Exhibit 10.2
1999 PERFORMANCE ACCELERATED
RESTRICTED STOCK UNIT AGREEMENT
(February 3, 1999 Grant)
This Performance Accelerated Restricted Stock Unit Agreement (the
"Agreement"), is entered into as of the Grant Date, by and between Hexcel
Corporation, a Delaware corporation (the "Company"), and the Grantee.
Pursuant to the Hexcel Corporation Incentive Stock Plan (the "Plan"),
the Executive Compensation Committee (the "Committee") of the Board of Directors
of the Company (the "Board") has determined that the Grantee shall be granted
Performance Accelerated Restricted Stock Units ("PARS") upon the terms and
subject to the conditions hereinafter contained. Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Plan.
1. NOTICE OF GRANT; INCORPORATION OF PLAN. A Notice of Grant is
attached hereto as Annex A and incorporated by reference herein. Unless
otherwise provided herein, capitalized terms used in this Agreement and set
forth in the Notice of Grant shall have the meanings ascribed to them in the
Notice of Grant and capitalized terms used in this Agreement and set forth in
the Plan shall have the meanings ascribed to them in the Plan. The Plan is
incorporated by reference and made a part of this Agreement, and this Agreement
shall be subject to the terms of the Plan, as the Plan may be amended from time
to time, provided that any such amendment of the Plan must be made in accordance
with Section X of the Plan. The PARS granted herein constitute an Award within
the meaning of the Plan.
2. TERMS OF RESTRICTED STOCK. The grant of PARS provided in
Section 1 hereof shall be subject to the following terms, conditions and
restrictions:
(a) The Grantee shall not possess any incidents of ownership
(including, without limitation, dividend and voting rights) in shares of Common
Stock in respect of the PARS until such PARS have vested and been distributed to
the Grantee in the form of shares of Common Stock.
(b) Except as provided in this Section 2 (b), the PARS and any
interest therein may not be sold, assigned, transferred, pledged, hypothecated
or otherwise disposed of, except by will or the laws of descent and
distribution, prior to the distribution of the Common Stock in respect of such
PARS and subject to the conditions set forth in the Plan and this Agreement. Any
attempt to transfer PARS in contravention of this Section is void AB INITIO.
PARS shall not be subject to execution, attachment or other process.
Notwithstanding the foregoing, the Grantee shall be permitted to transfer PARS
to members of his or her immediate family (i.e., children, grandchildren or
spouse), trusts for the benefit of such family members, and partnerships whose
only partners are such family members; provided, however, that no consideration
can be paid for the transfer of the PARS and the transferee of the PARS shall be
subject to all conditions applicable to the PARS (including all of the terms and
conditions of this Agreement) prior to transfer.
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3. VESTING AND CONVERSION OF PARS. The PARS shall vest on (a)
January 1, 2006, or (b) on an earlier date or dates to the extent certain pre-
determined performance criteria (the "PARS Goals") are achieved. The PARS Goals
shall be as follows: if Company's income before income taxes (excluding business
acquisition and consolidation expenses) ("EBT"), determined by reference to the
Company's audited financial statements, equal or exceed $66.4 million for any
fiscal year of the Company, 33-1/3% (or, if applicable, an additional 33-1/3%)
of the total number of PARS shall become vested; if EBT for any fiscal year of
the Company equal or exceed $75 million, 66-2/3% (or, if applicable, up to an
additional 66-2/3%) of the total number of PARS shall become vested; and if EBT
for any fiscal year of the Company equal or exceed $80 million, 100% of the
total number of PARS shall become vested; provided, however, that no more than
100% of the total number of PARS may become vested. Upon the later to occur of
(i) January 1, 2002 or (ii) the vesting of a certain number of PARS, such vested
PARS shall be converted into an equivalent number of shares of Common Stock that
will be immediately distributed to the Grantee; provided, however, that, to the
extent that (and only to the extent that) the Company would be precluded from
deducting the associated compensation expense because of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), such PARS shall be
converted and distributed to the Grantee on the first business day of the first
year (or years, if the first deferred distribution shall not include all of such
PARS) in which the Company will not be so precluded; and provided further, that
no PARS shall be converted and distributed to the Grantee unless the Grantee is
an employee of the Company (or a Subsidiary) on December 31, 2001. On each
dividend payment date with respect to the Common Stock subsequent to any PARS
becoming fully vested but not yet converted and distributed by virtue of the
immediately preceding proviso, the Company shall credit the Grantee with an
additional number of fully vested whole and partial PARS (assuming each such
PARS unit was a share of Common Stock) equal in value to the amount of dividends
which the Grantee would have received on such dividend payment date if all such
vested PARS (including PARS previously credited to the Grantee pursuant to this
section) which had not yet been converted into shares had been so converted
prior to the record date of such dividend. Such dividends will be credited as
vested PARS as of the payment date of such dividends and such vested PARS shall
thereafter be treated in the same manner as other PARS under this Agreement (the
foregoing method of dividend crediting being referred to herein as being
credited with the "Dividend Equivalent").
Upon the distribution of the shares of Common Stock in respect of
the PARS, the Company shall issue to the Grantee or the Grantee's personal
representative a stock certificate representing such shares of Common Stock,
free of any restrictions.
4. TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL.
(a) For purposes of the grant hereunder, any transfer of
employment by the Grantee among the Company and its Subsidiaries shall not be
considered a termination of employment. Notwithstanding any other provision
contained herein or in the Plan, (i) if the Grantee dies or terminates
employment due to Disability (as defined in the last Section hereof), all PARS
shall vest, be converted into shares of Common Stock and be immediately
distributed to the Grantee, (ii) if the Grantee's employment with the Company is
involuntarily terminated other than for Cause (as defined in the last Section
hereof), all PARS shall vest, be converted into shares of Common Stock and be
immediately distributed to the Grantee, (iii) if the Grantee voluntarily
terminates employment with the Company, all vested PARS
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shall be converted into shares of Common Stock and be immediately distributed
to the Grantee, provided that the Grantee is an employee of the Company (or a
Subsidiary) on December 31, 2001, and (iv) if the Grantee's employment with
the Company terminates due to the Grantee's Retirement (as defined in the
last Section hereof), all PARS shall vest, be converted in shares of Common
Stock and be immediately distributed to the Grantee; provided, however,
that in each case an appropriate number of such PARS shall not be
converted and distributed to the Grantee until the first business day of the
first year in which the Company is not precluded from deducting the
associated compensation expense under Section 162(m) of the Code, but only to
the extent such number of PARS would not be deductible until such time;
further, provided, that the Grantee shall, if applicable, be credited with
the Dividend Equivalent with respect to such PARS.
If the Grantee's employment with the Company is involuntarily
terminated for Cause or the Grantee voluntarily terminates his employment with
the Company, the Grantee shall forfeit all PARS which have not yet become
vested as of the date of termination of employment.
(b) In the event of a Change in Control (as defined in the last
Section hereof), all PARS shall vest, be converted into shares of Common Stock
and be immediately distributed to the Grantee.
5. EQUITABLE ADJUSTMENT.
The aggregate number of shares of Common Stock subject to the
PARS shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a subdivision or
consolidation of shares or other capital adjustment, or the payment of a stock
dividend or other increase or decrease in such shares, effected without the
receipt of consideration by the Company, or other change in corporate or capital
structure. The Committee shall also make the foregoing changes and any other
changes, including changes in the classes of securities available, to the extent
reasonably necessary or desirable to preserve the intended benefits under this
Agreement in the event of any other reorganization, recapitalization, merger,
consolidation, spin-off, extraordinary dividend or other distribution or similar
transaction involving the Company.
6. TAXES. The Grantee shall pay to the Company promptly upon
request any taxes the Company reasonably determines it is required to withhold
under applicable tax laws with respect to the PARS. Such payment shall be made
as provided in Section IX(f) of the Plan.
7. NO GUARANTEE OF EMPLOYMENT. Nothing set forth herein or in
the Plan shall confer upon the Grantee any right of continued employment for any
period by the Company, or shall interfere in any way with the right of the
Company to terminate such employment.
8. NOTICES. Any notice required or permitted under this
Agreement shall be deemed given when delivered personally, or when deposited in
a United States Post Office, postage prepaid, addressed, as appropriate, to the
Grantee at the last address specified in Grantee's employment records, or such
other address as the Grantee may designate in
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writing to the Company, or to the Company, Attention: Corporate Secretary,
or such other address as the Company may designate in writing to the Grantee.
9. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party
hereto to enforce at any time any provision of this Agreement shall in no way be
construed to be a waiver of such provision or of any other provision hereof.
10. GOVERNING LAW. This Agreement shall be governed by and
construed according to the laws of the State of Delaware, without regard to the
conflicts of laws provisions thereof.
11. INCORPORATION OF PLAN. The Plan is hereby incorporated by
reference and made a part of this Agreement, and this Agreement shall be
subject to the terms of the Plan, as the Plan may be amended from time to time,
provided that any such amendment of the Plan must be made in accordance with
Section X of the Plan. The PARS granted herein constitute Awards within the
meaning of the Plan.
12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original but all of which together shall
represent one and the same agreement.
13. MISCELLANEOUS. This Agreement cannot be changed or terminated
orally. This Agreement and the Plan contain the entire agreement between the
parties relating to the subject matter hereof. The section headings herein are
intended for reference only and shall not affect the interpretation hereof.
14. DEFINITIONS. For purposes of this Agreement:
(I) the term "Beneficial Owner" (and variants thereof) shall have the
meaning given in Rule 13d-3 promulgated under the Exchange Act;
(II) the term "Cause" shall mean (A) the willful and continued failure by
the Grantee to substantially perform the Grantee's duties with the Company
(other than any such failure resulting from the Grantee's incapacity due to
physical or mental illness) after a written demand for substantial
performance is delivered to the Grantee by the Company, which demand
specifically identifies the manner in which the Company believes that the
Grantee has not substantially performed the Grantee's duties, or (B) the
willful engaging by the Grantee in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (A) and (B) of this definition, no act,
or failure to act, on the Grantee's part shall be deemed "willful" unless
done, or omitted to be done, by the Grantee not in good faith and without
the reasonable belief that the Grantee's act, or failure to act, was in the
best interest of the Company;
(III) the term "Change in Control" shall mean any of the following events:
(A)(i) any Person (as defined in this Section), is or
becomes the Beneficial Owner of 20% or more of either (x) the then
outstanding Common Stock of the Company (the "Outstanding Common
Stock") or (y) the combined
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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 affiliates or (2) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its affiliates
and (ii) Ciba (as defined in this Section) beneficially owns, in
the aggregate, a lesser percentage of the Total Voting Power than
such Person beneficially owns; or
(B) a change in the composition of the Board such that the
individuals who, as of the effective date of this Agreement,
constitute the Board (such individuals shall be hereinafter referred
to as the "Incumbent Directors") cease for any reason to constitute
at least a majority of the Board; provided, however, for purposes of
this definition, that any individual who becomes a director
subsequent to such effective date, whose election, or nomination
for election by the Company's stockholders, was made or approved
pursuant to the Governance Agreement (as defined in this Section) or
by a vote of at least a majority of the Incumbent Directors (or
directors whose election or nomination for election was previously
so approved) shall be considered a member of the Incumbent Board;
but, provided, further, that any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a person or legal entity other than the Board shall not be
considered a member of the Incumbent Board; or
(C) the approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company ("Corporate
Transaction"); excluding, however, such a Corporate Transaction (i)
pursuant to which all or substantially all of the individuals and
entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and Total Voting Power immediately prior to
such Corporate Transaction will beneficially own, directly or
indirectly, more than 50%, respectively, of the outstanding common
stock and the combined voting power of the then outstanding
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,
or (ii) after which no Person beneficially owns a greater percentage
of the combined voting power of the then outstanding securities
entitled to vote generally in the election of directors of such
corporation than does Ciba; or
(D) Ciba shall become the Beneficial Owner of more than
57.5% of the Total Voting Power; or
(E) the approval by the stockholders of the Company of a
complete
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liquidation or dissolution of the Company.
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(IV) the term "Ciba" shall mean Ciba Specialty Chemicals Holding Inc., a
Swiss corporation, together with its affiliates holding Company voting
securities pursuant to Section 4.01(b) of the Governance Agreement;
(V) the term "Disability" shall mean that, as a result of the Grantee's
incapacity due to physical or mental illness or injury, the Grantee shall
not have performed all or substantially all of the Grantee's usual duties as
an employee of the Company for a period of more than one-hundred-fifty (150)
days in any period of one-hundred-eighty (180) consecutive days;
(VI) the term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended;
(VII) the term "Governance Agreement" shall have the meaning given in the
Strategic Alliance Agreement (as defined in this Section);
(VIII) the term "Person" shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding Ciba for so long as Ciba is subject to the
restrictions imposed by the Governance Agreement;
(IX) the term "Retirement" shall mean termination of the Grantee's
employment, other than by reason of death or Cause, either (A) at or after
age 65 or (B) at or after age 55 after five (5) years of employment by the
Company (or a Subsidiary thereof); and
(X) the term "Strategic Alliance Agreement" shall mean the Strategic
Alliance Agreement among the Company, Ciba-Geigy Limited and Ciba-Geigy
Corporation, dated as of September 29, 1995, as amended, and any of their
respective permitted successors or assigns thereunder.
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ANNEX A
NOTICE OF GRANT
PERFORMANCE ACCELERATED RESTRICTED STOCK UNITS
HEXCEL CORPORATION INCENTIVE STOCK PLAN
The following employee of Hexcel Corporation, a Delaware corporation
("Hexcel") or a Subsidiary, has been granted performance accelerated restricted
stock units in accordance with the terms of this Notice of Grant and the
Agreement to which this Notice of Grant is attached.
The terms below shall have the meanings ascribed to them below when used in
the Agreement.
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Grantee
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Address of Grantee
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Employee Number
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Employee ID Number
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Foreign Sub Plan, if applicable
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Grant Date February 3, 1999
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Aggregate Number of PARS
Granted
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IN WITNESS WHEREOF, the parties hereby agree to the terms of this Notice of
Grant and the Agreement to which this Notice of Grant is attached and execute
this Notice of Grant and the Agreement as of the Grant Date.
__________________________ HEXCEL CORPORATION
Grantee
By:_________________________
Name:_______________________
Title:________________________
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