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Exhibit 10.3
HEXCEL CORPORATION
2003 INCENTIVE STOCK PLAN
I. PURPOSE
This Hexcel Corporation 2003 Incentive Stock Plan (this "Plan") is an
amendment and restatement of the Current Incentive Stock Plan and the Current
Broad Based Plan (the Current Incentive Stock Plan together with the Current
Broad Based Plan to be collectively referred to as the "Amended and Restated
Plans"). This Plan combines the Amended and Restated Plans into one plan and
increases the number of shares available under the Amended and Restated Plans.
Upon the Effective Date, each Award (as defined in the Amended and Restated
Plans) outstanding under either of the Amended and Restated Plans shall become
an Award outstanding under this Plan, and shall continue to be subject to the
same terms and conditions to which such Award was subject prior to the adoption
of this Plan.
This Plan is intended to attract, retain and provide incentives to
Employees, officers, Directors and consultants of the Corporation, and to
thereby increase overall stockholders' value. This Plan generally provides for
the granting of stock, stock options, stock appreciation rights, restricted
shares, other stock-based awards or any combination of the foregoing to the
eligible participants.
II. DEFINITIONS
(a) "Affiliate" of any Person shall mean any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such first Person. The term "Control" shall have
the meaning specified in Rule 12b-2 under the Exchange Act.
(b) "Award" includes, without limitation, stock options (including
Director Options and incentive stock options within the meaning of Section
422(b) of the Code) with or without stock appreciation rights, dividend
equivalent rights, stock awards, restricted share awards, or other awards that
are valued in whole or in part by reference to, or are otherwise based on, the
Common Stock ("other Common Stock-based Awards"), all on a stand-alone,
combination or tandem basis, as described in or granted under this Plan.
(c) "Award Agreement" means a written agreement setting forth the terms
and conditions of each Award made under this Plan.
(d) "Beneficial Owner" (and variants thereof) shall have the meaning given
in Rule 13d-3 promulgated under the Exchange Act.
(e) "Board" means the Board of Directors of the Corporation.
(f) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
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(g) "Committee" means the Compensation Committee of the Board or such
other committee of the Board as may be designated by the Board from time to time
to administer this Plan.
(h) "Common Stock" means the $.01 par value common stock of the
Corporation.
(i) "Corporation" means Hexcel Corporation, a Delaware corporation.
(j) "Current Broad Based Plan" means the Hexcel Corporation 1998 Broad
Based Incentive Stock Plan, dated as of February 5, 1998, as amended on February
3, 2000, February 1, 2001 and January 10, 2002
(k) "Current Incentive Stock Plan" means the Hexcel Corporation Incentive
Stock Plan, dated as of February 21, 1996, which Plan was amended and restated
January 30, 1997, further amended on December 10, 1997, further amended on March
25, 1999, further amended on December 2, 1999, amended and restated on February
3, 2000, amended and restated on December 19, 2000, and further amended on
January 10, 2002
(l) "Director" means a member of the Board.
(m) "Director Option" means a stock option granted pursuant to Section VII
hereof to a Director.
(n) "Director Optionee" means a recipient of an Award of a Director
Option.
(o) "Effective Date" means March 19, 2003.
(p) "Employee" means an employee of the Corporation or a Subsidiary.
(q) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
(r) "Fair Market Value" means the closing price for the Common Stock as
reported in publications of general circulation from the New York Stock Exchange
Consolidated Transactions Tape on such date, or, if there were no sales on the
valuation date, on the next preceding date on which such closing price was
recorded; provided, however, that the Committee may specify some other
definition of Fair Market Value in good faith with respect to any particular
Award.
(s) "Participant" means an Employee, officer, Director or consultant who
has been granted an Award under this Plan.
(t) "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.
(u) "Plan Year" means a calendar year.
(v) "Stockholders Agreement" means any stockholders agreement, governance
agreement or other similar agreement between the Corporation and a holder or
holders of Voting Securities.
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(w) "Subsidiary" means any corporation or other entity, whether domestic
or foreign, in which the Corporation has or obtains, directly or indirectly, a
proprietary interest of more than 50% by reason of stock ownership or otherwise.
(x) "Voting Securities" means Common Stock and any other securities of the
Corporation entitled to vote generally in the election of directors of the
Corporation.
III. ELIGIBILITY
Any Employee, officer, Director or consultant of the Corporation or a
Subsidiary selected by the Committee is eligible to receive an Award pursuant to
Section VI hereof. Additionally, Directors described in Section VII(a) hereof
are eligible to receive Awards of Director Options pursuant to Section VII.
IV. PLAN ADMINISTRATION
(a) Except as otherwise determined by the Board, this Plan shall be
administered by the Committee. The Board, or the Committee to the extent
determined by the Board, shall periodically make determinations with respect to
the participation of Employees, officers, Directors and consultants in this Plan
and, except as otherwise required by law or this Plan, the grant terms of
Awards, including vesting schedules, price, restriction or option period,
dividend rights, post-retirement and termination rights, payment alternatives
such as cash, stock, contingent awards or other means of payment consistent with
the purposes of this Plan, and such other terms and conditions as the Board or
the Committee deems appropriate which shall be contained in an Award Agreement
with respect to a Participant.
(b) The Committee shall have authority to interpret and construe the
provisions of this Plan and any Award Agreement and make determinations pursuant
to any Plan provision or Award Agreement which shall be final and binding on all
persons. No member of the Committee shall be liable for any action or
determination made in good faith, and the members shall be entitled to
indemnification and reimbursement in the manner provided in the Corporation's
Certificate of Incorporation, as it may be amended from time to time.
The Committee shall have the authority at the time of the grant of any
Award to provide for the conditions and circumstances under which such Award
shall be forfeited. The Committee shall have the authority to accelerate the
vesting of any Award and the time at which any Award becomes exercisable. The
Committee shall have the authority to cancel an Award (with the consent of the
Participant holding such Award) on such terms and conditions as the Committee
shall determine.
V. CAPITAL STOCK SUBJECT TO THE PROVISIONS OF THIS PLAN
(a) The capital stock subject to the provisions of this Plan shall be
shares of authorized but unissued Common Stock and shares of Common Stock held
as treasury stock. Subject to adjustment in accordance with the provisions of
Section XI, and subject to Section V(c) below, the maximum number of shares of
Common Stock that shall be available for grants of Awards under this Plan shall
be 14,233,848, which, as of the Effective Date, includes (i) 8,483,918 shares of
Common Stock subject to outstanding grants of Awards under this Plan,
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and (ii)5,749,930 shares of Common Stock available for future grants of Awards
under this Plan.
(b) The grant of a restricted share Award shall be deemed to be equal to
the maximum number of shares which may be issued under the Award. Awards payable
only in cash will not reduce the number of shares available for Awards granted
under this Plan.
(c) There shall be carried forward and be available for Awards under this
Plan, in addition to shares available for grant under paragraph (a) of this
Section V, all of the following: (i) shares represented by Awards which are
cancelled, forfeited, surrendered, terminated, paid in cash or expire
unexercised; and (ii) the excess amount of variable Awards which become fixed at
less than their maximum limitations.
VI. DISCRETIONARY AWARDS UNDER THIS PLAN
As the Board or Committee may determine, the following types of
Awards and other Common Stock-based Awards may be granted under this Plan on a
stand-alone, combination or tandem basis:
(a) STOCK OPTION. A right to buy a specified number of shares of Common
Stock at a fixed exercise price during a specified time, all as the Committee
may determine.
(b) INCENTIVE STOCK OPTION. An Award which may be granted only to
Employees in the form of a stock option which shall comply with the requirements
of Code Section 422 or any successor section as it may be amended from time to
time. The exercise price of any incentive stock option shall not be less than
100% of the Fair Market Value of the Common Stock on the date of grant of the
incentive stock option Award. Subject to adjustment in accordance with the
provisions of Section XI, the aggregate number of shares which may be subject to
incentive stock option Awards under this Plan shall not exceed the maximum
number of shares provided in paragraph (a) of Section V above. To the extent
that the aggregate Fair Market Value of Common Stock with respect to which
options intended to be incentive stock options are exercisable for the first
time by any individual during any calendar year exceeds $100,000, such options
shall be treated as options which are not incentive stock options.
(c) STOCK OPTION IN LIEU OF COMPENSATION ELECTION. A right given with
respect to a year to a Director, officer or key Employee to elect to exchange
annual retainers, fees or compensation for stock options.
(d) STOCK APPRECIATION RIGHT. A right which may or may not be contained in
the grant of a stock option or incentive stock option to receive the excess of
the Fair Market Value of a share of Common Stock on the date the option is
surrendered over the option exercise price or other specified amount contained
in the Award Agreement.
(e) RESTRICTED SHARES. A transfer of Common Stock to a Participant subject
to forfeiture until such restrictions, terms and conditions as the Committee may
determine are fulfilled.
(f) DIVIDEND OR EQUIVALENT. A right to receive dividends or their
equivalent in value in Common Stock, cash or in a combination of both with
respect to any new or previously existing Award.
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(g) STOCK AWARD. An unrestricted transfer of ownership of Common Stock.
(h) OTHER STOCK-BASED AWARDS. Other Common Stock-based Awards which are
related to or serve a similar function to those Awards set forth in this
Section VI.
VII. FORMULA AWARDS UNDER THIS PLAN
In addition to discretionary Awards (including, without limitation,
options) that may be granted to Directors pursuant to Section VI hereof,
Director Options shall be granted as provided below:
(a) GRANTS OF DIRECTOR OPTIONS.
(i) With respect to any individual who becomes a Director and who
is not also a full-time employee of the Corporation or any Subsidiary (provided
such individual has not previously received a grant pursuant to this Section
VII(a)(i)), such individual shall be granted, as of the date of election or
appointment as a Director, a Director Option to acquire 10,000 shares of Common
Stock upon the terms and subject to the conditions set forth in this Plan and
this Section VII.
(ii) Immediately after each annual meeting of stockholders of the
Corporation each Director who is not on such date also a full-time employee of
the Corporation or any Subsidiary shall be granted a Director Option to acquire
2,000 shares of Common Stock upon the terms and subject to the conditions set
forth in this Plan and this Section VII.
(iii) If on any date when Options are to be granted pursuant to
Section VII(a)(i) or (ii) the total number of shares of Common Stock as to which
Director Options are to be granted exceeds the number of shares of Common Stock
remaining available under this Plan, there shall be a PRO RATA reduction in the
number of shares of Common Stock as to which each Director Option is granted on
such day.
(b) TERMS OF DIRECTOR OPTIONS.
The terms of each Director Option granted under this Section VII shall
be determined by the Board consistent with the provisions of this Plan,
including the following:
(i) The purchase price of the shares of Common Stock subject to
each Director Option shall be equal to the Fair Market Value of such shares on
the date such option is granted.
(ii) Each Director Option shall be exercisable as to one-third of
the shares subject thereto immediately upon the grant of the option and as to an
additional one-third of such shares on the first and second anniversaries of the
date of such grant.
(iii) Each Director Option shall expire ten years after the granting
thereof. Each Director Option shall be subject to earlier expiration as
expressly provided in Section VII(c) hereof.
(c) DISABILITY, DEATH OR TERMINATION OF DIRECTOR STATUS; CHANGE IN
CONTROL.
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(i) If a Director Optionee ceases to be a Director for any reason
other than his disability or death, each Director Option held by him to the
extent exercisable on the effective date of his ceasing to be a Director shall
remain exercisable until the earlier to occur of (i) the first anniversary of
such effective date and (ii) the expiration of the stated term of the Director
Option; PROVIDED, HOWEVER, that if the Director Optionee is removed, withdraws
or otherwise ceases to be a Director due to his fraud, dishonesty or intentional
misrepresentation in connection with his duties as a Director or his
embezzlement, misappropriation or conversion of assets or opportunities of the
Corporation or any Subsidiary, all unexercised Director Options held by the
Director Optionee shall expire forthwith. Each Director Option held by the
Director Optionee to the extent not exercisable on the effective date of his
ceasing to be a Director for any reason other than his disability or death shall
expire forthwith.
(ii) If a Director Optionee ceases to be a Director as a result of
his disability or death, each Director Option held by him to the extent that the
Director Option is exercisable on the effective date of his ceasing to be a
Director shall remain exercisable by the Director Optionee or the Director
Optionee's executor, administrator, legal representative or beneficiary, as the
case may be, until the earlier to occur of (x) the third anniversary of such
effective date and (y) the expiration of the stated term of the Director Option.
Each Director Option held by the Director Optionee to the extent not exercisable
on the effective date of his ceasing to be a Director as a result of his
disability or death shall expire forthwith.
(iii) In the event of a Change in Control (as hereinafter defined)
while a Director Optionee is a Director, each Director Option held by the
Director Optionee to the extent not then exercisable shall thereupon become
exercisable. If a Change in Control occurs on or before the effective date of a
Director Optionee's ceasing to be a Director, the provisions of this subsection
(iii) shall govern with respect to the exercisability of the Director Options
held by him as of the date on which the Director Optionee ceases to be a
Director and the provisions of subsection (i) or (ii) of this Section VII(c)
shall govern with respect to the period of time during which such Director
Options shall remain exercisable. For purposes of this subsection (iii), "Change
in Control" shall mean any of the following events:
(1) any Person is or becomes the Beneficial Owner, directly or
indirectly, of 40% or more of either (A) the then outstanding Common Stock of
the Corporation (the "Outstanding Common Stock") or (B) the combined voting
power of the then outstanding securities entitled to vote generally in the
election of directors of the Corporation (the "Total Voting Power"); excluding,
however, the following: (I) any acquisition by the Corporation or any of its
Controlled Affiliates, (II) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Corporation or any of its
Controlled Affiliates and (III) any Person who becomes such a Beneficial Owner
in connection with a transaction described in the exclusion within paragraph (3)
below; or
(2) a change in the composition of the Board such that the
individuals who, as of the Effective Date, 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 Corporation's stockholders, was made or approved pursuant to the terms of
each then existing Stockholders 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
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considered a member of the Incumbent Board; but, PROVIDED, FURTHER, that any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person or
legal entity other than the Board shall not be considered a member of the
Incumbent Board; or
(3) there is consummated a merger or consolidation of the
Corporation or any direct or indirect subsidiary of the Corporation or a sale or
other disposition of all or substantially all of the assets of the Corporation
("Corporate Transaction"); excluding, however, such a Corporate Transaction (A)
pursuant to which all or substantially all of the individuals and entities who
are the Beneficial Owners, respectively, of the Outstanding Common Stock and
Total Voting Power immediately prior to such Corporate Transaction will
Beneficially Own, directly or indirectly, more than 50%, respectively, of the
outstanding common stock and the combined voting power of the then outstanding
common stock and the combined voting power of the then outstanding securities
entitled to vote generally in the election of directors of the company resulting
from such Corporate Transaction (including, without limitation, a company which
as a result of such transaction owns the Corporation or all or substantially all
of the Corporation's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership immediately prior to
such Corporate Transaction of the Outstanding Common Stock and Total Voting
Power, as the case may be, and (B) immediately following which the individuals
who comprise the Board immediately prior thereto constitute at least a majority
of the board of directors of the company resulting from such Corporate
Transaction (including, without limitation, a company which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries); or
(4) the approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
VIII. AWARD AGREEMENTS
Each Award under this Plan shall be evidenced by an Award Agreement
setting forth the terms and conditions of the Award and executed by the
Corporation and Participant.
IX. OTHER TERMS AND CONDITIONS
(a) ASSIGNABILITY. Unless provided to the contrary in any Award, no Award
shall be assignable or transferable except by will, by the laws of descent and
distribution and during the lifetime of a Participant, the Award shall be
exercisable only by such Participant. No Award granted under this Plan shall be
subject to execution, attachment or process.
(b) TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP. The Committee shall
determine the disposition of the grant of each Award in the event of the
retirement, disability, death or other termination of a Participant's employment
or other relationship with the Corporation or a Subsidiary.
(c) RIGHTS AS A STOCKHOLDER. A Participant shall have no rights as a
stockholder with respect to shares covered by an Award until the date the
Participant is the holder of record. No adjustment will be made for dividends or
other rights for which the record date is prior to such date.
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(d) NO OBLIGATION TO EXERCISE. The grant of an Award shall impose no
obligation upon the Participant to exercise the Award.
(e) PAYMENTS BY PARTICIPANTS. The Committee may determine that Awards for
which a payment is due from a Participant may be payable: (i) in U.S. dollars by
personal check, bank draft or money order payable to the order of the
Corporation, by money transfers or direct account debits; (ii) through the
delivery or deemed delivery based on attestation to the ownership of shares of
Common Stock with a Fair Market Value equal to the total payment due from the
Participant; (iii) pursuant to a "cashless exercise" program if established by
the Corporation; (iv) by a combination of the methods described in (i) through
(iii) above; or (v) by such other methods as the Committee may deem appropriate.
(f) WITHHOLDING. Except as otherwise provided by the Committee, (i) the
deduction of withholding and any other taxes required by law will be made from
all amounts paid in cash and (ii) in the case of payments of Awards in shares of
Common Stock, the Participant shall be required to pay the amount of any taxes
required to be withheld prior to receipt of such stock, or alternatively, a
number of shares the Fair Market Value of which equals the amount required to be
withheld may be deducted from the payment.
(g) MAXIMUM AWARDS. The maximum number of shares of Common Stock that may
be issued to any single Participant pursuant to options under this Plan is equal
to the maximum number of shares provided for in paragraph (a) of Section V.
X. TERMINATION, MODIFICATION AND AMENDMENTS
(a) The Committee may at any time terminate this Plan or from time to time
make such modifications or amendments of this Plan as it may deem advisable;
provided, however, that no amendments to this Plan which require stockholder
approval under applicable law, rule or regulation shall become effective unless
the same shall be approved by the requisite vote of the Corporation's
stockholders.
(b) No termination, modification or amendment of this Plan may adversely
affect the rights conferred by an Award without the consent of the recipient
thereof.
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XI. RECAPITALIZATION
The aggregate number of shares of Common Stock as to which Awards may
be granted to Participants, the number of shares thereof covered by each
outstanding Award, and the per share price thereof set forth in each outstanding
Award, shall all 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 receipt
of consideration by the Corporation, or other change in corporate or capital
structure; provided, however, that any fractional shares resulting from any such
adjustment shall be eliminated. The Committee shall also make the foregoing
changes and any other changes, including changes in the classes of securities or
other consideration available, to the extent it is deemed necessary or desirable
to preserve the intended benefits of this Plan for the Corporation and the
Participants in the event of any other reorganization, recapitalization, merger,
consolidation, spin-off, extraordinary dividend or other distribution or similar
transaction.
XII. NO RIGHT TO EMPLOYMENT
Except as provided in Section VII with respect to Director Options, no
person shall have any claim or right to be granted an Award, and the grant of an
Award shall not be construed as giving a Participant the right to be retained in
the employ of, or in any other relationship with, the Corporation or a
Subsidiary. Further, the Corporation and each Subsidiary expressly reserve the
right at any time to dismiss a Participant free from any liability, or any claim
under this Plan, except as provided herein or in any Award Agreement issued
hereunder or in any other agreement applicable between a Participant and the
Corporation or a Subsidiary.
XIII. GOVERNING LAW
To the extent that federal laws do not otherwise control, this Plan
shall be construed in accordance with and governed by the laws of the State of
Delaware.
XIV. SAVINGS CLAUSE
This Plan is intended to comply in all aspects with applicable laws
and regulations. In case any one more of the provisions of this Plan shall be
held invalid, illegal or unenforceable in any respect under applicable law and
regulation, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and the invalid,
illegal or unenforceable provision shall be deemed null and void; however, to
the extent permissible by law, any provision which could be deemed null and void
shall first be construed, interpreted or revised retroactively to permit this
Plan to be construed in compliance with all applicable laws so as to foster the
intent of this Plan.
XV. EFFECTIVE DATE AND TERM
This Plan shall be effective as of the Effective Date.
THIS PLAN SHALL TERMINATE ON THE TENTH ANNIVERSARY DATE OF THE
EFFECTIVE DATE. NO AWARDS SHALL BE GRANTED AFTER THE TERMINATION OF THIS PLAN.
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