect, (x) neither the
Company nor any trade or business, whether or not incorporated (an "ERISA
Affiliate"), which together with the Company would be deemed a "single
employer" within the meaning of Section 414 of the Code or Section 4001(b)
of ERISA, has incurred any unsatisfied liability under Title IV of ERISA
and no conditions exists that could reasonably be expected to present a
risk to the Company or any ERISA Affiliate of incurring any such liability
(other than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course), and (y) no "employee benefit
plan," maintained or contributed to by the Company or any ERISA Affiliate,
other than a "multiemployer plan" as defined in Section 3(37)(A) of ERISA,
has incurred an "accumulated funding deficiency" (within the meaning of
Section 302 of ERISA or Section 412 of the Code) whether or not waived. As
to any "multiemployer plan" maintained or contributed to by the Company or
any of its Subsidiaries or ERISA Affiliate of the Company, neither the
Company nor any ERISA Affiliate has any knowledge (a) that such plan is not
in substantial compliance with the applicable provisions of ERISA and the
Code; or (b) that such plan has incurred an "accumulated funding
deficiency" (within the meaning of Section 302 of ERISA or Section 412 of
the Code) whether or not waived.
(b) Each Plan which is intended to be qualified
under Section 401(a) of the Code is the subject of a favorable
determination letter from the IRS, and, to the Company's Knowledge, nothing
has occurred which may reasonably be expected to result in the revocation
of such determination.
(c) Except as set forth on Schedule 2.10(c), the
execution and delivery of, and performance of the transactions contemplated
in, this Agreement will not (either alone or upon the occurrence of any
additional or subsequent events) (i) constitute an event under any Plan (or
related trust), trust or loan that will or may result in any material
payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligation
to fund benefits with respect to any current or former employee or director
of the Company or any subsidiary of the Company, or (ii) result in the
triggering or imposition of any material restrictions or limitations on the
right of the Company or any Subsidiary to amend or terminate any Plan.
2.11 Existing Governance Agreement; Section 203 of the
DGCL; Takeover Statute. The Independent Directors (as defined in the
Existing Governance Agreement) have taken all actions necessary or
advisable under the Existing Governance Agreement to approve and consent to
the transactions contemplated hereby (including the purchase of the Shares
by the Investors) and by the Ciba Documents. The Board has taken all
actions necessary or advisable so that the restrictions contained in
Section 203 of the DGCL applicable to a "business combination" (as defined
in such Section) will not apply to the execution by the Investors of the
Stock Purchase Agreement or the consummation of any of the transactions
contemplated by the Stock Purchase Agreement. The execution, delivery and
performance of the Stock Purchase Agreement will not cause to be applicable
to the Company any "fair price," "moratorium," "control share acquisition"
or other similar antitakeover statute or regulation enacted under state or
federal laws.
2.12 Real Property Holding Corporation. The Company is
not, and has not been at any time during the past 5 years, a "United States
real property holding corporation" within the meaning of Section 897(c)(2)
of the Internal Revenue Code of 1986, as amended.
2.13 Negotiations with Third Parties. Except in
connection with the transactions contemplated by the Stock Purchase
Transaction Documents, the Company is not currently, and since September
24, 2000 has not been, directly or indirectly, negotiating, seeking to
negotiate or otherwise engaging in discussions with any Person relating to
(a) an acquisition of greater than 20% of the Common Stock (including the
Shares), (b) a tender or exchange offer, (c) a merger, consolidation or
other business combination involving the Company or any of its
Subsidiaries, or (d) an offer to acquire in any manner a greater than 20%
equity interest in the Company, or more than 20% of the assets of the
Company and its Subsidiaries taken as a whole.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor hereby represents and warrants to the
Company, severally and not jointly, as of the date hereof and as of the
Closing, as follows:
3.1. Organization. Such Investor is a limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and authority to
carry on its business as it is now being conducted.
3.2. Due Authorization. Such Investor has all right,
power and authority to enter into this Agreement, the Governance Agreement,
the Stock Purchase Transaction Documents to which it is a party and the
Registration Rights Agreement and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by such
Investor of this Agreement, the Governance Agreement, the Stock Purchase
Transaction Documents to which it is a party and the Registration Rights
Agreement, and the compliance by such Investor with each of the provisions
of this Agreement and each of the Governance Agreement, the Stock Purchase
Transaction Documents to which it is a party and the Registration Rights
Agreement (a) are within the power and authority of such Investor and (b)
have been duly authorized by all necessary action on the part of such
Investor. This Agreement has been, and each of such other agreements when
executed and delivered by such Investor will be, duly and validly executed
and delivered by such Investor, and this Agreement constitutes, and each of
such other agreements when executed and delivered by such Investor will
constitute, a valid and binding agreement of such Investor enforceable
against such Investor in accordance with its respective terms except as
such enforcement is limited by bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors' rights generally and for
limitations imposed by general principles of equity.
3.3. Consents, No Violations. Neither the execution,
delivery or performance by such Investor of this Agreement, the Stock
Purchase Agreement, the Governance Agreement or the Registration Rights
Agreement nor the consummation of the transactions contemplated hereby or
thereby will (a) conflict with, or result in a breach or a violation of,
any provision of the organizational documents of such Investor, (b)
constitute, with or without notice or the passage of time or both, a
breach, violation or default, create an Encumbrance, or give rise to any
right of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration, under (i) any Law, or (ii) any
provision of any agreement or other instrument to which such Investor is a
party or pursuant to which such Investor or its assets or properties is
subject, or (c) except for any required filing under the HSR Act, the
German Act Against Restraints of Competition, and any other foreign
governmental and regulatory filings, notices and approvals required to be
made or obtained as contemplated by Section 5.1(f) hereof, and filings,
consents, approvals or authorizations of, notifications to, or exemptions
or waivers by any Governmental Entity or any other Persons which are not,
individually or in the aggregate, material to the consummation of the
transactions contemplated hereby or thereby, require any consent, approval
or authorization of, notification to, filing with, or exemption or waiver
by, any Governmental Entity or any other Person on the part of such
Investor.
3.4. Ownership of Capital Stock. Neither Investor nor any
of their respective subsidiaries, directors, officers or members
beneficially owns, directly or indirectly, any capital stock of the Company
or is party to any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any capital stock of the
Company or any security convertible into capital stock of the Company,
other than as contemplated by this Agreement.
ARTICLE IV
COVENANTS
4.1. Conduct of Business by the Company Pending the
Closing. The Company covenants and agrees that, during the period from the
date of this Agreement and continuing until the earlier of the termination
of this Agreement or the Closing, unless the Investors otherwise agree in
writing, the Company shall, and shall cause each of its Significant
Subsidiaries to, (i) conduct its business only in the ordinary course and
consistent with past practice; (ii) use reasonable best efforts to preserve
and maintain its assets and properties and its relationships with its
customers, suppliers, advertisers, distributors, agents, officers and
employees and other Persons with which it has significant business
relationships; (iii) use reasonable best efforts to maintain all of the
material assets it owns or uses in the ordinary course of business
consistent with past practice; (iv) use reasonable best efforts to preserve
the goodwill and ongoing operations of its business; (v) maintain its books
and records in the usual, regular and ordinary manner, on a basis
consistent with past practice; and (vi) comply in all material respects
with applicable Laws; provided, however, that during such period the
Company and its Significant Subsidiaries shall be permitted to take all
actions as set forth in Section 2.06 of the Governance Agreement which
would not require the approval of a majority of the directors appointed by
the Investors to the Board; provided, however, that the Company shall not
issue any shares of Common Stock unless the Investors consent in writing to
the offering price for such shares of Common Stock. Except as expressly
contemplated by this Agreement or as set forth on Schedule 4.1, between the
date of this Agreement and the Closing, the Company shall not, and shall
cause each of its Significant Subsidiaries not to, do any of the following
without the prior written consent of the Investors, which consent shall not
be unreasonably withheld or delayed:
(a) amend the Company's certificate of incorporation or bylaws or other
organizational documents except pursuant to Section 4.2 of this Agreement;
(b) take any action that is reasonably likely to result in (i) any of the
representations and warranties set forth in Article II becoming false or
inaccurate in any material respect as of the Closing Date or (ii) any of
the conditions to the obligations of the Investors set forth in Section 5.2
not being satisfied; or
(c) agree to take any of the actions restricted by this Section 4.1.
4.2. Amendment of By-Laws of the Company. Simultaneously
with the Closing, the By-Laws shall be in full force and effect and
following the Closing, the Company shall use its reasonable best efforts to
ensure that the By-Laws will not be inconsistent, at any time, with any of
the terms and provisions contained in the Governance Agreement.
4.3. HSR Act; Other Filings. Each of the Investors and
the Company shall cooperate in making required filings under the HSR Act,
the German Act Against Restraints of Competition and any other foreign
governmental and regulatory filings, notices and approvals required to be
made or obtained as contemplated by Section 5.1(f) hereof, and shall use
its commercially reasonable efforts to take, or cause to be taken, all
actions necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement.
4.4. Consents; Approvals. Except as set forth in Schedule
4.4, the Company shall use its commercially reasonable efforts to obtain,
as promptly as practicable, all consents, waivers, exemptions, approvals,
authorizations or orders (collectively, "Consents") (including, without
limitation (i) all Consents required to avoid any breach, violation,
default, encumbrance or right of termination, modification, cancellation,
prepayment, suspension, limitation, revocation or acceleration of any
material agreement or instrument to which the Company is a party or its
properties or assets are bound, (ii) all Consents pursuant to the Company's
or any of the Subsidiaries' financing documents, including all indentures
and credit agreements of the Company or any of the Subsidiaries and the
Consent of the Majority Lenders under the Credit Agreement, and (iii) all
United States and foreign governmental and regulatory rulings and
approvals), required in connection with the consummation of the
transactions contemplated by the Stock Purchase Agreement, the Governance
Agreement and the Registration Rights Agreement, in each case as promptly
as practicable, except where the failure to obtain such Consents would not,
individually or in the aggregate, have a Material Adverse Effect.
4.5. Listing. The Company shall use its commercially
reasonable efforts to continue to have its Common Stock listed on the New
York Stock Exchange or a national securities exchange for so long as the
Investors own any Shares.
4.6. No Solicitation. The Company agrees that, from the
date hereof until the earlier of (x) the Closing and (y) termination of
this Agreement, (i) it shall not, and it shall cause its agents,
affiliates, representatives, and any other person acting on its behalf, not
to, directly or indirectly, (a) provide any information concerning the
Company or Ciba to any third party (other than the Investors and their
Affiliates, representatives and agents) expressing an interest in acquiring
all or a portion of the Shares or (b) solicit, negotiate with respect to,
facilitate, or approve any sale or offer for the purchase of all or any
portion of the Shares, or options or warrants to purchase all or any
portion of the Shares or any securities convertible into or exchangeable
for all or any portion of the Shares, and it shall terminate any existing
activities or discussions with any party other than the Investors with
respect to the foregoing and (ii) it shall promptly advise the Investors of
any inquiry, request or proposal relating thereto that may be received,
including the terms of such inquiry, request or proposal and the identity
of the inquirer, requestor or offeror; provided, that the Company may (I)
at any time prior to the Closing Date, if the Company is not otherwise in
violation of this Section 4.6, provide information to, and negotiate or
otherwise engage in discussions with, any party who delivers a written
proposal relating to (a) an acquisition of all or a portion of the Common
Stock (including the Shares), (b) a tender or exchange offer, (c) a merger,
consolidation or other business combination involving the Company or any of
its Subsidiaries, or (d) an offer to acquire in any manner a greater than
20% equity interest in, or more than 20% of the assets of, the Company or
any of its Subsidiaries, if and so long as the Board determines in good
faith by a majority vote, based upon advice of its outside legal counsel,
that failing to take such action would reasonably be expected to constitute
a breach of the fiduciary duties of the Board; and (II) take a position
with respect to such proposal, or amend or withdraw such position, as
required by Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act.
4.7. Cooperation. Subject to Section 4.6, each of the
Investors and the Company agrees to use its commercially reasonable efforts
to take, or cause to be taken, all such further actions as shall be
necessary to make effective and consummate the transactions contemplated by
this Agreement.
4.8. Capitalization Certificate. After the close of
business on the business day immediately prior to the Closing, the Company
shall deliver to the Investors and Ciba a certificate executed by the
Company's Chief Financial Officer which certificate shall specify the
number of shares of Common Stock issued and outstanding as of the close of
business on such date.
4.9. Execution and Delivery of Agreements by the Company.
Subject to Section 4.6, prior to or simultaneously with the Closing, the
Company shall execute and deliver (i) the Governance Agreement and the
Registration Rights Agreement (in each case upon satisfaction or waiver of
the conditions set forth in Sections 5.1 and 5.3 hereto) and (ii) the
Supplemental Indenture.
4.10. Execution and Delivery of Agreements by the
Investors. Prior to or simultaneously with the Closing, upon satisfaction
or waiver of the conditions set forth in Sections 5.1 and 5.2, the
Investors shall execute and deliver the Governance Agreement and the
Registration Rights Agreement.
ARTICLE V
CONDITIONS
5.1. Conditions to Obligations of the Investors and the
Company. The respective obligations of the Investors and the Company to
execute and deliver the Governance Agreement and the Registration Rights
Agreement are subject to the satisfaction or waiver at or prior to the
Closing of each of the following conditions:
(a) No statute, rule or regulation or order of any court
or administrative agency shall be in effect which prohibits the
consummation of the transactions contemplated hereby;
(b) The transactions contemplated by the Stock Purchase
Transaction Documents shall have been consummated simultaneously with the
closing hereunder;
(c) The Company shall have received the Consent of the
Majority Lenders under the Credit Agreement, which Consent shall be
reasonably acceptable to the Investors and the Company;
(d) Any waiting period (and any extension thereof) under
the HSR Act applicable to this Agreement and the transactions contemplated
hereby shall have expired or been terminated;
(e) The German Federal Cartel Office shall have approved
the transactions contemplated hereby; and
(f) The Company and/or the Investors shall have made any
other material foreign governmental and regulatory filings, given all
material notices and obtained any material approvals that the Company and
the Investors reasonably agree are required in connection with the
consummation of the transactions contemplated by the Stock Purchase
Agreement, this Agreement, the Governance Agreement, the Registration
Rights Agreement and the Ciba Documents.
5.2. Conditions to Obligations of the Investors. The
obligations of the Investors to execute and deliver the Governance
Agreement and the Registration Rights Agreement shall be subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) Each of the representations and warranties of the
Company contained in this Agreement shall be true and correct when made and
as of the Closing (except to the extent such representations and warranties
are made as of a particular date, in which case such representations and
warranties shall have been true and correct in all material respects as of
such date);
(b) The Company shall have performed, satisfied and
complied in all material respects with all of their covenants and
agreements set forth in this Agreement to be performed, satisfied and
complied with prior to or at the Closing;
(c) The Company shall have delivered to the Investors an
officer's certificate certifying as to the Company's compliance with the
conditions set forth in clause (a) of Section 5.1 and clauses (a) and (b)
of this Section 5.2;
(d) The Investors shall have received a reasonably
acceptable opinion from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel
to the Company, addressing the due authorization and enforceability of this
Agreement with respect to the Company and the representations and
warranties made by the Company in Section 2.6 of this Agreement;
(e) The Ciba Documents shall be in full force and effect;
(f) The agreements, each dated as of the date hereof,
from the Company's employees set forth on Exhibit E to the Stock Purchase
Agreement shall be in full force and effect as of the Closing; and
(g) Xx. Xxxx X. Xxx'x employment agreement attached
hereto as Exhibit F and all other agreements contemplated thereby shall be
in full force and effect as of the Closing;
5.3. Conditions to Obligations of the Company. The
obligations of the Company to execute and deliver the Governance Agreement
and the Registration Rights Agreement shall be subject to the satisfaction
or waiver at or prior to the Closing of each of the following conditions:
(a) Each of the representations and warranties of the
Investors contained in this Agreement shall be true and correct when made
and as of the Closing (except to the extent such representations and
warranties are made as of a particular date, in which case such
representations and warranties shall have been true and correct in all
material respects as of such date);
(b) The Investors shall have performed, satisfied and
complied in all material respects with all of its covenants and agreements
set forth in this Agreement to be performed, satisfied and complied with
prior to or at the Closing Date;
(c) The Investors shall have delivered to the Company an
officer's certificate certifying as to the Investors' compliance with the
conditions set forth in clause (a) of Section 5.1 and clauses (a) and (b)
of this Section 5.3;
(d) The trustee under the Indenture shall have executed
and delivered the Supplemental
Indenture; and
(e) The Company shall have received a reasonably
acceptable opinion from Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel
to the Investors, addressing the due authorization and enforceability of
this Agreement with respect to the Investors and the representations and
warranties made by the Investors in Section 3.3 of this Agreement.
ARTICLE VI
TERMINATION
6.1. Termination. This Agreement shall terminate
automatically, without any further action required by the parties hereto,
upon the earlier of (i) the termination of the Stock Purchase Agreement, or
(ii) the latest of (A) November 9, 2000, if the Closing shall not have
occurred by such date, (B) November 27, 2000, if the Closing shall not have
occurred by such date and if the condition set forth in Section 5.1(c)
shall not have been satisfied on or prior to November 27, 2000, (C) two
business days after the satisfaction of the conditions set forth in
Sections 5.1(d), 5.1(e) and 5.1(f) hereof (the earlier of such dates
referred to in (i) and (ii) above, the "Termination Date"); provided,
however, that if the Company receives an Acquisition Proposal with respect
to which the Board has made a determination pursuant to Section 4.6 hereof,
and the Company executes a definitive agreement with respect to such
Acquisition Proposal prior to the Termination Date, the Company, by a vote
of a majority of the Independent Directors, can elect to terminate this
Agreement prior to the Termination Date by delivering written notice of
such termination to the Investors. Notwithstanding the foregoing, if the
Company terminates this Agreement upon execution of a definitive agreement
with respect to an Acquisition Proposal, then upon the earlier of (x) the
date such Acquisition Proposal is abandoned or terminated and (y) 120 days
after execution of such definitive agreement, if the transactions
contemplated by such Acquisition Proposal are not consummated within such
120 day period, this Agreement shall be automatically reinstated and the
"Termination Date" shall be deemed to be the earlier of (i) the termination
of the Stock Purchase Agreement, or (ii) 21 business days after the date of
such reinstatement if the Closing shall not have occurred by such date.
6.2. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 6.1, this Agreement shall
forthwith become void and there shall be no liability on the part of any
party hereto (or any stockholder, director, officer, partner, employee,
agent, consultant or representative of such party) except as set forth in
this Section 6.2, provided that nothing contained in this Agreement shall
relieve any party from liability for any breach of the representations and
warranties set forth in Articles II and III of this Agreement (subject to
Section 7.4) or of the covenants set forth in Article IV of this Agreement
and provided further that this Section 6.2 and Sections 7.1, 7.2, 7.3, 7.4,
8.2, 8.3, 8.7, 8.12, 8.13 and 8.14 shall survive termination of this
Agreement.
ARTICLE VII
INDEMNIFICATION
7.1. Survival. The representations and warranties of the
parties hereto contained in this Agreement shall expire twelve months after
the Closing Date, except that the representations and warranties set forth
in Sections 2.1(a), 2.2 and 2.3 shall survive until the expiration of the
applicable statute of limitations (including any extensions thereof). After
the expiration of such periods, any claim by a party hereto based upon any
such representation or warranty shall be of no further force and effect,
except to the extent a party has asserted a claim in accordance with this
Article VII for breach of any such representation or warranty prior to the
expiration of such period, in which event any representation or warranty to
which such claim relates shall survive with respect to such claim until
such claim is resolved as provided in this Article VII. The covenants and
agreements of the parties hereto contained in this Agreement shall survive
the Closing until performed in accordance with their terms.
7.2. Indemnification. (a) The Company shall indemnify,
defend and hold harmless the Investors, their Affiliates, and their
respective officers, directors, partners, members, employees, agents,
representatives, successors and assigns (each an "Investor Indemnified
Person") from and against all Losses incurred or suffered by an Investor
Indemnified Person arising from (i) the breach of any of the
representations or warranties made by the Company in this Agreement or (ii)
the breach of any covenant or agreement made by the Company in this
Agreement.
(b) The Investors shall indemnify, defend and hold
harmless the Company, its Affiliates, and their respective officers,
directors, partners, members, employees, agents, representatives,
successors and assigns (each a "Company Indemnified Person") from and
against all Losses incurred or suffered by a Company Indemnified Person
arising from (i) the breach of any of the representations or warranties
made by the Investors in this Agreement or (ii) the breach of any covenant
or agreement made by the Investors in this Agreement. .
(c) No claim may be made against the Company for
indemnification with respect to breaches of representations and warranties
pursuant to Section 7.2(a)(i) above with respect to any Losses unless the
aggregate amount of Losses incurred by the Investor Indemnified Persons
thereunder exceeds $1,597,750, and the Company shall then only be liable
for one-third of such Losses that exceed $1,597,750. The maximum amount
recoverable under Section 7.2(a)(i) shall be $10,000,000. No claim may be
made against the Investors for indemnification with respect to breaches of
representations and warranties pursuant to Section 7.2(b)(i) above with
respect to any Losses unless the aggregate amount of Losses incurred by the
Company Indemnified Persons thereunder exceeds $1,597,750, and the
Investors shall then only be liable for one-third of such Losses that
exceed $1,597,750. The maximum amount recoverable under Section 7.2(b)(i)
shall be $10,000,000.
(d) No Investor Indemnified Person may pursue a claim for
indemnification under Section 7.2(a)(i) after the first anniversary of the
Closing Date unless prior to such anniversary such Investor Indemnified
Person submits a good faith, reasonably detailed claim in writing that such
Investor Indemnified Person reasonably believes is based on factual
contentions that have evidentiary support and that such Investor
Indemnified Person has incurred or will incur a Loss, which in the case of
claims related to Sections 2.5 and 2.7 of this Agreement may be based upon
facts that such Investor Indemnified Person had knowledge of at or prior to
the Closing Date only if such claim also relies upon a materially adverse
occurrence or development that occurs after the Closing Date. In no case
shall any payment be made (A) in the case of an indemnification claim under
Section 7.2(a)(i) or 7.2(a)(ii) until a Loss occurs or (B) in the case of
an indemnification claim under Section 7.2(a)(i) for any Loss incurred
after the date that is 30 months after the Closing Date. No Person shall
have any liability to any Investor Indemnified Person under Section
7.2(a)(i) for any breach of a representation or warranty to the extent that
a claim for indemnification is based upon facts of which any Investor
Indemnified Person had knowledge on or prior to the Closing Date, unless
such claim also relies upon a materially adverse occurrence or development
that occurs after the Closing Date. For purposes of this Section 7.2(d),
(i) the Investors shall only be deemed to have knowledge of a fact if any
of the Persons listed on Schedule 7.2 has knowledge of the particular fact
and (ii) such individual shall be deemed to have knowledge only to the
extent of his knowledge of such fact.
7.3. Procedure for Indemnification. (a) If an Investor
Indemnified Person or a Company Indemnified Person (such Person being
referred to as the "Indemnitee") shall receive notice or otherwise learn of
the assertion by a Person who is not a party to this Agreement of any claim
or of the commencement by any such Person of any action (a "Claim") with
respect to which the other party (the "Indemnifying Party") may be
obligated to provide indemnification, such Indemnitee shall give such
Indemnifying Party written notice thereof promptly after becoming aware of
such Claim; provided, that the failure of any Indemnitee to give notice as
provided in this Section 7.3 shall not relieve the applicable Indemnifying
Party of its obligations under this Article VII, except to the extent that
such Indemnifying Party is prejudiced by such failure to give notice;
provided, further, that the applicable Indemnifying Party shall have no
obligations under this Article VII unless such written notice is received
by the Indemnifying Party within the survival periods set forth in Section
7.1. Such notice shall describe the Claim in reasonable detail, and shall
indicate the amount (estimated if necessary) of the Loss that has been or
may be sustained by or is claimed against such Indemnitee. Such notice
shall be a condition precedent to any liability of any Indemnifying Party
for any Claim under the provisions for indemnification contained in this
Agreement.
(b) An Indemnifying Party may elect to compromise, settle
or defend, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Claim; provided, however, that the
Indemnifying Party shall not compromise, settle or defend a Claim without
the consent of the Indemnitee (which consent shall not be unreasonably
withheld). If an Indemnifying Party elects to compromise, settle or defend
a Claim, it shall, within 30 days of the receipt of notice from an
Indemnitee pursuant to Section 7.3(a) (or sooner, if the nature of such
Claim so requires), notify the applicable Indemnitee of its intent to do
so, and such Indemnitee shall cooperate in the compromise or settlement of,
or defense against, such Claim. After notice from an Indemnifying Party to
an Indemnitee of its election to assume the defense of a Claim, such
Indemnifying Party shall not be liable to such Indemnitee under this
Article VII for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof (except expenses approved
in advance by the Indemnitee); provided, that such Indemnitee shall have
the right to employ one separate counsel reasonably satisfactory to the
Indemnifying Party to represent such Indemnitee if the defendants in any
such claim included both the Indemnifying Party and the Indemnitee and, in
such Indemnitee's reasonable judgment, a conflict of interest between such
Indemnitee and such Indemnifying Party exists in respect of such claim, and
in that event the reasonable fees and expenses of such separate counsel
shall be paid by such Indemnifying Party. If an Indemnifying Party elects
not to compromise, settle or defend against a Claim, or fails to notify an
Indemnitee of its election as provided in this Section 7.3 within 30 days
of notice from the Indemnitee pursuant to Section 7.3(a), such Indemnitee
may compromise, settle or defend such Claim.
(c) If an Indemnifying Party chooses to defend any claim,
the applicable Indemnitee shall make available to such Indemnifying Party
any personnel or any books, records or other documents within its control
that are necessary or appropriate for such defense.
(d) If the amount of any Loss shall, at any time
subsequent to payment pursuant to this Agreement, be reduced by recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, shall promptly be repaid by the
applicable Indemnitee to the applicable Indemnifying Party.
(e) In the event of payment by an Indemnifying Party to
any Indemnitee in connection with any Claim, such Indemnifying Party shall
be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Claim. Such Indemnitee shall cooperate with
such Indemnifying Party in a reasonable manner, and, at the cost and
expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
7.4. Sole Remedy. Except in the case of fraud, the rights
to indemnification provided for in this Article VII for a breach of
representations or warranties by the Investors (in the case of
indemnification pursuant to Section 7.2(b)(i)) or the Company (in the case
of indemnification pursuant to Section 7.2(a)(i)) shall constitute the sole
remedy of the Company and the Investors, respectively, for such breach, and
the Company and the Investors shall have no other liability or damages to
the other party resulting from any such breach.
ARTICLE VIII
MISCELLANEOUS
8.1. Defined Terms; Interpretations. The following terms,
as used herein, shall have the following meanings:
"Acquisition Proposal" shall mean a bona-fide written
offer by any Person not affiliated with the Company relating to (a) a
merger, consolidation or other business combination involving the Company,
or (b) an offer to acquire in any manner a greater than 50% equity interest
in, or more than 50% of the assets of, the Company and its Subsidiaries
taken as a whole.
"Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"Agreement" shall have the meaning ascribed thereto in
the preamble.
"Board" shall have the meaning ascribed thereto in the
recitals.
"Ciba" shall have the meaning ascribed thereto in the
recitals.
"Ciba SCH" shall have the meaning ascribed thereto in the
recitals.
"Ciba SCI" shall have the meaning ascribed thereto in the
recitals.
"Ciba Documents" shall mean the Consent and Termination
Agreement and the Supplemental Indenture.
"Ciba Indenture" shall have the meaning ascribed thereto
in Section 2.6.
"Claim" shall have the meaning ascribed thereto in
Section 7.3(a).
"Closing" shall have the meaning ascribed thereto in the
Stock Purchase Agreement.
"Closing Date" shall mean have the meaning ascribed
thereto in the Stock Purchase Agreement.
"Common Stock" shall have the meaning ascribed thereto in
the recitals.
"Company" shall have the meaning ascribed thereto in the
preamble.
"Company Indemnified Person" shall have the meaning
ascribed thereto in Section 7.2(b).
"Consent and Termination Agreement" shall mean the
Consent and Termination Agreement, dated the date hereof, between the
Company and Ciba SCH.
"Consents" shall have the meaning ascribed thereto in
Section 4.4.
"Credit Agreement" shall mean the Second Amended and
Restated Credit Agreement, dated as of September 15, 1998, as amended,
among the Company, certain of its subsidiaries, the Lenders parties
thereto, Citibank N.A. and Credit Suisse First Boston.
"DGCL" shall mean the Delaware General Corporation Law.
"Encumbrances" shall have the meaning ascribed thereto in
Section 2.1(b).
"ERISA" shall have the meaning ascribed thereto in
Section 2.10(a).
"ERISA Affiliate" shall have the meaning ascribed thereto
in Section 2.10(a).
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any successor federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at
the time. Reference to a particular section of the Securities Exchange Act
of 1934, as amended, shall include reference to the comparable section, if
any, of any such successor federal statute.
"Existing Governance Agreement" shall have the meaning
ascribed thereto in Section 2.6.
"GAAP" shall have the meaning ascribed thereto in Section
2.5.
"Governance Agreement" shall have the meaning ascribed
thereto in the recitals.
"Governmental Entity" shall mean any supernational,
national, foreign, federal, state or local judicial, legislative,
executive, administrative or regulatory body or authority.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
thereunder.
"Indemnifying Party" shall have the meaning ascribed
thereto in Section 7.3(a).
"Indemnitee" shall have the meaning ascribed thereto in
Section 7.3(a).
"Independent Director" shall mean any director of the
Company who was not nominated to the Board by Ciba and who (i) is not and
has never been an officer, employee or director of Ciba or any affiliate
(other than the Company) or associate of Ciba and (ii) has no affiliation
or compensation, consulting or contractual relationship with Ciba or any of
its affiliates (other than the Company) such that a reasonable person would
regard such director as likely to be unduly influenced by Ciba or any of
its affiliate (other than the Company).
"Investors" shall have the meaning ascribed thereto in
the preamble.
"Investor Indemnified Person" shall have the meaning
ascribed thereto in Section 7.2(a).
"Knowledge" shall mean, with respect to the Company, the
knowledge of Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxx, Xxxx X. Xxxxxxx, Xxxxxxx
X. Xxxxxxx, Xxxxxxx Xxxx, Xxxx X. Xxx, Xxx X. Xxxxxxxx, Xxxxxx X. Xxxxx,
Xxxxxx X. Xxxxxxxx, Xxxxxx X.X. Xxxxxx and Xxxxx X. Xxxxxxx.
"Laws" shall include all foreign, federal, state, and
local laws, statutes, ordinances, rules, regulations, orders, judgments,
decrees and bodies of law.
"Licenses" shall have the meaning ascribed thereto in
Section 2.7.
"Litigation" shall have the meaning ascribed thereto in
Section 2.9(a).
"Losses" shall mean each and all of the following items:
claims, losses, liabilities, obligations, payments, damages (actual or
punitive), charges, judgments, fines, penalties, amounts paid in
settlement, costs and expenses (including, without limitation, interest
which may be imposed in connection therewith, costs and expenses of
investigation, actions, suits, proceedings, demands, assessments and fees,
expenses and disbursements of counsel, consultants and other experts).
"Majority Lenders" shall have the meaning ascribed
thereto in the Credit Agreement.
"Material Adverse Effect" shall mean a material adverse
effect on the properties, business, prospects (but only with respect to the
representations and warranties contained in Sections 2.5 and 2.7),
operations, results of operations, earnings, assets, liabilities or
condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole.
"Person" shall mean any individual, firm, corporation,
limited liability company, partnership, company or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Plans" shall have the meaning ascribed thereto in
Section 2.10(a).
"Registration Rights Agreement" shall have the meaning
ascribed thereto in the recitals.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall have the meaning ascribed thereto in
Section 2.4.
"Securities Act" shall mean the Securities Act of 1933,
as amended, or any successor federal statute, and the rules and regulations
of the SEC thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Act shall include
reference to the comparable section, if any, of such successor federal
statute.
"Shares" shall have the meaning ascribed thereto in the
recitals.
"Significant Subsidiaries" shall have the meaning
ascribed thereto in Rule 1-02 of Regulation S-X (17 CFR 210).
"Stock Purchase Agreement" shall have the meaning
ascribed thereto in the recitals.
"Stock Purchase Transaction Documents" shall have the
meaning ascribed thereto in the recitals.
"Subsidiary" shall mean as to any Person, each
corporation, partnership or other entity of which shares of capital stock
or other equity interests having ordinary voting power (other than capital
stock or other equity interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors
or other managers of such corporation, partnership or other entity are at
the time owned, directly or indirectly, or the management of which is
otherwise controlled, directly or indirectly, or both, by such Person.
"Supplemental Indenture" shall mean the Supplemental
Indenture, as contemplated by Section 3.02 of the Consent and Termination
Agreement, between the Company and First Trust of California, National
Association.
8.2. Fees and Expenses. All costs and expenses incurred
in connection with this Agreement shall be paid by the party incurring such
costs or expense.
8.3. Public Announcements. The Investors and the Company
shall consult with each other before issuing any press release with respect
to this Agreement or the transactions contemplated hereby and neither shall
issue any such press release or make any such public statement without the
prior consent of the other, which consent shall not be unreasonably
withheld or delayed; provided, however, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may upon the advice of counsel be required by Law or any
exchange on which the Company's securities are listed and, to the extent
time permits, it has used all reasonable efforts to consult with the other
party prior thereto.
8.4. Further Assurances. Subject to Section 4.6, at any
time or from time to time after the Closing, the Company, on the one hand,
and the Investors, on the other hand, agree to cooperate with each other,
and at the request of the other party, to execute and deliver any further
instruments or documents and to take all such further action as the other
party may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated hereby or by the Governance
Agreement or the Registration Rights Agreement and to otherwise carry out
the intent of the parties hereunder or thereunder.
8.5. Successors and Assigns. This Agreement shall bind
and inure to the benefit of the Company and the Investors and their
respective successors, permitted assigns, heirs and personal
representatives, provided that prior to the Closing the Company may not
assign its rights or obligations under this Agreement to any Person without
the prior written consent of the Investors, and provided further that the
Investors may not assign their rights or obligations under this Agreement
to any Person (other than an "Investor" (as defined in the Governance
Agreement)) without the prior written consent of the Company. In addition,
and whether or not any express assignment has been made, the provisions of
this Agreement which are for each Investor's benefit as purchaser and
holder of Shares are also for the benefit of, and enforceable by, any
"Investor" (as defined in the Governance Agreement).
8.6. Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings with
respect thereto including the Letter Agreement, dated September 15, 2000,
between GS Capital Partners 2000, L.P. and the Company, as amended prior to
the date hereof and the Confidentiality Agreement, dated June 19, 2000
between Xxxxxxx, Xxxxx & Co. and the Company.
8.7. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or
certified mail, return receipt requested, postage prepaid, addressed to
such party at the address set forth below or such other address as may
hereafter be designated in writing by such party to the other parties:
(i) if to the Company, to:
Hexcel Corporation
Two Stamford Plaza
000 Xxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
Vice President, General Counsel
and Secretary
with a copy to each of the following (which
shall not constitute notice):
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Coco, Esq.
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(ii) if to the Investors, to:
c/o Goldman Xxxxx Capital Partners 2000, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxxx
with a copy to (which shall not constitute
notice):
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
All such notices, requests, consents and other
communications shall be deemed to have been given or made if and when
delivered personally or by overnight courier to the parties at the above
addresses or sent by electronic transmission, with confirmation received,
to the telecopy numbers specified above (or at such other address or
telecopy number for a party as shall be specified by like notice).
8.8. Amendments. The terms and provisions of this
Agreement may be modified or amended, or any of the provisions hereof
waived, temporarily or permanently, in a writing executed and delivered by
the Company and the Investors. No waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute a waiver of any other
provision hereof (whether or not similar). No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof.
8.9. Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart hereof shall be deemed to
be an original instrument, but all such counterparts together shall
constitute but one agreement.
8.10. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of this Agreement.
8.11. Nouns and Pronouns. Whenever the context may
require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of names and
pronouns shall include the plural and vice versa.
8.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
8.13. Submission to Jurisdiction. Each of the parties
hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of New York and of the
United States of America, in each case located in the County of New York,
for any Litigation arising out of or relating to this Agreement or the
other Transaction Documents and the transactions contemplated hereby and
thereby (and agrees not to commence any Litigation relating hereto or
thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail to its
respective address set forth in this Agreement shall be effective service
of process for any Litigation brought against it in any such court. Each of
the parties hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any Litigation arising out of this
Agreement or the transactions contemplated hereby in the courts of the
State of New York or the United States of America, in each case located in
the County of New York, hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such
Litigation brought in any such court has been brought in an inconvenient
forum.
8.14. WAIVER OF JURY TRIAL. THE COMPANY AND THE INVESTORS
HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTION DOCUMENTS.
8.15. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and
valid, but if any provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
render invalid or unenforceable any other provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed
and delivered this Agreement as of the date first above written.
HEXCEL CORPORATION
By: /s/ Xxxx X. Xxx
_________________________
Name: Xxxx X. Xxx
Title: Chairman and Chief
Executive Officer
LXH, L.L.C.
By: GS Capital Partners 2000, L.P.,
its Managing Member
By: GS Advisors 2000, LLC, its general partner
By: /s/ Xxxxxxxxx X. Xxxxxxxxxx
______________________________
Name: Xxxxxxxxx X. Xxxxxxxxxx
Title: Vice President
LXH II, L.L.C.
By: GS Capital Partners 2000 Offshore, L.P.,
its Managing Member
By: GS Advisors 2000, LLC, its general partner
By: /s/ Xxxxxxxxx X. Xxxxxxxxxx
______________________________
Name: Xxxxxxxxx X. Xxxxxxxxxx
Title: Vice President
EXHIBIT A TO EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
October 11, 2000, by and between LXH, L.L.C., a Delaware limited liability
company ("LXH"), LXH II, L.L.C., a Delaware limited liability company
(together with LXH, the "Purchasers"), Ciba Specialty Chemicals Holding
Inc., a corporation organized under the laws of Switzerland ("Ciba"), Ciba
Specialty Chemicals Inc., a corporation organized under the laws of
Switzerland and wholly-owned subsidiary of Ciba ("Ciba SCI") and Ciba
Specialty Chemicals Corporation, a corporation organized under the laws of
Delaware and wholly-owned subsidiary of Ciba (together with Ciba SCI, the
"Sellers").
W I T N E S S E T H :
WHEREAS, the Sellers beneficially own an aggregate of
18,021,748 shares of common stock, par value $0.01 per share (the "Common
Stock"), of Hexcel Corporation (the "Company");
WHEREAS, the Company and Ciba are parties to a governance
agreement, dated as of February 29, 1996, pursuant to which, among other
things, Ciba may sell all or a portion of the shares of Common Stock
beneficially owned by it with the approval and consent of certain directors
of the Company;
WHEREAS, upon the terms and subject to the conditions set
forth in this Agreement, the Sellers wish to sell to the Purchasers and the
Purchasers wish to purchase from the Sellers a number of shares of Common
Stock beneficially owned by the Sellers determined in accordance with
Section 1.1 hereof (the "Shares");
WHEREAS, the Independent Directors have approved and
consented to the sale of the Shares by the Sellers to the Purchasers on the
terms set forth herein; and
WHEREAS, the Purchasers and the Sellers desire to provide
for the purchase and sale of the Shares and to establish certain rights and
obligations in connection therewith.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements set forth in
this Agreement, the parties hereto agree as follows:
ARTICLE I
ISSUANCE AND SALE OF SHARES
1.1. Purchase and Sale. Upon the terms and subject to the
conditions set forth herein, at the Closing (as defined below) the Sellers
shall sell to each Purchaser and such Purchaser shall purchase from the
Sellers the number of Shares set forth opposite such Purchaser's name on
Schedule 1.1 for a price per Share equal to $11.00 or an aggregate purchase
price of $159,775,000, (the "Purchase Price"). Each Purchaser shall pay
such Purchaser's portion of the Purchase Price to the Sellers by delivering
to the Sellers (x) cash and (y) a secured promissory note, in the form of
Exhibit A hereto (the "Notes"), in each case in the aggregate amounts set
forth opposite such Purchaser's name on Schedule 1.1; provided, however,
that the Purchasers shall have the right to reallocate between the
Purchasers the Shares to be purchased by each Purchaser by delivering
written notice of such reallocation to Ciba and the Sellers not less than
three days prior to the Closing, so long as such reallocation does not
change the total number of Shares being acquired hereunder or the Purchase
Price. At least three days prior to the Closing, the Sellers shall deliver
to the Purchasers a schedule (which schedule shall be binding on the
Purchasers) which shall set forth the number of Shares being sold by each
Seller hereunder, the portion of the Purchase Price payable to each such
Seller and the allocation of cash and the principal amount of Notes payable
to each such Seller; provided, however, that such schedule shall not change
the total number of Shares being acquired by each Purchaser, the portion of
the Purchase Price being paid by each Purchaser or the total cash amount or
aggregate principal amount of Notes being delivered hereunder.
Notwithstanding anything to the contrary set forth above, the aggregate
number of Shares purchased by the Purchasers hereunder shall be reduced to
the extent required to prevent the Purchasers from Beneficially Owning in
excess of 39.3% of the outstanding shares of Common Stock immediately
following the Closing and, in such event, the Purchase Price (and the
amount of cash and the aggregate principal amount of Notes issued by the
Purchasers) shall be appropriately reduced based on the per Share price set
forth above.
1.2. The Closing; Deliveries. (a) The closing of the
purchase and sale of the Shares hereunder (the "Closing") shall take place
at the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:00 a.m. as promptly as practicable
following the satisfaction or waiver of the conditions set forth in Article
V (other than those conditions that by their nature are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those
conditions), but no earlier than twenty days after the date hereof and no
later than the Termination Date (as defined below), or at such other place,
time and/or date as shall be mutually agreed by Ciba, the Sellers and the
Purchasers (the date of the Closing, the "Closing Date").
(b) At the Closing, each Seller shall deliver to each Purchaser one or more
certificates representing the Shares being sold by such Seller to such
Purchaser duly endorsed for transfer in blank or accompanied by stock
powers duly endorsed in blank, with any required stock transfer stamps
attached, in an aggregate amount equal to the number of Shares being
purchased by such Purchaser hereunder. Delivery of such certificates shall
be made against receipt by such Seller of the portion of the Purchase Price
payable therefor to such Seller. The cash portion of the Purchase Price
shall be paid by wire transfer to an account or accounts designated by the
Sellers at least three business days prior to the Closing Date.
(c) The Sellers shall be responsible for and shall pay any sales, use,
transfer, documentary or other similar taxes that relate to the purchase
and sale of the Shares hereunder.
1.3. Capitalized Terms. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to such terms in Section
8.1.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Ciba and each Seller hereby represents and warrants to
each Purchaser, as of the date hereof and as of the Closing, as follows:
2.1. Title to Shares. Such Seller has good and valid
title to the Shares being sold by such Seller to each Purchaser hereunder,
free and clear of all liens, charges, claims, security interests,
restrictions, options, proxies, voting trusts or other encumbrances
("Encumbrances") other than Encumbrances that will be released prior to or
simultaneously with the Closing. Assuming each Purchaser has the requisite
power and authority to be the lawful owner of such Shares, upon delivery to
each Purchaser at the Closing of certificates representing such Shares, and
upon such Seller's receipt of the Purchase Price for such Shares, each
Purchaser will acquire all of such Seller's right, title and interest in
and to the Shares being sold to each Purchaser and will receive good and
valid title to such Shares, free and clear of any and all Encumbrances
created by such Seller.
2.2. Organization. Each of Ciba and such Seller is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization or incorporation and has the
requisite corporate power and authority to carry on its business as it is
now being conducted.
2.3. Due Authorization. Each of Ciba and such Seller has
all right, power and authority to enter into this Agreement and each of the
other Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
each of Ciba and such Seller of this Agreement and each of the other
Transaction Documents to which it is a party, the sale and delivery of the
Shares being sold by such Seller to each Purchaser hereunder and the
compliance by each of Ciba and such Seller with each of the provisions of
this Agreement and each of the other Transaction Documents to which it is a
party have been duly authorized by all necessary corporate action of such
party. This Agreement has been, and each of the other Transaction Documents
to which each of Ciba and such Seller is a party when executed and
delivered by each of Ciba and such Seller will be, duly and validly
executed and delivered by such party, and this Agreement constitutes, and
each of such other Transaction Documents when executed and delivered by
each of Ciba and such Seller will constitute, a valid and binding agreement
of such party enforceable against such party in accordance with its terms
except as such enforcement is limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally and
for limitations imposed by general principles of equity.
2.4. Consents, No Violations. Neither the execution,
delivery or performance by either Ciba or such Seller of this Agreement or
any of the other Transaction Documents to which it is a party nor the
consummation of the transactions contemplated hereby or thereby will (a)
conflict with, or result in a breach or a violation of, any provision of
the certificate of incorporation or by-laws or other organizational
documents of either Ciba or such Seller, (b) constitute, with or without
notice or the passage of time or both, a breach, violation or default,
create an Encumbrance, or give rise to any right of termination,
modification, cancellation, prepayment, suspension, limitation, revocation
or acceleration, under (i) any Law or (ii) any provision of any material
agreement or other instrument to which either Ciba or such Seller is a
party or pursuant to which either Ciba or such Seller or any of its assets
or properties is subject, or (c) except for any required filing under the
HSR Act and those consents waived or obtained prior to or at the Closing,
require any consent, approval or authorization of, notification to, filing
with, or exemption or waiver by, any Governmental Entity or any other
Person on the part of either Ciba or such Seller.
2.5. Brokers or Finders. Except for Deutsche Bank, whose
fees will be paid by Ciba and the Sellers, upon the consummation of the
transactions contemplated by this Agreement, no agent, broker, investment
banker or other Person is or will be entitled to any broker's or finder's
fee or any other commission or similar fee from Ciba or such Seller in
connection with any of the transactions contemplated by this Agreement or
the other Transaction Documents.
2.6. Disclosure. There is no fact or information relating
to the Company or any of its subsidiaries, actually known to Ciba or such
Seller, that would reasonably be expected to have a Material Adverse Effect
and that has not been disclosed to the Purchasers by Ciba or such Seller.
2.7. Qualified Purchaser Status. Such Seller is a
"qualified purchaser" as defined in Section 2(51)(A)(iv) of the Investment
Company Act.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby represents and warrants to Ciba and
each Seller, severally and not jointly, as of the date hereof and as of the
Closing, as follows:
3.1. Organization. Such Purchaser is a limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and authority to
carry on its business as it is now being conducted.
3.2. Due Authorization. Such Purchaser has all right,
power and authority to enter into this Agreement and each of the other
Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
such Purchaser of this Agreement and each of the other Transaction
Documents to which it is a party, the purchase of the Shares being
purchased by such Purchaser and the compliance by such Purchaser with each
of the provisions of this Agreement and each of the Transaction Documents
to which it is a party (a) are within the power and authority of such
Purchaser and (b) have been duly authorized by all necessary action on the
part of such Purchaser. This Agreement has been, and each of the other
Transaction Documents to which it is a party when executed and delivered by
such Purchaser will be, duly and validly executed and delivered by such
Purchaser, and this Agreement constitutes, and each of such other
Transaction Documents when executed and delivered by such Purchaser will
constitute, a valid and binding agreement of such Purchaser enforceable
against such Purchaser in accordance with its respective terms except as
such enforcement is limited by bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors' rights generally and for
limitations imposed by general principles of equity.
3.3. Consents, No Violations. Neither the execution,
delivery or performance by such Purchaser of this Agreement or any of the
other Transaction Documents to which it is a party nor the consummation of
the transactions contemplated hereby or thereby will (a) conflict with, or
result in a breach or a violation of, any provision of the organizational
documents of such Purchaser, (b) constitute, with or without notice or the
passage of time or both, a breach, violation or default, create an
Encumbrance, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or
acceleration, under (i) any Law, or (ii) any provision of any material
agreement or other instrument to which such Purchaser is a party or
pursuant to which such Purchaser or its assets or properties is subject, or
(c) except for any required filing under the HSR Act, the German Act
Against Restraints of Competition, and any other foreign governmental and
regulatory filings, notices and approvals required to be made or obtained
as contemplated by Section 5.1(d) hereof, and those consents waived or
obtained, require any consent, approval or authorization of, notification
to, filing with, or exemption or waiver by, any Governmental Entity or any
other Person on the part of such Purchaser.
3.4. No Brokers or Finders. No agent, broker, investment
banker or other Person is or will be entitled to any broker's or finder's
fee or any other commission or similar fee from such Purchaser in
connection with the transactions contemplated by this Agreement or the
other Transaction Documents.
3.5. Availability of Funds. Such Purchaser has, or will
have prior to the Closing, available sufficient funds to pay such
Purchaser's cash portion of the Purchase Price.
3.6. Restricted Securities. Such Purchaser is purchasing
the Shares being purchased by it for investment and not with a view to any
public resale or other distribution thereof, except in compliance with
applicable securities laws.
ARTICLE IV
PRE-CLOSING COVENANTS
4.1. Ownership of Shares. Ciba and the Sellers shall
retain beneficial and record ownership of the Shares during the period from
the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing. Other than in connection with
the transactions contemplated by this Agreement, Ciba and the Sellers shall
not, and shall not authorize any of their affiliates, officers or directors
(other than such officers and directors acting in their capacities as
officers or directors of the Company) or any other Person on its behalf to,
directly or indirectly, (i) sell, assign, transfer, encumber or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the direct or indirect sale, assignment,
transfer, encumbrance or other disposition of, any of the Shares or any
economic interest therein or (ii) seek, solicit, propose, facilitate,
participate in any discussions or negotiations regarding, or furnish any
information with respect to any transaction or arrangement described in
clause (i). Ciba and the Sellers will notify each Purchaser promptly (and
provide all details reasonably requested by such Purchaser) if any of Ciba
or the Sellers is approached or solicited, directly or indirectly, by any
person with respect to any of the foregoing.
4.2. HSR Act; German Filing; Cooperation. The Purchasers
shall make or cause to be made all necessary filings under the HSR Act and
the German Act Against Restraints of Competition and shall use their
reasonable best efforts to take, or cause to be taken, all actions
necessary, proper or advisable in connection therewith to consummate and
make effective as promptly as practicable the transactions contemplated by
this Agreement. The Purchasers, Ciba and the Sellers agree to use their
reasonable best efforts to take, or cause to be taken, all such further
actions as shall be necessary, proper or advisable to make effective and
consummate as promptly as practicable the transactions contemplated by this
Agreement.
4.3. Consents; Approvals. Ciba and each of the Sellers
shall use their reasonable best efforts to obtain, or to assist the Company
in obtaining, all consents, waivers, exemptions, approvals, authorizations
or orders (collectively, "Consents") (including, without limitation (i)
Consents required to avoid any breach, violation, default, encumbrance or
right of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration of any material agreement or
instrument to which Ciba or such Seller is a party or its properties or
assets are bound, (ii) all Consents pursuant to the Company's financing
documents, including without limitation, all indentures and credit
agreements of the Company, and (iii) all United States and foreign
governmental and regulatory rulings and approvals).
4.4. FIRPTA Certificate. Prior to the Closing, the
Sellers shall cause to be delivered to the Purchasers the certificate
described in Treas. Reg. Section 1.1445-2(c)(3), duly executed and
acknowledged, certifying that the stock being sold is not a United States
real property interest under Section 897 of the Internal Revenue Code of
1986, as amended.
4.5. Indenture. Prior to or simultaneously with the
Closing, Ciba shall execute and deliver the Consent and Termination
Agreement and shall consent in writing to the amendment to the Indenture in
the manner provided in Section 3.02 of the Consent and Termination
Agreement.
ARTICLE V
CONDITIONS
5.1. Conditions to Obligations of the Purchasers, Ciba
and the Sellers. The respective obligations of the Purchasers, Ciba and the
Sellers to consummate the transactions contemplated hereby are subject to
the satisfaction or waiver at or prior to the Closing of each of the
following conditions:
(a) No statute, rule or regulation or order of any court
or administrative agency shall be in effect which prohibits the
consummation of the transactions contemplated hereby;
(b) Any waiting period (and any extension thereof) under
the HSR Act applicable to this Agreement and the transactions contemplated
hereby shall have expired or been terminated;
(c) The German Federal Cartel Office shall have approved
the transactions contemplated hereby; and
(d) The Company and/or the Investors shall have made any
other material foreign governmental and regulatory filings, given all
material notices and obtained any material approvals that the Company and
the Purchasers reasonably agree are required in connection with the
consummation of the transactions contemplated by this Agreement, the
Governance Agreement, the Registration Rights Agreement and the Hexcel
Agreement.
5.2. Conditions to Obligations of the Purchasers. The
obligations of each Purchaser to consummate the transactions contemplated
hereby shall be subject to the satisfaction or waiver at or prior to the
Closing of each of the following conditions:
(a) Each of the representations and warranties of Ciba
and the Sellers contained in this Agreement shall be true and correct in
all material respects when made and as of the Closing (except to the extent
such representations and warranties are made as of a particular date, in
which case such representations and warranties shall have been true and
correct in all material respects as of such date);
(b) Each of Ciba and the Sellers shall have performed,
satisfied and complied in all material respects with all of its covenants
and agreements set forth in this Agreement to be performed, satisfied and
complied with prior to or at the Closing;
(c) Each of Ciba and the Sellers shall have delivered to
each Purchaser an officer's certificate certifying as to Ciba and such
Seller's compliance with the conditions set forth in clauses (a) and (b) of
this Section 5.2;
(d) The transactions contemplated by the Hexcel Agreement
shall be consummated simultaneously with the transactions contemplated
hereby and the Purchasers and the Company shall have executed and delivered
the governance agreement in the form of Exhibit B hereto (the "Governance
Agreement"), the registration rights agreement in the form of Exhibit C
hereto (the "Registration Rights Agreement"), and all other agreements,
documents and instruments required to be delivered in connection therewith;
(e) Each Purchaser and Ciba shall have executed and
delivered a Pledge Agreement in the form of Exhibit D hereto (the "Pledge
Agreement");
(f) Such Purchaser shall have received the opinions
substantially in the form set forth on Exhibit E from either Cravath,
Swaine & Xxxxx, Xxxx X . XxXxxx, Esq. or Switzerland counsel for Ciba and
the Sellers;
(g) (i) The Majority Lenders (as defined in the Credit
Agreement) shall have executed an agreement, in form and substance
satisfactory to the Purchasers, consenting to the transactions contemplated
hereby and (ii) the agreements, each dated as of the date hereof, from the
Company's employees set forth on Exhibit F hereto shall be in full force
and effect as of the Closing;
(i) Xx. Xxxx X. Xxx'x employment agreement attached
hereto as Exhibit G and all other agreements contemplated thereby shall be
in full force and effect as of the Closing;
(j) The Consent and Termination Agreement in the form
attached as Exhibit H (the "Consent and Termination Agreement") shall have
been executed and delivered by Ciba and the Company and the Indenture shall
have been amended in the manner set forth in Section 3.02 of the Consent
and Termination Agreement; and
(k) Neither the Company nor any of its subsidiaries shall
have suffered any change, event, or development or series of changes,
events or developments which individually or in the aggregate has had or
would reasonably be expected to have a Material Adverse Effect.
5.3. Conditions to Obligations of Ciba and the Sellers.
The obligations of Ciba and the Sellers to consummate the transactions
contemplated hereby shall be subject to the satisfaction or waiver at or
prior to the Closing of each of the following conditions:
(a) Each of the representations and warranties of the
Purchasers contained in this Agreement shall be true and correct when made
and as of the Closing (except to the extent such representations and
warranties are made as of a particular date, in which case such
representations and warranties shall have been true and correct in all
material respects as of such date);
(b) The Purchasers shall have performed, satisfied and
complied with all of its covenants and agreements set forth in this
Agreement to be performed, satisfied and complied with prior to or at the
Closing Date;
(c) The Purchasers shall have delivered to each of Ciba
and the Sellers an officer's certificate certifying as to the Purchasers'
compliance with the conditions set forth in clauses (a) and (b) of this
Section 5.3;
(d) The Purchasers shall have executed and delivered the
Pledge Agreement and the Purchasers shall have delivered to Ciba, as
collateral agent, the Shares to be held as collateral security thereunder;
and
(e) Ciba and the Sellers shall have received an opinion
from Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx substantially in the form of
Exhibit I hereto.
ARTICLE VI
TERMINATION
6.1. Termination. (a) This Agreement may be terminated
at any time prior to the Closing:
(i) by mutual written agreement of (x) Ciba and the
Sellers and (y) the Purchasers;
(ii) by (x) the Purchasers or (y) Ciba and the Sellers,
if the Closing shall not have occurred by the latest of (A) November 9,
2000, (B) November 27, 2000, if the condition set forth in Section
5.2(g)(i) shall not have been satisfied on or prior to November 9, 2000,
(C) two business days after the satisfaction of the conditions set forth in
Sections 5.1(b), 5.1(c) and 5.1(d) hereof (the latest of such dates, the
"Drop Dead Date") (provided that the right to terminate this Agreement
under this Section 6.1(a)(ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause
of or resulted in the failure of the Closing to occur on or before such
date); provided, however, that notwithstanding the foregoing, if the
Company, by a vote of the Independent Directors terminates the Hexcel
Agreement pursuant to Section 6.1 thereof in connection with the execution
of a definitive agreement relating to an Acquisition Proposal, the Drop
Dead Date shall be automatically extended to the earlier of (1) the
business day following the consummation of the transactions contemplated by
the Acquisition Proposal and (2) the date that is 21 business days
following the date such Acquisition Proposal is abandoned or terminated;
provided, however that the Drop Dead Date shall not, in any case, be
extended past the date that is 21 business days following the first
anniversary of the date hereof; or
(iii) by (x) the Purchasers or (y) Ciba and the Sellers,
if a court of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued a nonappealable final
order, decree or ruling or taken any other action having the effect of
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement.
(b) The date of any termination of this Agreement
pursuant to Section 6.1(a) is referred to herein as the "Termination Date".
6.2. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 6.1(a), this Agreement
shall forthwith become void and there shall be no liability on the part of
any party hereto (or any stockholder, director, officer, partner, employee,
agent, consultant or representative of such party) except as set forth in
this Section 6.2, provided that nothing contained in this Agreement shall
relieve any party from liability for any breach of this Agreement and
provided further that this Section 6.2 and Sections 7.1, 7.2, 7.3, 8.3,
8.12, 8.13 and 8.14 shall survive termination of this Agreement and Section
8.2 shall survive termination of this Agreement to the extent provided
therein.
ARTICLE VII
INDEMNIFICATION
7.1. Survival. The representations and warranties of the
parties hereto contained in this Agreement or in any of the other
Transaction Documents shall survive the Closing and the delivery of the
Transaction Documents. In the case of the representations and warranties
made by Ciba, any Seller or any Purchaser in this Agreement or in any of
the other Transaction Documents, such representations and warranties are
being made severally and not jointly by Ciba and the Sellers or by the
Purchasers, as the case may be. The covenants and agreements of the parties
hereto contained in this Agreement or in any of the other Transaction
Documents shall survive the Closing until performed in accordance with
their terms.
7.2. Indemnification. (a) Ciba and the Sellers jointly
and severally shall indemnify, defend and hold harmless the Purchasers,
their Affiliates, and their respective officers, directors, partners,
members, employees, agents, representatives, successors and assigns (each a
"Purchaser Indemnified Person") from and against (I) all Losses incurred or
suffered by a Purchaser Indemnified Person arising from (i) the breach of
any of the representations or warranties made by Ciba or the Sellers in
this Agreement or any other Transaction Document or (ii) the breach of any
covenant or agreement made by Ciba or the Sellers in this Agreement or any
other Transaction Document and (II) one-third of all Losses in respect of
which an Investor Indemnified Person would be entitled to indemnification
under the Hexcel Agreement pursuant to Section 7.2(a)(i) thereof after
giving effect to the limitations on such indemnification contained in the
Hexcel Agreement other than the limitation set forth in Section 7.2(c)
thereof that limits the Company's liability thereunder to one-third of all
Losses incurred by the Investor Indemnified Person; provided, that, the
maximum amount recoverable under this Section 7.2(a)(II) shall be
$10,000,000.
(b) Each Purchaser, severally and not jointly, shall
indemnify, defend and hold harmless Ciba and the Sellers, their Affiliates,
and their respective officers, directors, partners, members, employees,
agents, representatives, successors and assigns (each a "Sellers
Indemnified Person") from and against all Losses incurred or suffered by a
Sellers Indemnified Person arising from (i) the breach of any of the
representations or warranties made by such Purchaser in this Agreement or
any other Transaction Document or (ii) the breach of any covenant or
agreement made by such Purchaser in this Agreement or any other Transaction
Document.
7.3. Procedure for Indemnification. (a) If a Purchaser
Indemnified Party or a Sellers Indemnified Person (such Person being
referred to as the "Indemnitee") shall receive notice or otherwise learn of
the assertion by a Person who is not a party to this Agreement of any claim
or of the commencement by any such Person of any action (a "Claim") with
respect to which the other party (the "Indemnifying Party") may be
obligated to provide indemnification, such Indemnitee shall give such
Indemnifying Party written notice thereof promptly after becoming aware of
such Claim; provided, that the failure of any Indemnitee to give notice as
provided in this Section 7.3 shall not relieve the applicable Indemnifying
Party of its obligations under this Article VII, except to the extent that
such Indemnifying Party is prejudiced by such failure to give notice;
provided, further, that the applicable Indemnifying Party shall have no
obligations under this Article VII unless such written notice is received
by the Indemnifying Party within the survival periods set forth in Section
7.1. Such notice shall describe the Claim in reasonable detail, and shall
indicate the amount (estimated if necessary) of the Loss that has been or
may be sustained by or is claimed against such Indemnitee. Such notice
shall be a condition precedent to any liability of any Indemnifying Party
for any Claim under the provisions for indemnification contained in this
Agreement.
(b) An Indemnifying Party may elect to compromise, settle
or defend, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Claim; provided, however, that the
Indemnifying Party shall not compromise, settle or defend a Claim without
the consent of the Indemnitee (which consent shall not be unreasonably
withheld). If an Indemnifying Party elects to compromise, settle or defend
a Claim, it shall, within 30 days of the receipt of notice from an
Indemnitee pursuant to Section 7.3(a) (or sooner, if the nature of such
Claim so requires), notify the applicable Indemnitee of its intent to do
so, and such Indemnitee shall cooperate in the compromise or settlement of,
or defense against, such Claim. After notice from an Indemnifying Party to
an Indemnitee of its election to assume the defense of a Claim, such
Indemnifying Party shall not be liable to such Indemnitee under this
Article VII for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof (except expenses approved
in advance by the Indemnitee); provided, that such Indemnitee shall have
the right to employ one separate counsel reasonably satisfactory to the
Indemnifying Party to represent such Indemnitee if the defendants in any
such claim included both the Indemnifying Party and the Indemnitee and, in
such Indemnitee's reasonable judgment, a conflict of interest between such
Indemnitee and such Indemnifying Party exists in respect of such claim, and
in that event the reasonable fees and expenses of such separate counsel
shall be paid by such Indemnifying Party. If an Indemnifying Party elects
not to compromise, settle or defend against a Claim, or fails to notify an
Indemnitee of its election as provided in this Section 7.3 within 30 days
of notice from the Indemnitee pursuant to Section 7.3(a), such Indemnitee
may compromise, settle or defend such Claim.
(c) If an Indemnifying Party chooses to defend any claim,
the applicable Indemnitee shall make available to such Indemnifying Party
any personnel or any books, records or other documents within its control
that are necessary or appropriate for such defense.
(d) If the amount of any Loss shall, at any time
subsequent to payment pursuant to this Agreement, be reduced by recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, shall promptly be repaid by the
applicable Indemnitee to the applicable Indemnifying Party.
(e) In the event of payment by an Indemnifying Party to
any Indemnitee in connection with any Claim, such Indemnifying Party shall
be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Claim. Such Indemnitee shall cooperate with
such Indemnifying Party in a reasonable manner, and, at the cost and
expense of such Indemnifying Party, in prosecuting any subrogated right or
claim.
ARTICLE VIII
MISCELLANEOUS
8.1. Defined Terms; Interpretations. The following terms,
as used herein, shall have the following meanings:
"Acquisition Proposal" shall have the meaning ascribed to
such term in the Hexcel Agreement.
"Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"Aggregate Consideration Per Share" shall have the
meaning ascribed thereto in Section 8.2(b)(i).
"Agreement" shall have the meaning ascribed thereto in
the preamble.
"Alternative Transaction" shall have the meaning ascribed
thereto in Section 8.2(b)(ii).
"Beneficially Owning" shall have the meaning ascribed
thereto in the Governance Agreement.
"Ciba" shall have the meaning ascribed thereto in the
recitals.
"Claim" shall have the meaning ascribed thereto in
Section 7.3.
"Closing" shall have the meaning ascribed thereto in
Section 1.2(a).
"Closing Date" shall have the meaning ascribed thereto in
Section 1.2(a).
"Common Stock" shall have the meaning ascribed thereto in
the recitals.
"Company" shall have the meaning ascribed thereto in the
recitals.
"Consent and Termination Agreement" shall have the
meaning ascribed thereto in Section 5.2(j).
"Consents" shall have the meaning ascribed thereto in
Section 4.3.
"Credit Agreement" shall mean the Second Amended and
Restated Credit Agreement, dated as of September 15, 1998, among the
Company, certain of its subsidiaries, the Lenders parties thereto, Citibank
N.A. and Credit Suisse First Boston.
"DGCL" shall mean the Delaware General Corporation Law.
"Drop Dead Date" shall have the meaning ascribed thereto
in Section 6.1(a)(ii).
"Encumbrances" shall have the meaning ascribed thereto in
Section 2.1.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any successor federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at
the time. Reference to a particular section of the Securities Exchange Act
of 1934, as amended, shall include reference to the comparable section, if
any, of any such successor federal statute.
"Fair Market Value" shall have the meaning ascribed
thereto in Section 8.2(b)(iii).
"Governance Agreement" shall have the meaning ascribed
thereto in Section 5.2(d).
"Governmental Entity" shall mean any supernational,
national, foreign, federal, state or local judicial, legislative,
executive, administrative or regulatory body or authority.
"Hexcel Agreement" shall mean the agreement, dated as of
the date hereof, among each of the Purchasers and the Company, attached as
Exhibit J hereto.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
thereunder.
"Indemnifying Party" shall have the meaning ascribed
thereto in Section 7.3.
"Indemnitee" shall have the meaning ascribed thereto in
Section 7.3.
"Indenture" shall have the meaning ascribed thereto in
the Consent and Termination Agreement.
"Independent Directors" shall have the meaning ascribed
thereto in the Hexcel Agreement.
"Investment Company Act" shall mean the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder.
"Investor Indemnified Person" shall have the meaning
ascribed thereto in Section 7.2(a) of the Hexcel Agreement.
"Laws" shall include all foreign, federal, state, and
local laws, statutes, ordinances, rules, regulations, orders, judgments,
decrees and bodies of law.
"Litigation" shall have the meaning ascribed thereto in
Section 8.13.
"Losses" shall mean each and all of the following items:
claims, losses, liabilities, obligations, payments, damages, charges,
judgments, fines, penalties, amounts paid in settlement, costs and expenses
(including, without limitation, interest which may be imposed in connection
therewith, costs and expenses of investigation, actions, suits,
proceedings, demands, assessments and fees, expenses and disbursements of
counsel, consultants and other experts).
"Material Adverse Effect" shall mean a material adverse
effect on the properties, business, operations, results of operations,
earnings, assets, liabilities or condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole; provided, however, that
changes relating to United States or foreign economies in general or the
Company's and its subsidiaries' industries in general and not specifically
relating to the Company or its subsidiaries shall not constitute a Material
Adverse Effect for purposes of this Agreement.
"Notes" shall have the meaning ascribed thereto in
Section 1.1.
"Person" shall mean any individual, firm, corporation,
limited liability company, partnership, company or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Pledge Agreement" shall have the meaning ascribed
thereto in Section 5.2(e).
"Purchase Price" shall have the meaning ascribed thereto
in Section 1.1.
"Purchasers" shall have the meaning ascribed thereto in
the preamble.
"Purchaser Indemnified Person" shall have the meaning
ascribed thereto in Section 7.2(a).
"Registration Rights Agreement" shall have the meaning
ascribed thereto in Section 5.2(d).
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933,
as amended, or any successor federal statute, and the rules and regulations
of the SEC thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Act shall include
reference to the comparable section, if any, of such successor federal
statute.
"Sellers" shall have the meaning ascribed thereto in the
preamble.
"Sellers Indemnified Person" shall have the meaning
ascribed thereto in Section 7.2(b).
"Shares" shall have the meaning ascribed thereto in the
recitals.
"Step-Down Date" shall have the meaning ascribed thereto
in Section 8.2(a).
"Termination Date" shall have the meaning ascribed
thereto in Section 6.1(b).
"Third Party Purchaser" shall have the meaning ascribed
thereto in Section 8.2(b)(iv).
"Transaction Documents" shall mean this Agreement, the
Notes, the Pledge Agreement and all other contracts, agreements, schedules,
certificates and other documents being delivered pursuant to or in
connection with this Agreement or such other documents or the transactions
contemplated hereby or thereby.
8.2. Fees and Expenses. (a) Except as provided in this
Section 8.2, all costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such costs or expense. At
the Closing, Ciba and the Sellers shall reimburse the Purchasers for their
reasonable costs and expenses (including the fees and expenses of its
counsel) incurred in connection with this Agreement and the transactions
contemplated hereby, in an amount not to exceed $500,000. In addition, if
the transactions contemplated by this Agreement are not consummated by
reason of the failure of Ciba or any Seller to perform its obligations
hereunder, then (i) on the Termination Date, Ciba and the Sellers shall pay
to the Purchasers an amount in cash equal to the Purchasers' reasonable
costs and expenses (including the fees and expenses of its counsel)
incurred in connection with this Agreement and the transactions
contemplated hereby in an amount not to exceed $1,000,000 in the aggregate
and (ii) (A) if any Alternative Transaction is consummated on or prior to
March 1, 2001 (the "Step-Down Date") or thereafter pursuant to a definitive
agreement executed on or prior to the Step-Down Date, Ciba and the Sellers
shall pay the Purchasers an amount in cash equal to the product of (x) the
number of Shares sold, transferred or otherwise disposed of in such
Alternative Transaction, multiplied by (y) 25% of the Aggregate
Consideration Per Share in excess of $11.00, or (B) if any Alternative
Transaction is consummated after the Step-Down Date and on or prior to June
1, 2001 (in a transaction to which clause (A) does not apply), or
thereafter pursuant to a definitive agreement executed after the Step-Down
Date and on or prior to June 1, 2001, Ciba and the Sellers shall pay the
Purchasers an amount in cash equal to the product of (x) the number of
shares sold, transferred or otherwise disposed of in such Alternative
Transaction, multiplied by (y) 10% of the Aggregate Consideration Per Share
in excess of $11.00. Any amounts payable by Ciba and the Sellers to the
Purchasers pursuant to clause (ii) above shall be paid to the Purchasers no
later than the first business day after the closing of each Alternative
Transaction to which such clause (ii) applies; provided, however, that in
no event shall any amounts be paid pursuant to clause (ii) above if any
Alternative Transaction to which clause (ii) applies does not close.
(b) Notwithstanding anything to the contrary contained
herein, if (i) the Hexcel Agreement is terminated by the Company by a vote
of the Independent Directors pursuant to Section 6.1 thereof upon execution
of a definitive agreement with respect to an Acquisition Proposal, and (ii)
the transactions contemplated by such Acquisition Proposal are consummated
on or prior to the date that is 21 business days following the first
anniversary of the date hereof without the Closing hereunder having
occurred, then Ciba and the Sellers shall pay the Purchasers no later than
the first business day after the closing of such transactions, an amount in
cash equal to the product of (i) the lesser of (A) the number of Shares
sold, transferred or otherwise disposed of in such Acquisition Proposal and
(B) the number of Shares being purchased by the Purchasers hereunder,
multiplied by (ii) 100% of the Aggregate Consideration Per Share in excess
of $11.00.
(c) For purposes of this Section 8.2:
(i) "Aggregate Consideration Per Share" shall mean the
amount per Share payable to any Seller and/or any of its
Affiliates pursuant to any Alternative Transaction or Acquisition
Proposal. The amount per Share payable with respect to any
Alternative Transaction or Acquisition Proposal shall be
determined by dividing (A) the sum of (x) all cash amounts payable
to any Seller and/or any of its Affiliates and (y) the Fair Market
Value of all securities, property or other consideration payable
to any Seller and/or any of its Affiliates, in each case pursuant
to such Alternative Transaction or Acquisition Proposal by (B) the
number of Shares sold, transferred or otherwise disposed of
pursuant to such Alternative Transaction or Acquisition Proposal.
(ii) "Alternative Transaction" shall mean any sale,
transfer or other disposition of all or any portion of the Shares
by any Seller and/or any of its Affiliates to a Third Party
Purchaser.
(iii) "Fair Market Value" shall mean (a) with respect to
securities (i) listed for trading on a national securities
exchange or admitted for trading on a national market system,
either (x) the closing price quoted on the principal securities
exchange on which such securities are listed for trading or (y) if
not so listed, the average of the closing bid and asked prices for
such securities quoted on the national market system on which such
securities are admitted for trading, each as published in the
Eastern Edition of The Wall Street Journal, in each case for the
ten (10) trading days prior to the date such securities are
delivered to Ciba or the Sellers or (ii) not listed for trading on
a national securities exchange or admitted for trading on a
national market system, the fair market value of such securities
as determined in good faith from time to time according to the
mutual agreement of the Purchasers, Ciba and the Sellers;
provided, however, in the event that Ciba, the Purchasers and the
Sellers are unable to reach an agreement as to the fair market
value of such securities, the fair market value of such securities
will be determined by a neutral third party mutually agreed upon
by the Purchasers, Ciba and the Sellers, with such determination
by the neutral third party being binding on the Purchasers, Ciba
and the Sellers and not subject to any recourse or appeal or (b)
with respect to any other property, the fair market value of such
property as determined in good faith from time to time according
to the mutual agreement of the Purchasers, Ciba and the Sellers;
provided, however, in the event that the Purchasers, Ciba and the
Sellers are unable to reach an agreement as to the fair market
value of such property, the fair market value of such property
will be determined by a neutral third party mutually agreed upon
by the Purchasers, Ciba and the Sellers, with such determination
by the neutral third party being binding on the Purchasers, Ciba
and the Sellers and not subject to any recourse or appeal.
(iv) "Third Party Purchaser" shall mean any Person other
than Ciba, any Seller or any Affiliates of Ciba or any Seller.
8.3. Public Announcements. The Purchasers, Ciba and the
Sellers shall consult with each other before issuing any press release with
respect to this Agreement or the transactions contemplated hereby and
neither shall issue any such press release, make any such public statement
or make any filings required by Law without the prior consent of the other,
which consent shall not be unreasonably withheld or delayed; provided,
however, that a party may, without the prior consent of the other party,
issue such press release, make such public statement or make such required
filing as may upon the advice of counsel be required by Law or any exchange
on which Ciba or the Sellers' securities are listed and, to the extent time
permits, it has used all reasonable efforts to consult with the other party
prior thereto.
8.4. Further Assurances. At any time or from time to time
after the Closing, Ciba and the Sellers, on the one hand, and the
Purchasers, on the other hand, agree to cooperate with each other, and at
the request of the other party, to execute and deliver any further
instruments or documents and to take all such further action as the other
party may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated hereby or by the other
Transaction Documents and to otherwise carry out the intent of the parties
hereunder or thereunder.
8.5. Successors and Assigns. This Agreement shall bind
and inure to the benefit of Ciba, the Sellers and the Purchasers and the
respective successors, permitted assigns, heirs and personal
representatives of Ciba, the Sellers and the Purchasers, provided that
prior to the Closing none of Ciba or the Sellers may assign its rights or
obligations under this Agreement to any Person without the prior written
consent of the Purchasers, and provided further that the Purchasers may not
assign their rights or obligations under this Agreement to any Person
(other than an Affiliate of such Purchaser) without the prior written
consent of Ciba and the Sellers. In addition, and whether or not any
express assignment has been made, the provisions of this Agreement which
are for the Purchasers' benefit as Purchasers or holders of the Shares are
also for the benefit of, and enforceable by, any Affiliates of the
Purchasers who hold such Shares and received such Shares in accordance with
the terms of this Agreement.
8.6. Entire Agreement. This Agreement and the other
Transaction Documents contain the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings with respect thereto,
including, without limitation, the Letter Agreement, dated September 1,
2000, between GS Capital Partners 2000, L.P. and Ciba Specialty Chemicals
Holding Inc. and Ciba Specialty Chemicals Corporation, as amended prior to
the date hereof.
8.7. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or
certified mail, return receipt requested, postage prepaid, addressed to
such party at the address set forth below or such other address as may
hereafter be designated in writing by such party to the other parties:
(i) if to Ciba and the Sellers, to each
of the following addresses:
Ciba Specialty Chemicals Holding Inc.
Xxxxxxxxxxxxxx 000
XX - 0000, Xxxxx
Xxxxxxxxxxx
Telecopy No.: 00-00-000-0000
Attention: Xxxxxx Xxxxx, Esq.
Ciba Specialty Chemicals Inc.
Xxxxxxxxxxxxxx 000
XX - 0000, Xxxxx
Xxxxxxxxxxx
Telecopy No.: 00-00-000-0000
Attention: Xxxxxx Xxxxx, Esq.
Ciba Specialty Chemicals Corporation
X.X. Xxx 0000
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxxxxx
Xxxx X. XxXxxx, Esq.
with a copy to (which shall not
constitute notice):
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(ii) if to the Purchasers, to:
c/o Goldman Xxxxx Capital Partners 2000, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxxx
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
All such notices, requests, consents and other
communications shall be deemed to have been given or made if and when
delivered personally or by overnight courier to the parties at the above
addresses or sent by electronic transmission, with confirmation received,
to the telecopy numbers specified above (or at such other address or
telecopy number for a party as shall be specified by like notice).
8.8. Amendments. The terms and provisions of this
Agreement may be modified or amended, or any of the provisions hereof
waived, temporarily or permanently, in a writing executed and delivered by
Ciba, the Sellers and the Purchasers. No waiver of any of the provisions of
this Agreement shall be deemed to or shall constitute a waiver of any other
provision hereof (whether or not similar). No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof.
8.9. Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart hereof shall be deemed to
be an original instrument, but all such counterparts together shall
constitute but one agreement.
8.10. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of this Agreement.
8.11. Nouns and Pronouns. Whenever the context may
require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of names and
pronouns shall include the plural and vice versa.
8.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
8.13. Submission to Jurisdiction. Each of the parties
hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of New York and of the
United States of America, in each case located in the County of New York,
for any claim, action, suit, investigation or proceeding ("Litigation")
arising out of or relating to this Agreement or the other Transaction
Documents and the transactions contemplated hereby and thereby (and agrees
not to commence any Litigation relating hereto or thereto except in such
courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in
this Agreement shall be effective service of process for any Litigation
brought against it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue
of any Litigation arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United
States of America, in each case located in the County of New York, hereby
further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Litigation brought in any such court
has been brought in an inconvenient forum.
8.14. WAIVER OF JURY TRIAL. CIBA, THE SELLERS AND THE
PURCHASERS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTION DOCUMENTS.
8.15. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and
valid, but if any provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
render invalid or unenforceable any other provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed
and delivered this Agreement as of the date first above written.
LXH, L.L.C.
By:
----------------------------------------------------------
Name
Title:
LXH II, L.L.C.
By:
----------------------------------------------------------
Name
Title:
CIBA SPECIALTY CHEMICALS HOLDING INC.
By:_________________________
Name:
Title:
CIBA SPECIALTY CHEMICALS INC.
By:_________________________
Name:
Title:
CIBA SPECIALTY CHEMICALS CORPORATION
By:_________________________
Name:
Title:
Exhibit B to Exhibit 10.1
GOVERNANCE AGREEMENT
dated as of
[ ], 2000
among
LXH, L.L.C.,
LXH II, L.L.C.,
Hexcel Corporation
and
The Other Parties Listed
on the Signature Pages Hereto
GOVERNANCE AGREEMENT dated as of [ ], 2000, among LXH, L.L.C., a
Delaware limited liability company ("LXH"), LXH II, L.L.C., a Delaware
limited liability company ("LXH II"), HEXCEL CORPORATION, a Delaware
corporation ("Hexcel"), and the other parties listed on the signature pages
hereto (the "Limited Partnerships").
WHEREAS, LXH, LXH II, Ciba Specialty Chemicals Holding Inc., Ciba
Specialty Chemicals Inc. and Ciba Specialty Chemicals Corporation are
parties to a Stock Purchase Agreement dated as of October 11, 2000 (the
"Purchase Agreement"), and have consummated the transactions contemplated
therein (the "Transactions"), whereby the Investors (as such term is
defined below) now Beneficially Own approximately 39.3% of the Total Voting
Power of Hexcel (as such terms are defined below); and
WHEREAS the parties hereto wish to further establish the nature of
their relationship and set forth their agreement concerning the governance
of Hexcel following consummation of the Transactions as well as certain
matters relating to the Investors' ownership of Voting Securities (as such
term is defined below).
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
"ADDITIONAL SHARES" means, as of any date of determination, up to
255,381 shares of Hexcel Common Stock (as equitably adjusted to reflect any
stock split, combination, reorganization, recapitalization,
reclassification or other similar event involving the Hexcel Common Stock)
the Beneficial Ownership of which may be acquired inadvertently from time
to time by The Xxxxxxx Xxxxx Group, Inc. or its Affiliates acting in
connection with their activities as a broker or dealer registered under
Section 15 of the Exchange Act or as an asset manager (excluding Affiliates
formed for the purpose of effecting principal transactions); provided, that
if and for so long as The Xxxxxxx Sachs Group, Inc. and its Affiliates
collectively Beneficially Own less than 30% of the Total Voting Power of
Hexcel, the maximum number of Additional Shares shall be 400,000 (as
equitably adjusted to reflect any stock split, combination, reorganization,
recapitalization, reclassification or other similar event involving the
Hexcel Common Stock).
An "AFFILIATE" of any Person means 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. "CONTROL" has the
meaning specified in Rule 12b-2 under the Exchange Act as in effect on the
date of this Agreement.
Any Person shall be deemed to "BENEFICIALLY OWN", to have "BENEFICIAL
OWNERSHIP" of, or to be "BENEFICIALLY OWNING" any securities (which
securities shall also be deemed "BENEFICIALLY OWNED" by
such Person) that such Person is deemed to "beneficially own" within the
meaning of Rule 13d-3 and 13d-5 under the Exchange Act as in effect on the
date of this Agreement; provided that, except for the rights set forth in
Section 3.02 hereof, any Person shall be deemed to Beneficially Own any
securities that such Person has the right to acquire, whether or not such
right is exercisable immediately.
"BOARD" means the board of directors of Hexcel.
"BROAD DISTRIBUTION" with respect to Voting Securities, means a
distribution of Voting Securities that, to the knowledge, after due
inquiry, of the Person on whose behalf such distribution is being made,
will not result in the acquisition by any other Person of Beneficial
Ownership of any such Voting Securities to the extent that, after giving
effect to such acquisition, such acquiring Person (other than any Investor
and other than any underwriter acting in such capacity in an underwritten
public offering of Hexcel Common Stock) would Beneficially Own in excess of
5% of the Total Voting Power of Hexcel.
"BUYOUT TRANSACTION" means a tender offer, merger or any similar
transaction that offers holders of Voting Securities (other than, if
applicable, the Person proposing such transaction) the opportunity to
dispose of the Voting Securities Beneficially Owned by such holders or
otherwise contemplates the acquisition by any Person or Group of Voting
Securities that would result in Beneficial Ownership by such Person or
Group of a majority of the Voting Securities outstanding, or a sale of all
or substantially all of Hexcel's assets.
"CHAIRMAN" means the Chairman of the Board and Chief Executive
Officer of Hexcel.
"CLOSING DATE" means the date of the closing of the Transactions.
"CUSTOMARY ACQUISITION/CONTROL PREMIUM" means the
aggregate realizable value for all Voting Securities (including Voting
Securities owned by the Investors), assuming a sale of Hexcel in its
entirety in a transaction or series of related transactions to a third
party or parties on an arm's length basis in a controlled auction process
designed to maximize shareholder value by attracting all possible bidders,
including the Investors and their Affiliates.
"DEBT INSTRUMENTS" shall mean (i) Hexcel's Second Amended and
Restated Credit Agreement, dated as of September 15, 1998, as amended from
time to time, or any replacement thereof and (ii) the Indenture, dated as
of January 21, 1999, relating to Hexcel's 9-3/4% Senior Subordinated Notes
Due 2009.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GOVERNMENTAL ENTITY" means any court, administrative agency,
regulatory body, commission or other governmental authority, board, bureau
or instrumentality, domestic or foreign and any subdivision thereof.
"GROUP" has the meaning set forth in Section 13(d) of the Exchange
Act as in effect on the date of this Agreement.
"GS CAPITAL" shall mean GS Capital Partners 2000 L.P., a Delaware
limited partnership.
"HEXCEL" has the meaning set forth in the recitals to this Agreement.
"HEXCEL COMMON STOCK" means the common stock of Hexcel, par
value $0.01 per share, and any equity securities issued or issuable in
exchange for or with respect to the Common Stock by way of a stock
dividend, stock split or combination of shares or in connection with a
reclassification, recapitalization, merger, consolidation or other
reorganization.
"HEXCEL OPTION PERIOD" means the 6 month period following the first
anniversary of the Closing Date.
"INDEMNIFIED INDIVIDUALS" means each of the individuals who at any
time were officers and directors of Hexcel and their respective heirs and
personal and legal representatives.
"INDEPENDENT DIRECTOR" means a director of Hexcel who is not an
Investors' Director and who (i) is not and has never been an officer,
employee or director of any of the Investors or their Affiliates or
associates (as defined in Rule 12b-2 under the Exchange Act), in each case
other than Hexcel, and (ii) has no affiliation or compensation, consulting
or contractual relationship with any of the Investors or their Affiliates
or associates (in each case other than Hexcel) such that a reasonable
person would regard such director as likely to be unduly influenced by any
of such Persons or any of their Affiliates or associates (in each case
other than Hexcel).
"INITIAL INVESTORS' SHARES" means the [ ] shares of Hexcel Common
Stock initially sold by Ciba Specialty Chemicals Inc. and Ciba Specialty
Chemicals Corporation pursuant to the Purchase Agreement (as equitably
adjusted to reflect any stock split, combination, reorganization,
recapitalization, reclassification or other similar event involving the
Initial Investors' shares).
"INVESTOR BUYOUT TRANSACTION" means a Buyout Transaction by
the Investors or their Affiliates or any other Person acting on behalf of
the Investors or their Affiliates, or any Person who is part of a Group
with the Investors, involving the acquisition of all (but not less than
all) Voting Securities held by the Other Holders, provided that all Other
Holders are entitled to receive Requisite Consideration upon consummation
of such Buyout Transaction.
"INVESTORS" means (i) LXH, (ii) LXH II, (iii) each of the Limited
Partnerships, (iv) The Xxxxxxx Xxxxx Group, Inc., or any direct or indirect
Subsidiary of The Xxxxxxx Sachs Group, Inc. formed for the purpose of
effecting principal transactions, and (v) subject to the approval of a
majority of the Independent Directors, one other Person designated within
90 days following the Closing Date by LXH or LXH II as a proposed
transferee of up to 2,200,000 shares of Hexcel Common Stock; provided, that
any of the foregoing Persons shall be an Investor only for so long as it
Beneficially Owns Voting Securities subject to the provisions of this
Agreement or is a transferee of Voting Securities pursuant to Section
4.01(a)(i); provided, further, that any such Person specified in clause
(iv) or (v) that acquires Voting Securities in accordance with this
Agreement shall execute a joinder in which it shall agree to be bound by
the provisions of this Agreement to the same extent as the Investors and
shall thereafter be deemed to be an "Investor" for all purposes of this
Agreement.
"INVESTORS' DIRECTORS" means Investors' Nominees who are elected or
appointed to serve as members of the Board in accordance with this
Agreement.
"INVESTORS' NOMINEES" means such Persons as are so designated by GS
Capital or LXH II, as such designations may change from time to time in
accordance with this Agreement, to serve as members of the Board pursuant
to Section 2.02 hereof.
"ORDINARY COURSE BROKER DEALER SHARES" means those shares of Hexcel
Common Stock which are acquired by any Person solely in connection with the
activities of a broker or dealer registered under Section 15 of the
Exchange Act (i) as a result of underwriting activities in connection with
a registration statement filed by Hexcel (including any shares acquired for
the investment account of a broker or dealer in connection with such
underwriting activities), (ii) as a result of the exercise of investment or
voting discretion authority with respect to any of such Person's customer
accounts, or (iii) in good faith in connection with a debt previously
contracted; provided, in each case, that the Person engaging in such
activities does not Beneficially Own such shares of Hexcel Common Stock.
"OTHER HOLDERS" means the holders of the Other Shares.
"OTHER SHARES" means Voting Securities not Beneficially Owned by the
Investors.
"PERSON" means any individual, Group, corporation, firm, partnership,
joint venture, trust, business association, organization, Governmental
Entity or other entity.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of the date hereof between LXH, LXH II and Hexcel.
"REQUISITE CONSIDERATION" means consideration that is (i) approved by
(x) a majority of the Independent Directors acting solely in the interests
of the Other Holders, after the receipt of an opinion of an independent
nationally recognized investment banking firm retained by them or (y) a
majority in interest of the Other Holders by means of a Stockholder Vote
solicited pursuant to a proxy statement containing the information required
by Schedule 14A under the Exchange Act (it being understood that the
Independent Directors shall, consistent with their fiduciary duties, be
free to include in such proxy statement, if applicable, the reasons
underlying any failure by them to approve a Buyout Transaction by the
requisite vote, including whether a fairness opinion was sought by the
Independent Directors and any opinions or recommendations expressed in
connection therewith) and (ii) in the opinion of an independent nationally
recognized investment banking firm (including such a firm retained by the
Investor), fair to the Other Holders from a financial point of view. In
connection with the retention of any investment banking firm referred to
herein, the Independent Directors shall instruct such investment banking
firm, unless the Independent Directors conclude, after consultation with
their outside legal and financial advisors, that such instructions are not
appropriate, to (a) value Hexcel's businesses taking into account a premium
for control and (b) assume for purposes of such opinion that the Other
Holders are entitled to their proportionate part of a Customary
Acquisition/Control Premium.
"SEC" means the Securities and Exchange Commission or any successor
Governmental Entity.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02 of
Regulation S-X under the Securities Act as in effect on the date of this
Agreement.
"STANDSTILL PERIOD" means the three-year period commencing on the
Closing Date.
"STOCKHOLDER VOTE" means as to any matter to be presented to holders
of Voting Securities, a vote at a duly called and held annual or special
meeting of the holders of Voting Securities entitled to vote on such
matter.
"SUBSIDIARY" means, with respect to any Person, as of any date of
determination, any other Person as to which such Person owns, directly or
indirectly, or otherwise controls, more than 50% of the voting shares or
other similar interests.
"THIRD PARTY OFFER" means a bona fide offer to enter into a Buyout
Transaction by a Person other than the Investors or any of their
Affiliates, any other Person acting on behalf of the Investors or any of
their Affiliates, or any Person who is part of a Group with the Investors
or any of their Affiliates, that does not treat the Investors or their
Affiliates differently than the Other Holders.
"TOTAL VOTING POWER OF HEXCEL" means the total number of votes that
may be cast in the election of directors of Hexcel if all Voting Securities
outstanding or treated as outstanding pursuant to the final sentence of
this definition were present and voted at a meeting held for such purpose.
The percentage of the Total Voting Power of Hexcel Beneficially Owned by
any Person is the percentage of the Total Voting Power of Hexcel that is
represented by the total number of votes that may be cast in the election
of directors of Hexcel by Voting Securities Beneficially Owned by such
Person. In calculating such percentage, the Voting Securities Beneficially
Owned by any Person that are not outstanding but are subject to issuance
upon exercise or exchange of rights of conversion or any options, warrants
or other rights Beneficially Owned by such Person shall be deemed to be
outstanding for the purpose of computing the percentage of the Total Voting
Power represented by Voting Securities Beneficially Owned by such Person,
but shall not be deemed to be outstanding for the purpose of computing the
percentage of the Total Voting Power represented by Voting Securities
Beneficially Owned by any other Person.
"TRANSACTIONS" has the meaning set forth in the recitals to this
Agreement.
"VOTING SECURITIES" means Hexcel Common Stock and any other
securities of Hexcel or any Subsidiary of Hexcel entitled to vote generally
in the election of directors of Hexcel or such Subsidiary of Hexcel.
ARTICLE II
CORPORATE GOVERNANCE
SECTION 2.01 BOARD OF DIRECTORS. The Board shall
consist of ten members, one of whom shall be the Chairman.
SECTION 2.02 INVESTORS BOARD REPRESENTATION. (a) Subject to
Section 2.05(c), for so long as the Investors Beneficially Own 20% or more
of the Total Voting Power of Hexcel, the parties hereto shall exercise all
authority under applicable law to cause any slate of directors presented to
stockholders for election to the Board to consist of such nominees that, if
elected, would result in the Board consisting of three Investors'
Directors, the Chairman and six additional Independent Directors; provided,
however, that if the Investors, directly or indirectly, during the term of
this Agreement shall have sold, transferred or otherwise disposed of, on a
cumulative basis, Beneficial Ownership of such number of shares
representing 331/3% or more of the Initial Investors' Shares to Persons
that are not Investors, then the parties hereto shall exercise all
authority under applicable law to cause any slate of directors presented to
stockholders for election to the Board to consist of such nominees that, if
elected, would result in the Board consisting of two Investors' Directors,
the Chairman and seven additional Independent Directors.
(b) Subject to Section 2.05(c), for so long as the Investors
Beneficially Own less than 20% but at least 15% of the Total Voting Power
of Hexcel, the parties hereto shall exercise all authority under applicable
law to cause any slate of directors presented to stockholders for election
to the Board to consist of such nominees that, if elected, would result in
the Board consisting of two Investors' Directors, the Chairman and seven
additional Independent Directors; provided, however, that if the Investors,
directly or indirectly, during the term of this Agreement shall have sold,
transferred or otherwise disposed of, on a cumulative basis, Beneficial
Ownership of such number of shares of Hexcel Common Stock representing
662/3% of the Initial Investors' Shares to Persons that are not Investors,
then the parties hereto shall exercise all authority under applicable law
to cause any slate of directors presented to stockholders for election to
the Board to consist of such nominees that, if elected, would result in the
Board consisting of one Investors' Director, the Chairman and eight
additional Independent Directors.
(c) Subject to Section 2.05(c), for so long as the Investors
Beneficially Own less than 15% but at least 10% of the Total Voting Power
of Hexcel, the parties hereto shall exercise all authority under applicable
law to cause any slate of directors presented to stockholders for election
to the Board to consist of such nominees that, if elected, would result in
the Board consisting of one Investors' Director, the Chairman and eight
additional Independent Directors.
(d) In order to determine (x) the number of Investors' Nominees to be
included in any slate of directors to be presented to stockholders for
election to the Board and (y) the percentage of the Total Voting Power of
Hexcel Beneficially Owned by the Investors for purposes of Section 2.06,
the Investors shall be deemed to Beneficially Own a percentage of the Total
Voting Power of Hexcel that is no more than (1) 39.3% of the Total Voting
Power of Hexcel less (2) the percentage of the Total Voting Power of Hexcel
represented by any Voting Securities disposed of, directly or indirectly,
by the Investors to Persons that are not Investors since the Closing Date.
(e) The Additional Shares shall not be included in any calculation
of the Investors' Beneficial Ownership of the Total Voting Power of Hexcel
under this Agreement.
SECTION 2.03 DESIGNATION OF SLATE. (a) Any Investors' Nominees
that are included in a slate of directors pursuant to Section 2.02 shall be
designated as provided in this Section 2.03, and any Independent Director
nominees who are to be included in any slate of directors pursuant to
Section 2.02 shall be designated by majority vote by the then incumbent
Independent Directors (including the Chairman if he or she is an
Independent Director). Hexcel's nominating committee, if any (or if there
is no such nominating committee, the Board or any other duly authorized
committee thereof), shall nominate each person so designated. The initial
Investors' Nominees shall be Xxxxxxx Xxxxx (appointed by GS Capital), and [
] (appointed by GS Capital) and [ ] (appointed by LXH II). The initial
Chairman shall be Xxxx X. Xxx. Upon consummation of the Transactions, the
number of directors constituting the entire Board will be fixed at ten and
simultaneously herewith a sufficient number of the then serving members of
the Board will resign in order to permit the appointment of the initial
Investors' Nominees to fill the vacancies thereby created. The remaining
members of the Board shall be Xxxxxx X. Xxxxx, Xxxxxxxx X. Xxxxxx, Xxxxx
Xxxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx and one additional Independent
Director.
(b) The parties hereby agree that for so long as (i) the Investors
are permitted to designate three Investors' Directors pursuant to this
Agreement, two directors shall be designated by GS Capital and one director
shall be designated by LXH II, (ii) the Investors are permitted to
designate two Investors' Directors pursuant to this Agreement, one director
shall be designated by GS Capital and one director shall be designated by
LXH II and (iii) the Investors are permitted to designate one Investors'
Director pursuant to this Agreement, that director shall be designated by
GS Capital.
(c) If, for any reason, all of the Investors' Directors designated by
GS Capital pursuant to Section 2.02 and this Section 2.03 are not elected
to the Board by stockholders, then Hexcel shall exercise all authority
under applicable law to cause any person designated by GS Capital to be
elected to the Board, and during any such absence of membership on the
Board, Hexcel shall, after receiving notice from GS Capital as to the
identity of a representative of GS Capital, (i) permit such representative
to attend all Board meetings (other than meetings solely of the Independent
Directors) and to the extent contemplated by Section 2.04 all committees
thereof as an observer; (ii) provide such representative advance notice of
each such meeting, including such meeting's time and place, at the same
time and in the same manner as such notice is provided to the members of
the Board (or such committee thereof); (iii) provide such representative
with copies of all materials, including notices, minutes and consents,
distributed to the members of the Board (or such committee thereof) at the
same time as such materials are distributed to such Board (or such
committee thereof) and shall permit such representative to have the same
access to information concerning the business and operations of Hexcel as
such representative would have had as an Investors' Director; and (iv) on a
basis consistent with the members of the Board, permit such representative
to discuss the affairs, finances and accounts of Hexcel with, and to make
proposals and furnish advice with respect thereto, the Board, without
voting; provided, in each case, that such representative agrees in writing
to maintain the confidentiality of all materials and information provided
to him pursuant to this Section 2.03(c) and to return to Hexcel all such
materials and information at such time as such representative ceases to act
as a representative pursuant to this Section 2.03(c).
SECTION 2.04 COMMITTEE MEMBERSHIP. So long as the
Investors shall be entitled to designate two or more Investors' Directors
for election to the Board, each committee of the Board, including the
finance, audit, nominating, and compensation committees shall consist of at
least one Investors' Director; provided, however, that if no Investors'
Director is "independent" as defined by the listing standards of the New
York Stock Exchange, then the audit committee of the Board shall consist
solely of Independent Directors.
SECTION 2.05 RESIGNATIONS AND REPLACEMENTS. (a) If at any time
a member of the Board resigns (pursuant to this Section 2.05 or otherwise)
or is removed in accordance with applicable law or Hexcel's by-laws, a new
member shall be designated to replace such member until the next election
of directors. If consistent with Section 2.02 the replacement director is
to be an Investors' Director, the party that designated such Investors'
Director shall designate the replacement Investors' Director. If the former
member was the Chairman, the replacement Chairman shall be the replacement.
Except as set forth in paragraph (c) below, if consistent with Section
2.02, the replacement director is to be an Independent Director (other than
the Chairman), the remaining Independent Directors (including the Chairman
if he or she is an Independent Director) shall designate the replacement
Independent Director.
(b) Subject to paragraph (c) below, if at any time the number of
Investors' Nominees entitled to be nominated to the Board in accordance
with this Agreement in an election of directors presented to stockholders
would decrease, within 10 days thereafter GS Capital and the Investors
shall cause a sufficient number of Investors' Directors to resign from the
Board so that the number of Investors' Directors on the Board after such
resignation(s) equals the number of Investors' Nominees that GS Capital and
the Investors would have been entitled to designate had an election of
directors taken place at such time. GS Capital and the Investors shall also
cause a sufficient number of Investors' Directors to resign from any
relevant committees of the Board so that such committees are comprised in
the manner contemplated by Section 2.04 after giving effect to such
resignations. Any vacancies created by the resignations required by this
Section 2.05(b) shall be filled by Independent Directors.
(c) If at any time the percentage of the Total Voting Power of Hexcel
Beneficially Owned by the Investors decreases as a result of an issuance of
Voting Securities by Hexcel (other than any of the issuances described in
the last sentence of this Section 2.05(c)), the Investors may notify Hexcel
that the Investors intend to acquire a sufficient amount of additional
Voting Securities in accordance with this Agreement necessary to maintain
their then current level of Board representation within 90 days. In such
event, until the end of such period (and thereafter if the Investors in
fact restore their percentage of the Total Voting Power of Hexcel during
such period and provided that the Investors continue to maintain the
requisite level of Beneficial Ownership of Voting Securities in accordance
with Section 2.02) the Board shall continue to have the number of
Investors' Directors that corresponds to the percentage of the Total Voting
Power of Hexcel Beneficially Owned by the Investors prior to such issuance
of Voting Securities by Hexcel. Notwithstanding any provision herein to the
contrary, the provisions of this Section 2.05(c) shall not apply to any
issuance of Voting Securities (x) in connection with the registered public
offering of up to 6,900,000 shares of Hexcel Common Stock permitted by
Section 2.06(iv) of this Agreement, (y) upon conversion of any convertible
securities which are either outstanding on the date hereof or approved by
the Board or a duly authorized committee of the Board after the date hereof
in accordance with Section 2.06 hereof, or (z) pursuant to employee or
director stock option or incentive compensation or similar plans
outstanding as of the date hereof or, subsequent to the date hereof,
approved by the Board or a duly authorized committee of the Board.
SECTION 2.06 APPROVALS. The Board shall not authorize, approve
or ratify any of the following actions without the approval of a majority
of the Investors' Directors for so long as (subject to the provisions of
Section 2.02(d)) the Investors Beneficially Own 15% or more of the Total
Voting Power of Hexcel and, if the Investors' collective percentage
Beneficial Ownership of the Total Voting Power of Hexcel is reduced below
15% by an issuance of Voting Securities by Hexcel, until (x) 10 business
days after Hexcel notifies the Investors in writing of such issuance, and
(y) if the Investors shall have notified Hexcel within 10 business days
after their receipt of a written notification of such issuance that the
Investors, pursuant to the option granted to the Investors by Section 3.02
of this Agreement, intend to acquire a sufficient amount of Voting
Securities within such 90-day period referred to therein, so that the
Investors will collectively Beneficially Own at least 15% of the Total
Voting Power of Hexcel by the end of such 90-day period, subject to Section
2.05(c), during the 90-day period following an issuance of Voting
Securities by Hexcel that causes the Investors to collectively Beneficially
Own less than 15% of the Total Voting Power of Hexcel:
(i) any merger, consolidation, acquisition or other business
combination involving Hexcel or any Subsidiary of Hexcel (other than
a Buyout Transaction) if the value of the consideration to be paid or
received by Hexcel and/or its stockholders in any such individual
transaction or in such transaction when added to the aggregate value
of the consideration paid or received by Hexcel and/or its
stockholders in all other such transactions approved by the Board
during the immediately preceding 12 months exceeds the greater of (x)
$150 million or (y) 11% of Hexcel's total consolidated assets;
(ii) any Buyout Transaction; provided, however, that the
Investors' Directors approval rights pursuant to this clause (ii)
shall apply only for the 18 month period following the Closing Date;
(iii) any sale, transfer, assignment, conveyance, lease or
other disposition or any series of related dispositions of any
assets, business or operations of Hexcel or any of its Subsidiaries
(other than a Buyout Transaction) if the value of the assets,
business or operations so disposed during the immediately preceding
12 months exceeds the greater of (x) $150 million or (y) 11% of
Hexcel's total consolidated assets;
(iv) any issuance by Hexcel or any Significant Subsidiary of
Hexcel of equity or equity-related securities (other than (1)
pursuant to customary employee or director stock option or incentive
compensation or similar plans approved by the Board or a duly
authorized committee of the Board, (2) pursuant to transactions
solely among Hexcel and its wholly owned Subsidiaries (including any
Subsidiaries which would be wholly owned by Hexcel but for the
issuance of directors' or shareholders' qualifying shares), (3) upon
conversion of convertible securities or upon exercise of warrants or
options, which convertible securities, warrants or options are either
outstanding on the date of this Agreement or approved by the Board or
a duly authorized committee of the Board after the date of this
Agreement in accordance with this Section 2.06, or (4) in connection
with any mergers, consolidations, acquisitions or other business
combinations involving Hexcel or any Subsidiary of Hexcel which are
approved by the Board or a duly authorized committee of the Board in
accordance with this Section 2.06 (if applicable)) for which the
consideration received by Hexcel for such transactions during the
immediately preceding 12 months exceeds the greater of (x) $150
million or (y) 11% of Hexcel's total consolidated assets; provided,
however, that during the 12 month period following the Closing Date,
neither Hexcel nor any Subsidiary of Hexcel may issue shares of
Hexcel Common Stock in a registered public offering under the
Securities Act, in a private placement or otherwise without the
approval of a majority of the Investors' Directors unless the
aggregate number of shares issued during this 12 month period does
not exceed 6,900,000 and the offering price of such shares is
unanimously approved by a pricing committee of the Board, such
committee consisting solely of one Investors' Director, the Chairman
and one additional Independent Director (selected by the Independent
Directors).
SECTION 2.07 SOLICITATION AND VOTING OF SHARES. (a) Hexcel
shall use commercially reasonable efforts to solicit from the stockholders
of Hexcel eligible to vote for the election of directors proxies in favor
of the Board nominees selected in accordance with Section 2.02.
(b) In any election of directors or at any meeting of the
stockholders of Hexcel called expressly for the removal of directors, for
so long as the Board includes (and will include after any such removal) the
Investors' Directors contemplated by Section 2.02, the Investors shall be
present for purposes of establishing a quorum and shall vote all their
Voting Securities entitled to vote (1) in favor of any nominee or director
selected in accordance with Section 2.02 and (2) against the removal of any
director designated in accordance with Section 2.02. Except as provided
above and in Section 3.03, the Investors shall be free to vote in their
sole discretion all their Voting Securities entitled to vote on any other
matter submitted to or acted upon by stockholders; provided, however, that
the Investors shall vote against any amendment to Hexcel's certificate of
incorporation with respect to the directors' and officers' indemnification
provisions contained therein which would adversely affect the rights
thereunder of the Indemnified Individuals at any time prior to such vote,
except for such modifications as are required by applicable law.
SECTION 2.08 BY-LAWS; RESTRICTIONS ON COMPANY ACTION;
ANTI-TAKEOVER MEASURES. (a) Hexcel shall cause the amendment of its by-laws
to reflect the provisions of Article II of this Agreement and such other
matters as the parties may reasonably agree. The form of such amended
by-laws is attached hereto as Exhibit A. Those by-laws reflecting the
provisions of Article II of this Agreement shall not thereafter be amended
during the term of this Agreement except with the Investor's written
consent. Hexcel and the Investors shall each take or cause to be taken all
lawful action necessary to ensure at all times that Hexcel's certificate of
incorporation and by-laws are not at any time inconsistent with the
provisions of this Agreement.
(b) Except as required by applicable law, rule or regulation, Hexcel
shall not approve or recommend to its stockholders any transaction or
approve, recommend or take any other action (other than those expressly
contemplated by this Agreement and other than those that affect the
Investors and each Other Holder or each director at the same time in the
same manner) that would (1) materially adversely discriminate against the
Investors as stockholders of Hexcel or (2) restrict the right of any
Investors' Director to vote on any matter as such director believes
appropriate in light of his or her duties as a director or the manner in
which an Investors' Director may participate in his or her capacity as a
director in deliberations or discussions at meetings of the Board or any
committee thereof, except with respect to (i) entering into contractual or
other business relationships with the Investors or any of their Affiliates
(other than in their capacity as stockholders of Hexcel), (ii) disputes
with the Investors or any of their Affiliates (including disputes under
this Agreement), (iii) interpretation or enforcement of this Agreement or
any other agreement with the Investors or any of their Affiliates or (iv)
any other matter involving an actual or potential conflict of interest due
to such director's relationship with the Investors or any of their
Affiliates. Notwithstanding the foregoing, Hexcel may adopt or implement
any takeover defense measures applicable to the Investors or any of their
Affiliates, including the institution or amendment by Hexcel or any of its
Subsidiaries of any stockholders rights plan or similar plan or device, or
any change of control matters (including provisions in future agreements or
collaborations), provided, that such takeover defense measures shall not
restrict the rights of the Investors to acquire any Voting Securities
pursuant to the provisions of this Agreement.
ARTICLE III
STANDSTILL
SECTION 3.01 STANDSTILL. (a) Except as otherwise expressly
provided in this Agreement (including Section 2.05(c), this Section 3.01,
Section 3.02 or Section 3.03) or as specifically approved by a majority of
the Independent Directors (so long as such approval was not obtained by the
Investors in violation of this Agreement), none of the Investors or any of
their Affiliates shall, directly or indirectly, (i) by purchase or
otherwise, Beneficially Own, acquire, agree to acquire or offer to acquire
any Voting Securities or direct or indirect rights or options to acquire
Voting Securities (including any voting trust certificates representing
such securities) other than the Initial Investors' Shares, Ordinary Course
Broker Dealer Shares and, subject to Section 4.01(d), the Additional
Shares, (ii) enter, propose to enter into, solicit or support any merger or
business combination or similar transaction involving Hexcel or any of its
Subsidiaries, or purchase, acquire, propose to purchase or acquire or
solicit or support the purchase or acquisition of any portion of the
business or assets of Hexcel or any of its Subsidiaries (except for
proposals to purchase or acquire a non-material portion of the assets of
Hexcel or any of its Subsidiaries that are not required to be publicly
disclosed), (iii) initiate or propose any securityholder proposal without
the approval of the Board granted in accordance with this Agreement or
make, or in any way participate in, any "solicitation" of "proxies" (as
such terms are used in the proxy rules promulgated by the SEC under the
Exchange Act) to vote, or seek to advise or influence any Person with
respect to the voting of, any Voting Securities or request or take any
action to obtain any list of securityholders for such purposes with respect
to any matter other than those upon which the Investors may vote in their
sole discretion pursuant to Section 2.07 (or, as to such matters, solicit
any Person in a manner that would require the filing of a proxy statement
under Regulation 14A of the Exchange Act), (iv) form, join or in any way
participate in a Group (other than a Group consisting solely of the
Investors) formed for the purpose of acquiring, holding, voting or
disposing of or taking any other action with respect to Voting Securities
that would be required under Section 13(d) of the Exchange Act to file a
Statement on Schedule 13D with respect to such Voting Securities, (v)
deposit any Voting Securities in a voting trust or enter into any voting
agreement or arrangement with respect thereto (other than this Agreement),
(vi) seek representation on the Board (other than as provided in this
Agreement), the removal of any directors from the Board or a change in the
size or composition of the Board, (vii) make any request to amend or waive
any provision of this Section 3.01, which request would require public
disclosure under applicable law, rule or regulation, (viii) disclose any
intent, purpose, plan, arrangement or proposal inconsistent with the
foregoing (including any such intent, purpose, plan, arrangement or
proposal that is conditioned on or would require the waiver, amendment,
nullification or invalidation of any of the foregoing) or take any action
that would require public disclosure of any such intent, purpose, plan,
arrangement or proposal, (ix) take any action challenging the validity or
enforceability of the foregoing or (x) assist, advise, encourage or
negotiate with any Person with respect to, or seek to do, any of the
foregoing.
(b) Nothing in this Section 3.01 shall (i) prohibit or restrict the
Investors from responding to any inquiries from any shareholders of Hexcel
as to the Investors' intention with respect to the voting of any Voting
Securities Beneficially Owned by the Investors so long as such response is
consistent with the terms of this Agreement; (ii) restrict the right of
each Investors' Director on the Board or any committee thereof to vote on
any matter as such individual believes appropriate in light of his or her
duties as a director or committee member or the manner in which an
Investors' Director may participate in his or her capacity as a director in
deliberations or discussions at meetings of the Board or as a member of any
committee thereof; (iii) prohibit the Investors from Beneficially Owning
Voting Securities issued as dividends or distributions in respect of, or
issued upon conversion, exchange or exercise of, securities which the
Investors are permitted to Beneficially Own under this Agreement; (iv)
prohibit any officer, director, employee or agent of the Investors from
purchasing or otherwise acquiring Voting Securities so long as he or she is
not a member of a Group that includes the Investors or is not otherwise
acting on behalf of the Investors; (v) prohibit the Investors from
disclosing in accordance with their obligations (if any) under the federal
securities laws or other applicable law their desire (if any) that Hexcel
become the subject of a Buyout Transaction; or (vi) restrict the ability of
Xxxxxxx, Xxxxx & Co. and its Affiliates who are not Investors, solely as
agent, to engage in brokerage, investment advisory, anti-raid advisory,
merger advisory, financing, asset management, trading, arbitrage and other
similar activities, in each case on behalf of clients, provided in the case
of this clause (vi) that (A) no Person engaged in such activities shall be
acting, directly or indirectly, at the direction of any other Person at
Xxxxxxx, Sachs & Co. or any of its Affiliates which either is formed for
the purpose of effecting principal transactions or has access to
confidential information of Hexcel, and (B) appropriate protective
arrangements prohibiting disclosure of confidential information are put in
place between the Investors and the Persons who are engaging in such
activities.
(c) After the Standstill Period, nothing in this Section 3.01 shall
prohibit or restrict the Investors from proposing, participating in,
supporting or causing the consummation of a Third Party Offer or an
Investor Buyout Transaction, subject to Section 3.03.
(d) Notwithstanding anything to the contrary set forth in this
Section 3.01, if, at any time following the consummation of a bankruptcy
proceeding involving Hexcel, any Person (other than Hexcel) is permitted by
law or the bankruptcy court in which the proceeding is pending to propose a
plan of reorganization for Hexcel, the Investors shall be permitted to
propose a plan of reorganization for Hexcel; provided, that no plan of
reorganization shall be proposed by the Investors prior to the expiration
or termination of the exclusivity period for Hexcel's filing of a plan of
reorganization, as such exclusivity period may be extended from time to
time (it being understood and agreed that the Investors shall not object to
any extension of Hexcel's exclusivity period and shall not initiate or
otherwise support any proceeding to terminate or shorten the length of
Hexcel's exclusivity period).
SECTION 3.02 INVESTORS RIGHT TO MAINTAIN POSITION. Hexcel
hereby grants to the Investors the following irrevocable option:
If, at any time after the Closing Date for so long as the Investors
shall be entitled to designate one or more Investors' Nominees for election
to the Board, Hexcel shall issue for cash any additional Voting Securities
(except for any issuances described in the following sentence), then Hexcel
shall notify the Investors of such issuance and the price and terms
thereof, and the Investors shall have the option, for a period of 45 days
after receipt of such notice, to purchase from Hexcel an Amount (as defined
below) of such Voting Securities for the same consideration per security
and on the same terms as were applicable to such issuance by Hexcel. The
foregoing option shall not apply to any issuance of Voting Securities (x)
in connection with the registered public offering of up to 6,900,000 shares
of Hexcel Common Stock permitted by Section 2.06(iv) of this Agreement, (y)
upon conversion of any convertible securities which are either outstanding
as of the date hereof or approved by the Board or a duly authorized
committee of the Board after the date of this Agreement in accordance with
Section 2.06, or (z) pursuant to employee or director stock option or
incentive compensation or similar plans outstanding as of the date hereof
or, subsequent to the date hereof, approved by the Board or a duly
authorized committee of the Board. An "Amount" shall mean such number of
securities that would allow the Investors to Beneficially Own the same
percentage of the Total Voting Power of Hexcel as the Investors
Beneficially Owned immediately prior to such issuance.
SECTION 3.03 THIRD PARTY OFFERS; INVESTOR BUYOUT
TRANSACTIONS.
(a) In the event that Hexcel becomes the subject of (i) a Third Party
Offer or (ii) an Investor Buyout Transaction that is made during the term
of this Agreement and such Third Party Offer or Investor Buyout Transaction
is approved by (x) a majority of the Board and (y) a majority of the
Independent Directors acting solely in the interest of the Other Holders,
the Investors may act at their sole discretion with respect to such Third
Party Offer or Investor Buyout Transaction.
(b) In the event that Hexcel becomes the subject of a Third Party
Offer that is made prior to the third anniversary of the Closing Date and
such Third Party Offer is approved by a majority of the Board but not by a
majority of the Independent Directors acting solely in the interests of the
Other Holders, none of the Investors nor any of their Affiliates (other
than with respect to Ordinary Course Broker Dealer Shares and Additional
Shares) may support such Third Party Offer, vote in favor of such Third
Party Offer or tender or sell their Voting Securities to the Person making
such Third Party Offer.
(c) In the event that Hexcel becomes the subject of a Third Party
Offer or Investor Buyout Transaction that is made after the third
anniversary of the Closing and such Third Party Offer or Investor Buyout
Transaction is approved by a majority of the Board but not by a majority of
the Independent Directors acting solely in the interests of the Other
Holders, the Investors and each of their Affiliates (other than with
respect to Ordinary Course Broker Dealer Shares and Additional Shares) must
vote all of their Voting Securities against such Third Party Offer or
Investor Buyout Transaction in proportion to the votes cast against such
Third Party Offer or Investor Buyout Transaction with respect to Other
Shares and may not tender or sell their Voting Securities to the Person
making such Third Party Offer or Investor Buyout Transaction in a
proportion greater than the tenders or sales made by the Other Holders to
the Person making such Third Party Offer or Investor Buyout Transaction; it
being understood that the Investors may enter into agreements to tender or
sell Voting Securities to any such Person conditioned upon final
determination of the number of Voting Securities permitted to be so
tendered or sold under this Section 3.03 and Section 3.01.
ARTICLE IV
TRANSFER RESTRICTIONS
SECTION 4.01 RESTRICTIONS. (a) Other than sales, transfers, or
other dispositions to the Investors and other than sales, transfers or
other dispositions of the Additional Shares by the Persons holding such
Additional Shares, none of the Investors or their Affiliates, directly or
indirectly, may sell, transfer or otherwise dispose of Beneficial Ownership
of Voting Securities for a period of one year after the Closing Date.
During the period commencing one year from the Closing Date, the Investors,
directly or indirectly, may sell, transfer or otherwise dispose of
Beneficial Ownership of Voting Securities (i) to another Investor (provided
that such Investor is a signatory to this Agreement or has executed, at the
time of such sale, transfer or other disposition, a joinder in which it
shall agree to be bound by the provisions of this Agreement to the same
extent as the Investors signatory hereto), (ii) in accordance with Rule 144
under the Securities Act (including the volume and manner-of-sale
limitations of Rule 144 regardless of whether such limitations are
applicable) and otherwise subject to compliance with the Securities Act,
(iii) in a registered public offering or a non-registered offering subject
to an applicable exemption from the registration requirements of the
Securities Act in a manner calculated to achieve a Broad Distribution, (iv)
in a Third Party Offer if and to the extent permitted under Section 3.03 or
(v) which are Additional Shares.
(b) If, during the Hexcel Option Period, any of the Investors
proposes to sell, transfer or otherwise dispose of Beneficial Ownership of
any Voting Securities in accordance with this Section 4.01 (other than
transfers (i) to another Investor, (ii) in accordance with Rule 144 under
the Securities Act (including the volume and manner-of-sale limitations of
Rule 144 regardless of whether such limitations are applicable), (iii) in a
manner calculated to achieve a Broad Distribution or in a Third Party Offer
if and to the extent otherwise permitted pursuant to the provisions of this
Agreement and (iv) of Additional Shares), the applicable Investor shall
notify Hexcel of such proposed transfer and the price thereof, and Hexcel
shall have the option for a period of 90 days after receipt of such notice,
to purchase or cause its designee to purchase from such party all of such
Voting Securities. If Hexcel or its designee does not exercise its option
prior to the expiration of such 90 day period or if the offer does not
result in a purchase by Hexcel or its designee, then the applicable
Investor shall have 90 days from the earlier of receipt of a notice from
Hexcel, on behalf of itself and any designee, stating its intention not to
exercise its option pursuant to this Section 4.01, or the expiration of the
90 days from the receipt by Hexcel of the original notice, to consummate
the proposed transaction with any other Person solely at a price that is no
less than the price as stated in its notice to Hexcel pursuant to this
Section 4.01, subject to the terms of this Agreement. Upon any downward
change in the price per security of the proposed transfer subsequent to the
receipt by Hexcel of the original notice, the applicable Investor shall
notify Hexcel of such change and Hexcel shall have the option for a period
of 90 days after receipt of such notice, to purchase or cause its designee
to purchase from such Investor such Voting Securities for the same
consideration per security and on the same terms as are stated in such
notice. The closing of any purchase of Voting Securities by Hexcel or its
designee pursuant to this Section 4.01(b) shall take place as soon as
practicable following the delivery by Hexcel of written notice to the
applicable Investor of its intent to exercise the option pursuant to this
Section 4.01(b) or, if later, the expiration of any prohibition referred to
in the proviso to the first sentence of this Section 4.01(b), or at such
other time and place as the parties to the transaction may agree. At such
closing, the applicable Investor shall deliver certificates representing
the Voting Securities to be transferred, duly endorsed for transfer and
accompanied by all requisite stock transfer taxes, if any, and such Voting
Securities shall be free and clear of any liens, claims or encumbrances
(other than restrictions imposed pursuant to applicable federal and state
securities laws) and the applicable Investor shall so represent and warrant
that it is the record and beneficial owner of such Voting Securities.
(c) If Hexcel or its designee does not exercise its option in
accordance with this Section 4.01 or if the offer does not result in a
purchase by Hexcel or its designee, or if any of the Investors proposes to
sell, transfer or otherwise dispose of Beneficial Ownership of any Voting
Securities after the Hexcel Option Period (other than transfers to another
Investor), then, prior to any such transfer, the applicable Investor shall
cause any proposed transferee of Beneficial Ownership of Voting Securities,
that together with their Affiliates, to their knowledge after due inquiry,
would Beneficially Own more than 5% of the then outstanding Voting
Securities upon consummation of the proposed transfer, to agree in writing
with Hexcel, for a period of three years from the consummation of the
proposed transfer, to be bound by provisions substantially equivalent to,
or more favorable to Hexcel than, those contained in (i) Section 2.07(b),
and (ii) Section 3.01(a) of this Agreement, to the same extent that the
Investors would be bound if they Beneficially Owned the Voting Securities
Beneficially Owned by such transferee.
(d) Notwithstanding anything to the contrary in this Agreement, none
of the Investors or their Affiliates may, directly or indirectly, acquire,
sell, transfer or otherwise dispose of Beneficial Ownership of Voting
Securities if such acquisition, sale, transfer or other disposition would
result in a default or acceleration of amounts outstanding under the Debt
Instruments, unless prior to the consummation of such acquisition, sale,
transfer or other disposition, any required consents under the Debt
Instruments to effect such acquisition, sale, transfer or disposition shall
have been obtained.
SECTION 4.02 LEGENDS. (a) Except as set forth in paragraph (b)
below, during the term of this Agreement all certificates representing
Voting Securities Beneficially Owned by the Investors shall bear an
appropriate restrictive legend indicating that such Voting Securities are
subject to restrictions pursuant to this Agreement and that such Voting
Securities were not issued pursuant to a public offering registered
pursuant to the Securities Act.
(b) Upon any transfer or proposed transfer of Beneficial Ownership by
the Investors of any Voting Securities to any Person other than the
Investors that is permitted pursuant to this Agreement, Hexcel shall, upon
receipt of timely notice and such certificates, opinions and other
documentation as shall be reasonably requested by Hexcel, cause
certificates representing such transferred Voting Securities to be issued
not later than the time needed to effect such transfer (x) without any
restrictive legend if upon consummation of such transfer such Voting
Securities are no longer "restricted securities" as defined in Rule 144
under the Securities Act or (y) without any reference to this Agreement
(except with respect to the limitations contained in Section 4.01(c), if
applicable).
SECTION 4.03 EFFECT. Any purported transfer of Voting
Securities that is inconsistent with the provisions of this Article IV
shall be null and void and of no force or effect.
SECTION 4.04 CONTROL OF THE INVESTORS. Each of the
Investors (other than the Investor identified in clause (v) of the
definition of the term "Investors") represents and warrants to Hexcel, for
so long as each such Investor holds Voting Securities pursuant to this
Agreement, that it is Controlled, directly or indirectly, by The Xxxxxxx
Xxxxx Group, Inc., and covenants that during the term of this Agreement,
such Investor shall not, without the prior written consent of Hexcel, take
or permit any action which would result in the direct or indirect transfer
of Control of such Investor from The Xxxxxxx Sachs Group, Inc. to any other
Person. On the date hereof, the Limited Partnerships own all of the
membership interests of LXH and LXH II.
ARTICLE V
TERMINATION
SECTION 5.01 TERM. (a) This Agreement shall automatically
terminate upon the earlier of:
(i) the tenth anniversary of the Closing Date; or
(ii) the occurrence of any event in accordance with this
Agreement which causes the percentage of the Total Voting Power of
Hexcel Beneficially Owned by the Investors to be either (x) less than
10% or (y) 90% or more.
(b) If any party to this Agreement is in breach of or violates any
material obligation under this Agreement and fails to cure such breach or
violation within 60 days after delivery of written notice from the other
party specifying such breach or violation and requesting its cure, such
other party may terminate its obligations under this Agreement by written
notice to the other parties hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 NOTICES. All notices, requests and other
communications hereunder shall be in writing (including fax) and shall be
sent, delivered or mailed, addressed, or faxed:
(a) if to Hexcel, to:
Hexcel Corporation
0 Xxxxxxxx Xxxxx
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(T) (000) 000-0000
(F) (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
with a copy to:
Xxxxxx X. Coco, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(T) (000) 000-0000
(F) (000) 000-0000
(b) if to the Investors, to:
c/o Goldman Sachs Capital Partners 2000, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(T) (000) 000-0000
(F) (000) 000-0000
Attention: Xx. Xxxxxxx Xxxxx
with a copy to:
Xxxxxx X. Xxxxxxxxx, Esq.
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(T) (000) 000-0000
(F) (000) 000-0000
Each such notice, request or other communication shall be given (i) by hand
delivery, (ii) by nationally recognized courier service or (iii) by fax,
receipt confirmed. Each such notice, request or communication shall be
effective (A) if delivered by hand or by nationally recognized courier
service, when delivered at the address specified in this Section 6.01 (or
in accordance with the latest unrevoked written direction from such party)
and (B) if given by fax, when such fax is transmitted to the fax number
specified in this Section 6.01 (or in accordance with the latest unrevoked
written direction from such party), and the appropriate confirmation is
received.
SECTION 6.02 INTERPRETATION. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words
"included", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
SECTION 6.03 SEVERABILITY. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the application
thereof to any person or entity or any circumstance, is found to be invalid
or unenforceable in any jurisdiction, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as
may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not
be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of
such provision, or the application thereof, in any other jurisdiction.
SECTION 6.04 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original and all
of which shall, taken together, be considered one and the same agreement,
it being understood that both parties need not sign the same counterpart.
SECTION 6.05 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
This Agreement, together with the Agreement, dated as of October 11, 2000,
among Hexcel, LXH and LXH II, and the Registration Rights Agreement (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof and (b) is not intended to confer upon any
Person, other than the parties hereto and, solely with respect to the
proviso in Section 2.07(b), the Indemnified Individuals, any rights or
remedies hereunder.
SECTION 6.06 FURTHER ASSURANCES. Each party shall execute,
deliver, acknowledge and file such other documents and take such further
actions as may be reasonably requested from time to time by the other party
hereto to give effect to and carry out the transactions contemplated
herein.
SECTION 6.07 GOVERNING LAW; EQUITABLE REMEDIES. This Agreement
shall be governed by and construed in accordance with the laws of the State
of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties
hereto shall be entitled to equitable relief, including in the form of
injunctions, in order to enforce specifically the provisions of this
Agreement, in addition to any other remedy to which they are entitled at
law or in equity.
SECTION 6.08 CONSENT TO JURISDICTION. Each party
hereto irrevocably submits to the exclusive jurisdiction of the United
States District Court for the Southern District of New York located in the
borough of Manhattan in the City of New York, or if such court does not
have jurisdiction, the Supreme Court of the State of New York, New York
County, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby. Each party
hereto further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set
forth in Section 6.01 shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction as set forth above in the immediately preceding
sentence. Each party hereto irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby in (a) the
United States District Court for the Southern District of New York or (b)
the Supreme Court of the State of New York, New York County, and hereby
further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.
SECTION 6.09 AMENDMENTS; WAIVERS. (a) No provision of this
Agreement may be amended or waived unless such amendment or waiver is in
writing and signed, in the case of an amendment, by the parties hereto, or
in the case of a waiver, by the party against whom the waiver is to be
effective; provided that no such amendment or waiver by Hexcel shall be
effective without the approval of a majority of the Independent Directors.
Notwithstanding any provision herein to the contrary, if a majority of the
Independent Directors determine in good faith to do so, such Independent
Directors may seek to enforce, in the name and on behalf of Hexcel, the
terms of this Agreement against the Investors.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 6.10 ASSIGNMENT. Neither this Agreement nor any of the
rights or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered, all as of the date first set forth above.
GS CAPITAL PARTNERS 2000 L.P.
By:_________________________
Name:
Title:
GS CAPITAL PARTNERS 2000 OFFSHORE, L.P.
By:_________________________
Name:
Title:
GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P.
By:_________________________
Name:
Title:
GS CAPITAL PARTNERS 2000 GMBH & CO.
BETEILIGUNGS KG
By:_________________________
Name:
Title:
XXXXX XXXXXX XXXX 0000, X.X.
By:_________________________
Name:
Title:
LXH, L.L.C.
By: GS Capital Partners 2000, L.P., Managing Member
By:_________________________
Name:
Title:
LXH II, L.L.C.
By:
By:_________________________
Name:
Title:
HEXCEL CORPORATION
By:_________________________
Name:
Title:
Exhibit C to Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made as
of ___________, 2000, between HEXCEL CORPORATION, a Delaware corporation
(the "Company"), LXH, L.L.C., a Delaware limited liability company ("LXH")
and LXH II, L.L.C., a Delaware limited liability company (together with
LXH, the "Investors").
WHEREAS, the Investors have entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated as of October 11, 2000,
with Ciba Specialty Chemicals Holding Inc., a corporation organized under
the laws of Switzerland ("Ciba Holdings"), Ciba Specialty Chemicals Inc., a
corporation organized under the laws of Switzerland and wholly-owned
subsidiary of Ciba Holdings ("Ciba SCI") and Ciba Specialty Chemicals
Corporation, a corporation organized under the laws of Delaware and a
wholly-owned subsidiary of Ciba Holdings (together with Ciba Holdings and
Ciba SCI, "Ciba") pursuant to which, upon the terms and subject to the
conditions contained therein, the Investors have agreed to acquire shares
of Common Stock of the Company; and
WHEREAS, simultaneously herewith, the Investors and the Company
are executing and delivering a Governance Agreement (the "Governance
Agreement") providing, among other things, for certain rights and
obligations with respect to the ownership of the shares of Common Stock
acquired by the Investors; and
WHEREAS, (i) in connection with the execution and delivery by the
Investors of the Stock Purchase Agreement and the consummation of the
transactions contemplated hereby and (ii) to induce the Investors and their
Affiliates to execute and deliver the Governance Agreement and to
consummate the transactions contemplated thereby, the Company has agreed to
provide the Investors with the registration rights set forth in this
Agreement.
ACCORDINGLY, the parties hereto agree as follows:
1. Certain Definitions.
-------------------
As used in this Agreement, capitalized terms not otherwise defined
herein shall have the meanings ascribed to them below:
"Affiliate" means (i) with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) with respect to
any individual, shall also mean the spouse or child of such individual;
provided, that neither the Company nor any Person controlled by the Company
shall be deemed to be an Affiliate of any Holder.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company, as amended and in effect on the date hereof.
"Ciba Registrable Securities" means (a) any shares of Common Stock
held by Ciba after giving effect to the consummation of the transactions
contemplated by the Stock Purchase Agreement and (b) any shares of Common
Stock issued or issuable, directly or indirectly, in exchange for or with
respect to the Common Stock referenced in clause (a) above by way of stock
dividend, stock split or combination of shares or in connection with a
reclassification, recapitalization, merger, consolidation or other
reorganization. As to any particular Ciba Registrable Securities, such
securities shall cease to be Ciba Registrable Securities when (A) a
registration statement with respect to the sale of such securities shall
have been declared effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement,
or (B) such securities shall have been sold (other than in a privately
negotiated sale) pursuant to Rule 144 (or any successor provision) under
the Securities Act and in compliance with the requirements of paragraphs
(f) and (g) of Rule 144 (notwithstanding the provisions of paragraph (k) of
such Rule).
"Common Stock" means the common stock, par value $.01 per share,
of the Company and any equity securities issued or issuable in exchange for
or with respect to the Common Stock by way of a stock dividend, stock split
or combination of shares or in connection with a reclassification,
recapitalization, merger, consolidation or other reorganization.
"Common Stock Equivalents" shall mean all options, warrants and
other securities convertible into, or exchangeable or exercisable for, (at
any time or upon the occurrence of any event or contingency and without
regard to any vesting or other conditions to which such securities may be
subject), Common Stock.
"Expenses" shall mean any and all fees and expenses incurred in
connection with the Company's performance of or compliance with Article 2,
including, without limitation: (i) SEC, stock exchange or NASD registration
and filing fees and all listing fees and fees with respect to the inclusion
of securities on the New York Stock Exchange or on any securities market on
which the Common Stock is listed or quoted, (ii) fees and expenses of
compliance with state securities or "blue sky" laws and in connection with
the preparation of a "blue sky" survey, including without limitation,
reasonable fees and expenses of blue sky counsel, (iii) printing and
copying expenses, (iv) messenger and delivery expenses, (v) expenses
incurred in connection with any road show, (vi) fees and disbursements of
counsel for the Company, (vii) with respect to each registration, the fees
and disbursements (which shall not exceed $50,000 per registration) of one
counsel for the selling Holder(s) (selected by the Initiating Holders, in
the case of a registration pursuant to Section 2.1, and selected by the
underwriter, in the case of a registration pursuant to Section 2.2), (viii)
fees and disbursements of all independent public accountants (including the
expenses of any audit and/or "cold comfort" letter) and fees and expenses
of other persons, including special experts, retained by the Company, (ix)
fees and expenses payable to a Qualified Independent Underwriter (as such
term is defined in Schedule E to the By-Laws of the NASD) and (x) any other
fees and disbursements of underwriters, if any, customarily paid by issuers
of securities (collectively, "Expenses").
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Holder" or "Holders" means any Person who is a signatory to this
Agreement and any Person who shall hereafter acquire and hold Registrable
Securities in accordance with the terms of the Governance Agreement.
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government or
any agency or political subdivisions thereof.
"Registrable Securities" means (a) any shares of Common Stock held
by the Holders and (b) any shares of Common Stock issued or issuable,
directly or indirectly, in exchange for or with respect to the Common Stock
referenced in clause (a) above by way of stock dividend, stock split or
combination of shares or in connection with a reclassification,
recapitalization, merger, consolidation or other reorganization. As to any
particular Registrable Securities, such securities shall cease to be
Registrable Securities when (A) a registration statement with respect to
the sale of such securities shall have been declared effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement, or (B) such securities shall
have been sold (other than in a privately negotiated sale) pursuant to Rule
144 (or any successor provision) under the Securities Act and in compliance
with the requirements of paragraphs (f) and (g) of Rule 144
(notwithstanding the provisions of paragraph (k) of such Rule).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
2. Registration Rights.
-------------------
2.1. Demand Registrations.
--------------------
(a) (i) Subject to Section 2.1(b) below, at any time
after the first anniversary of the date hereof, the Holders shall have the
right to require the Company to file a registration statement under the
Securities Act covering such aggregate number of Registrable Securities
which represents 20% or greater of the then outstanding Registrable
Securities, by delivering a written request therefor to the Company
specifying the number of Registrable Securities to be included in such
registration by such Holders and the intended method of distribution
thereof. All such requests by any Holder pursuant to this Section 2.1(a)(i)
are referred to herein as "Demand Registration Requests," and the
registrations so requested are referred to herein as "Demand Registrations"
(with respect to any Demand Registration, the Holders making such demand
for registration being referred to as the "Initiating Holders"). As
promptly as practicable, but no later than ten days after receipt of a
Demand Registration Request, the Company shall give written notice (the
"Demand Exercise Notice") of such Demand Registration Request to all
Holders of record of Registrable Securities.
(ii) The Company, subject to Sections 2.3 and
2.6, shall include in a Demand Registration (x) the Registrable Securities
of the Initiating Holders and (y) the Registrable Securities of any other
Holder of Registrable Securities which shall have made a written request to
the Company for inclusion in such registration (which request shall specify
the maximum number of Registrable Securities intended to be disposed of by
such Holders) within 30 days after the receipt of the Demand Exercise
Notice (or, 15 days if, at the request of the Initiating Holders, the
Company states in such written notice or gives telephonic notice to all
Holders, with written confirmation to follow promptly thereafter, that such
registration will be on a Form S-3).
(iii) The Company shall, as expeditiously as
possible but subject to Section 2.1(b), use its commercially reasonable
efforts to (x) effect such registration under the Securities Act of the
Registrable Securities which the Company has been so requested to register,
for distribution in accordance with such intended method of distribution,
and (y) if requested by the Initiating Holders, obtain acceleration of the
effective date of the registration statement relating to such registration.
(b) Notwithstanding anything to the contrary in Section
2.1(a), the Demand Registration rights granted in Section 2.1(a) to the
Investors are subject to the following limitations: (i) the Company shall
not be required to cause a registration pursuant to Section 2.1(a)(i) to be
declared effective within a period of 180 days after the effective date of
any other registration statement of the Company filed pursuant to the
Securities Act; (ii) if the Board of Directors of the Company, in its good
faith judgment, determines that any registration of Registrable Securities
should not be made or continued because it would materially interfere with
any material financing, acquisition, corporate reorganization or merger or
other transaction or event involving the Company or any of its subsidiaries
(a "Valid Business Reason"), the Company may postpone filing a registration
statement relating to a Demand Registration Request until such Valid
Business Reason no longer exists, but in no event for more than three
months (such period of postponement or withdrawal under this clause (ii),
the "Postponement Period"); and the Company shall give written notice of
its determination to postpone or withdraw a registration statement and of
the fact that the Valid Business Reason for such postponement or withdrawal
no longer exists, in each case, promptly after the occurrence thereof;
provided, however, the Company shall not be permitted to postpone or
withdraw a registration statement after the expiration of any Postponement
Period until twelve months after the expiration of such Postponement
Period; (iii) the Company shall not, be obligated to effect more than three
Demand Registrations under Section 2.1(a) and (iv) the Company shall not be
required to effect a Demand Registration unless the Registrable Securities
to be included in such registration have an aggregate anticipated offering
price of at least $25,000,000 (based on the then-current market price of
the Common Stock).
If the Company shall give any notice of postponement or
withdrawal of any registration statement pursuant to clause (ii) above, the
Company shall not, during the period of postponement or withdrawal,
register any Common Stock, other than pursuant to a registration statement
on Form S-4 or S-8 (or an equivalent registration form then in effect).
Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company that the Company has determined to withdraw any
registration statement pursuant to clause (ii) above, such Holder will
discontinue its disposition of Registrable Securities pursuant to such
registration statement and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than permanent
file copies, then in such Holder's possession of the prospectus covering
such Registrable Securities that was in effect at the time of receipt of
such notice. If the Company shall have withdrawn or prematurely terminated
a registration statement filed under Section 2.1(a)(i) (whether pursuant to
clause (ii) above or as a result of any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court),
the Company shall not be considered to have effected an effective
registration for the purposes of this Agreement until the Company shall
have filed a new registration statement covering the Registrable Securities
covered by the withdrawn registration statement and such registration
statement shall have been declared effective and shall not have been
withdrawn. If the Company shall give any notice of withdrawal or
postponement of a registration statement, the Company shall, at such time
as the Valid Business Reason that caused such withdrawal or postponement no
longer exists (but in no event later than three months after the date of
the postponement or withdrawal), use its commercially reasonable best
efforts to effect the registration under the Securities Act of the
Registrable Securities covered by the withdrawn or postponed registration
statement in accordance with this Section 2.1 (unless the Initiating
Holders shall have withdrawn such request, in which case the Company shall
not be considered to have effected an effective registration for the
purposes of this Agreement).
(c) The Company, subject to Sections 2.3 and 2.6, may
elect to include in any registration statement and offering made pursuant
to Section 2.1(a)(i), (i) authorized but unissued shares of Common Stock or
shares of Common Stock held by the Company as treasury shares and (ii) any
other shares of Common Stock which are requested to be included in such
registration pursuant to the exercise of piggyback rights granted by the
Company which are not inconsistent with the rights granted in, or otherwise
conflict with the terms of, this Agreement ("Additional Piggyback Rights")
provided, however, that such inclusion shall be permitted only to the
extent that it is pursuant to and subject to the terms of the underwriting
agreement or arrangements, if any, entered into by the Initiating Holders.
(d) In connection with any Demand Registration, the
Company shall have the right to designate the lead managing underwriter in
connection with such registration and each other managing underwriter for
such registration, provided that in each case, each such underwriter is
reasonably satisfactory to the Initiating Holders.
2.2. Piggyback Registrations.
-----------------------
(a) If, at any time, the Company proposes or is required
to register any of its equity securities under the Securities Act (other
than pursuant to (i) registrations on such form or similar form(s) solely
for registration of securities in connection with an employee benefit plan
or dividend reinvestment plan or a merger or consolidation or (ii) a Demand
Registration under Section 2.1) on a registration statement on Form S-1,
Form S-2 or Form S-3 (or an equivalent general registration form then in
effect), whether or not for its own account, the Company shall give prompt
written notice of its intention to do so to each of the Holders of record
of Registrable Securities. Upon the written request of any such Holder,
made within 15 days following the receipt of any such written notice (which
request shall specify the maximum number of Registrable Securities intended
to be disposed of by such Holder and the intended method of distribution
thereof), the Company shall, subject to Sections 2.2(b), 2.3 and 2.6
hereof, use its commercially reasonable efforts to cause all such
Registrable Securities, the Holders of which have so requested the
registration thereof, to be included in the registration statement with the
securities which the Company at the time proposes to register to permit the
sale or other disposition by the Holders (in accordance with the intended
method of distribution thereof) of the Registrable Securities to be so
registered. No registration of Registrable Securities effected under this
Section 2.2(a) shall relieve the Company of its obligations to effect
Demand Registrations under Section 2.1 hereof.
(b) If, at any time after giving written notice of its
intention to register any equity securities and prior to the effective date
of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register or to delay
registration of such equity securities, the Company may, at its election,
give written notice of such determination to all Holders of record of
Registrable Securities and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such abandoned registration, without
prejudice, however, to the rights of Holders under Section 2.1, and (ii) in
the case of a determination to delay such registration of its equity
securities, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other equity securities.
(c) Any Holder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any registration
statement pursuant to this Section 2.2 by giving written notice to the
Company of its request to withdraw; provided, however, that (i) such
request must be made in writing prior to the earlier of the execution of
the underwriting agreement or the execution of the custody agreement with
respect to such registration and (ii) such withdrawal shall be irrevocable
and, after making such withdrawal, a Holder shall no longer have any right
to include Registrable Securities in the registration as to which such
withdrawal was made.
2.3. Allocation of Securities Included in Registration Statement.
-----------------------------------------------------------
(a) If any requested registration made prior to 18 months
after the date hereof pursuant to Section 2.1 involves an underwritten
offering and the lead managing underwriter of such offering (the "Manager")
shall advise the Company that, in its view, the number of securities
requested to be included in such registration by the Holders of Registrable
Securities or any other persons (including those shares of Common Stock
requested by the Company to be included in such registration) exceeds the
largest number (the "Section 2.3(a) Sale Number") that can be sold in an
orderly manner in such offering within a price range acceptable to the
Initiating Holders, the Company shall use its commercially reasonable
efforts to include in such registration:
(i) first, all Registrable Securities and Ciba
Registrable Securities requested to be included in such
registration by the holders thereof; provided, however, that, if
the number of such Registrable Securities and Ciba Registrable
Securities exceeds the Section 2.3(a) Sale Number, the number of
such Registrable Securities and Ciba Registrable Securities (not
to exceed the Section 2.3(a) Sale Number) to be included in such
registration shall be allocated on a pro rata basis among all
holders requesting that Registrable Securities and Ciba
Registrable Securities be included in such registration, based on
the number of Registrable Securities and Ciba Registrable
Securities then owned by each such holder requesting inclusion in
relation to the number of Registrable Securities and Ciba
Registrable Securities owned by all holders requesting inclusion;
(ii) second, to the extent that the number of
Registrable Securities to be included pursuant to clause (i) of
this Section 2.3(a) is less than the Section 2.3(a) Sale Number,
the remaining shares to be included in such registration shall be
allocated on a pro rata basis among all holders requesting that
securities be included in such registration pursuant to the
exercise of Additional Piggyback Rights ("Piggyback Shares"),
based on the aggregate number of Piggyback Shares then owned by
each holder requesting inclusion in relation to the aggregate
number of Piggyback Shares owned by all holders requesting
inclusion, up to the Section 2.3(a) Sale Number; and
(iii) third, to the extent that the number of
securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(a) is less than the Section 2.3(a) Sale Number, any
securities that the Company proposes to register, up to the
Section 2.3(a) Sale Number.
If, as a result of the proration provisions of this
Section 2.3(a), any Holder shall not be entitled to include all Registrable
Securities in a registration that such Holder has requested be included,
such Holder may elect to withdraw his request to include Registrable
Securities in such registration or may reduce the number requested to be
included; provided, however, that (x) such request must be made in writing
prior to the earlier of the execution of the underwriting agreement or the
execution of the custody agreement with respect to such registration and
(y) such withdrawal shall be irrevocable and, after making such withdrawal,
such Holder shall no longer have any right to include Registrable
Securities in the registration as to which such withdrawal was made.
(b) If any requested registration made at any time after
18 months following the date hereof pursuant to Section 2.1 involves an
underwritten offering and the Manager shall advise the Company that, in its
view, the number of securities requested to be included in such
registration by the Holders of Registrable Securities or any other persons
(including those shares of Common Stock requested by the Company to be
included in such registration) exceeds the largest number (the "Section
2.3(b) Sale Number") that can be sold in an orderly manner in such offering
within a price range acceptable to the Initiating Holders, the Company
shall use its commercially reasonable efforts to include in such
registration:
(i) first, all Registrable Securities requested
to be included in such registration by the Holders; provided,
however, that, if the number of such Registrable Securities
exceeds the Section 2.3(b) Sale Number, the number of such
Registrable Securities (not to exceed the Section 2.3(b) Sale
Number) to be included in such registration shall be allocated on
a pro rata basis among all Holders requesting that Registrable
Securities be included in such registration, based on the number
of Registrable Securities then owned by each such Holder
requesting inclusion in relation to the number of Registrable
Securities owned by all Holders requesting inclusion;
(ii) second, to the extent that the number of
securities to be included pursuant to clause (i) of this Section
2.3(b) is less than the Section 2.3(b) Sale Number, the remaining
shares to be included in such registration shall be allocated on a
pro rata basis among all holders requesting that Piggyback Shares
(including Ciba Registrable Securities) be included in such
registration pursuant to the exercise of Additional Piggyback
Rights, based on the aggregate number of Piggyback Shares then
owned by each holder requesting inclusion in relation to the
aggregate number of Piggyback Shares owned by all holders
requesting inclusion, up to the Section 2.3(b) Sale Number; and
(iii) third, to the extent that the number of
securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(b) is less than the Section 2.3(b) Sale Number, any
securities that the Company proposes to register, up to the
Section 2.3(b) Sale Number.
If, as a result of the proration provisions of this
Section 2.3(b), any Holder shall not be entitled to include all Registrable
Securities in a registration that such Holder has requested be included,
such Holder may elect to withdraw his request to include Registrable
Securities in such registration or may reduce the number requested to be
included; provided, however, that (x) such request must be made in writing
prior to the earlier of the execution of the underwriting agreement or the
execution of the custody agreement with respect to such registration and
(y) such withdrawal shall be irrevocable and, after making such withdrawal,
such Holder shall no longer have any right to include Registrable
Securities in the registration as to which such withdrawal was made.
(c) If any registration pursuant to Section 2.2 involves
an underwritten offering that was initially proposed by the Company prior
to the first anniversary of the date hereof as a primary registration of
its securities and the Manager shall advise the Company that, in its view,
the number of securities requested to be included in such registration
exceeds the number (the "Section 2.3(c) Sale Number") that can be sold in
an orderly manner in such registration within a price range acceptable to
the Company, the Company shall include in such registration:
(i) first, all Ciba Registrable Securities
requested to be included in such registration by the holders of
such securities; provided, however, that, if the number of such
Ciba Registrable Securities exceeds the Section 2.3(c) Sale
Number, the number of such Ciba Registrable Securities (not to
exceed the Section 2.3(c) Sale Number) to be included in such
registration shall be allocated on a pro rata basis among all
holders requesting that Ciba Registrable Securities be included in
such registration, based on the number of Ciba Registrable
Securities then owned by each such holder requesting inclusion in
relation to the number of Ciba Registrable Securities owned by all
holders requesting inclusion;
(ii) second, to the extent that the number of
securities to be included pursuant to clause (i) of this Section
2.3(c) is less than the Section 2.3(c) Sale Number, any securities
that the Company proposes to register, up to the Section 2.3(c)
Sale Number (the "Company Securities");
(iii) third, to the extent that the number of
securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(c) is less than the Section 2.3(c) Sale Number, the
remaining shares to be included in such registration shall be
allocated on a pro rata basis among all Holders requesting that
Registrable Securities be included in such registration, based on
the aggregate number of Registrable Securities then owned by each
holder requesting inclusion in relation to the aggregate number of
Registrable Securities owned by all holders requesting inclusion,
up to the Section 2.3(c) Sale Number; and
(iv) fourth, to the extent that the number of
securities to be included pursuant to clauses (i), (ii) and (iii)
of this Section 2.3(c) is less than the Section 2.3(c) Sale
Number, the remaining shares to be included in such registration
shall be allocated on a pro rata basis among all holders
requesting that Piggyback Shares be included in such registration
pursuant to the exercise of Additional Piggyback Rights, based on
the aggregate number of Piggyback Shares then owned by each holder
requesting inclusion in relation to the aggregate number of
Piggyback Shares owned by all holders requesting inclusion, up to
the Section 2.3(c) Sale Number.
(d) If any registration pursuant to Section 2.2 involves
an underwritten offering that was initially proposed by the Company after
the first anniversary of the date hereof but prior to 18 months after the
date hereof as a primary registration of its securities and the Manager
shall advise the Company that, in its view, the number of securities
requested to be included in such registration exceeds the number (the
"Section 2.3(d) Sale Number") that can be sold in an orderly manner in such
registration within a price range acceptable to the Company, the Company
shall include in such registration:
(i) first, all Common Stock that the
company proposes to register for its own account;
(ii) second, to the extent that the number of
securities to be included pursuant to clause (i) of this Section
2.3(d) is less than the Section 2.3(d) Sale Number, the remaining
shares to be included in such registration shall be allocated on a
pro rata basis among all holders requesting that Ciba Registrable
Securities be included in such registration, based on the
aggregate number of Ciba Registrable Securities then owned by each
holder requesting inclusion in relation to the aggregate number of
Ciba Registrable Securities owned by all holders requesting
inclusion, up to the Section 2.3(d) Sale Number;
(iii) third, to the extent that the number of
securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(d) is less than the Section 2.3(d) Sale Number, the
remaining shares to be included in such registration shall be
allocated on a pro rata basis among all Holders requesting that
Registrable Securities be included in such registration, based on
the aggregate number of Registrable Securities then owned by each
holder requesting inclusion in relation to the aggregate number of
Registrable Securities owned by all holders requesting inclusion,
up to the Section 2.3(d) Sale Number; and
(iv) fourth, to the extent the number of securities
to be included pursuant to clauses (i), (ii) and (iii) of this
Section 2.3(d) is less than the Section 2.3(d) Sale Number, the
remaining shares to be included in such registration shall be
allocated on a pro rata basis among all holders requesting that
Piggyback Shares be included in such registration pursuant to the
exercise of Additional Piggyback Rights, based on the aggregate
number of Piggyback Shares then owned by each holder requesting
inclusion in relation to the aggregate number of Piggyback Shares
owned by all holders requesting inclusion, up to the Section
2.3(d) Sale Number.
(e) If any registration pursuant to Section 2.2 involves
an underwritten offering that was initially proposed by the Company at any
time after 18 months following the date hereof as a primary registration of
its securities and the Manager shall advise the Company that, in its view,
the number of securities requested to be included in such registration
exceeds the number (the "Section 2.3(e) Sale Number") that can be sold in
an orderly manner in such registration within a price range acceptable to
the Company, the Company shall include in such registration:
(i) first, all Common Stock that the
Company proposes to register for its own account;
(ii) second, to the extent that the number of
securities to be included pursuant to clause (i) of this Section
2.3(e) is less than the Section 2.3(e) Sale Number, the remaining
shares to be included in such registration shall be allocated on a
pro rata basis among all holders requesting that Registrable
Securities or Ciba Registrable Securities be included in such
registration, based on the aggregate number of Registrable
Securities and Ciba Registrable Securities then owned by each
holder requesting inclusion in relation to the aggregate number of
Registrable Securities and Ciba Registrable Securities owned by
all holders requesting inclusion, up to the Section 2.3(e) Sale
Number; and
(iii) third, to the extent the number of
securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(e) is less than the Section 2.3(e) Sale Number, the
remaining shares to be included in such registration shall be
allocated on a pro rata basis among all holders requesting that
Piggyback Shares be included in such registration pursuant to the
exercise of Additional Piggyback Rights, based on the aggregate
number of Piggyback Shares then owned by each holder requesting
inclusion in relation to the aggregate number of Piggyback Shares
owned by all holders requesting inclusion, up to the Section
2.3(e) Sale Number.
(f) If any registration pursuant to Section 2.2 involves
an underwritten offering that was initially proposed prior to 18 months
after the date hereof by holders of securities of the Company that have the
right to require such registration ("Additional Demand Rights") and the
Manager shall advise the Company that, in its view, the number of
securities requested to be included in such registration exceeds the number
(the "Section 2.3(f) Sale Number") that can be sold in an orderly manner in
such registration within a price range acceptable to the Company, the
Company shall include in such registration:
(i) first, all Ciba Registrable Securities
requested to be included in such registration by the holders of
such securities; provided, however, that, if the number of such
Ciba Registrable Securities exceeds the Section 2.3(f) Sale
Number, the number of such Ciba Registrable Securities (not to
exceed the Section 2.3(f) Sale Number) to be included in such
registration shall be allocated on a pro rata basis among all
holders requesting that Ciba Registrable Securities be included in
such registration, based on the number of Ciba Registrable
Securities then owned by each such holder requesting inclusion in
relation to the number of Ciba Registrable Securities owned by all
holders requesting inclusion;
(ii) second, to the extent that the number of
securities to be included pursuant to clause (i) of this Section
2.3(f) is less than the Section 2.3(f) Sale Number, the remaining
shares to be included in such registration shall be allocated on a
pro rata basis among holders requesting that securities be
included in such registration pursuant to Additional Demand Rights
("Additional Registrable Securities"), based on the aggregate
number of Additional Registrable Securities then owned by each
holder requesting inclusion in relation to the aggregate number of
Additional Registrable Securities owned by all holders requesting
inclusion, up to the Section 2.3(f) Sale Number;
(iii) third, to the extent that the number of
securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(f) is less than the Section 2.3(f) Sale Number, the
remaining shares to be included in such registration shall be
allocated on a pro rata basis among all Holders requesting that
Registrable Securities be included in such registration, based on
the aggregate number of Registrable Securities then owned by each
holder requesting inclusion in relation to the aggregate number of
Registrable Securities owned by all holders requesting inclusion,
up to the Section 2.3(f) Sale Number;
(iv) fourth, to the extent the number of
securities to be included pursuant to clauses (i), (ii) and (iii)
of this Section 2.3(f) is less than the Section 2.3(f) Sale
Number, any Common Stock that the Company proposes to register for
its own account, up to the Section 2.3(f) Sale Number; and
(v) five, to the extent that the number of
securities to be included pursuant to clauses (i), (ii), (iii) and
(iv) of this Section 2.3(f) is less than the Section 2.3(f) Sale
Number, the remaining shares to be included in such registration
shall be allocated on a pro rata basis among all holders
requesting that Piggyback Shares be included in such registration
pursuant to the exercise of Additional Piggyback Rights, based on
the aggregate number of Piggyback Shares then owned by each holder
requesting inclusion in relation to the aggregate number of
Piggyback Shares owned by all holders requesting inclusion, up to
the Section 2.3(f) Sale Number.
(g) If any registration pursuant to Section 2.2 involves
an underwritten offering that was initially proposed after 18 months
following the date hereof by holders of securities of the Company that have
Additional Demand Rights and the Manager shall advise the Company that, in
its view, the number of securities requested to be included in such
registration exceeds the number (the "Section 2.3(g) Sale Number") that can
be sold in an orderly manner in such registration within a price range
acceptable to the Company, the Company shall include in such registration:
(i) first, all securities requested to be
included in such registration by the holders of Additional Demand
Rights ("Additional Registrable Securities"); provided, however,
that, if the number of such Additional Registrable Securities
exceeds the Section 2.3(g) Sale Number, the number of such
Additional Registrable Securities (not to exceed the Section
2.3(g) Sale Number) to be included in such registration shall be
allocated on a pro rata basis among all holders of Additional
Registrable Securities requesting that Additional Registrable
Securities be included in such registration, based on the number
of Additional Registrable Securities then owned by each such
holders requesting inclusion in relation to the number of
Additional Registrable Securities owned by all of such holders
requesting inclusion;
(ii) second, to the extent that the number of
securities to be included pursuant to clause (i) of this Section
2.3(g) is less than the Section 2.3(g) Sale Number, the remaining
shares to be included in such registration shall be allocated on a
pro rata basis among all holders requesting that Registrable
Securities or Ciba Registrable Securities be included in such
registration, based on the aggregate number of Registrable
Securities and Ciba Registrable Securities then owned by each
holder requesting inclusion in relation to the aggregate number of
Registrable Securities and Ciba Registrable Securities owned by
all holders requesting inclusion, up to the Section 2.3(g) Sale
Number;
(iii) third, to the extent the number of
securities to be included pursuant to clauses (i) and (ii) of this
Section 2.3(g) is less than the Section 2.3(g) Sale Number, any
Common Stock that the Company proposes to register for its own
account, up to the Section 2.3(g) Sale Number; and
(iv) fourth, to the extent that the number of
securities to be included pursuant to clauses (i), (ii), and (iii)
of this Section 2.3(g) is less than the Section 2.3(g) Sale
Number, the remaining shares to be included in such registration
shall be allocated on a pro rata basis among all holders
requesting that Piggyback Shares be included in such registration
pursuant to the exercise of Additional Piggyback Rights, based on
the aggregate number of Piggyback Shares then owned by each holder
requesting inclusion in relation to the aggregate number of
Piggyback Shares owned by all holders requesting inclusion, up to
the Section 2.3(g) Sale Number.
2.4. Registration Procedures. If and whenever the Company is
required by the provisions of this Agreement to use its commercially
reasonable efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in this Agreement, the
Company shall, as expeditiously as possible:
(a) prepare and file with the SEC a registration
statement on an appropriate registration form of the SEC for the
disposition of such Registrable Securities in accordance with the intended
method of disposition thereof, which form shall be selected by the Company
and shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by the
SEC to be filed therewith, and the Company shall use its commercially
reasonable efforts to cause such registration statement to become and
remain effective (provided, however, that before filing a registration
statement or prospectus or any amendments or supplements thereto, or
comparable statements under securities or blue sky laws of any
jurisdiction, the Company will furnish to one counsel for the Holders
participating in the planned offering (selected by the Initiating Holders,
in the case of a registration pursuant to Section 2.1, and selected by the
lead managing underwriter, in the case of a registration pursuant to
Section 2.2) and the lead managing underwriter, if any, copies of all such
documents proposed to be filed (including all exhibits thereto), which
documents will be subject to the reasonable review and reasonable comment
of such counsel, and the Company shall not file any registration statement
or amendment thereto or any prospectus or supplement thereto to which the
Holders of a majority of the Registrable Securities covered by such
registration statement or the underwriters, if any, shall reasonably
object);
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for such period as any seller of Registrable Securities
pursuant to such registration statement shall request and to comply with
the provisions of the Securities Act with respect to the sale or other
disposition of all Registrable Securities covered by such registration
statement in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such registration statement;
(c) furnish, without charge, to each seller of such
Registrable Securities and each underwriter, if any, of the securities
covered by such registration statement such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits), and the prospectus included in such registration
statement (including each preliminary prospectus) in conformity with the
requirements of the Securities Act, and other documents, as such seller and
underwriter may reasonably request in order to facilitate the public sale
or other disposition of the Registrable Securities owned by such seller
(the Company hereby consenting to the use in accordance with all applicable
law of each such registration statement (or amendment or post-effective
amendment thereto) and each such prospectus (or preliminary prospectus or
supplement thereto) by each such seller of Registrable Securities and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such registration statement or
prospectus);
(d) use its commercially reasonable efforts to register
or qualify the Registrable Securities covered by such registration
statement under such other securities or "blue sky" laws of such
jurisdictions as any sellers of Registrable Securities or any managing
underwriter, if any, shall reasonably request in writing, and do any and
all other acts and things which may be reasonably necessary or advisable to
enable such sellers or underwriter, if any, to consummate the disposition
of the Registrable Securities in such jurisdictions, except that in no
event shall the Company be required to qualify to do business as a foreign
corporation in any jurisdiction where it would not, but for the
requirements of this paragraph (d), be required to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to
general service of process in any such jurisdiction;
(e) promptly notify each Holder selling Registrable
Securities covered by such registration statement and each managing
underwriter, if any: (i) when the registration statement, any pre-effective
amendment, the prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration statement has been filed and,
with respect to the registration statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the SEC or state
securities authority for amendments or supplements to the registration
statement or the prospectus related thereto or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the registration statement or the initiation of any
proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of
any jurisdiction or the initiation of any proceeding for such purpose; (v)
of the existence of any fact of which the Company becomes aware which
results in the registration statement, the prospectus related thereto or
any document incorporated therein by reference containing an untrue
statement of a material fact or omitting to state a material fact required
to be stated therein or necessary to make any statement therein not
misleading; and (vi) if at any time the representations and warranties
contemplated by any underwriting agreement, securities sale agreement, or
other similar agreement, relating to the offering shall cease to be true
and correct in all material respects; and, if the notification relates to
an event described in clause (v), the Company shall promptly prepare and
furnish to each such seller and each underwriter, if any, a reasonable
number of copies of a prospectus supplemented or amended so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein in the light of the circumstances under which they
were made not misleading;
(f) comply with all applicable rules and regulations of
the SEC, and make generally available to its security holders, as soon as
reasonably practicable after the effective date of the registration
statement (and in any event within 16 months thereafter), an earnings
statement (which need not be audited) covering the period of at least
twelve consecutive months beginning with the first day of the Company's
first calendar quarter after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(g) (i) cause all such Registrable Securities covered by
such registration statement to be listed on the New York Stock Exchange or
the principal securities exchange on which similar securities issued by the
Company are then listed (if any), if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) if
no similar securities are then so listed, to either cause all such
Registrable Securities to be listed on a national securities exchange or to
secure designation of all such Registrable Securities as a Nasdaq National
Market "national market system security" within the meaning of Rule 11Aa2-1
of the Exchange Act or, failing that, secure Nasdaq National Market
authorization for such shares and, without limiting the generality of the
foregoing, take all actions that may be required by the Company as the
issuer of such Registrable Securities in order to facilitate the managing
underwriter's arranging for the registration of at least two market makers
as such with respect to such shares with the National Association of
Securities Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer agent
and registrar for all such Registrable Securities covered by such
registration statement not later than the effective date of such
registration statement;
(i) enter into such customary agreements (including, if
applicable, an underwriting agreement) and take such other actions as the
Holders of a majority of the Registrable Securities participating in such
offering shall reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (it being understood that the
Holders of the Registrable Securities which are to be distributed by any
underwriters shall be parties to any such underwriting agreement and may,
at their option, require that the Company make to and for the benefit of
such Holders the representations, warranties and covenants of the Company
which are being made to and for the benefit of such underwriters);
(j) use its commercially reasonable efforts to obtain an
opinion from the Company's counsel and a "cold comfort" letter from the
Company's independent public accountants in customary form and covering
such matters as are customarily covered by such opinions and "cold comfort"
letters delivered to underwriters in underwritten public offerings, which
opinion and letter shall be reasonably satisfactory to the underwriter, if
any, and furnish to each Holder participating in the offering and to each
underwriter, if any, a copy of such opinion and letter addressed to such
Holder or underwriter;
(k) deliver promptly to each Holder participating in the
offering and each underwriter, if any, copies of all correspondence between
the SEC and the Company, its counsel or auditors and all memoranda relating
to discussions with the SEC or its staff with respect to the registration
statement, other than those portions of any such memoranda which contain
information subject to attorney-client privilege with respect to the
Company, and, upon receipt of such confidentiality agreements as the
Company may reasonably request, make reasonably available for inspection by
any seller of such Registrable Securities covered by such registration
statement, by any underwriter, if any, participating in any disposition to
be effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by any such seller or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of the Company's
officers, directors and employees to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement;
(l) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement;
(m) provide a CUSIP number for all Registrable
Securities, not later than the effective date of the registration
statement;
(n) make reasonably available its employees and personnel
for participation in "road shows" an other marketing efforts and otherwise
provide reasonable assistance to the underwriters (taking into account the
needs of the Company's businesses and the requirements of the marketing
process) in the marketing of Registrable Securities in any underwritten
offering;
(o) promptly prior to the filing of any document which is
to be incorporated by reference into the registration statement or the
prospectus (after the initial filing of such registration statement)
provide copies of such document to counsel for the selling holders of
Registrable Securities and to each managing underwriter, if any, and make
the Company's representatives reasonably available for discussion of such
document and make such changes in such document concerning the selling
holders prior to the filing thereof as counsel for such selling holders or
underwriters may reasonably request;
(p) furnish to the Holder participating in the offering
and the managing underwriter, without charge, at least one signed copy, and
to each other Holder participating in the offering, without charge, at
least one photocopy of a signed copy, of the registration statement and any
post-effective amendments thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(q) cooperate with the sellers of Registrable Securities
and the managing underwriter, if any, to facilitate the timely preparation
and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such
Registrable Securities to be issued in such denominations and registered in
such names in accordance with the underwriting agreement prior to any sale
of Registrable Securities to the underwriters or, if not an underwritten
offering, in accordance with the instructions of the sellers of Registrable
Securities at least three business days prior to any sale of Registrable
Securities and instruct any transfer agent and registrar of Registrable
Securities to release any stop transfer orders in respect thereof;
(r) take all such other commercially reasonable actions
as are necessary or advisable in order to expedite or facilitate the
disposition of such Registrable Securities; and
(s) take no direct or indirect action prohibited by
Regulation M under the Exchange Act; provided, however, that to the extent
that any prohibition is applicable to the Company, the Company will take
such action as is necessary to make any such prohibition inapplicable.
The Company may require as a condition precedent to the
Company's obligations under this Section 2.4 that each seller of
Registrable Securities as to which any registration is being effected
furnish the Company such information in writing regarding such seller and
the distribution of such Registrable Securities as the Company may from
time to time reasonably request provided that such information is necessary
for the Company to consummate such registration and shall be used only in
connection with such registration.
Each seller of Registrable Securities agrees that upon
receipt of any notice from the Company of the happening of any event of the
kind described in clause (v) of paragraph (e) of this Section 2.4, such
Holder will discontinue such Holder's disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by paragraph (e) of this Section 2.4 and, if so
directed by the Company, will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such
Holder's possession of the prospectus covering such Registrable Securities
that was in effect at the time of receipt of such notice. In the event the
Company shall give any such notice, the applicable period mentioned in
paragraph (b) of this Section 2.4 shall be extended by the number of days
during such period from and including the date of the giving of such notice
to and including the date when each seller of any Registrable Securities
covered by such registration statement shall have received the copies of
the supplemented or amended prospectus contemplated by paragraph (e) of
this Section 2.4.
If any such registration statement or comparable
statement under "blue sky" laws refers to any Holder by name or otherwise
as the Holder of any securities of the Company, then such Holder shall have
the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder and the Company, to the
effect that the holding by such Holder of such securities is not to be
construed as a recommendation by such Holder of the investment quality of
the Company's securities covered thereby and that such holding does not
imply that such Holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such reference to
such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the
deletion of the reference to such Holder.
2.5. Registration Expenses.
---------------------
(a) The Company shall pay all Expenses (x) with respect
to any Demand Registration whether or not it becomes effective or remains
effective for the period contemplated by Section 2.4(b) and (y) with
respect to any registration effected under Section 2.2.
(b) Notwithstanding the foregoing, (x) the provisions of
this Section 2.5 shall be deemed amended to the extent necessary to cause
these expense provisions to comply with "blue sky" laws of each state in
which the offering is made and (y) in connection with any registration
hereunder, each Holder of Registrable Securities being registered shall pay
all underwriting discounts and commissions and any transfer taxes, if any,
attributable to the sale of such Registrable Securities, pro rata with
respect to payments of discounts and commissions in accordance with the
number of shares sold in the offering by such Holder, and (z) the Company
shall, in the case of all registrations under this Article 2, be
responsible for all its internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties).
2.6. Certain Limitations on Registration Rights. In the case of
any registration under Section 2.1 pursuant to an underwritten offering,
or, in the case of a registration under Section 2.2, if the Company has
determined to enter into an underwriting agreement in connection therewith,
all securities to be included in such registration shall be subject to an
underwriting agreement and no Person may participate in such registration
unless such Person agrees to sell such Person's securities on the basis
provided therein and, subject to Section 3.1 hereof, completes and executes
all reasonable questionnaires, and other documents (including custody
agreements and powers of attorney) which must be executed in connection
therewith, and provides such other information to the Company or the
underwriter as may be necessary to register such Person's securities.
2.7. Limitations on Sale or Distribution of Other Securities. (a)
Each seller of Registrable Securities agrees that, (i) to the extent
requested in writing by a managing underwriter, if any, of any registration
effected pursuant to Section 2.1, not to sell, transfer or otherwise
dispose of, including any sale pursuant to Rule 144 under the Securities
Act, any Common Stock, or any other equity security of the Company or any
security convertible into or exchangeable or exercisable for any equity
security of the Company (other than as part of such underwritten public
offering) during the time period reasonably requested by the managing
underwriter, not to exceed 90 days (and the Company hereby also so agrees
(except that the Company may effect any sale or distribution of any such
securities pursuant to a registration on Form S-4 (if reasonably acceptable
to such managing underwriter) or Form S-8, or any successor or similar form
which is then in effect or upon the conversion, exchange or exercise of any
then outstanding Common Stock Equivalent) to use its commercially
reasonable efforts to cause each holder of any equity security or any
security convertible into or exchangeable or exercisable for any equity
security of the Company purchased from the Company at any time other than
in a public offering so to agree), and (ii) to the extent requested in
writing by a managing underwriter of any underwritten public offering
effected by the Company for its own account (it will not sell any Common
Stock (other than as part of such underwritten public offering) during the
time period reasonably requested by the managing underwriter, which period
shall not exceed 90 days.
(b) The Company hereby agrees that, if it shall
previously have received a request for registration pursuant to Section 2.1
or 2.2, and if such previous registration shall not have been withdrawn or
abandoned, the Company shall not sell, transfer, or otherwise dispose of,
any Common Stock, or any other equity security of the Company or any
security convertible into or exchangeable or exercisable for any equity
security of the Company (other than as part of such underwritten public
offering, a registration on Form S-4 or Form S-8 or any successor or
similar form which is then in effect or upon the conversion, exchange or
exercise of any then outstanding Common Stock Equivalent), until a period
of 90 days shall have elapsed from the effective date of such previous
registration; and the Company shall so provide in any registration rights
agreements hereafter entered into with respect to any of its securities.
2.8. No Required Sale. Nothing in this Agreement shall
be deemed to create an independent obligation on the part of any
Holder to sell any Registrable Securities pursuant to any effective
registration statement.
2.9. Indemnification. (a) In the event of any registration of any
securities of the Company under the Securities Act pursuant to this Article
2, the Company will, and hereby agrees to, indemnify and hold harmless, to
the fullest extent permitted by law, each Holder of Registrable Securities,
its directors, officers, fiduciaries, employees, stockholders, members or
general and limited partners (and the directors, officers, employees and
stockholders thereof), each other Person who participates as an underwriter
or a Qualified Independent Underwriter, if any, in the offering or sale of
such securities, each officer, director, employee, stockholder, fiduciary,
managing director, agent, affiliates, consultants, representatives,
successors, assigns or partner of such underwriter or Qualified Independent
Underwriter, and each other Person, if any, who controls such Holder or any
such underwriter within the meaning of the Securities Act, from and against
any and all losses, claims, damages or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) and expenses
(including reasonable fees of counsel and any amounts paid in any
settlement effected with the Company's consent, which consent shall not be
unreasonably withheld or delayed) to which each such indemnified party may
become subject under the Securities Act or otherwise in respect thereof
(collectively, "Claims"), insofar as such Claims arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any registration statement under which such securities
were registered under the Securities Act or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus or any amendment or supplement
thereto, together with the documents incorporated by reference therein, or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or (iii) any violation by the Company of any federal, state or
common law rule or regulation applicable to the Company and relating to
action required of or inaction by the Company in connection with any such
registration, and the Company will reimburse any such indemnified party for
any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such Claim as such
expenses are incurred; provided, however, that the Company shall not be
liable to any such indemnified party in any such case to the extent such
Claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact made in such registration statement or amendment thereof or supplement
thereto or in any such prospectus or any preliminary, final or summary
prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such indemnified party
specifically for use therein. Such indemnity and reimbursement of expenses
shall remain in full force and effect regardless of any investigation made
by as on behalf of such indemnified party and shall survive the transfer of
such securities by such Holder.
(b) Each Holder of Registrable Securities that are
included in the securities as to which any registration under Section 2.1
or 2.2 is being effected shall, severally and not jointly, indemnify and
hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 2.9) to the extent permitted by law the
Company, its officers and directors, each Person controlling the Company
within the meaning of the Securities Act and all other prospective sellers
and their respective directors, officers, fiduciaries, managing directors,
employees, agents, affiliates, consultants, representatives, successors,
assigns, general and limited partners, stockholders and respective
controlling Persons with respect to any untrue statement or alleged untrue
statement of any material fact in, or omission or alleged omission of any
material fact from, such registration statement, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company or its representatives by or on behalf
of such Holder specifically for use therein and reimburse such indemnified
party for any legal or other expenses reasonably incurred in connection
with investigating or defending any such Claim as such expenses are
incurred; provided, however, that the aggregate amount which any such
Holder shall be required to pay pursuant to this Section 2.9(b) and
Sections 2.9(c), (e) and (f) shall in no case be greater than the amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities pursuant to the registration statement giving rise to such
claim. Such indemnity and reimbursement of expenses shall remain in full
force and effect regardless of any investigation made by or on behalf of
such indemnified party and shall survive the transfer of such securities by
such Holder.
(c) Indemnification similar to that specified in the
preceding paragraphs (a) and (b) of this Section 2.9 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification
of securities under any state securities and "blue sky" laws.
(d) Any Person entitled to indemnification under this
Agreement shall notify promptly the indemnifying party in writing of the
commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 2.9, but the failure
of any such Person to provide such notice shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of
this Section 2.9, except to the extent the indemnifying party is materially
prejudiced thereby and shall not relieve the indemnifying party from any
liability which it may have to any such Person otherwise than under this
Article 2. In case any action or proceeding is brought against an
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside
counsel to the indemnified party a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, to
assume the defense thereof jointly with any other indemnifying party
similarly notified, to the extent that it chooses, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party that it so chooses, the
indemnifying party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that (i) if the indemnifying party fails
to take reasonable steps necessary to defend diligently the action or
proceeding within 20 days after receiving notice from such indemnified
party; or (ii) if such indemnified party who is a defendant in any action
or proceeding which is also brought against the indemnifying party
reasonably shall have concluded that there may be one or more legal
defenses available to such indemnified party which are not available to the
indemnifying party; or (iii) if representation of both parties by the same
counsel is otherwise inappropriate under applicable standards of
professional conduct, then, in any such case, the indemnified party shall
have the right to assume or continue its own defense as set forth above
(but with no more than one firm of counsel for all indemnified parties in
each jurisdiction, except to the extent any indemnified party or parties
reasonably shall have concluded that there may be legal defenses available
to such party or parties which are not available to the other indemnified
parties or to the extent representation of all indemnified parties by the
same counsel is otherwise inappropriate under applicable standards of
professional conduct) and the indemnifying party shall be liable for any
expenses therefor. No indemnifying party shall, without the written consent
of the indemnified party, which consent shall not be unreasonably withheld,
effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (A)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (B) does not include a
statement as to or an admission of fault, culpability or a failure to act,
by or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is
unavailable or is insufficient to hold harmless an indemnified party under
Sections 2.9(a), (b) or (c), then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of any
Claim in such proportion as is appropriate to reflect the relative fault of
the indemnifying party, on the one hand, and the indemnified party, on the
other hand, with respect to such offering of securities. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party or the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. If, however, the allocation
provided in the second preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section 2.9(e) were to
be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
the preceding sentences of this Section 2.9(e). The amount paid or payable
in respect of any Claim shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. No Person guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation. Notwithstanding anything in this
section 2.9(e) to the contrary, no indemnifying party (other than the
Company) shall be required pursuant to this section 2.9(e) to contribute
any amount in excess of the net proceeds received by such indemnifying
party from the sale of Registrable Securities in the offering to which the
losses, claims, damages or liabilities of the indemnified parties relate,
less the amount of any indemnification payment made by such indemnifying
party pursuant to Sections 2.9(b) and (c).
(f) The indemnity and contribution agreements contained
herein shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or
contract and shall remain operative and in full force and effect regardless
of any investigation made or omitted by or on behalf of any indemnified
party and shall survive the transfer of the Registrable Securities by any
such party.
(g) The indemnification and contribution required by this
Section 2.9 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received
or expense, loss, damage or liability is incurred.
3. Underwritten Offerings.
----------------------
3.1. Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by the Investors pursuant to a
registration requested under Section 2.1, the Company shall enter into a
customary underwriting agreement with the underwriters. Such underwriting
agreement shall be satisfactory in form and substance to the Initiating
Holders and shall contain such representations and warranties by, and such
other agreements on the part of, the Company and such other terms as are
generally prevailing in agreements of that type, including, without
limitation, indemnities and contribution agreements on substantially the
same terms as those contained herein. Any Holder participating in the
offering shall be a party to such underwriting agreement and may, at its
option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit
of such underwriters shall also be made to and for the benefit of such
Holder and that any or all of the conditions precedent to the obligations
of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such Holder; provided, however, that the
Company shall not be required to make any representations or warranties
with respect to written information specifically provided by a selling
Holder for inclusion in the registration statement. Each such Holder shall
not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties
or agreements regarding such Holder, its ownership of and title to the
Registrable Securities, and its intended method of distribution; and any
liability of such Holder to any underwriter or other Person under such
underwriting agreement shall be limited to liability arising from breach of
its representations and warranties and shall be limited to an amount equal
to the proceeds (net of expenses and underwriting discounts and
commissions) that it derives from such registration.
3.2. Piggyback Underwritten Offerings. In the case of a
registration pursuant to Section 2.2 hereof, if the Company shall have
determined to enter into an underwriting agreement in connection therewith,
any Registrable Securities to be included in such registration shall be
subject to such underwriting agreement. Any Holder participating in such
registration may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of such Holder and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such Holder. Each
such Holder shall not be required to make any representations or warranties
to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Holder, its
ownership of and title to the Registrable Securities, and its intended
method of distribution; and any liability of such Holder to any underwriter
or other Person under such underwriting agreement shall be limited to
liability arising from breach of its representations and warranties and
shall be limited to an amount equal to the proceeds (net of expenses and
underwriting discounts and commissions) that it derives from such
registration.
4. General.
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4.1. Adjustments Affecting Registrable Securities. The Company
agrees that it shall not effect or permit to occur any combination or
subdivision of shares of Common Stock which would adversely affect the
ability of any Holder of any Registrable Securities to include such
Registrable Securities in any registration contemplated by this Agreement
or the marketability of such Registrable Securities in any such
registration. The Company agrees that it will take all reasonable steps
necessary to effect a subdivision of shares if in the reasonable judgment
of (a) the Initiating Holders or (b) the managing underwriter for the
offering in respect of such Demand Registration Request, such subdivision
would enhance the marketability of the Registrable Securities. Each Holder
agrees to vote all of its shares of capital stock in a manner, and to take
all other actions necessary, to permit the Company to carry out the intent
of the preceding sentence including, without limitation, voting in favor of
an amendment to the Company's Certificate of Incorporation in order to
increase the number of authorized shares of capital stock of the Company.
4.2. Rule 144. The Company covenants that (i) so long as it
remains subject to the reporting provisions of the Exchange Act, it will
timely file the reports required to be filed by it under the Securities Act
or the Exchange Act (including, but not limited to, the reports under
Sections 13 and 15(d) of the Exchange Act referred to in subparagraph
(c)(1) of Rule 144 under the Securities Act), and (ii) will take such
further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder
to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (A) Rule 144 under
the Securities Act, as such Rule may be amended from time to time, or (B)
any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Securities, the Company will deliver
to such Holder a written statement as to whether it has complied with such
requirements.
4.3. Nominees for Beneficial Owners. If Registrable Securities are
held by a nominee for the beneficial owner thereof, the beneficial owner
thereof may, at its option, be treated as the Holder of such Registrable
Securities for purposes of any request or other action by any Holder or
Holders of Registrable Securities pursuant to this Agreement (or any
determination of any number or percentage of shares constituting
Registrable Securities held by any Holder or Holders of Registrable
Securities contemplated by this Agreement), provided that the Company shall
have received assurances reasonably satisfactory to it of such beneficial
ownership.
4.4 Amendments and Waivers. The terms and provisions of this
Agreement may be modified or amended, or any of the provisions hereof
waived, temporarily or permanently, in a writing executed and delivered by
the Company and the Investors. No waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute a waiver of any other
provision hereof (whether or not similar). No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof.
4.5. Notices. Except as otherwise provided in this Agreement, all
notices, requests, consents and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written instrument
delivered in person or by telecopy (with a confirmatory copy sent by a
different means within three business days of such notice), nationally
recognized overnight courier or first class registered or certified mail,
return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties:
(i) if to the Company, to:
Hexcel Corporation
Two Stamford Plaza
000 Xxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
Vice President,
General Counsel and Secretary
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Coco, Esq.
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(ii) if to the Holders:
x/x XX Xxxxxxx Xxxxxxxx 0000, X.X.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxxx
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
All such notices, requests, consents and other communications shall be
deemed to have been given when received.
4.6. Miscellaneous.
-------------
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and the respective
successors, personal representatives and assigns of the parties hereto,
whether so expressed or not. If any Person shall acquire Registrable
Securities from any Holder, in any manner, whether by operation of law or
otherwise, but in compliance with the Governance Agreement, such Person
shall promptly notify the Company and such Registrable Securities acquired
from such Holder shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such
Person shall be entitled to receive the benefits of and be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement. Any such successor or assign shall agree in
writing to acquire and hold the Registrable Securities acquired from such
Holder subject to all of the terms hereof. If any Holder shall acquire
additional Registrable Securities, such Registrable Securities shall be
subject to all of the terms, and entitled to all the benefits, of this
Agreement.
(b) This Agreement (with the documents referred to herein
or delivered pursuant hereto), together with the Agreement, dated as of
October 11, 2000, between the Company and the Investors, and the Governance
Agreement, embodies the entire agreement and understanding between the
parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof.
(c) This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York without
giving effect to the conflicts of law principles thereof other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
(d) Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of New York and of the United States of America, in
each case located in the County of New York, for any claim, action, suit,
or proceeding ("Litigation") arising out of or relating to this Agreement
and the transactions contemplated hereby (and agrees not to commence any
Litigation relating hereto or thereto except in such courts), and further
agrees that service of any process, summons, notice or document by U.S.
registered mail to its respective address set forth in this Agreement shall
be effective service of process for any Litigation brought against it in
any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any
Litigation arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of New York or the United States of
America, in each case located in the County of New York, hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in
any such court that any such Litigation brought in any such court has been
brought in an inconvenient forum.
(e) The Company and the Investors hereby waive any right
they may have to a trial by jury in respect of any action, proceeding or
litigation directly or indirectly arising out of, under or in connection
with this agreement or the transaction documents.
(f) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
All section references are to this Agreement unless otherwise expressly
provided.
(g) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
(h) Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction.
(i) The parties hereto acknowledge that there would be no
adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled
to injunctive relief, including specific performance, to enforce such
obligations without the posting of any bond, and, if any action should be
brought in equity to enforce any of the provisions of this Agreement, none
of the parties hereto shall raise the defense that there is an adequate
remedy at law.
(h) Each party hereto shall do and perform or cause to be
done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments, and documents
as any other party hereto reasonably may request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.
4.7. No Inconsistent Agreements. The rights granted to the Holders
of Registrable Securities hereunder do not in any way conflict with and are
not inconsistent with any other agreements to which the Company is a party
or by which it is bound. Without the prior written consent of Holders of a
majority of the then outstanding Registrable Securities, the Company will
not, on or after the date of this Agreement, enter into any agreement with
respect to its securities which is inconsistent with the rights granted in
this Agreement or otherwise conflicts with the provisions hereof, other
than any lock-up agreement with the underwriters in connection with any
registered offering effected hereunder, pursuant to which the Company shall
agree not to register for sale, and the Company shall agree not to sell or
otherwise dispose of, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, for a specified period
following the registered offering. The Company further agrees that if any
other registration rights agreement entered into after the date of this
Agreement with respect to any of its securities contains terms which are
more favorable to, or less restrictive on, the other party thereto than the
terms and conditions contained in this Agreement are (insofar as they are
applicable) to the Holders, then the terms and conditions of this Agreement
shall immediately be deemed to have been amended without further action by
the Company or any of the Holders of Registrable Securities so that the
Holders shall each be entitled to the benefit of any such more favorable or
less restrictive terms or conditions.
IN WITNESS WHEREOF, the parties hereto have duly executed
this agreement as of the date first above written.
HEXCEL CORPORATION
By:
-----------------------------
Name:
Title:
LXH, L.L.C.
By: GS Capital Partners 2000, L.P.,
its managing member
By: GS Advisors 2000, L.L.C.,
its general partner
By:
-----------------------------
Name:
Title:
LXH II, L.L.C.
By: GS Capital Partners 2000 Offshore, L.P.,
its managing member
By: GS Advisors 2000, L.L.C.,
its general partner
By:
-----------------------------
Name:
Title:
Exhibit D to Exhibit 10.1
BYLAWS OF HEXCEL CORPORATION
A DELAWARE CORPORATION
AMENDED AND RESTATED AS OF [ ], 2000
OFFICES
1. PRINCIPAL EXECUTIVE OFFICE. The principal executive office of the
Corporation is hereby fixed and located at 0 Xxxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxx. The Board of Directors is hereby granted full power and
authority to change the place of said principal executive office from time
to time.
2. OTHER OFFICES. The registered office of the Corporation in the State of
Delaware is hereby fixed and located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx, c/o The Corporation Trust Company. The Board of Directors is
hereby granted full power and authority to change the place of said
registered office within the State of Delaware from time to time. The
Corporation may also have offices in such other places in the United States
or elsewhere as the Board of Directors may from time to time designate or
as the business of the Corporation may from time to time require.
STOCKHOLDERS
3. PLACE OF MEETINGS. Stockholders' meetings shall be held at such place,
whether within or without the State of Delaware, as the Board of Directors
shall, by resolution, designate.
4. ANNUAL MEETINGS. Annual meetings of stockholders shall be held on such
dates and at such times as shall be designated from time to time by the
Board of Directors and stated in the notice of such annual meeting. At such
annual meetings directors shall be elected and such other business as may
be properly brought before such meeting shall be conducted.
Written notice of each annual meeting shall be mailed to or delivered
to each stockholder of record entitled to vote thereat not less than ten
(10) days nor more than sixty (60) days before the date of such annual
meeting. Such notice shall specify the place, the day, and the hour of such
meeting, and the matters which the Board of Directors intends to present
for action by the stockholders.
Except to the extent, if any, specifically provided to the contrary
in the Certificate of Incorporation or these Bylaws, to be properly brought
before an annual meeting, all business must be either (a) specified in the
notice of annual meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (b) otherwise properly brought before
the annual meeting by or at the direction of the Board of Directors or (c)
otherwise properly brought before the annual meeting by a stockholder of
record who complies with the notice procedures set forth below. In addition
to any other applicable requirements, for business (including the
nomination of a person or persons for election to the Board of Directors)
to be properly brought before any annual meeting by a stockholder, the
stockholder must have given timely notice thereof, in proper form, to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of
the Corporation not less than sixty (60) nor more than ninety (90) days
prior to the anniversary date of the immediately preceding annual meeting;
provided, however, that in the event the annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary
date, notice by the stockholder in order to be timely must be so received
not later than the close of business on the tenth (10th) day following the
date on which notice of the date of the annual meeting was mailed or
otherwise made public. To be in proper form, a stock- holder's notice to
the Secretary must be in writing and must set forth with respect to each
matter the stockholder proposes to bring before the annual meeting (a) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting,
(b) the name and record address of the stockholder proposing such business,
(c) the class or series and number of shares of the capital stock of the
Corporation that are owned beneficially or of record by the stockholder,
(d) as to each person whom the stockholder proposes to nominate for
election to the Board of Directors, (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or
employment of the person and (iii) the class or series and number of shares
of capital stock of the Corporation that are owned beneficially or of
record by the person, (e) a description of all arrangements or
understandings between such stockholder and any other person or persons
(including their name(s)) in connection with the proposal of such business
(or the nomination of any person or persons for election to the Board of
Directors) by any stockholder and any material interest of such stockholder
in such business (or nomination), (f) any other information that would be
required to be disclosed in a proxy statement or other filing required to
be made in connection with the solicitation of proxies for the proposal (or
the election of a person or persons to the Board of Directors) pursuant to
the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder if such stockholder were engaged in such
a solicitation and (g) a representation that such stockholder or a
representative thereof intends to appear in person at the annual meeting to
bring such business before the meeting (or nominate a person or persons for
election to the Board of Directors). Any such notice relating to the
nomination of a person or persons for election to the Board of Directors
must be accompanied by a written consent of each proposed nominee to being
named as a nominee and to serve as a director if elected.
The Chairman of the annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 4 and
any such business not properly brought before the meeting shall not be
transacted at the meeting.
5. SPECIAL MEETINGS. Special meetings of the stockholders may be called at
any time and for any purpose or purposes by the Board of Directors, the
Chairman of the Board, the Chief Executive Officer or by a committee of the
Board of Directors which has been duly designated by the Board of Directors
and whose powers and authority, as provided in a resolution of the Board of
Directors or in these Bylaws, include the power to call such meetings. If
and to the extent that any special meeting of stockholders may be called by
any other person or persons specified in any provision of the Certificate
of Incorporation or any amendment thereto, or any certificate filed under
Section 151(g) of the General Corporation Law of the State of Delaware (the
"GCL") designating the number of shares of Preferred Stock to be issued and
the rights, preferences, privileges and restrictions granted to and imposed
on the holders of such designated Preferred Stock, then such special
meeting may also be called by such person or persons in the manner, at the
times and for the purposes so specified. Except in special cases where
other express provision is made by statute, notice of such special meeting
shall be given in the same manner as for an annual meeting of stockholders.
Such notice shall also specify the general nature of the business to be
transacted at the meeting, and no business shall be transacted at the
special meeting except as specified in such notice (or any supplement
thereto).
6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any stockholders' meeting, annual
or special, whether or not a quorum is present, may be adjourned from time
to time by the chairman of such meeting or by the vote of a majority of the
shares present in person or represented by proxy at such meeting, but in
the absence of a quorum no other business may be transacted at such
meeting.
Notice of an adjourned meeting need not be given if (a) the meeting
is adjourned for thirty (30) days or less, (b) the time and place of the
adjourned meeting are announced at the meeting at which the adjournment is
taken, and (c) no new record date is fixed for the adjourned meeting.
Otherwise, notice of the adjourned meeting shall be given as if the
adjourned meeting were a new meeting.
7. VOTING. Except as otherwise provided by applicable law, the Certificate
of Incorporation or these Bylaws, a stockholder shall be entitled to one
vote for each share held of record on the record date fixed for the
determination of the stockholders entitled to notice of and to vote at a
meeting or, if no such date is fixed, the date determined in accordance
with applicable law. If any share is entitled to more or less than one vote
on any matter, all references herein to a majority or other proportion of
shares shall refer to a majority or other proportion of the voting power of
shares entitled to vote on such matter.
8. QUORUM. A majority of the outstanding shares entitled to vote,
represented in person or by proxy, shall constitute a quorum for the
transaction of business. No business may be transacted at a meeting in the
absence of a quorum other than the adjournment of such meeting, except that
if a quorum is present at the commencement of a meeting, business may be
transacted until the meeting is adjourned even though the withdrawal of
stockholders results in less than a quorum being present in person or by
proxy at such meeting. If a quorum is present at a meeting, the affirmative
vote of a majority of the shares present or represented by proxy at the
meeting and entitled to vote on any matter shall be the act of the
stockholders unless the vote of a larger number is required by applicable
law, the Certificate of Incorporation or these Bylaws. If a quorum is
present at the commencement of a meeting but the withdrawal of stockholders
results in less than a quorum being present in person or by proxy at such
meeting, the affirmative vote of a majority of the shares required to
constitute a quorum shall be the act of the stockholders unless the vote of
a larger number is required by applicable law, the Certificate of
Incorporation or these Bylaws.
9. PROXIES. A stockholder may be represented at any meeting of stockholders
by a written proxy signed by the person entitled to vote or by such
person's duly authorized attorney-in-fact. A proxy must bear a date within
three (3) years prior to the meeting, unless the proxy specifies a
different length of time. A revocable proxy is revoked by a writing
delivered to the Secretary of the Corporation stating that the proxy is
revoked or by a subsequent proxy executed by, or by attendance at the
meeting and voting in person by, the person executing the proxy.
10. CHAIRMAN AND SECRETARY AT MEETINGS. At any meeting of
stockholders, the Chairman of the Board of Directors, or in his absence, a
person designated by the Board of Directors, shall preside at and act as
chairman of the meeting. The Secretary, or in his absence a person
designated by the chairman of the meeting, shall act as secretary of the
meeting.
11. INSPECTORS. The Board of Directors may, in advance of any meeting of
stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. Each inspector, before entering upon the discharge of
his duties, shall take and sign an oath to faithfully execute the duties of
inspector. The inspector(s) shall determine the number of shares of capital
stock of the Corporation outstanding and the voting power of each, the
number of shares present or represented by proxy at the meeting, the
existence of a quorum, the validity and effect of proxies, and shall
receive votes, ballots or consents, count and tabulate all votes, ballots
or consents, determine the results of any election or vote, and do such
acts as are proper to conduct the election or vote with fairness to all
stockholders. At the request of the chairman of the meeting, the inspectors
shall make a written report of any matters determined by them. No director
or candidate for the office of director shall act as an inspector of an
election of directors.
12. LIST OF STOCKHOLDERS. The Secretary of the Corporation shall prepare
and make, at least ten (10) days before every meeting of the stockholders,
a complete list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each stockholder
and the number of shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at
least ten (10) days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
DIRECTORS
13. POWERS. Subject to any limitations contained in the Certificate of
Incorporation, these Bylaws or the GCL as to actions to be authorized or
approved by the stockholders, and subject to the duties of directors as
prescribed by these Bylaws, all corporate powers shall be exercised by or
under the ultimate direction of, and the business and affairs of the
Corporation shall be managed by, or under the ultimate direction of, the
Board of Directors.
14. CERTAIN DEFINITIONS. For purposes of these Bylaws:
"Additional Shares" means, as of any date of determination, up to
255,381 shares of the Corporation's Common Stock (as equitably adjusted to
reflect any stock split, combination, reorganization, recapitalization,
reclassification or other similar event involving the the Corporation's
Common Stock) the Beneficial Ownership of which may be acquired
inadvertantly from time to time by The Xxxxxxx Xxxxx Group, Inc. or its
Affiliates acting in connection with their activities as a broker or dealer
registered under Section 15 of the Exchange Act or as an asset manager
(excluding Affiliates formed for the purpose of effecting principal
transactions); provided, that if and for so long as The Xxxxxxx Sachs
Group, Inc. and its Affiliates collectively Beneficially Own less than 30%
of the Total Voting Power of the Corporation, the maximum number of
Additional Shares shall be 400,000 (as equitably adjusted to reflect any
stock split, combination, reorganization, recapitalization,
reclassification or other similar event involving the the Corporation's
Common Stock).
An "Affiliate" of any Person means 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. "Control" has the
meaning specified in Rule 12b-2 under the Exchange Act as in effect on the
date of this Agreement.
Any person shall be deemed to "Beneficially Own", to have "Beneficial
Ownership" of, or to be "Beneficially Owning" any securities (which
securities shall also be deemed "Beneficially Owned" by such person) that
such person is deemed to "beneficially own" within the meaning of Rule
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended, as
in effect on [ ], 2000; provided that, except for the rights set forth in
Section 3.02 of the Governance Agreement, any Person shall be deemed to
Beneficially Own any securities that such Person has the right to acquire,
whether or not such right is exercisable immediately.
"Buyout Transaction" means a tender offer, merger, sale of all or
substantially all the Corporation's assets or any similar transaction that
offers holders of Voting Securities (other than, if applicable, the Person
proposing such transaction) the opportunity to dispose of Voting Securities
Beneficially Owned by such holders or otherwise contemplates the
acquisition by any Person or Group of Voting Securities that would result
in Beneficial Ownership by such Person or Group of a majority of the Voting
Securities outstanding, or a sale of all or substantially all of the
Corporation's assets.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Governance Agreement" means the Governance Agreement dated as of [ ],
2000 among LXH, L.L.C., LXH II, L.L.C., the Corporation and the other parties
listed on the signature pages thereto (the "Limited Partnerships").
"Group" has the meaning set forth in Section 13(d) of the Exchange
Act as in effect on the date of this Agreement.
"GS Capital" means GS Capital Partners 2000, L.P., a Delaware limited
partnership.
"Independent Director" means a director of the Corporation who is not
an Investors' Director and who (i) is not and has never been an officer,
employee or director of any of the Investors or their Affiliates or
associates (as defined in Rule 12b-2 under the Exchange Act), in each case
other than the Corporation, and (ii) has no affiliation or compensation,
consulting or contractual relationship with any of the Investors or their
Affiliates or associates (in each case other than the Corporation) such
that a reasonable person would regard such director as likely to be unduly
influenced by any of such Persons or any of their Affiliates or associates
(in each case other than the Corporation).
"Initial Investors' Shares" means the [ ] shares of the Corporation's
Common Stock initially purchased by the Investors pursuant to the Stock
Purchase Agreement, dated October 10, 2000, among Ciba Specialty Chemicals
Holding Inc., Ciba Specialty Chemicals Inc., and the Investors (as
equitably adjusted to reflect any stock split, combination, reorganization,
recapitalization, reclassification or other similar event involving the
Initial Investors' shares).
"Investors" means (i) LXH, L.L.C., a Delaware limited liability
company, (ii) LXH II, L.L.C., a Delaware limited liability company, (iii)
each of the Limited Partnerships, (iv) The Xxxxxxx Xxxxx Group, Inc., or
any direct or indirect Subsidiary of The Xxxxxxx Sachs Group, Inc. formed
for the purpose of effecting principal transactions, and (v) subject to the
approval of a majority of the Independent Directors, one other Person
designated within 90 days following the Closing Date by LXH, L.L.C. or LXH
II, L.L.C. as a proposed transferee of up to 2,200,000 shares of the
Corporation's Common Stock; provided, that any of the foregoing Persons
shall be an Investor only for so long as it Beneficially Owns Voting
Securities subject to the provisions of the Governance Agreement or is a
transferee of Voting Securities pursuant to Section 4.01(a)(i) of the
Governance Agreement; provided, further, that any such Person specified in
clause (iv) or (v) that acquires Voting Securities in accordance with the
Governance Agreement has executed a joinder in which it shall agree to be
bound by the provisions of the Governance Agreement to the same extent as
the Investors.
"Investors' Directors" means Investors' Nominees who are elected or
appointed to serve as members of the Board of Directors.
"Investors' Nominees" means such persons as are so designated by GS
Capital or LXH II, L.L.C., as such designations may change from time to
time, to serve as members of the Board of Directors pursuant to Sections 17
and 18.
"Ordinary Course Broker Dealer Shares" means those shares of the
Corporation's Common Stock which are acquired by any Person solely in
connection with the activities of a broker or dealer registered under
Section 15 of the Exchange Act (i) as a result of underwriting activities
in connection with a registration statement filed by Hexcel (including any
shares acquired for the investment account of a broker or dealer in
connection with such underwriting activities), (ii) as a result of the
exercise of investment or voting discretion authority with respect to any
of such Person's customer accounts, or (iii) in good faith in connection
with a debt previously contracted; provided, in each case, that the Person
engaging in such activities does not Beneficially Own such shares of the
Corporation's Common Stock.
"Person" or "person" means any individual, group, corporation,
partnership, joint venture, trust, business association, organization,
governmental entity or other entity.
"Subsidiary" means, with respect to any Person, as of any date of
determination, any other Person as to which such Person owns, directly or
indirectly, or otherwise controls, more than 50% of the voting shares or
other similar interests.
"Significant Subsidiary" has the meaning set forth in Rule 1-02 of
Regulation S-X under the Securities Act of 1933, as amended, as in effect
on [ ], 2000.
"Total Voting Power of the Corporation" means the total number of
votes that may be cast in the election of directors of the Corporation if
all Voting Securities outstanding or treated as outstanding pursuant to the
final sentence of this definition were present and voted at a meeting held
for such purpose. The percentage of the Total Voting Power of the
Corporation Beneficially Owned by any Person is the percentage of the Total
Voting Power of the Corporation that is represented by the total number of
votes that may be cast in the election of directors of the Corporation by
Voting Securities Beneficially Owned by such Person. In calculating such
percentage, the Voting Securities Beneficially Owned by any Person that are
not outstanding but are subject to issuance upon exercise or exchange of
rights of conversion or any options, warrants or other rights Beneficially
Owned by such Person shall be deemed to be outstanding for the purpose of
computing the percentage of the Total Voting Power represented by Voting
Securities Beneficially Owned by such Person, but shall not be deemed to be
outstanding for the purpose of computing the percentage of the Total Voting
Power represented by Voting Securities Beneficially Owned by any other
Person.
"Voting Securities" means the Common Stock of the Corporation and any
other securities of the Corporation or any subsidiary of the Corporation
entitled to vote generally in the election of directors of the Corporation
or such subsidiary of the Corporation.
15. NUMBER OF DIRECTORS.
(a) Except as provided in Subsection 6.1 of the Certificate of
Incorporation and subject to compliance with Section 17, the authorized
number of directors of this Corporation shall be not less than three (3)
nor more than fifteen (15), with the exact number of directors within such
range specified in subsection (b) below, or, if not so specified, with the
exact number of directors within such range fixed from time to time by
resolution of the Board of Directors.
(b) It is hereby specified that this Corporation shall have ten (10)
directors, one of whom shall be the Chief Executive Officer (who shall also
be Chairman of Board) of the Corporation.
16. ELECTION.
(a) Directors shall hold office until the annual meeting next
following their election and until their successors are nominated, elected
and qualified pursuant to these Bylaws; subject, however, to their prior
resignation, death or removal as provided by the Certificate of
Incorporation, these Bylaws or applicable law.
Subject to the Certificate of Incorporation and Subsections (b), (c),
(d) and (e) hereof, any vacancies in the Board of Directors for any reason,
and any newly created directorships resulting from any increase in the
number of directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, even if less than a quorum; and
any directors so chosen shall hold office until the next election of the
class for which such directors shall have been chosen, and until their
successors shall be elected and qualified or until their earlier death,
resignation or removal.
(b) If at any time a member of the Board dies, resigns or is removed,
a new member shall be designated to replace such member until the next
election of directors. If, consistent with Section 17, the replacement
director is to be an Investors' Director, the Investors shall designate the
replacement Investors' Director. If the former member was the Chief
Executive Officer, the replacement Chief Executive Officer shall be the
replacement. Except as set forth in paragraph (d) below, if consistent with
Section 17, the replacement director is to be an Independent Director
(other than the Chief Executive Officer), the remaining Independent
Directors (including the Chief Executive Officer, if he or she is an
Independent Director) shall designate the replacement Independent Director.
(c) Subject to paragraph (d) below, if at any time the number of
Investors' Nominees entitled to be nominated to the Board of Directors in
accordance with these Bylaws in an election of directors presented to
stockholders decreases, within 10 days thereafter the Investors shall cause
a sufficient number of Investors' Directors to resign from the Board of
Directors so that the number of Investors' Directors on the Board of
Directors after such resignation(s) equals the number of Investors'
Nominees that GS Capital and the Investors would have been entitled to
designate had an election of directors taken place at such time. GS Capital
and the Investors shall also cause a sufficient number of Investors'
Directors to resign from any relevant committees of the Board of Directors
so that such committees are comprised in the manner contemplated by Section
19 after giving effect to such resignations. Any vacancies created by the
resignations required by this Subsection (c) shall be filled by Independent
Directors.
(d) If at any time the percentage of the Total Voting Power of the
Corporation Beneficially Owned by the Investors decreases as a result of an
issuance of Voting Securities by the Corporation (other than any of the
issuances described in the last sentence of this Section 16(d)), the
Investors may notify the Corporation that the Investors intend to acquire a
sufficient amount of additional Voting Securities necessary to maintain its
then current level of Board of Directors representation within 90 days. In
such event, until the end of such period (and thereafter if the Investors
in fact restore their percentage of the Total Voting Power of the
Corporation during such period and provided that the Investors continue to
maintain the requisite level of Beneficial Ownership of Voting Securities
in accordance with Section 17) the Board of Directors shall continue to
have the number of Investors' Directors that corresponds to the percentage
of the Total Voting Power of the Corporation Beneficially Owned by the
Investors prior to such issuance of Voting Securities by the Corporation.
Notwithstanding any provision in the Governance Agreement to the contrary,
the provisions of this Section 16(d) shall not apply to any issuance of
Voting Securities (x) in connection with the registered public offering of
up to 6,900,000 shares of the Corporation's Common Stock permitted by
Section 20(c), (y) upon conversion of any convertible securities which are
either outstanding on the date hereof or approved by the Board or a duly
authorized committee of the Board after the date hereof in accordance with
Section 2.06 of the Governance Agreement, or (z) pursuant to employee or
director stock option or incentive compensation or similar plans
outstanding as of the date hereof or, subsequent to the date hereof,
approved by the Board or a duly authorized committee of the Board.
(e) Whenever the holders of any one or more classes or series of
Preferred Stock issued by the Corporation shall have the right, voting
separately by class or series, to elect directors at any annual or special
meeting of stockholders, the election, term of office, filling of
vacancies, removal and other features of such directorships shall be
governed by the terms of the Certificate of Incorporation applicable
thereto, and by the terms of any certificate filed pursuant to Section
151(g) of the GCL designating such class or series and the rights,
preferences, privileges and restrictions granted to and imposed on the
holders of such designated Preferred Stock.
17. INVESTORS BOARD REPRESENTATION.
(a) For so long as the Investors Beneficially Own 20% or more of the
Total Voting Power of the Corporation, subject to Section 2.02(d), the
Corporation shall exercise all authority under applicable law to cause any
slate of directors presented to stockholders for election to the Board of
Directors to consist of such nominees that, if elected, would result in the
entire Board of Directors consisting of three Investors' Directors, the
Chief Executive Officer (who shall also be the Chairman of the Board), and
six additional Independent Directors; provided, however, that if the
Investors, directly or indirectly, shall have sold, transferred or
otherwise disposed of, on a cumulative basis, Beneficial Ownership of such
number of shares representing 331/3% or more of the Initial Investors'
Shares to Persons who are not Investors, then the Corporation shall
exercise all authority under applicable law to cause any slate of directors
presented to stockholders for election to the Board of Directors to consist
of such nominees that, if elected, would result in the entire Board of
Directors consisting of two Investors' Directors, the Chief Executive
Officer (who shall also be the Chairman of the Board), and seven additional
Independent Directors.
(b) For so long as the Investors Beneficially Own less than 20% but
at least 15% of the Total Voting Power of the Corporation, subject to
Section 17(d), the Corporation shall exercise all authority under
applicable law to cause any slate of directors presented to stockholders
for election to the Board of Directors to consist of such nominees that, if
elected, would result in the entire Board of Directors consisting of two
Investors' Directors, the Chief Executive Officer (who shall also be the
Chairman of the Board) and seven additional Independent Directors;
provided, however, that if the Investors, directly or indirectly, shall
have sold, transferred or otherwise disposed of, on a cumulative basis,
Beneficial Ownership of such number of shares representing 662/3% or more
of the Initial Investors' Shares, then the Corporation shall exercise all
authority under applicable law to cause any slate of directors presented to
stockholders for election to the Board of Directors to consist of such
nominees that, if elected, would result in the entire Board of Directors
consisting of one Investors' Director, the Chief Executive Officer (who
shall also be the Chairman of the Board), and eight additional Independent
Directors.
(c) For so long as the Investors Beneficially Own less than 15% but
at least 10% of the Total Voting Power of the Corporation, subject to
Section 17(d), the Corporation shall exercise all authority under
applicable law to cause any slate of directors presented to stockholders
for election to the Board of Directors to consist of such nominees that, if
elected, would result in the entire Board of Directors consisting of one
Investors' Director, the Chief Executive Officer (who shall also be the
Chairman of the Board), and eight additional Independent Directors.
(d) In order to determine (x) the number of Investors' Nominees to be
included in any slate of directors to be presented to stockholders for
election to the Board of Directors and (y) the percentage of the Total
Voting Power of the Corporation Beneficially Owned by the Investors for
purposes of Section 20, the Investors shall be deemed to Beneficially Own a
percentage of the Total Voting Power of the Corporation that is no more
than (1) 39.3% of the Total Voting Power of the Corporation less (2) the
percentage of the Total Voting Power of the Corporation represented by any
Voting Securities disposed of, directly or indirectly, by the Investors
since [ ], 2000.
(e) The Additional Shares shall not be included in any calculation
of the Investors' Beneficial Ownership of the Total Voting Power of the
Corporation under these Bylaws.
18. DESIGNATION OF SLATE. Any Investors' Nominees that are included in a
slate of directors pursuant to Section 17 shall be designated by the
Investors, and any Independent Director nominees who are to be included in
any slate of directors pursuant to Section 17 shall be designated by
majority vote of the then incumbent Independent Directors (including the
Chief Executive Officer (who shall also be the Chairman of the Board) if he
or she is an Independent Director). The Corporation's nominating committee,
if any (or if there is no such nominating committee, the Board or any other
duly authorized committee thereof) shall nominate each person so
designated.
19. COMMITTEE MEMBERSHIP. Subject to applicable law, rules and regulations
(including those of applicable self-regulatory organizations), so long as
the Investors shall be entitled to designate two or more Investors'
Directors for election to the Board of Directors, each committee of the
Board of Directors, including the finance, audit, nominating, and
compensation committees, shall include at least one Investors' Director.
20. APPROVALS. The Board of Directors shall not authorize, approve or
ratify any of the following actions without the approval of a majority of
the Investors' Directors for so long as (subject to the provisions of
Section 17(d)) the Investors Beneficially Own 15% or more of the Total
Voting Power of the Corporation and, if the Investors' collective
percentage Beneficial Ownership of the Total Voting Power of the
Corporation is reduced below 15% as so determined by an issuance of Voting
Securities by the Corporation, until (x) 10 business days after the
Corporation notifies the Investors in writing of such issuance, and (y) if
the Investors shall have notified the Corporation within 10 business days
after their receipt of a written notification of such issuance that the
Investors, pursuant to the option granted to the Investors by Section 3.02
of the Governance Agreement, intend to acquire a sufficient amount of
Voting Securities within such 90-day period referred to therein, so that
the Investors will collectively Beneficially Own at least 15% of the Total
Voting Power of the Corporation determined in accordance with Section 17(d)
by the end of such 90-day period, during the 90-day period following an
issuance of Voting Securities by the Corporation that causes the Investors
to collectively Beneficially Own less than 15% of the Total Voting Power of
the Corporation as so determined:
(a) any merger, consolidation, acquisition or other business
combination involving the Corporation or any Subsidiary of the Corporation
(other than a Buyout Transaction) if the value of the consideration to be
paid or received by the Corporation and/or its stockholders in any such
individual transaction or in such transaction when added to the aggregate
value of the consideration paid or received by the Corporation in all other
such transactions approved by the Board of Directors during the immediately
preceding 12 months exceeds the greater of (x) $150 million or (y) 11% of
the Corporation's total consolidated assets;
(b) any Buyout Transaction; provided, however, that the Investors'
rights pursuant to this clause (b) shall apply only for the 18-month period
following [ ], 2000;
(c) any sale, transfer, assignment, conveyance, lease or other
disposition or any series of related dispositions of any assets, business
or operations of the Corporation or any of its Subsidiaries (other than a
Buyout Transaction) if the value of the assets, business or operations so
disposed during the immediately preceding 12 months exceeds the greater of
(x) $150 million or (y) 11% of the Corporation's total consolidated assets;
(d) any issuance by the Corporation or any Significant Subsidiary of
the Corporation of equity or equity-related securities other than (i)
pursuant to customary employee or director stock option or incentive
compensation or similar plans approved by the Board of Directors or a duly
authorized committee of the Board of Directors, (ii) pursuant to
transactions solely among the Corporation and its wholly owned Subsidiaries
(including any Subsidiaries which would be wholly owned by the Corporation
but for the issuance of directors' or shareholders' qualifying shares),
(iii) upon conversion of convertible securities or upon exercise of
warrants or options, which convertible securities, warrants or options are
either outstanding on [ ], 2000 or approved by the Board or a duly
authorized committee of the Board after [ ], 2000 in accordance with
Section 2.06 of the Governance Agreement, or (iv) in connection with any
mergers, consolidations, acquisitions or other business combinations
involving the Corporation or any Subsidiary of the Corporation which are
approved by the Board or a duly authorized committee of the Board in
accordance with Section 2.06 of the Governance Agreement (if applicable)
and for which the consideration received by the Corporation for such
transactions during the immediately preceding 12 months exceeds the greater
of (x) $150 million or (y) 11% of the Corporation's total consolidated
assets; provided, however, that during the 12 month period following [ ],
2000, neither the Corporation nor any Subsidiary of the Corporation may
issue shares of Common Stock in a registered public offering under the
Securities Act in a private placement or otherwise without the approval of
a majority of the Investors' Directors unless the aggregate number of
shares issued during this 12 month period does not exceed 6,900,000 and the
offering price of such shares is unanimously approved by a pricing
committee of the Board of Directors, such committee consisting solely of
one Investors' Director, the Chairman of the Board and one additional
Independent Director (selected by the Independent Directors).
21. NONEXCLUSIVITY. The Investor's rights under Sections 14, 15, 16, 17,
18, 19, and 20 shall not be deemed exclusive of any rights related to
similar matters to which the Investors may be entitled under these Bylaws,
the Certificate of Incorporation, any agreement (including the Governance
Agreement) or otherwise.
22. QUORUM AND REQUIRED VOTE. A majority of the directors then in office
shall constitute a quorum for the transaction of business, provided that
unless the authorized number of directors is one, the number constituting a
quorum shall not be less than the greater of one-third of the authorized
number of directors or two directors. Except as otherwise provided by the
Certificate of Incorporation or these Bylaws, every act or decision done or
made by a majority of the directors present at a meeting duly held at which
a quorum is present is the act of the Board of Directors. A meeting at
which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for such meeting. A
majority of the directors present at a meeting, whether or not a quorum is
present, may adjourn the meeting to another time and place.
23. REMOVAL. Except as provided in the Certificate of Incorporation and in
Section 16 hereof, a director may be removed from office at any time, with
or without cause, by the affirmative vote of the holders of a majority of
the outstanding shares entitled to vote at an election of directors. No
reduction in the number of directors shall have the effect of removing any
director prior to the expiration of his term.
24. RESIGNATION. Any director may resign by giving written notice to the
Chairman of the Board, the Chief Executive Officer, the Secretary or the
Board of Directors. Such resignation shall be effective when given unless
the notice specifies a later time. The resignation shall be effective
regardless of whether it is accepted by the Corporation.
25. COMPENSATION. If the Board of Directors so resolves, the directors,
including the Chairman of the Board, shall receive compensation and
expenses of attendance at meetings of the Board of Directors and committees
of the Board of Directors. Nothing herein shall preclude any director from
serving the Corporation in another capacity and receiving compensation for
such service.
26. COMMITTEES. Subject to Section 19, the Board of Directors may, by
resolution adopted by a majority of the authorized number of directors,
designate one or more committees, each consisting of two or more directors,
to serve at the pleasure of the Board of Directors. In the absence or
disqualification of any member of a committee of the Board of Directors,
the other members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may, subject to
Section 19, unanimously appoint another member of the Board of Directors to
act in the place of such absent or disqualified member. The Board of
Directors may, subject to Section 19, designate one or more directors as
alternate members of a committee who may replace any absent member at any
meeting of the committee. To the extent permitted by resolution of the
Board of Directors, a committee may exercise all of the authority of the
Board of Directors to the extent permitted by Section 141(c) of the GCL.
27. TIME AND PLACE OF MEETINGS AND TELEPHONE MEETINGS.
Immediately following each annual meeting of stockholders (or at such other
time and place as may be determined by the Board of Directors), the Board
of Directors shall hold a regular meeting for purposes of organizing the
Board of Directors, electing officers, appointing committees and
transacting other business. The Board of Directors may establish by
resolution the times, if any, that other regular meetings of the Board of
Directors shall be held. All meetings of directors shall be held at the
principal executive office of the Corporation or at such other place,
whether within or without the State of Delaware, as shall be designated in
the notice for the meeting or in a resolution of the Board of Directors.
Directors may participate in a meeting through use of conference telephone
or similar communications equipment, so long as all directors participating
in such meeting can hear each other.
28. CALL. Meetings of the Board of Directors, whether regular or special,
may be called by the Chairman of the Board, the Chief Executive Officer,
the Secretary or any two directors.
29. NOTICE. Regular meetings of the Board of Directors may be held without
notice if the date and time of such meetings have been fixed by the Board
of Directors. Special meetings shall be held upon four days' notice by
mail, 24 hours notice delivered personally or by telephone, telegraph or
confirmed fax or on such shorter notice as the person or persons calling
such meeting may deem necessary or appropriate under the circumstances.
Regular meetings shall be held upon similar notice if notice is required
for such meetings. Neither a notice nor a waiver of notice need specify the
purpose of any regular or special meeting. Notice sent by mail, telegram or
fax shall be addressed to a director at his business or home address/fax
number as shown upon the records of the Corporation, or at such other
address/fax number as the director specifies in writing delivered to the
Corporation, or if such an address/fax number is not so shown on such
records and no written instructions have been received from the director,
at the place at which meetings of directors are regularly held. Such
mailing, telegraphing, delivery or transmittal, as above provided, shall be
due, legal and personal notice to such director. If a meeting is adjourned
for more than 24 hours, notice of the adjourned meeting shall be given
prior to the time of such meeting to the directors who were not present at
the time of the adjournment.
30. MEETING WITHOUT REGULAR CALL AND NOTICE. The transaction of business at
any meeting of the Board of Directors, however called and noticed or
wherever held, is as valid as though transacted at a meeting duly held
after regular call and notice if a quorum is present and if, either before
or after the meeting, each of the directors not present signs a written
waiver of notice, a consent to holding the meeting or an approval of the
minutes of the meeting. For such purposes, a director shall not be
considered present at a meeting if, although in attendance at the meeting,
the director protests the lack of notice prior to the meeting or at its
commencement.
31. ACTION WITHOUT MEETING. Any action required or permitted to be taken by
the Board of Directors may be taken without a meeting, if all of the
members of the Board of Directors individually or collectively consent in
writing to such action. In addition, all directors (including those who are
not members of a particular committee) shall receive notice of, and shall
be entitled to attend, all meetings of any committee of the Board of
Directors. Only those directors who are members of a particular committee
shall be entitled to vote at meetings thereof.
32. COMMITTEE MEETINGS. The principles set forth in Sections 27 through 31
of these Bylaws shall also apply to committees of the Board of Directors
and to actions taken by such committees.
33. HONORARY ADVISORS TO THE BOARD. The Board of Directors may appoint one
or more Honorary Advisors, who shall hold such position for such period,
shall have such authority and perform such duties as the Board of Directors
may specify, subject to change at any time by the Board of Directors. An
Honorary Advisor to the Board of Directors shall not be a director for any
purpose or with respect to any provision of the Certificate of
Incorporation, these Bylaws or of the GCL, and shall have no vote as a
director. However, an Honorary Advisor to the Board of Directors may
receive such compensation and expense reimbursement as the Board of
Directors shall from time to time determine.
OFFICERS
34. TITLES AND RELATION TO BOARD OF DIRECTORS. The officers of the
Corporation shall include a Chief Executive Officer, a President, a
Secretary and a Treasurer. The Board of Directors may also choose a
Chairman of the Board, one or more Vice Chairmen of the Board, a Chief
Operating Officer, a Chief Financial Officer, a General Counsel, and one or
more Vice Presidents (who may be designated Executive or Senior Vice
Presidents), Assistant Secretaries, Assistant Treasurers or other officers.
All officers shall perform their duties and exercise their powers subject
to the direction of the Chief Executive Officer and the overriding
direction of the Board of Directors. If there shall occur a vacancy in any
office, in the absence of the appointment of a replacement by the Board of
Directors, the Chief Executive Officer shall have the right and power to
appoint a Secretary, a Treasurer, a Chief Operating Officer, a Chief
Financial Officer, a General Counsel, one or more additional Vice
Presidents (who may be designated Executive or Senior Vice Presidents), one
or more Assistant Secretaries and one or more Assistant Treasurers, all of
whom shall serve at the pleasure of the Board of Directors, and shall
perform their duties and exercise their powers subject to the direction of
the Chief Executive Officer and the overriding direction of the Board of
Directors. Any number of offices may be held simultaneously by the same
person.
35. ELECTION, TERM OF OFFICE AND VACANCIES. At its regular annual meeting,
the Board of Directors shall choose the officers of the Corporation. No
officer need be a member of the Board of Directors except the Chairman of
the Board and the Chief Executive Officer. The officers shall hold office
until their successors are chosen, except that the Board of Directors may
remove any officer at any time. Subject to Section 34 of these Bylaws, if
an office becomes vacant for any reason, the vacancy shall be filled by the
Board of Directors.
36. RESIGNATION. Any officer may resign at any time upon written notice to
the Corporation without prejudice to the rights, if any, of the Corporation
under any contract to which the officer is a party. Such resignation shall
be effective when given unless the notice specifies a later time. The
resignation shall be effective regardless of whether it is accepted by the
Corporation.
37. COMPENSATION. The Board of Directors shall fix the compensation of the
Chairman of the Board, any Vice Chairman, the Chief Executive Officer and
the President and may fix the salaries of other employees of the
Corporation including the other officers. If the Board of Directors does
not fix the salaries of the other officers, the Chief Executive Officer
shall fix such salaries.
38. CHAIRMAN OF THE BOARD. The Chairman of the Board shall, if present,
preside at all meetings of the Board of Directors, and exercise and perform
such other powers and duties as may be from time to time assigned to him by
the Board of Directors or prescribed by these Bylaws.
39. CHIEF EXECUTIVE OFFICER. Unless otherwise determined by the Board of
Directors, the Chief Executive Officer shall be deemed general manager of
the Corporation. The Chief Executive Officer shall be the Chairman of the
Board, shall be entitled to attend all meetings of the Board of Directors
and any committees thereof and shall effectuate orders and resolutions of
the Board of Directors and exercise such other powers and perform such
other duties as the Board of Directors shall from time to time prescribe.
40. PRESIDENT AND VICE PRESIDENTS. In the absence or disability of the
Chief Executive Officer and Chairman of the Board, the President, and in
the absence or disability of the President, the Vice President (who may be
designated Executive or Senior Vice President), if any, or if more than
one, the Vice Presidents (who may be designated Executive or Senior Vice
Presidents) in order of their rank as fixed by the Board of Directors or,
if not so ranked, the Vice President (who may be designated Executive or
Senior Vice President) designated by the Board of Directors, shall perform
all the duties of the Chief Executive Officer, and when so acting shall
have all the powers of, and be subject to all the restrictions upon, the
Chief Executive Officer. The President and Vice Presidents (who may be
designated Executive or Senior Vice Presidents) shall have such other
powers and perform such other duties as from time to time may be prescribed
for them by the Board of Directors or these Bylaws.
41. SECRETARY. The Secretary (or in his absence an Assistant Secretary or,
if there be no Assistant Secretaries, another person designated by the
Board of Directors) shall have the following powers and duties:
(a) Record of Corporate Proceedings. The Secretary shall attend all
meetings of the Board of Directors and its committees and shall record all
votes and the minutes of such meetings in a book to be kept for that
purpose at the principal executive office of the Corporation or at such
other place as the Board of Directors may determine. The Secretary shall
keep at the Corporation's principal executive office the original or a copy
of these Bylaws, as amended from time to time.
(b) Record of Shares. Unless a transfer agent is appointed by the
Board of Directors to keep a share register, the Secretary shall keep at
the principal executive office of the Corporation a share register showing
the names of the stockholders and their addresses, the number and class of
shares held by each, the number and date of certificates issued, and the
number and date of cancellation of each certificate surrendered for
cancellation.
(c) Notices. The Secretary shall give such notices as may be required
by law or these Bylaws.
(d) Additional Powers and Duties. The Secretary shall exercise such
other powers and perform such other duties as the Board of Directors or the
Chief Executive Officer shall from time to time prescribe.
42. TREASURER. Unless otherwise determined by the Board of Directors, the
Treasurer of the Corporation shall be its chief financial officer, and
shall have custody of the corporate funds and securities and shall keep
adequate and correct accounts of the Corporation's properties and business
transactions. The Treasurer shall disburse such funds of the Corporation as
may be ordered by the Board of Directors or by one or more persons
authorized by the Board of Directors, taking proper vouchers for such
disbursements, and when requested shall render to the Chief Executive
Officer, the Board of Directors and, if applicable, the Chief Financial
Officer, an account of all transactions and the financial condition of the
Corporation and shall exercise such other powers and perform such other
duties as the Board of Directors, the Chief Executive Officer or, if
applicable, the Chief Financial Officer shall prescribe.
43. OTHER OFFICERS AND AGENTS. Such other officers and agents as the Board
of Directors may choose shall perform such duties and have such powers as
from time to time may be assigned to them by the Board of Directors. The
Board of Directors may delegate to any other officer of the Corporation the
power to choose such other officers and to prescribe their respective
duties and powers.
SHARES
44. CERTIFICATES. Every stockholder shall be entitled to have a certificate
or certificates certifying the number and class of shares of the capital
stock of the Corporation owned by him. All such certificates shall be
signed in the manner prescribed in the GCL. Any signature on such
certificates may be a facsimile signature. The Board of Directors shall
have the power to appoint one or more transfer agents and/or registrars for
the transfer or registration of certificates of stock of any class, and may
require stock certificates to be countersigned or registered by one or more
of such transfer agents and/or registrars.
45. TRANSFERS OF SHARES OF CAPITAL STOCK. Transfers of shares shall be made
only upon the transfer books of the Corporation, kept at the office of the
Corporation or transfer agents and/or registrars designated by the Board of
Directors. Before any new certificate is issued, the old certificate shall
be surrendered for cancellation.
46. STOCKHOLDERS OF RECORD. Only stockholders of record shall be entitled
to be treated by the Corporation as the holders in fact of the shares
standing in their respective names and the Corporation shall not be bound
to recognize any equitable or other claim to or interest in any share of
any other person, whether or not it shall have express or other notice
thereof, except as expressly provided by law.
47. LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation may cause a new
stock certificate to be issued in place of any certificate previously
issued by the Corporation alleged to have been lost, stolen or destroyed.
The Corporation may, at its discretion and as a condition precedent to such
issuance, require the owner of such certificate to deliver an affidavit
stating that such certificate was lost, stolen or destroyed, or to give the
Corporation a bond or other security sufficient to indemnify it against any
claim that may be made against it, including any expense or liability, on
account of the alleged loss, theft or destruction or the issuance of a new
certificate.
48. STOCKHOLDERS RECORD DATE. In order that the Corporation may determine
the stockholders entitled to notice of and to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of Directors
may fix a record date, which shall be not more than sixty (60) days nor
less than ten (10) days before the date of such meeting. A determination of
stockholders of record entitled to notice of and to vote at a meeting of
stockholders shall apply to any adjournment of the meeting, provided,
however, that the Board of Directors may fix a new record date for the
adjourned meeting, and shall fix a new record date for such adjourned
meeting if the adjourned meeting is to take place more than thirty (30)
days from the date set for the original meeting.
49. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation and the GCL, the Board of Directors may, out of funds legally
available therefor, declare dividends upon the stock of the Corporation.
Before the declaration of any dividend, the Board of Directors may set
apart, out of any funds of the Corporation available for dividends, such
sum or sums as from time to time in its discretion may be deemed proper for
working capital or as a reserve fund to meet contingencies or for such
other purposes as shall be deemed conducive to the interests of the
Corporation.
AMENDMENTS
50. ADOPTION OF AMENDMENTS. The Board of Directors is authorized and
empowered from time to time in its discretion to make, alter, amend or
repeal these Bylaws, except as such power may be restricted or limited by
the GCL; provided, however, that the provisions set forth in Sections 14,
16(a)-(d), 17, 18, 19, 20 or this Section 50 shall not be amended or
repealed unless the Investors shall have consented thereto in writing.
Notwithstanding the foregoing, Sections 14, 16(b)-(d), 17, 18, 19, 20 and
the proviso in the preceding sentence of this Section 50 shall be
automatically repealed and cease to have any force or effect on the date
upon which the Investors rights under the Governance Agreement terminate
pursuant to the terms of such agreement.
51. RECORD OF AMENDMENTS. Whenever an amendment or new bylaw is adopted, it
shall be copied in the book to be kept for that purpose at the principal
executive office of the Corporation or at such other place as the Board of
Directors may determine. If any bylaw is repealed, the fact of repeal with
the date of the meeting at which the repeal was enacted or written consent
with respect thereto was filed shall be stated in said book.
CORPORATE SEAL
52. FORM OF SEAL. The corporate seal shall be circular in form, and shall
have inscribed thereon the name of the Corporation, the date of its
incorporation and the word "Delaware".
MISCELLANEOUS
53. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for payment of
money, notes, or other evidences of indebtedness, issued in the name of or
payable by or to the Corporation, shall be signed or endorsed by the Chief
Executive Officer, the President, the Chief Financial Officer, the
Treasurer or such other person or persons as may from time to time be so
authorized in accordance with a resolution of the Board of Directors.
54. CONTRACTS, ETC.; HOW EXECUTED. Except as otherwise provided in these
Bylaws, the Chairman of the Board (in his capacity as Chief Executive
Officer), the President, any Vice President (who may be designated
Executive or Senior Vice President) or Treasurer, or such other officer or
officers as may from time to time be so authorized in accordance with a
resolution of the Board of Directors, shall have the power and authority to
sign and execute on behalf of the Corporation deeds, conveyances and
contracts, and any and all other documents requiring execution by the
Corporation. The Board of Directors may authorize any other officer or
officers, or agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
55. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chief Executive
Officer, the President or any Vice President (who may be designated
Executive or Senior Vice President) or the Secretary or Assistant Secretary
of the Corporation are authorized to vote, represent, and exercise on
behalf of the Corporation all rights incident to any and all shares of any
other corporation or corporations standing in the name of the Corporation.
The authority herein granted to said officers to vote or represent on
behalf of the Corporation any and all shares held by the Corporation in any
other corporation or corporations may be exercised either by such officers
in person or by any other person authorized so to do by proxy or power of
attorney duly executed by said officers.
56. INSPECTION OF BYLAWS. The Corporation shall keep in its principal
office for the transaction of business the original or a copy of these
Bylaws as amended or otherwise altered to date, certified by the Secretary,
which shall be open to inspection by the stockholders at all reasonable
times during office hours.
57. FISCAL YEAR. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
58. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise requires,
the general provisions, rules and construction, and definitions contained
in the GCL shall govern the construction of these Bylaws. Without limiting
the generality of the foregoing, the masculine gender includes the feminine
and neuter, the singular number includes the plural and the plural number
includes the singular, and the term "person" includes a corporation or
other entity or organization as well as a natural person.
59. SEVERABILITY. If any provision of these Bylaws is determined to be
invalid, void, illegal or unenforceable, the remaining provisions of these
Bylaws shall continue to be valid and enforceable and shall in no way be
affected, impaired or invalidated thereby.
Exhibit F to Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AGREEMENT made this 11th day of October, 2000, between Hexcel
Corporation, a Delaware corporation (the "Company"), and Xxxx X. Xxx (the
"Executive").
The Executive is presently employed by the Company as its
Chairman and Chief Executive Officer pursuant to an Employment Agreement
entered into as of February 29, 1996, as amended (the "Prior Agreement").
The Board of Directors of the Company (the "Board") recognizes
that the Executive's contribution to the growth and success of the Company
has been substantial. In connection with the transactions (the
"Transactions") contemplated by the Stock Purchase Agreement (the "Stock
Purchase Agreement") dated as of October 11, 2000 by and among Ciba
Specialty Chemicals Holding, Inc. ("Ciba SCH"), Ciba Specialty Chemicals
Inc. ("Ciba SCI"), Ciba Specialty Chemicals Corporation ("Ciba SCC" and
together with Ciba SCH and Ciba SCI, "Ciba"), LXH, L.L.C. ("LXH") and LXH
II, L.L.C. ("LXH II" and together with LXH, "the Purchasers"), pursuant to
which, among other things, the Purchasers will purchase from Ciba shares of
common stock of the Company, the Board desires to provide for the continued
employment of the Executive and to make certain changes in the Executive's
employment arrangements with the Company which the Board has determined
will reinforce and encourage the continued attention and dedication to the
Company of the Executive as a member of the Company's management, in the
best interest of the Company and its stockholders. The Executive is willing
to commit himself to continue to serve the Company, on the terms and
conditions herein provided.
In order to effect the foregoing, the Company and the Executive
wish to enter into this Amended and Restated Employment Agreement on the
terms and conditions set forth below. Accordingly, in consideration of the
premises and the respective covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Employment. The Company hereby agrees to continue to
employ the Executive, and the Executive hereby agrees to continue to serve the
Company, on the terms and conditions set forth herein.
2. Term. The employment of the Executive by the Company as
provided in Section 1 shall commence on the Closing Date (as such term is
defined in the Stock Purchase Agreement) (the "Commencement Date") and end
on the third anniversary of the Commencement Date, unless further extended
or sooner terminated as hereinafter provided; provided, however, that on
such third anniversary the term of this Agreement shall be automatically
extended for one additional year unless either the Company or the Executive
shall have given notice to the other at least 90 days prior to such third
anniversary that this Agreement shall not be so renewed.
3. Position and Duties. The Executive shall serve as Chairman
of the Board and Chief Executive Officer of the Company and shall have such
responsibilities, duties and authority consistent with such position and as
may from time to time be assigned to the Executive by the Board. The
Executive shall devote substantially all of his working time and efforts to
the business and affairs of the Company; provided, however, that the
Executive will be permitted (i) to serve as a director or advisor to other
for-profit and not-for-profit organizations and corporations and (ii) to
serve as an active partner of investment partnerships, in each case so long
as (x) such service does not materially interfere with the performance of
his obligations hereunder and (y) such organizations, corporations and
partnerships are not competitive in any business area in which the Company
is engaged during the term of this Agreement. The Executive shall furnish
to the Company a list of each such entity on the Commencement Date and
shall update such list as appropriate.
4. Place of Performance. In connection with the Executive's
employment by the Company, the Executive shall perform his duties and
conduct his business at the principal executive offices of the Company,
which shall at all times be located in the New York City/Connecticut
metropolitan area, except for required travel on the Company's business to
an extent substantially consistent with present business travel
obligations.
5. Compensation and Related Matters.
(a) Salary. During the period of the Executive's
employment hereunder, the Company shall pay to the Executive an annual base
salary at a rate no less than the rate of base salary in effect on the date
hereof or at such increased rate as may from time to time be determined by
the Board, provided, however, that once the Executive's annual base salary
is increased, it may not thereafter be decreased during the term of this
Agreement. The Executive's annual base salary shall be paid in
substantially equal installments, no less frequently than monthly, in
accordance with the Company's standard payroll practices. Compensation of
the Executive by salary payments shall not be deemed exclusive and shall
not prevent the Executive from participating in any other compensation or
benefit plan of the Company. The salary payments (including any increased
salary payments) hereunder shall not in any way limit or reduce any other
obligation of the Company hereunder, and no other compensation, benefit or
payment hereunder shall in any way limit or reduce the obligation of the
Company to pay the Executive's salary hereunder.
(b) Annual Bonuses. During the term of the Executive's
employment hereunder, the Executive shall participate in the Company's
Management Incentive Compensation Plan (or in such alternative annual
incentive compensation plans as the Company shall make available to its
other officers) (the "MICP") on terms no less favorable than those
applicable to other senior officers of the Company and shall have a target
bonus thereunder of not less than 80% of his rate of base salary.
(c) Equity Compensation.
(i) Incentive Stock Plan. (A) Effective as of the
Commencement Date, the Executive shall be granted non- qualified
options (the "Option") to purchase 400,000 shares of common stock of
the Company, par value $.01 per share ("Common Stock"), under the
Company's Incentive Stock Plan (the "Incentive Stock Plan"), at a per
share exercise price equal to the greater of (1) the closing price
per share (the "Price Per Share") of Common Stock on the New York
Stock Exchange (or if not then listed on such exchange, such other
national securities exchange or quotation system as then listed upon)
on the Commencement Date or (2) $11. Such options will become vested
and exercisable at the rate of (x) 33-1/3% of such options on each of
the first three anniversaries of the Commencement Date and shall
expire on the earlier of the third anniversary of the termination of
the Executive's employment (90 days following termination of
employment if his employment is terminated for Cause (as defined
below)) or the tenth anniversary of the Commencement Date. The
Company agrees that such grant shall not be in lieu of, or otherwise
be taken into account in determining the size or terms of, the annual
long term incentive grant to the Executive for the 2001 or other
fiscal year.
(ii) Forfeiture. If the Executive's
employment with the Company is involuntarily terminated for Cause
or the Executive voluntarily terminates his employment with the
Company other than for Good Reason (as defined below), the Executive
shall forfeit the portion of the Option which has not yet become
vested and/or exercisable as of the Date of Termination (as defined
below).
Notwithstanding any other provision contained herein, if the
Executive's employment with the Company is involuntarily terminated
other than for Cause, the Executive terminates employment for Good
Reason, or the Executive dies or terminates employment due to
disability, the Option shall become immediately vested and
exercisable.
(iii) Plan Terms Govern. Subject to the
foregoing, the Option shall contain such terms and conditions as shall
be set forth in the Incentive Stock Plan.
(iv) Annual Grants. During the term of the
Executive's employment hereunder, the Executive shall participate in
such long-term incentive and equity compensation plans as the Company
shall make available to its other officers on terms no less favorable
than those applicable to such other officers.
(d) Deferred Compensation Account. (i) Following the
Commencement Date, the Company shall continue to maintain the nonqualified
deferred compensation arrangement and the related Account established for
the benefit of the Executive pursuant to the Section 5(d) of the Prior
Agreement. The Company shall credit to the Account an amount equal to
$489,987 on December 31, 2000, an additional $519,387 on December 31, 2001,
an additional $550,550 on December 31, 2002 and an additional $583,583 on
December 31, 2003. The Account shall continue to be credited with interest
at the end of each fiscal year at a rate of 9%. No later than January 31 of
each year during the term of this Agreement beginning with January 31,
2001, the Company shall deliver to the Executive a statement showing the
balance of the Account as of December 31 of the prior year and all amounts
credited to the Account during such year.
(ii) At any time following the later of (x) the
Executive's attainment of age 65 or (y) the last required crediting
to the Account pursuant to the second sentence of Section 5(d)(i)
above (including any early crediting as described in (iv) below) (but
in no event earlier than the Executive's termination of employment
with the Company), the Executive shall receive, or commence to
receive, the amount credited to the Account. The Executive may elect
to receive the value of the Account (l) in a lump sum, (2) in the
form of a single life annuity with a ten-year certain payment, or (3)
by causing the Company to purchase a single premium annuity contract
from an insurance company of the Executive's choice, provided that
any such election is made no later than the time determined by the
Company's counsel to avoid the application of the doctrine of
constructive receipt. If the Executive fails to make a timely
election, payment will be in the form of a lump sum. Annuity payments
(if applicable) shall be the actuarial equivalent of the lump sum
amount, using the mortality table for males provided in Revenue
Ruling 95-28 and assuming an interest rate equal to the product of
(x) the prime rate in effect at Credit Suisse as of the first day of
the month immediately preceding the first month for which an annuity
payment is to be made to the Executive hereunder and (y) 1 minus the
highest rate of individual federal, state and local income tax in
effect for the year in which the annuity payments commence and in the
jurisdiction of the Executive's residence for such year (giving
effect to any available deduction for state and local income taxes in
calculating federal income tax).
(iii) If the Executive's employment with the
Company is involuntarily terminated other than for Cause or he
terminates employment for Good Reason, (A) all remaining contribution
installments referred to in clause (i) above that have not been made
to the Account will be credited to the Account as of the Date of
Termination, and (B) the Company shall commence distribution of the
Account as soon as practicable following the Date of Termination in
accordance with the election made by the Executive under clause (ii)
above.
If the Executive's employment with the Company is involuntarily
terminated for Cause or if he terminates employment voluntarily other
than for Good Reason, in either case during the term of this
Agreement, no further contributions shall be made to the Account and
the Company shall commence distribution of the Account as soon as
practicable following the Date of Termination in accordance with the
election made by the Executive under clause (ii) above. If the
Executive's employment with the Company is involuntarily terminated
for Cause, or if the Executive terminates employment with the Company
voluntarily other than for Good Reason, in either case following the
expiration of the term of this Agreement, the Company shall continue
to credit to the Account all amounts as they become due in accordance
with clause (i) above and the Company shall commence distribution of
the Account as soon as practicable following the last date on which
amounts are so credited in accordance with the election made by the
Executive under clause (ii) above.
If the Executive dies or terminates employment due to
disability, all remaining contribution installments referred to in
clause (i) above that have not been made to the Account will be
credited to the Account as of the Date of Termination and the Company
shall commence distribution of the Account as soon as practicable
following the Date of Termination as a lump-sum distribution.
(iv) In no event shall payment of the Account be
paid, or commence to be paid, until the first business day following
the Executive's termination of employment.
(e) Other Benefits. The Company shall maintain in full
force and effect, and the Executive shall be entitled to continue to
participate in with a level of benefits no less favorable than any other
senior executive officer of the Company, all of the employee benefit plans
and arrangements in effect on the date hereof in which the Executive
participates or plans or arrangements providing the Executive with at least
equivalent benefits thereunder (including, without limitation, each
retirement plan, supplemental and excess retirement plans, annual and long-
term incentive compensation plans, stock option and purchase plans, group
life insurance and accident plan, medical and dental insurance plans, and
disability plan). The Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement made
available by the Company in the future to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions
and overall administration of such plans and arrangements.
(f) Vacations. The Executive shall be entitled to a
number of vacation days in each calendar year, and to compensation in
respect of earned but unused vacation days, equal to the maximum number of
vacation days for which any executive officer of the Company may become
eligible determined under the Company's vacation policy as in effect from
time to time, but in no event less than six (6) weeks per year. The
Executive shall also be entitled to all paid holidays and personal days
given by the Company to its senior executive officers.
(g) Services Furnished. The Company shall furnish the
Executive with office space, stenographic assistance and such other
facilities and services as shall be suitable to the Executive's position
and adequate for the performance of his duties as set forth in Section 3
hereof and no less favorable to the Executive than those provided to the
Executive immediately prior to the Commencement Date.
(h) Expenses. During the term of the Executive's
employment hereunder, the Executive shall be entitled to receive prompt
reimbursement for all reasonable and customary expenses incurred by the
Executive in performing services hereunder, including all reasonable and
customary expenses of travel and living expenses while away from home on
business or at the request of and in the service of the Company, provided
that such expenses are incurred and accounted for in accordance with the
policies and procedures established by the Company.
6. Directorships/Other Offices. Subject to Sections 3 and 4,
the Executive agrees to serve without additional compensation, if elected
or appointed thereto, as a director of any of the Company's subsidiaries
and in one or more executive offices of any of the Company's subsidiaries,
provided that the Executive is indemnified for serving in any and all such
capacities on a basis no less favorable than is from time to time provided
by the Company or any of its subsidiaries to its other directors and senior
executive officers.
7. Termination. The Executive's employment hereunder may be
terminated without any breach of this Agreement only under the following
circumstances:
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
(b) Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties hereunder on a full-time basis for the entire period
of six consecutive months, and within thirty (30) days after written notice
of termination is given (which may occur before or after the end of such
six month period) shall not have returned to the performance of his duties
hereunder on a full-time basis, the Company may terminate the Executive's
employment hereunder.
(c) Cause. The Company may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Company
shall have "Cause" to terminate the Executive's employment hereunder upon
(i) the willful and continued failure by the Executive to substantially
perform his duties with the Company (other than any such failure resulting
from the Executive's incapability due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of
Termination, as defined in Section 7(e), by the Executive for Good Reason,
as defined in Section 7 (d) (ii)), after demand for substantial performance
is delivered by the Company that specifically identifies the manner in
which the Company believes the Executive has not substantially performed
his duties, or (ii) the willful engaging by the Executive in misconduct
which is demonstrably and materially injurious to the Company, monetarily
or otherwise including, but not limited to, conduct that constitutes
Competitive Activity, as defined in Section 11). For purposes of this
Section 7(c), no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the
best interest of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause without (1)
reasonable notice from the Board to the Executive setting forth the reasons
for the Company's intention to terminate for Cause, (2) delivery to the
Executive of a resolution duly adopted by the affirmative vote of
two-thirds or more of the Board then in office (excluding the Executive) at
a meeting of the Board called and held for such purpose, finding that in
the good faith opinion of the Board, the Executive was guilty of the
conduct set forth in this Section 7(c) and specifying the particulars
thereof in detail, (3) an opportunity for the Executive, together with his
counsel, to be heard before the Board, and (4) delivery to the Executive of
a Notice of Termination, as defined in subsection (e) hereof, from the
Board specifying the particulars thereof in detail.
(d) Termination by the Executive. (i) The Executive may
terminate his employment hereunder (A) for Good Reason or (B) upon 60 days
written notice to the Company.
(ii) For purposes of this Agreement, "Good Reason"
shall mean (A) a failure by the Company to comply with any material
provision of this Agreement which failure has not been cured within
thirty (30) days after written notice of such noncompliance has been
given by the Executive to the Company, (B) any purported termination
of the Executive's employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of paragraph (e)
hereof (and for purposes of this Agreement no such purported
termination shall be effective) or (C) a "Change in Control"
shall have occurred. For purposes of this Agreement, Change in
Control means:
(A) (i) 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
exception within paragraph (C) below; or
(B) 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 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
(C) 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
(D) the approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company.
(e) Notice of Termination. Any termination of the
Executive's employment by the Company or by the Executive (other than
termination pursuant to subsection (a) hereof) shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 13. For purposes of this Agreement, a "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
Executive's employment under the provision so indicated.
(f) Date of Termination. "Date of Termination" shall mean
(i) if the Executive's employment is terminated by his death, the date of
his death, (ii) if the Executive's employment is terminated pursuant to
subsection (b) above, thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30)-day period), (iii)
if the Executive's employment is terminated pursuant to subsection (c)
above, the date specified in the Notice of Termination, (iv) if the
Executive's employment is terminated pursuant to clause (B) of subsection
(d)(i) above, the date specified in the Notice of Termination, but in no
event earlier than 60 days following the date the Notice of Termination is
delivered and (v) if the Executive's employment is terminated for any other
reason, the date on which a Notice of Termination is given; provided,
however, that, if within thirty (30) days after any Notice of Termination
is given the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding and final
arbitration award or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected).
(g) Indemnification After Termination. Notwithstanding
any other provision of this Agreement to the contrary, upon the Executive's
termination of employment hereunder for any reason, the Company shall take
such action necessary and appropriate to provide that the Executive's
rights to indemnification from the Company as provided by applicable law,
by the Company's charter and by-laws and by any agreement between the
Company and the Executive shall not be affected in any manner adverse to
the Executive and shall be continued in full force and effect for a period
of at least six years following such termination of employment.
(h) Definitions. For purposes of Section 7(d) hereof, the
following terms shall have the following meanings:
(i) 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.
(ii) Beneficial Owner shall have the meaning used
in Rule 13d-3 promulgated under the Exchange Act.
(iii) 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.
(iv) Exchange Act shall mean the Securities
Exchange Act of 1934, as amended.
(v) Governance Agreement shall mean the
Governance Agreement among LXH, L.L.C., LXH II, L.L.C., Hexcel Corporation
and the other parties listed on the signature pages thereto.
(vi) Person shall have the meaning set forth in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) of the Exchange Act.
8. Compensation Upon Termination or During Disability.
(a) During any period that the Executive fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness ("disability period"), the Executive shall continue to receive his
full salary at the rate then in effect for such period until his employment
is terminated for disability pursuant to Section 7(b) hereof, provided that
payments so made to the Executive shall be reduced by the sum of the
amounts, if any, payable to the Executive at or prior to the time of any
such payment under disability benefit plans of the Company or under the
Social Security disability insurance program, and which amounts were not
previously applied to reduce any such payment.
(b) If the Executive's employment is terminated by his
death, the Company shall pay any amounts due to the Executive under Section
5 through the date of his death in accordance with Section 12(b).
(c) If the Executive's employment shall be terminated by
the Company for Cause or voluntarily by the Executive other than for Good
Reason, the Company shall pay the Executive his full salary through the
Date of Termination at the rate in effect at the time Notice of Termination
is given and the Company shall have no further obligations to the Executive
relating to the provision of salary under this Agreement.
(d) If (A) in breach of this Agreement, the Company shall
terminate the Executive's employment other than for disability pursuant to
Section 7(b) or other than for Cause or (B) the Executive shall terminate
his employment for Good Reason (but for the purpose of this Section 8(d),
the term Good Reason shall not include any reference to change in control
as set forth in Section 7(d)(ii)(C) hereof), then
(i) the Company shall pay the Executive (A) his
full salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, (B) a pro rata portion of
any incentive bonus for the year in which the Date of Termination
occurs, such amount determined based on the target bonus amount that
the Executive would have received if all performance goals (if any)
had been attained in full and had his employment continued until the
end of such year, and on the number of full and partial months worked
during such year, and (C) all other unpaid amounts, if any, with
respect to which the Executive has a vested interest as of the Date
of Termination under any compensation plan or program of the Company,
at the time such payments are due;
(ii) in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination, the
Company shall pay as liquidated damages, in full settlement of the
Company's obligations to the Executive relating to the provision of
salary and bonus under this Agreement, to the Executive an amount
equal to the product of (A) the sum of (1) the highest annual salary
rate in effect for the Executive in the 90 days immediately preceding
the Date of Termination and (2) the highest annual amount payable to
the Executive under the Company's annual bonus plans in respect of
the three calendar years preceding the calendar year in which such
Date of Termination occurs, and (B) the greater of the number of
years (including partial years) remaining in the term of employment
hereunder or the number two (2); such payment to be made in
substantially equal monthly installments.
(e) If the Executive shall terminate his employment under
clause (B) of subsection 7(d) (i) hereof, the Company shall pay the
Executive his full salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given.
9. Additional Payments.
(a) In the event that the Executive becomes entitled to
the payments under Section 8 hereof or Section 4 of the Executive Severance
Agreement entered into between the Company and the Executive as of February
3, 1999 (the "Executive Severance Agreement"), if any of the payments or
benefits received or to be received by the Executive in connection with the
transactions contemplated by the Stock Purchase Agreement (whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement
with the Company, any Person whose actions result in a Change in Control or
any Person affiliated with the Company or such Person) (all such payments
and benefits, excluding the Gross-Up Payment, being hereinafter referred to
as the "Total Payments") will be subject to the excise tax (the "Excise
Tax") imposed under section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and Excise Tax upon
the Gross-Up Payment, shall be equal to the Total Payments.
(b) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (i) all of the Total Payments shall be treated as "parachute payments"
(within the meaning of section 280G(b)(2) of the Code) unless, in the
opinion of tax counsel ("Tax Counsel") reasonably acceptable to the
Executive and selected by the accounting firm which was, immediately prior
to the Change in Control, the Company's independent auditor (the
"Auditor"), such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A)
of the Code, (ii) all "excess parachute payments" within the meaning of
section 280G(b)(l) of the Code shall be treated as subject to the Excise
Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services
actually rendered (within the meaning of section 280G(b)(4)(B) of the Code)
in excess of the base amount (within the meaning of section 280G(b)(3) of
the Code) allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or
any deferred payment or benefit shall be determined by the Auditor in
accordance with the principles of sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment is calculated for
purposes of this Section), net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.
(c) In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder in
calculating the Gross-Up Payment, the Executive shall repay to the Company,
within five (5) business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up Payment being
repaid by the Executive, to the extent that such repayment results in a
reduction in the Excise Tax and a dollar-for-dollar reduction in the
Executive's taxable income and wages for purposes of federal, state and
local income and employment taxes, plus interest on the amount of such
repayment at 120% of the rate provided in section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment (including
by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any interest,
penalties or additions payable by the Executive with respect to such
excess) within five (5) business days following the time that the amount of
such excess is finally determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative
or judicial proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Total Payments.
10. No Mitigation. The Company agrees that, if the Executive's
employment with the Company terminates during the term of this Agreement,
the Executive is not required to seek other employment or to attempt in any
way to reduce any amounts payable to the Executive by the Company
hereunder. Further, the amount of any payment or benefit provided for in
this Agreement shall not be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive
to the Company, or otherwise.
11. Noncompetition/Confidential Information. The Executive
agrees that, in order to protect the Company's trade secrets in the field
of engineered materials (e.g., high technology, lightweight structural
materials and specialty chemicals and resins) and other products being
manufactured or marketed by the Company or developed for manufacture or
marketing at the time of the Executive's retirement or termination of
employment, or the trade secrets of any business acquired by the Company
within six months after retirement or termination of such employment if
said acquisition was in the process of negotiation at the time of such
retirement or termination (hereinafter collectively designated the
"Company's Business"), at all times prior to his retirement or termination
of employment and during so much of the two-year period following such
retirement or termination that the Company, or any of its successors,
assigns or affiliated companies carries on any portion of the Company's
Business, the Executive shall not directly or indirectly, as a partner,
substantial owner, employee, associate, consultant, agent or otherwise,
engage in any activity related to or competitive with the Company's
Business in any county in the State of California, or in any other state,
territory or foreign country within which the Company carries on the
Company's Business or in which any of its products are sold either prior or
subsequent to the date hereof. The invalidity or unenforceability of any
provision of this Section 11 shall not affect the validity or
enforceability of any other provision of this Section 11, which shall
remain in full force and effect.
12. Successors; Binding Agreement.
(a) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on the same terms as
he would be entitled to hereunder if he terminated his employment for Good
Reason, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
Section 12 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amounts would still be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
13. Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when delivered or
(unless otherwise specified) mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xxxx X. Xxx
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to the Company:
Hexcel Corporation
Two Stamford Plaza
000 Xxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attn: Board of Directors
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the Executive and such officer
of the Company as may be specifically designated by the Board. No waiver by
either party hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not set forth expressly in this Agreement.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without
regard to its conflicts of law principles.
15. Validity. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain
in full force and effect.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
17. Survivorship. Any rights and obligations of the parties set
forth in Sections 5, 8 and 11 of this Agreement shall survive any
termination of this Agreement.
18. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators, at a location mutually
agreed upon by the Company and the Executive which is situated within 50
miles of the Company's headquarters, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however,
that the Company shall be entitled to seek a restraining order or
injunction in any court of competent jurisdiction to prevent any
continuation of any violation of the provisions of Section 11 of the
Employment Agreement and the Executive hereby consents that such
restraining order or injunction may be granted without the necessity of the
Company's posting any bond, and provided further that the Executive shall
be entitled to seek specific performance of his right to be paid until the
Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement. The Company shall pay
to the Executive all legal fees and expenses incurred by the Executive in
disputing in good faith any issue relating to the termination of the
Executive's employment or in seeking in good faith to obtain or enforce any
benefit or right provided by this Agreement, provided, that either (i) the
Executive eventually prevails on at least one material issue which is a
subject of such arbitration or (ii) the Executive and the Company enter
into a written settlement agreement relating to one or more of such
material issues prior to the conclusion of any such arbitration. Such
payments shall be made within five (5) business days after delivery of the
Executive's written requests for payment accompanied with such evidence of
fees and expenses incurred as the Company reasonably may require.
19. Entire Agreement; Other Agreements.
(a) This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any officer, employee or representative of any party hereto; and any prior
agreement of the parties hereto (including the Prior Agreement and the
employment agreement dated as of September 1, 1994 between the Executive
and the Company) in respect of the subject matter contained herein is
hereby terminated and cancelled).
(b) The Executive and the Company hereby agree that the
consummation of the transactions contemplated by the Stock Purchase
Agreement shall not be deemed to constitute a Change in Control for
purposes of any plan, award or agreement between the Company and the
Executive, including without limitation, the Incentive Stock Plan, the
MICP, any agreements entered into thereunder between the Executive and the
Company and the Executive Severance Agreement. Commencing on January 2,
2001, the Company shall deliver to the Executive as soon as practicable
following the election by the Executive therefor, the number of shares of
Common Stock allocable to vested restricted stock units credited to the
Executive under the Incentive Stock Plan and the Company's Management Stock
Purchase Plan (the Plans"); provided, however, that the number of shares of
Common Stock the Executive may elect to receive from the Plans by reason of
such election in any calendar year may not exceed the lesser of (1) 100,000
shares or (2) the number of shares allocable to vested restricted stock
units credited to the Executive under the Plans.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first above written.
HEXCEL CORPORATION
Attest:
By: By:
--------------------------------- ----------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Senior Vice President
WITNESS EXECUTIVE
------------------------------------ ----------------------------------------
Xxxx X. Xxx
Xxxx X. Xxx: Interests in Other Corporations, Organizations and Partnerships.
1. Chairman, President & CEO of Xxx Development Corporation.
2. Advisor to The Clipper Group.
3. Director of the Crane Company.
