Exhibit 10.32
PERFORMANCE BASED AWARD AGREEMENT
under the
Hexcel Corporation 2003 Incentive Stock
Plan
This Performance Based Award
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
2003 Incentive Stock Plan (the “Plan”), the
Compensation Committee (the “Committee”) of the Board
of Directors of the Company (the “Board”) has
determined that the Grantee shall be granted a Performance Based
Award (“PBA”) 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.
This PBA may result in the Grantee being awarded up to that number
of unrestricted shares of Common Stock equal to the Maximum Share
Award as set forth in the Notice of Grant. 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 IX of the Plan. The PBA
granted hereunder constitutes an Award within the meaning of the
Plan.
2.
Award of Unrestricted Shares of
Common Stock .
(a)
There are three Annual Performance
Periods (2009, 2010 and 2011) and a Long-Term Performance Period
(2009-2011) under this PBA. Each Annual Performance Period
shall have one or more performance measures identical to those
selected by the Committee for such Annual Performance Period under
the Annual Cash Bonus Plan. The RONCE performance measure set forth
on Annex B is the cumulative performance measure for the Long-Term
Performance Period.
(b)
As soon as practicable (but in no
event later than 90 days) after the end of each Annual Performance
Period, the Committee shall determine the Annual Payout Percentage
for such Annual Performance Period. The Annual Performance Share
Award with respect to each Annual Performance Period shall be
obtained by multiplying the Annual Target Share Award by the Annual
Payout Percentage with respect to such Annual Performance
Period.
(c)
So long as the Minimum Award
Condition is met and the Grantee is employed by the Company or a
Subsidiary at the end of the Long-Term Performance Period, the
Grantee shall, at such time as the number of unrestricted shares of
Common Stock is determined under this subsection 2(c), become
entitled to receive that number of unrestricted shares of Common
Stock equal to the greater of (i) the number
determined in accordance with the Share Award
Schedule that appears on Annex B and (ii) the sum of the
Annual Performance Share Awards for each of the three Annual
Performance Periods; provided however that if the sum
of the Annual Performance Share Awards is greater than the number
determined in accordance with the Share Award Schedule that appears
on Annex B, and the Company does not attain the Threshold Level of
the Long-Term Performance Measure, then the number of unrestricted
shares of Common Stock to be received by the Grantee shall be equal
to 75% of the sum of the Annual Performance Share Awards. The
Committee shall certify the degree of achievement of the Long-Term
Performance Measure promptly (but in no event later than 90 days)
after the end of the Long-Term Performance Period.
(d)
Subject to Sections 3 and 4, if the
Minimum Award Condition is not met, the Grantee shall receive
nothing and this PBA shall be null and void.
3.
Termination of
Employment .
(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. Any change in employment that does not constitute
a “separation from service” within the meaning of
Section 1.409A-1(h) of the Treasury Regulations (or any
successor provision) shall not be considered a termination of
employment. Any change in employment that does constitute a
“separation from service” within the meaning of
Section 1.409A-1(h) of the Treasury Regulations (or any
successor provision) shall be considered a termination of
employment.
(b)
If during the first Annual
Performance Period the Grantee dies or terminates employment due to
Disability or Retirement, or the Grantee’s employment is
involuntarily terminated without Cause or the Grantee terminates
employment for Good Reason, then the Grantee shall be entitled to
receive that number of unrestricted shares of Common Stock equal to
the Annual Performance Share Award determined for the first Annual
Performance Period multiplied by a fraction equal to M/12, where M
is the number of partial or total months the Grantee is employed by
the Company during the first Annual Performance Period.
(c)
If during the second Annual
Performance Period the Grantee dies or terminates employment due to
Disability or Retirement, or the Grantee’s employment is
involuntarily terminated without Cause or the Grantee terminates
employment for Good Reason, then the Grantee shall be entitled to
receive a number of unrestricted shares of Common Stock equal to
the lesser of (i) the sum of (A) the Annual Performance
Share Award determined for the first Annual Performance Period and
(B) the Annual Performance Share Award determined for the
second Annual Performance Period multiplied by a fraction equal to
M/12, where M is the number of partial or total months the Grantee
is employed by the Company during the second Annual Performance
Period, and (ii) the PBA Target Share Award.
(d)
If during the last Annual
Performance Period the Grantee dies or terminates employment due to
Disability or Retirement, or the Grantee’s employment is
involuntarily terminated without Cause or the Grantee terminates
employment for Good Reason, then, so long as the Minimum Award
Condition is met, the Grantee shall be entitled to receive that
number of unrestricted shares of Common Stock to which the Grantee
would have been entitled to receive had he been employed by the
Company or
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a Subsidiary at the end of the Long-Term
Performance Period multiplied by a fraction equal to M/36, where M
is the number of partial or total months the Grantee is employed by
the Company during the Long-Term Performance Period.
(e)
If, at any time during the Long-Term
Performance Period, the Grantee voluntarily terminates his
employment other than for Good Reason or is terminated by the
Company for Cause, the Grantee shall receive nothing and this PBA
shall be null and void.
(f)
The Grantee shall become entitled to
receive shares of unrestricted Common Stock pursuant to
Section 3(b) or 3(c) upon the date on which the
Committee certifies the degree of achievement of the applicable
performance measure(s) for the Annual Performance Period
during which the Grantee’s employment terminated. The Grantee
shall become entitled to receive shares of unrestricted Common
Stock under Section 3(d) at the same time as the Grantee
would become entitled to receive shares of unrestricted Common
Stock under Section 2(c) if the Grantee were employed by
the Company or a Subsidiary at the end of the Long-Term Performance
Period.
4.
Change in Control
. If a Change in Control
occurs anytime during the Long-Term Performance Period and prior to
the Grantee’s receiving any payment under this PBA, the
Grantee will immediately be awarded the PBA Target Share
Award. Payment of the PBA Target Share Award shall discharge
any obligation the Company has or may have to the Grantee under
this PBA in its entirety and the Grantee shall not be entitled to
payment of any additional amounts from the Company under this
PBA.
5.
Transferability of PBA; No
Incidents of Ownership; Dividends
(a)
Except as provided in this
Section 6(a), the PBA may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution. Any attempt to transfer the
PBA in contravention of this Section 5(a) is void ab
initio. The PBA shall not be subject to execution, attachment
or other process. Notwithstanding the foregoing, the Grantee shall
be permitted to transfer the PBA to members of his or her immediate
family (i.e., children, grandchildren or spouse), trusts for the
benefit of such family members, and partnerships or other entities
whose only partners or equity owners are such family members;
provided, however, that no consideration can be paid for the
transfer of the PBA and the transferee of the PBA must agree to be
subject to all conditions applicable to the PBA (including all of
the terms and conditions of this Agreement) prior to
transfer.
(b)
Except as set forth in
Section 5(c), 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 PBA unless and
until the Grantee becomes entitled to receive unrestricted shares
of Common Stock.
(c)
If one or more cash dividends are
paid with respect to Common Stock during the Long-Term Performance
Period then at the time unrestricted shares of Common Stock are
distributed to the Grantee, the Grantee shall receive a cash
payment equal to the aggregate dividend amount the Grantee would
have received had Grantee owned such shares of Common Stock on the
dividend record date(s).
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6.
Forfeiture of PBA on Certain
Conditions .
(a)
Notwithstanding anything to the
contrary contained in this Agreement, should the Grantee while an
employee or after termination of employment fail to comply with the
“Protective Condition” (as defined in
Section 6(b)), then the PBA shall immediately expire upon the
Grantee’s failure to meet such condition.
(b)
“Protective Condition”
shall mean that the Grantee (A) complies with all terms and
provisions of any obligation of confidentiality to the Company
and/or one of its Subsidiaries contained in a written agreement
signed by the Grantee, and (B) does not engage, in any
capacity, directly or indirectly, including but not limited to as
employee, agent, consultant, manager, executive, owner or
stockholder (except as a passive investor holding less than a 5%
equity interest in any enterprise) in any business entity engaged
in competition with the business conducted by the Company on the
date of the Grantee’s termination of employment with the
Company anywhere in the world (except that the Grantee may be
employed by a competitor of the Company so long as the
Grantee’s duties and responsibilities do not relate directly
or indirectly to the business segment of the new employer which is
competitive with the business conducted by the Company).
7.
Issuance of Shares
. Subject to section
11(e) below, any shares of Common Stock to be issued to the
Grantee under this PBA (i) shall be delivered to the Grantee
promptly, but in no event later than ten days, after such time as
the Grantee becomes entitled to receive such shares of Common
Stock, and (ii) may be issued in either certificated form, or
in uncertificated form (via the Direct Registration System or
otherwise).
8.
Equitable Adjustment
. The aggregate number of
shares of Common Stock subject to this PBA 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.
9.
Taxes . Upon the distribution of unrestricted
shares of Common Stock to the Grantee, absent a notification by the
Grantee to the Company (or an agent designated by the Company to
administer the Company’s stock incentive program) which is
received by the Company or its agent at least three business days
prior to the date of such distribution, to the effect that the
Grantee will pay to the Company or a Subsidiary by check or wire
transfer any taxes (“Withholding Taxes”) the Company
reasonably determines it or a Subsidiary is required to withhold
under applicable tax laws with respect to such shares, the Company
will reduce the number of shares of Common Stock to be distributed
to the Grantee in connection with such distribution by a number of
shares of Common Stock the Fair Market Value (as of the date the
Grantee becomes entitled to receive such shares) of which is equal
to the total amount of Withholding Taxes. In the event the Grantee
elects to pay to the Company or a Subsidiary the Withholding Taxes
with respect to such shares by check or wire transfer,
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the Company’s obligation to deliver such
shares of Common Stock shall be subject to the payment in available
funds by the Grantee of all Withholding Taxes with respect to such
shares. The Company or a Subsidiary shall, to the extent permitted
by law, have the right to deduct from any payment of any kind
otherwise due to the Grantee any federal, state, local or other
taxes required to be withheld with respect to such
payment.
10.
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.
11.
Section 409A
.
(a)
It is intended that this Agreement
comply in all respects with the requirements of Sections 409A
(a)(2) through (4) of the Code and applicable Treasury
Regulations and other generally applicable guidance issued
thereunder (collectively, the “Applicable Regulati
