<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
--------------------------
Date of Report (Date of earliest event reported) January 6, 1995
---------------
HEXCEL CORPORATION
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-1109521
- -------------------------- --------------------
(State or other jurisdic- (I.R.S. Employer
tion of incorporation or Identification No.)
organization)
1-8472
------------------------
(Commission File Number)
5794 West Las Positas Boulevard
Pleasanton, California 94588
- -------------------------------- -------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (510) 847-9500
--------------
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 6, 1995 (the "Closing Date"), pursuant to the terms of that
certain Asset Purchase Agreement dated as of November 3, 1994 (the "Purchase
Agreement") between Hexcel Corporation, a Delaware corporation (the
"Registrant") and Northrop Grumman Corporation, a Delaware corporation
("Northrop") (a copy of which Purchase Agreement was filed by the Registrant
with the Registrant's Quarterly Report on Form 10-Q dated October 2, 1994 and is
incorporated herein by reference), the Registrant closed on the sale to
Northrop of its manufacturing facility located in Chandler, Arizona (the
"Chandler Facility") and related assets and technology (the "EMT Technology").
The Registrant is currently the subject of a proceeding under chapter 11 of the
United States Bankruptcy Code ("Chapter 11") designated as Case No. 93-48535 T
before the United States Bankruptcy Court for the Northern District of
California (the "Bankruptcy Court"), and the sale of the Chandler Facility and
the EMT Technology was approved by the Court by order entered on
December 21, 1994.
The Chandler Facility was constructed in 1988 by the Registrant
primarily to manufacture various materials for the B-2 bomber program. EMT
Technology, as developed by the Registrant and sold to Northrop under the
Purchase Agreement, enables the design, fabrication, testing and analysis of
electromagnetically tailored materials and assemblies that are used to
attenuate, alter, control and/or absorb electromagnetic energy. Under the terms
of the Purchase Agreement, the Registrant retained a royalty-free,
non-exclusive license to use the EMT Technology in non-military applications and
will receive royalties from Northrop on certain of their applications of EMT
Technology. During a transition period of approximately six months commencing on
the Closing Date, the Registrant will move certain of its operations previously
carried on at the Chandler Facility (that were not sold to Northrop) to its
manufacturing facility in Casa Grande, Arizona.
The gross purchase price for the sale of the Chandler Facility and the
EMT Technology was $30,000,000 plus the value of existing inventory and certain
contingent payments, subject to certain conditions and adjustments. The
purchase price for the sale was the result of arm's length negotiations between
the Registrant and Northrop and took into account certain claims the parties had
against each other, as well as the current
<PAGE>
requirements of the B-2 bomber program. On the Closing Date, Northrop delivered
to the Registrant the net purchase price in an amount equal to $26,545,791,
which amount included (i) the $30,000,000 fixed purchase price, (ii) plus
$1,139,732 for the estimated value of inventory included in the transfer (final
inventory and any required adjustments to the inventory value is expected to
occur on February 6, 1995), (iii) less $2,300,000 withheld by Northrop as
Transition Insurance (as defined in the Purchase Agreement), as contemplated
under the terms of the Purchase Agreement, which amount will be returned to the
Registrant upon the satisfaction of certain conditions, (iv) less $2,293,941 as
Advanced Agreement Amounts (as defined in the Purchase Agreement), for shipments
of parts to Northrop made prior to close as contemplated under the Purchase
Agreement.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
CONFIRMATION OF FIRST AMENDED PLAN OF REORGANIZATION
The Registrant commenced its Chapter 11 proceeding by filing a voluntary
petition for relief under Chapter 11 on December 6, 1993. On January 12, 1995,
the Bankruptcy Court entered an order dated January 10, 1995 (the "Confirmation
Order") confirming the First Amended Plan of Reorganization, dated as of
November 7, 1994 (the "Plan"), which was jointly proposed by the Registrant and
The Official Committee of Equity Security Holders of the Registrant (the "Equity
Committee"). A copy of the Confirmation Order, which includes the Plan as
confirmed, is attached hereto as EXHIBIT 2.1 and is incorporated herein by
reference. Set forth below is a summary of the material features of the Plan.
GENERAL PROVISIONS OF THE PLAN
In general, the Plan provides for the reinstatement or payment in full of
all of the Registrant's creditors, except that it provides for the holders of
Class 4 Claims, Class 8 Claims and Class 10 Claims to be treated as described
below.
The Plan provides for the payment in full of allowed administrative expense
claims on the effective date of the Plan
<PAGE>
(the "Effective Date") or in accordance with the terms and conditions of
agreements relating to obligations incurred in the ordinary course of business
during the pendency of the Registrant's Chapter 11 case or assumed by the
Registrant. At the option of the Registrant, priority tax claims will be paid
in full on the Effective Date or paid over a six-year period from the date of
assessment with interest at the rate of 5% per year. The Plan provides that
allowed Class 1 Claims (other priority claims), which the Registrant believes do
not exist, will be paid in full on the Effective Date.
The Plan provides for the reinstatement of Class 2 Claims (claims of
secured creditors), Class 7 Claims (certain environmental claims) that are not
disallowed pursuant to a final order), and Class 9 Claims (claims of the holders
of the Registrant's 7% Convertible Subordinated Debentures Due 2011 (the
"Subordinated Debentures")). The Plan provides that Class 3 Claims (claims
relating to outstanding industrial developmemt revenue bond financings
("IDRBs")for the benefit of the Registrant) at the Registrant's and Equity
Committee's option shall be paid in full or reinstated. It is the Registrant's
and the Equity Committee's intention that the Class 3 Claims be reinstated.
The Plan provides that Banque Nationale de Paris ("BNP"), the holder of
Class 4 Claims (claims with respect to seven letters of credit issued by BNP
(the "BNP Letters of Credit") for the account of the Registrant, in connection
with the "IDRBs" will receive on the Effective Date the following: (i) cash
in the amount of $181,931.54 for all pre-petition unreimbursed drawings under
the seven BNP Letters of Credit, draw fees, letter of credit fees, attorneys'
fees, and fees and expenses paid by BNP to the remarketing agent for the
IDRBs, (ii) cash in the amount of all post-petition (a) unreimbursed drawings
under seven BNP Letters of Credit and unpaid accrued interest thereon at the
contract non-default rate and (b) draw fees, letter of credit fees and
expenses paid by BNP to the remarketing agent for the IDRBs for which BNP is
entitled to reimbursement under the terms of the seven BNP reimbursement
agreements between BNP and the Registrant (the "BNP Reimbursement Agreements")
pursuant to which the Registrant agreed to reimburse BNP for drawings under
the BNP Letters of Credit, and (iii) cash in the amount of $502,000 as payment
of a one-time reinstatement and extension fee.
<PAGE>
The Plan also provides that as of the Effective Date: (i) BNP will extend
the expiration date of the seven BNP Letters of Credit to December 31, 1998,
(ii) BNP will waive all defaults under the seven BNP Reimbursement Agreements
through the Effective Date and in connection with the consummation of the Plan,
and (iii) the seven BNP Reimbursement Agreements will be amended to (a) change
the covenants so that consummation of the Plan and establishment of the
Registrant's new exit financing facility will not result in a default
under the BNP Reimbursement Agreements (b) increase the letter of credit
commitment fees to 200 basis points per annum, payable quarterly in advance,
effective on the Effective Date, (c) increase the interest rate on the
Liquidity Reimbursement Obligations (as defined in the BNP Reimbursement
Agreements) and (d) contain such other representations, warranties,
conditions, covenants and other terms as BNP, the Registrant and the Equity
Committee may agree.
The Plan also provides that commencing 90 days after the Effective
Date and every three months thereafter, until the expiration of the seven BNP
Letters of Credit, the Registrant will, at its option either (i) deposit
$600,000 in a sinking fund in which BNP and/or the Trustees for the IDRBs will
hold a first priority security interest to secure the Registrant's obligations
under the BNP Reimbursement Agreements as amended, subject to the right of the
Registrant to use all or a portion of the sinking fund to reduce the available
amounts of the seven BNP Letters of Credit by the optional redemption of the
IDRBs in a like principal amount or (ii) provide a letter of credit in the
amount of $600,000 for the benefit of BNP to secure the Registrant's obligations
under the BNP Reimbursement Agreements. All net cash proceeds from the sale
or other disposition of any property, plant or equipment financed or refinanced
by the issuance of the IDRBs supported by the seven BNP Letters of Credit will
be applied to the reduction of the available amounts of one or more of the BNP
Letters of Credit by optional redemption of the IDRBs or will be deposited into
the sinking fund. Such net cash proceeds may, at the option of the Registrant,
be credited against the $600,000 quarterly deposit referred to above. In
addition, if the Registrant causes one or more of the BNP Letters of Credit to
be reduced as the result of the optional redemption of any IDRBs, it may, at its
option, credit the amount of such reduction against any sinking fund payments or
letters of credit designated by it until the full amount of such reduction has
been credited.
<PAGE>
The Plan provides that allowed Class 5 Claims (general unsecured claims not
included in the other Classes) will be paid in full, with interest as provided
in the Plan except that the Registrant (i) will not pay interest on any Class 5
Claim that becomes allowed pursuant to a compromise, settlement or judgment that
does not expressly provide for the accrual or payment of interest and (ii) will
pay interest on any Class 5 Claim that becomes allowed pursuant to a compromise,
settlement or judgment that expressly provides for a different rate of interest
at such different rate. The Plan provides for the holder of the Class 6 Claims
(claims related to certain notes issued to Principal Mutual Life Insurance
Company pursuant to two separate Note Agreements) to receive payment on the
Effective Date of $35,500,000 plus interest at the rate of 10% per year from
October 1, 1994.
The holders of Class 8 Claims (certain intercompany claims) will be
entitled to receive cash at anytime after September 30, 1998 and, with respect
to Class 8A Claims (claims held by the Registrant's subsidiary, Hexcel S.A.,
Lyon, France), interest semi-annually at the rate of 6.9% per year. The holders
of allowed Class 10 Claims (certain claims for rescission or damages
brought against the Registrant by persons who traded in the Old Common (as
defined below)) will receive $200,000 worth of New Common (as defined below)
valued at a price equal to the average of the daily average prices of the New
Common for the 20 trading days beginning 30 calendar days following the
expiration of the Rights described below. No distributions will be made to
holders of Class 10 Claims until all of the allowed claims in Class 10 and the
holders thereof have been determined. The holders of Class 11 Claims (claims of
holders of Old Common) will be treated as described below. All outstanding
options to purchase Old Common representing Class 12 Interests, will remain in
effect.
ISSUANCE OF NEW COMMON STOCK
The Plan also provides that as of the Effective Date, the Registrant's
common stock, par value $.01 per share ("Old Common"), will be cancelled and
exchanged for (i) one share of the Registrant's new common stock, par value $.01
per share ("New Common") and (ii) subscription rights ("Rights") to purchase New
Common. Each stockholder of record on the Effective Date will
<PAGE>
receive, in exchange for each share of Old Common held of record, one share of
New Common plus 1.21273 Rights to purchase New Common. Stockholders are not
required to turn in their stock certificates evidencing the Old Common. Each
Right entitles the owner to purchase one share of New Common at an exercise
price of $4.625 per share. A total of approximately 8,864,865 shares of New
Common (the "Offered Shares") may be subscribed for and purchased from the
Registrant pursuant to the exercise of the Rights. In addition, each holder of
record of Old Common on the Effective Date (and each beneficial owner of stock
held of record on the Effective Date by a bank, trust company, depositary or
securities broker or dealer) who exercises all of the Rights issued directly to
him (or to his institutional nominee for his account) by the Registrant will
have the right ("Oversubscription Right") to subscribe for the shares of New
Common, if any, which are designated for the "Stockholder Pool," at an exercise
price of $4.625 per share and subject to proration in the event that there are
insufficient shares designated in the Stockholder Pool to fulfill all exercised
Oversubscription Rights. The Stockholder Pool will consist of 75% of the excess
of (i) the number of shares of New Common which are subject to Rights which
expire unexercised over (ii) 108,108 shares, which will be sold to John J. Lee.
Reference is made to the Subscription Rights Plan, which is included in EXHIBIT
B to the Confirmation Order and is incorporated by reference herein, for a more
complete description of the Rights, the Oversubscription Rights and the method
of proration. The Rights, but not the Oversubscription Rights, are
transferable. Under the Plan, all outstanding options to purchase Old Common
will remain in effect.
STANDBY PURCHASE COMMITMENT
Mutual Series Fund Inc. ("Mutual Series") entered into a Standby Purchase
Commitment dated October 24, 1994, with the Registrant and the Equity Committee
(the "Standby Purchase Commitment"), a copy of which is included as EXHIBIT B to
the Plan and is incorporated by reference herein. The Plan provides for the
Registrant to perform its obligations under the Standby Purchase Commitment.
The Standby Purchase Commitment provides that on the Effective Date Mutual
Series will purchase from the Registrant 1,945,946 shares of New Common (the
"Minimum Shares") for a purchase price of $9,000,000 ($4.625 per share) and lend
the
<PAGE>
Registrant $41,000,000 (the "Advance") upon (i) the receipt from the Registrant
of a $500,000 commitment fee, (ii) reimbursement for certain out-of-pocket costs
and expenses and (iii) the Registrant entering into a registration rights
agreement with Mutual Series, as described below. The Advance will be secured
by the proceeds payable to the Registrant from the Rights offering.
The Standby Purchase Commitment further provides that upon the consummation
of the Rights offering Mutual Series will, subject to receipt of certain
payments described below, purchase the Offered Shares not previously purchased
from the Registrant pursuant to the exercise of the Rights or the purchase by
John J. Lee described below (the "Standby Shares"), at a price of $4.625 per
share. Mutual Series will pay the aggregate purchase price of the Standby
Shares by the cancellation of a portion of the principal amount of the Advance
representing the purchase price of the Standby Shares. At the closing of the
sale of the Standby Shares, the Registrant will repay the Advance (to the extent
not previously repaid) plus all unpaid interest on the Advance and certain out-
of-pocket costs and expenses incurred by Mutual Series.
The registration rights agreement between the Registrant and Mutual Series
(the "Mutual Registration Rights Agreement") provides that Mutual Series has the
right to demand that the Registrant effect the registration for public sale
under the Securities Act of 1933, as amended, of the New Common purchased by
Mutual Series pursuant to the Standby Purchase Commitment for a period of five
years commencing on the date of the closing of the sale of the Standby Shares.
Mutual Series may compel registration three times if its investment is less than
$30,000,000 and may compel registration five times if its investment is equal to
or greater than $30,000,000. Mutual Series is prohibited from compelling more
than one registration during any 180-day period and is required to register a
certain minimum number of shares of New Common, provided that Mutual Series
always has the right to compel a registration with respect to the sale of all of
the Registrable Securities then held by it. The Registration Rights Agreement
also provides that Mutual Series is entitled to certain "piggy-back"
registration rights during such five year time period. Reference is made to the
Mutual Registration Rights Agreement, which is included in EXHIBIT B to the Plan
and is incorporated by reference herein.
<PAGE>
CERTIFICATE OF INCORPORATION AND BY-LAWS
Pursuant to the Plan, on the Effective Date the Registrant's
Certificate of Incorporation will be amended and restated as provided in EXHIBIT
C to the Plan and its Bylaws will be amended and restated as provided in EXHIBIT
D to the Plan. The authorized capital stock of the Registrant will be increased
to 40,000,000 shares of New Common and 1,500,000 shares of preferred stock. As
amended, the Registrant's Certificate of Incorporation (the "Certificate of
Incorporation") eliminates (i) the classified board of directors of the
Registrant (the "Board"), so that after the Effective Date all Board positions
will be up for election at each annual meeting of the Registrant's stockholders
and (ii) certain supermajority provisions which required the affirmative vote of
75% of the voting power of the Registrant (a) to change the number of directors
within the authorized range, (b) for certain business combinations and other
transactions, (c) to adopt, amend or repeal, certain By-laws or provisions of
the Certificate of Incorporation and (d) to adopt any cumulative voting
provisions. The Certificate of Incorporation and the Registrant's By-laws, as
amended (the "By-laws"), provide that special meetings of the stockholders may
be called at any time by the Board, the Chairman of the Board, the Chief
Executive Officer, the President, or by a committee of the Board which has been
designated by the Board and which has the power and authority to call such a
meeting or by any stockholder or stockholders holding in the aggregate in
excess of 25% of the outstanding common stock of the Registrant.
Notwithstanding the foregoing, the By-laws provide that the next annual meeting
of stockholders of the Registrant shall be held not earlier than nine months
after the Effective Date unless otherwise determined by mutual agreement of the
two or three (as the case may be) members of the Board designated by Mutual
Series, on the one hand, and the three members of the Board designated by the
Equity Committee, on the other hand.
<PAGE>
BOARD OF DIRECTORS
As of the Effective Date, the Plan provides that the Board will initially
consist of eight individuals. One or two additional directors will be added
after the Effective Date in accordance with the terms of the Confirmation Order
and the Plan, as described below.
The Confirmation Order provides that the initial Board will be comprised of
John J. Lee and Peter Langerman, who were designated by Mutual Series, Joseph
Harrosh, Robert L. Witt and Peter D. Wolfson, who were designated by the Equity
Committee and Dr. George S. Springer, Franklin S. Wimer and Marshall S. Geller,
who were designated by joint selection of the Equity Committee and Mutual
Series. The directors were designated in accordance with the terms of the Plan
and the Standby Purchase Commitment. One seat on the Board will be reserved for
the new Chief Executive Officer, who will join the Board immediately upon
commencement of his or her employment. In addition, if upon the consummation of
the Rights offering Mutual Series owns more than 50% of the shares of New
Common, Mutual Series shall designate one additional director; if upon the
consummation of the Rights offering Mutual Series owns less than 25% of the
shares of New Common, then one additional director shall be designated by mutual
agreement of those directors previously designated by the Equity Committee, on
the one hand, and those directors previously designated by mutual agreement of
the Equity Committee and Mutual Series, on the other hand.
REGISTRANT'S CHIEF EXECUTIVE OFFICER
The Plan provides that Mr. John J. Lee, the Registrant's Chairman of the
Board and Chief Executive Officer, will continue as Chief Executive Officer
until a new Chief Executive Officer is hired. Following the selection of a new
Chief Executive Officer, Mr. Lee will resign as an officer and be retained as a
consultant to the Registrant for a period of two years pursuant to a consulting
agreement. The consulting agreement will contain the following terms: (i) Mr.
Lee will be paid base compensation (salary and fees) of $180,000 per year during
the first year and
<PAGE>
$230,000 during the second year plus the same benefits provided to him in his
interim employment agreement and (ii) the Board may terminate the agreement at
the end of the first year. In addition, Mr. Lee will have an opportunity to
earn a bonus based upon the attainment of certain goals established by the
Board.
The Plan provides for the Registrant to sell and for Mr. Lee to purchase
108,108 shares (the "Lee Shares") of New Common, at a purchase price of $4.625
per share following the expiration of the Rights offering.
The Plan also provides that Mr. Lee will receive stock options (the "Lee
Options") for approximately .625% of the shares of the New Common on a fully
diluted basis (without giving effect to the conversion of the Subordinated
Debentures) at a price equal to the average of the daily average prices of New
Common for the 20 trading days beginning 30 calendar days after the expiration
of the offering of the Rights. The Lee Options will vest in equal monthly
installments over the two-year term of the consulting agreement, subject to
being fully vested upon early termination (other than for cause or voluntary
resignation) and will be exercisable until the later of three years from the
Effective Date or one year after the expiration of the consulting agreement.
If Mr. Lee agrees to be bound by the terms of the Mutual Registration
Rights Agreement then, with respect to the Lee Shares, Mr. Lee will
be entitled to "piggy-back" registration rights similar to those granted to
Mutual Series and will have the right to participate in any demand
registration requested by Mutual Series.
REGISTRATION RIGHTS AGREEMENT FOR AFFILIATES
The Plan provides that the Registrant shall enter into a registration
rights agreement (the "Affiliate Registration Rights Agreement") with and for
the benefit of any person who, on the Effective Date, either is a director,
executive officer, or owner of 10% or more of the outstanding shares of New
Common ("Affiliated Holders"). The Affiliate Registration Rights Agreement
grants certain "piggy-back" rights in connection with certain registrations of
securities by the Registrant during the three year period commencing on the
Effective Date to any Affiliated Holder who, at the time the Registrant proposes
to
<PAGE>
effect such registration, is either a director, executive officer or owner of
10% or more of the outstanding shares of New Common. Reference is made to the
Affiliate Registration Rights Agreement, which is included as EXHIBIT E to the
Plan and is incorporated by reference herein.
TERMINATION OF RIGHTS TO PURCHASE PREFERRED STOCK
The Plan provides that on the Effective Date, the Agreement, dated as of
August 14, 1986 between the Registrant and The Bank of California, which
provides for the issuance of certain rights to purchase preferred stock of the
Registrant, will be terminated and cancelled.
LONG TERM INCENTIVE PLAN.
The Board adopted the Registrant's Long-Term Incentive Plan (the "Incentive
Plan") on October 25, 1994. The Confirmation Order provides that (i) the Plan
and the First Amended Disclosure Statement pursuant to Section 1125 of the
Bankruptcy Code for the Plan constituted a solicitation to the holders of Old
Common for the approval of the Incentive Plan, (ii) the acceptance of the
Incentive Plan by the holders of Old Common is confirmed and (iii) the
Confirmation Order constitutes evidence of stockholder approval of the
Incentive Plan for purposes of compliance with Rule 16b-3 under the Securities
Exchange Act of 1934, as amended. The Incentive Plan will replace the 1988
Management Stock Program, which will be terminated on the Effective Date,
except that the restrictions in such terminated plan concerning outstanding
restricted stock will continue to govern outstanding options and restricted
shares of New Common issued with respect thereto.
The following is a brief summary of the principal features of the Incentive
Plan and is qualified in its entirety by reference to the full text of the
Incentive Plan, which is attached as EXHIBIT 99.2 hereto and is incorporated by
reference herein.
The purpose of the Incentive Plan is to attract and retain employees of the
Registrant and to induce such employees to exert their maximum efforts toward
the Registrant's success. Under the Incentive Plan, the Registrant may grant to
eligible individuals
<PAGE>
stock options, dividend equivalent rights, stock awards, restricted share
awards, or other awards which are valued in whole or in part by reference to, or
are otherwise based on, the New Common, standing alone, in combination or in
tandem ("Awards"). Any employee, officer, director (other than a member of the
committee administering the Incentive Plan (the "Committee")) or consultant of
the Registrant or any subsidiary thereof selected by the Committee is eligible
to receive Awards.
The Incentive Plan will be administered by the Committee which shall have
the authority to take such actions as provided in the Incentive Plan,
including but not limited to determining the individuals to whom Awards shall
be granted and the timing, type and terms of such Awards.
The maximum aggregate number of shares of New Common as to which Awards may
at any time be granted under the Incentive Plan is 1,000,000 (which is exclusive
of any options outstanding on the Effective Date). Shares of New Common
underlying Awards that have terminated, expired, or been canceled, forfeited or
surrendered without having been exercised shall again be available for the grant
of Awards. Awards payable in cash will not reduce the number of shares
available for Awards under the Incentive Plan.
The Incentive Plan will terminate on the tenth anniversary of its adoption
and no Awards may be granted after such termination. The Incentive Plan may be
amended, modified or terminated at any time by the affirmative vote of the
holders of a majority of the outstanding shares of New Common present or
represented and entitled to vote at a duly held stockholders meeting.
STOCK ISSUED AND OUTSTANDING.
On the date of the Confirmation Order there were 7,309,827 shares of Old
Common issued and outstanding. On the Effective Date there will be 9,255,773
shares of New Common issued and outstanding (7,309,827 of which will be issued
in exchange for the Old Common and 1,945,946 of which will be purchased by
Mutual Series on the Effective Date) and there will be Rights to purchase
approximately an additional 8,864,865 shares of New Common (the "Offered
Shares"). In addition, $200,000 worth of New Common, valued at a price equal to
the average of the daily average prices
<PAGE>
of the New Common for the 20 trading days beginning 30 calendar days following
the expiration of the Rights will be distributed to holders of Class 10 Claims.
The aggregate total of such number of shares cannot be determined at this time.
Pursuant to the Plan, upon consummation of the Rights offering up to
approximately 8,972,973 additional shares of New Common will be issued pursuant
to the exercise of Rights, the purchase of Standby Shares by Mutual Series and
the purchase of shares by John J. Lee as described above, which will result in
there being an aggregate of approximately 18,228,746 outstanding shares of New
Common, excluding the shares issuable to holders of Class 10 Claims.
BALANCE SHEET OF THE REGISTRANT.
The Condensed Consolidated Balance Sheets as of October 2, 1994 and
December 31, 1993 were filed by the Registrant as part of the Registrant's Form
10-Q for the Quarter ended October 2, 1994 and are incorporated by reference
herein.
<PAGE>
ITEM 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
The required PRO FORMA financial information is attached hereto on
pages F-1 through F-4.
(c) EXHIBITS.
2.1 - Order Confirming First Amended Plan of Reorganization proposed by the
Debtor and the Official Committee of Equity Security Holders, dated as
of November 7, 1994 and entered on January 12, 1995 by the United
States Bankruptcy Court for the Northern District of California (the
"Confirmation Order"); Exhibit A to the Confirmation Order, the First
Amended Plan of Reorganization Proposed by the Debtor and the Official
Committee of Equity Security Holders, dated as of November 7, 1994 was
filed as Exhibit 2 to the Registrant's Form 10-Q for the Quarter Ended
October 2, 1994 and is incorporated by reference; and Exhibit B to the
Confirmation Order is included with the Confirmation Order.
4.1 - Amended and Restated Certificate of Incorporation of the
Registrant is included as Exhibit C to the Plan which was filed as
Exhibit 2 to the Registrant's Form 10-Q for the Quarter Ended October
2, 1994 and is incorporated by reference.
4.2 - Amended and Restated By-Laws of the Registrant,
is included as Exhibit D to the Plan which was filed as Exhibit 2 to
the Registrant's Form 10-Q for the Quarter Ended October 2, 1994 and
is incorporated by reference.
10- Asset Purchase Agreement Between Hexcel Corporation and Northrop
Grumman Corporation which was filed as Exhibit 10 to the Registrants
Form 10-Q for the Quarter Ended October 2, 1994 and is incorporated
by reference.
99.1 - Condensed Consolidated Statements of Operations for the Quarter and
Year-to-Date Ended October 2, 1994 and September 30, 1993; Condensed
Consolidated Balance Sheets as of October 2, 1994 and December 31,
1993; Condensed Consolidated Statements of Cash Flows for the
<PAGE>
Year-to-Date Ended October 2, 1994 and September 30, 1993; and Notes
to Consolidated Financial Statements were filed as part of the
Registrant's Form 10-Q for the Quarter Ended October 2, 1994 and are
incorporated by reference.
99.2 - Registrant's Long-Term Incentive Plan.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: January 23, 1995
HEXCEL CORPORATION
(Registrant)
By: /s/ Rodney P. Jenks
----------------------------------
Rodney P. Jenks, Jr.
Vice President, Secretary and General Counsel
<PAGE>
(b) Pro Forma Financial Information Page
------------------------------- ----
F-1 Pro Forma Financial Information -- Condensed Consolidated
Balance Sheet as of October 2, 1994.
F-3 Pro Forma Financial Information -- Condensed Consolidated
Statement of Operations for the Year-to-Date Ended
October 2, 1994.
F-4 Pro Forma Financial Information -- Condensed Consolidated
Statement of Operations for the Year Ended December 31, 1993.
<PAGE>
HEXCEL CORPORATION AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 2, 1994
<TABLE>
<CAPTION>
Unaudited
----------------------------------------------------------------------
Pro forma Adjustments
-------------------------------------------
Sale of Sale of Confirmation
As Euro-resins EMT of Plan of Pro forma
(IN THOUSANDS, EXCEPT PER SHARE DATA) Reported Business (1) Business Reorganization Results
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and equivalents $ 1,099 $ 22,586 (e) $ (22,986) (i) $ 699
Accounts receivable 64,910 4,071 (f) 68,981
Inventories 48,730 (1,263) (f) 47,467
Prepaid expenses 3,990 (813) (f) 3,177
Net assets of discontinued operations 12,000 $(9,000) (a) 3,000
- -------------------------------------------------------------------------------------------------------------------------------
Total current assets 130,729 (9,000) 24,581 (22,986) 123,324
- -------------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment 206,684 (19,530) (f) 187,154
Less accumulated depreciation 115,335 (11,984) (f) 103,351
- -------------------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 91,349 (7,546) 83,803
- -------------------------------------------------------------------------------------------------------------------------------
Investments and other assets 20,720 (4,458) (f) (925) (j) 15,337
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $242,798 $(9,000) $ 12,577 $ (23,911) $222,464
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity (Deficit)
Current liabilities:
Notes payable and current maturities of
long-term liabilities $ 20,393 $(8,685) (b) $ (4,196) (e) $ 20,382 (i) $ 27,894
Accounts payable 14,915 183 (f) 15,098
Accrued liabilities 28,421 145 (c) 577 (f) 9,972 (i) 39,115
- -------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 63,729 (8,540) (3,436) 30,354 82,107
- -------------------------------------------------------------------------------------------------------------------------------
Long-term liabilities, less current maturities 49,169 42,737 (i) 91,906
Liabilities subject to disposition in bankruptcy
reorganization 132,130 (132,130) (k)
- -------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity (deficit):
Common stock, $0.01 par value, authorized
20,000 shares, shares issued and outstanding
of 7,310 in 1994 73 109 (h) 182
Additional paid-in capital 62,562 50,091 (h) 112,653
Accumulated deficit (70,129) (460) (d) 16,013 (g) (15,072) (l) (69,648)
Minimum pension obligation adjustment (646) (646)
Cumulative currency translation adjustment 5,910 5,910
- -------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity (deficit) (2,230) (460) 16,013 35,128 48,451
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders'
equity (deficit) $242,798 $(9,000) $ 12,577 $ (23,911) $222,464
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to pro forma financial information on next page
F-1
<PAGE>
HEXCEL CORPORATION AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 2, 1994
NOTES TO PRO FORMA FINANCIAL INFORMATION
(1) This column reflects the sale of the European resins business which was
disclosed in a previous Form 8-K filed on January 13, 1995
(a) Net assets of European resins business sold
(b) Net cash proceeds from the sale of Hexcel Corporation's European resins
business are assumed to have been used to pay down outstanding revolving
debt
(c) Miscellaneous accrued liabilities
(d) Net loss from the disposal of Hexcel Corporation's European resins business
(e) Net cash proceeds from the sale of Hexcel Corporation's EMT business and
related inventory are assumed to have been used to pay off remaining
revolving debt and then increase cash
(f) Assets and liabilities of EMT business sold
(g) Net gain from the disposal of Hexcel Corporation's EMT business and related
inventory
(h) Amount reflects a $50 million equity infusion from Mutual Series Fund and
the common stock rights offering
(i) Reinstatement and/or payment of prepetition liabilities based upon the
provisions of the plan
(j) Miscellaneous asset reductions
(k) Reflects both the payment and/or reclassification of prepetition
indebtedness
(l) Reflects additional bankruptcy and other expenses pursuant to the plan
F-2
<PAGE>
HEXCEL CORPORATION AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR-TO-DATE ENDED OCTOBER 2, 1994
<TABLE>
<CAPTION>
Unaudited
--------------------------------------------------------
Pro forma Adjustments
----------------------------
Sale of Sale of
As Euro-resins EMT Pro forma
(IN THOUSANDS, EXCEPT PER SHARE DATA) Reported Business (1) Business Results
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $237,080 $ (4,688) (b) $ 232,392
Cost of sales (199,631) 4,057 (c) (195,574)
- -------------------------------------------------------------------------------------------------------------------------------
Gross margin 37,449 (631) 36,818
Other operating costs and expenses:
Marketing, general and administrative expenses (34,441) 275 (d) (34,166)
Other income (expenses) (8,146) (8,146)
- -------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) (5,138) (356) (5,494)
Interest expenses (7,086) 1,406 (e) (5,680)
Bankruptcy reorganization expenses (11,945) (11,945)
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before income taxes (24,169) 1,050 (23,119)
Benefit (provision) for income taxes (1,369) (1,369)
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations (25,538) 1,050 (24,488)
Income (losses) from discontinued operations (1,847) $ (984) (a) (2,831)
- -------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $(27,385) $ (984) $ 1,050 $ (27,319)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Net income (loss) per share and equivalent share:
Primary and fully diluted:
Continuing operations $ (3.50) $ 0.14 $ (3.36)
Discontinued operations (0.25) $(0.13) (0.38)
- -------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (3.75) $(0.13) $ 0.14 $ (3.74)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Weighted average shares and equivalent shares 7,310 7,310 7,310 7,310
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) This column reflects the sale of the European resins business which
was disclosed in a previous Form 8-K filed on January 13, 1995
(a) Elimination of net income from Hexcel Corporation's European resins
business
(b) Elimination of net sales attributable to Hexcel Corporation's EMT
business
(c) Elimination of cost of sales attributable to Hexcel Corporation's EMT
business
(d) Elimination of general and administrative expenses attributable to
Hexcel Corporation's EMT business
(e) Reduction of interest expenses resulting from the use of net cash
proceeds from the sale of Hexcel Corporation's EMT business to pay off
remaining revolving debt and generate interest income
</TABLE>
F-3
<PAGE>
HEXCEL CORPORATION AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Unaudited
--------------------------------------------------------
Pro forma Adjustments
----------------------------
Sale of Sale of
As Euro-resins EMT Pro forma
(IN THOUSANDS, EXCEPT PER SHARE DATA) Reported Business (1) Business Results
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $310,635 $(14,981) (b) $ 295,654
Cost of sales (263,090) 11,937 (c) (251,153)
- -------------------------------------------------------------------------------------------------------------------------------
Gross margin 47,545 (3,044) 44,501
Other operating costs and expenses:
Marketing, general and administrative expenses (52,510) 866 (d) (51,644)
Other income (expenses) (12,780) (12,780)
Restructuring expenses (46,600) (46,600)
- -------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) (64,345) (2,178) (66,523)
Interest expenses (8,862) 1,875 (e) (6,987)
Bankruptcy reorganization expenses (641) (641)
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations before income taxes (73,848) (303) (74,151)
Benefit (provision) for income taxes (6,024) (6,024)
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from continuing operations (79,872) (303) (80,175)
Income (losses) from discontinued operations (10,623) $ 421 (a) (10,202)
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) before cumulative effect of accounting changes (90,495) 421 (303) (90,377)
Cumulative effect of change in accounting for income taxes 4,500 4,500
- -------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $(85,995) $ 421 $ (303) $ (85,877)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Net income (loss) per share and equivalent share:
Primary and fully diluted:
Continuing operations $ (10.90) $ (0.04) $ (10.94)
Discontinued operations (1.44) $0.06 (1.38)
Cumulative effect of change in accounting for income 0.61 0.61
- -------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (11.73) $0.06 $ (0.04) $ (11.71)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Weighted average shares and equivalent shares 7,330 7,330 7,330 7,330
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) This column reflects the sale of the European resins business which
was disclosed in a previous Form 8-K filed on January 1, 1995
(a) Elimination of net losses from Hexcel Corporation's European resins
business
(b) Elimination of net sales attributable to Hexcel Corporation's EMT
business
(c) Elimination of cost of sales attributable to Hexcel Corporation's EMT
business
(d) Elimination of general and administrative expenses attributable to
Hexcel Corporation's EMT business
(e) Reduction of interest expenses resulting from the use of net cash
proceeds from the sale of Hexcel Corporation's EMT business to pay off
remaining revolving debt and generate interest income
</TABLE>
F-4
<PAGE>
Exhibit Index
- ------------- Page
----
2.1 - Order Confirming First Amended Plan of Reorganization
proposed by the Debtor and the Official Committee of Equity
Security Holders, dated as of November 7, 1994 and entered on
January 12, 1995 by the United States Bankruptcy Court for
the Northern District of California (the "Confirmation
Order"); Exhibit A to the Confirmation Order, the First
Amended Plan of Reorganization Proposed by the Debtor and
the Official Committee of Equity Security Holders, dated as
of November 7, 1994 was filed as Exhibit 2 to the
Registrant's Form 10-Q for the Quarter Ended October 2, 1994
and is incorporated by reference; and Exhibit B to the
Confirmation Order is included with the Confirmation Order.
4.1 - Amended and Restated Certificate of Incorporation of the
Registrant is included as Exhibit C to the Plan which was
filed as Exhibit 2 to the Registrant's Form 10-Q for the
Quarter Ended October 2, 1994 and is incorporated by
reference.
4.2 - Amended and Restated By-Laws of the Registrant, is included
as Exhibit D to the Plan which was filed as Exhibit 2 to the
Registrant's Form 10-Q for the Quarter Ended October 2, 1994
and is incorporated by reference.
10 - Asset Purchase Agreement Between Hexcel Corporation and Northrop
Grunmman Corporation which was filed as Exhibit 10 to the Registrants
Form 10-Q for the Quarter Ended October 2, 1994 and is incorporated
by reference.
99.1 - Condensed Consolidated Statements of Operations for the
Quarter and Year-to-Date Ended October 2, 1994 and September
30, 1993; Condensed Consolidated Balance Sheets as of
October 2, 1994 and December 31, 1993;
<PAGE>
Condensed Consolidated Statements of Cash Flows for the
Year-to-Date Ended October 2, 1994 and September 30, 1993;
and Notes to Consolidated Financial Statements were filed as
part of the Registrant's Form 10-Q for the Quarter Ended
October 2, 1994 and are incorporated by reference.
99.2 - Registrant's Long-Term Incentive Plan.
<PAGE>
EXHIBIT 2.1
KRONISH, LIEB, WEINER & HELLMAN
ROBERT J. FEINSTEIN, ESQ.
CHET F. LIPTON, ESQ.
1114 Avenue of the Americas
New York, New York 10036
Telephone: (212) 479-6000
- and -
GOLDBERG, STINNETT, MEYERS & DAVIS
A Professional Corporation
MERLE C. MEYERS, ESQ. #066849
44 Montgomery Street, Suite 2900
San Francisco, California 94104
Telephone: (415) 362-5045
Attorneys for the Debtor in Possession
MARCUS MONTGOMERY WOLFSON P.C.
PETER D. WOLFSON, ESQ.
ROBINSON MARKEL, ESQ.
SUZANNE D.T. LOVETT, ESQ.
53 Wall Street
New York, New York 10005
Telephone: (212) 858-5200
Attorneys for the Official Committee
of Equity Security Holders of
Hexcel Corporation
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
)
In re ) No. 93-48535 T
)
HEXCEL CORPORATION, a ) Chapter 11
Delaware corporation, )
)
Debtor. )
___________________________________)
<PAGE>
ORDER CONFIRMING FIRST AMENDED PLAN OF REORGANIZATION
PROPOSED BY THE DEBTOR AND THE OFFICIAL COMMITTEE
OF EQUITY SECURITY HOLDERS, DATED AS OF NOVEMBER 7, 1994
The First Amended Plan of Reorganization Proposed by Hexcel
Corporation, a Delaware corporation ("Hexcel" or the "Debtor") and the Official
Committee of Equity Security Holders of Hexcel Corporation (the "Equity
Committee"), dated as of November 7, 1994 (which, together with all
modifications thereto on or before the date hereof are herein referred to as the
"Plan"), a copy of which is annexed hereto as Exhibit A,(1) having been proposed
and filed with this Court by its co-proponents, Hexcel and the Equity Committee
(collectively, the "Proponents"); and the First Amended Disclosure Statement
Pursuant to Section 1125 of the Bankruptcy Code for the First Amended Plan of
Reorganization Proposed by the Debtor and the Equity Committee, dated as of
November 7, 1994 (the "Disclosure Statement"), having been approved by the Court
and transmitted to the Debtor's creditors and equity security holders in
accordance with the Order of the Court dated November 9, 1994 approving the
Disclosure Statement under Section 1125 of the Bankruptcy
_________________________
(1) Unless otherwise defined herein, capitalized terms used herein shall have
the meanings ascribed to them in the Plan.
2
<PAGE>
Code and establishing solicitation and tabulation procedures and providing for
other relief (the "Solicitation Order"); and a hearing having been held before
the Court commencing on January 10, 1995 to consider confirmation of the Plan
(the "Confirmation Hearing"); and due notice of the Confirmation Hearing and the
time for filing objections to confirmation of the Plan having been given to all
parties in interest in accordance with the Solicitation Order and other
applicable Orders of this Court; and the Court having found that the form and
scope of the notice of the Confirmation Hearing were appropriate under the
circumstances, that all parties in interest had an opportunity to appear and be
heard at the Confirmation Hearing, and that the procedures by which Ballots for
acceptance or rejection of the Plan were distributed and tabulated were fair and
were properly conducted in accordance with the Solicitation Order and other
applicable Orders of this Court; and the Court having considered all of the
objections to the confirmation of the Plan; and after due consideration and
deliberation, IT IS HEREBY ORDERED, DETERMINED, ADJUDGED, FOUND AND DECREED
that:
3
<PAGE>
JURISDICTION
1. This Court has jurisdiction to approve and confirm the Plan
pursuant to 28 U.S.C. Section 1334.
2. Confirmation of the Plan is a core proceeding pursuant to 28
U.S.C. Section 157(b).
MODIFICATION OF THE PLAN
3. The Proponents have modified the Plan as set forth on Exhibit B
hereto, which modifications are incorporated into and made part of the Plan.
4. The modifications of the Plan do not adversely change the
treatment of the Claim of any creditor or the Interest of any Equity Interest
holder and otherwise comply with Section 1127 of the Bankruptcy Code.
CONFIRMATION OF THE PLAN
5. The Plan complies with the applicable provisions of the
Bankruptcy Code.
6. The Proponents of the Plan have complied with the applicable
provisions of the Bankruptcy Code, including the disclosure and solicitation
requirements of Section 1125 of the Bankruptcy Code.
4
<PAGE>
7. Based on the Disclosure Statement, Hexcel's public dissemination
of reports on its recent financial results, and the record of the Confirmation
Hearing, Hexcel believes that all known material information concerning Hexcel
and its financial condition, as required under Section 1125 of the Bankruptcy
Code or otherwise, has been disclosed, and Hexcel believes there is no known
material non-public information relating to Hexcel and its financial condition
that has not been disclosed.
8. The Plan has been proposed in good faith and not by any means
forbidden by law.
9. All payments made or to be made by the Debtor, or by a person
issuing securities or acquiring property under the Plan, for services or for
costs and expenses in or in connection with the Chapter 11 Case, or in
connection with the Plan and incident to the Chapter 11 Case, have been
approved, have been fully disclosed to the Court and are reasonable or, if to be
fixed after confirmation of the Plan, will be subject to approval of the Court.
10. The identity, qualifications and affiliations of the persons who
are to be directors and officers of the Debtor after confirmation of the Plan
have
5
<PAGE>
been fully disclosed, and the appointment or continuance of such persons in such
offices is consistent with the interests of creditors and equity security
holders of the Debtor and with public policy.
11. The identity of any insider that will be employed or retained by
the Reorganized Debtor and the nature of such insider's compensation have been
fully disclosed.
12. No governmental regulatory commission has jurisdiction, after
confirmation of the Plan, over the rates of the Debtor.
13. With respect to each impaired Class of Claims or Equity
Interests, each holder of a Claim or Equity Interest of such Class has accepted
the Plan or will receive or retain under the Plan property of a value, as of the
Effective Date, that is not less than the amount that such holder would receive
or retain if the Debtor were liquidated under chapter 7 of the Bankruptcy Code
on such date.
14. Classes 1, 2, 3, 5, 6, 7, 9, 10 and 12 of the Plan are not
impaired by the Plan.
15. Classes 4, 8A, 8B and 11 of the Plan are impaired and have voted
to accept the Plan. All of the holders of Claims in Classes 4, 8A and 8B who
voted, have
6
<PAGE>
accepted the Plan. The holders of approximately 96% of the shares in Class 11
which were voted, have accepted the Plan. Although Classes 5 and 6 are not
impaired, the votes of creditors in such Classes were solicited. Approximately
99% in number and 99% in dollar amount of Class 5 creditors who voted, have
accepted the Plan, and the sole creditor in Class 6 voted to accept the Plan.
No Class of Claims or Interests has rejected the Plan.
16. Except to the extent that the holder of a Claim of a kind
specified in Section 507(a) of the Bankruptcy Code has agreed to a different
treatment of such Claim, the Plan provides that:
(a) with respect to a Claim of a kind specified in Section 507(a)(1),
(2), (3), (4), (5) or (6) of the Bankruptcy Code, on the Effective Date,
the holder of such Claim will receive on account of such Claim Cash equal
to the Allowed Amount of such Claim; and
(b) with respect to a Claim of a kind specified in Section 507(a)(7)
of the Bankruptcy Code, the holder of such Claim will receive on account of
such Claim deferred Cash payments, over a period not exceeding six years
after the date of assessment of such Claim, of a value, on the Effective
Date or as
7
<PAGE>
soon thereafter as is practicable, equal to the Allowed Amount of such
Claim.
17. At least one Class of Claims that is impaired under the Plan has
accepted the Plan, determined without including any acceptance of the Plan by
any insider.
18. Confirmation of the Plan is not likely to be followed by the
liquidation, or the need for further financial reorganization, of the Debtor.
19. All fees payable under Section 1930 of title 28 of the United
States Code have been paid or the Plan provides that they will be paid as
Administrative Expenses under the Plan.
20. The Plan provides for the continuation after the Effective Date
of all "retiree benefits" of Hexcel as defined by Section 1114(a) of the
Bankruptcy Code, for the duration of the period Hexcel has obligated itself to
provide such benefits.
21. Each of the conditions to the effectiveness of the Plan has been
or is expected promptly to be satisfied.
22. Section 8.4 of the Plan provides that the Certificate of
Incorporation of the Debtor shall be amended as of the Effective Date to
provide, among other things, for
8
<PAGE>
the inclusion of a provision prohibiting the issuance of non-voting equity
securities and providing, as to the classes of securities possessing voting
power, an appropriate distribution of such power among such classes.
23. The objections to the Plan be, and they hereby are, overruled.
24. Pursuant to Section 1129 of the Bankruptcy Code, the Plan be, and
it hereby is, confirmed.
25. Any security, money or other property or distributions pursuant
to the Plan that are unclaimed for a period of one year after distribution
thereof shall be revested in and become the property of Reorganized Hexcel.
26. Any payment made on behalf of a holder of a Class 9 Claim to the
indenture trustee for the Subordinated Debentures pursuant to the Plan,
including any payment of interest, that is unclaimed by the holder of a
Subordinated Debenture Claim for a period of one year after the distribution
thereof shall be returned to and revested in Reorganized Hexcel.
27. Except as otherwise provided herein and in the Plan, in
accordance with Section 1141(d) of the Bankruptcy Code, the Debtor is discharged
of and from any and all debts and Claims that arose before the date of entry
9
<PAGE>
of this Order, including, without limitation, any debt or Claim of a kind
specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether
or not (a) a proof of Claim based on such a debt is filed or deemed filed under
Section 501 of the Bankruptcy Code, (b) such Claim is allowed under Section 502
of the Bankruptcy Code, or (c) the holder of such Claim has accepted the Plan.
28. Nothing in this Order or in the Plan is intended to limit the
rights of creditors, if any, to seek allowance of their Claims pursuant to
Section 502(e)(2) or reconsideration of their Claims pursuant to Section 502(j)
of the Bankruptcy Code.
29. Except as otherwise provided in the Plan, in accordance with
Sections 1141(b) and 1141(c) of the Bankruptcy Code, all property of the
Debtor's estate and all other property dealt with in the Plan be, and it hereby
is, vested in the Debtor and is free and clear of all debts, Claims and
interests of creditors and holders of Equity Interests of the Debtor.
30. Except as provided in the Plan and subject only to the occurrence
of the Effective Date, any judgment at any time obtained, to the extent that
such judgment is a determination of personal liability of the Debtor with
10
<PAGE>
respect to any debt or Claim discharged hereunder be, and it hereby is, rendered
null and void.
31. Unless otherwise provided herein, all injunctions or stays
provided for in the Chapter 11 Case pursuant to Sections 105 or 362 of the
Bankruptcy Code or otherwise extant on the date of entry of this Order shall
remain in full force and effect until the Effective Date of the Plan.
32. Unless otherwise provided herein, the stay in effect pursuant to
Section 362(a) of the Bankruptcy Code and any stay entered in the Chapter 11
Case by this Court under Section 105 of the Bankruptcy Code be, and they hereby
are, dissolved and of no force or effect after the Effective Date of the Plan.
33. Except as provided in the Plan and subject only to the occurrence
of the Effective Date, the commencement or continuation of any action, the
employment of any process, or any act to collect, recover or offset any debt
discharged hereunder as a personal liability of the estate or Debtor, or from or
against property of the estate or Debtor, is permanently enjoined, stayed and
restrained.
34. Subject only to the occurrence of the Effective Date, pursuant to
Article VII of the Plan and
11
<PAGE>
Sections 365 and 1123(b)(2) of the Bankruptcy Code, and without further motion
to or order of the Bankruptcy Court, (i) the assumption of all executory
contracts and unexpired leases other than those (a) which have been rejected
pursuant to a prior Order of this Court, (b) which are set forth in Schedules
7.1(a) and 7.3 to the Plan, or (c) as to which a motion for approval of the
rejection thereof has been filed and served on or prior to the Effective Date,
be, and the same hereby is, approved in all respects; (ii) the rejection of all
executory contracts set forth in Schedules 7.1(a) and 7.3 to the Plan be, and
the same hereby is, approved in all respects; and (iii) all Claims arising from
contracts and leases assumed prior to or as a result of the Effective Date are
hereby disallowed.
35. Proof of any Claim for breach of an executory contract or
unexpired lease rejected pursuant to Section 7.1(a) or Section 7.3 of the Plan
be, and it hereby is, required to be served and filed with the Court no later
than thirty days after notice of entry of this Order, or it shall then be barred
and discharged.
36. Pursuant to Section 365(d)(4) of the Bankruptcy Code, the time
within which Hexcel may assume or reject the executory contracts and unexpired
leases
12
<PAGE>
specified in Section 7.1(a) and (b) and Section 7.3 of the Plan be, and it
hereby is, extended through the later to occur of (a) the date of entry of an
order approving the assumption or rejection of such executory contracts or
unexpired leases and (b) the Effective Date; PROVIDED, HOWEVER, that in the
event that the Effective Date does not occur and this Order is vacated pursuant
to the terms and provisions of the Plan or otherwise, the time within which
Hexcel may assume or reject all such executory contracts and unexpired leases
be, and it hereby is, extended for a period of thirty days after the date this
Order is vacated.
37. No payment or distribution provided for in the Plan shall be made
prior to the Effective Date. All distributions of Cash, Reorganized Hexcel
Common Stock, Rights or other consideration required to be made by Hexcel
pursuant to the Plan shall be made within the time provided by the Plan and, in
the case of distributions of Cash, shall be timely and proper if (i) mailed by
first class mail on or before the distribution dates set forth in the Plan to
the last known address of the persons entitled thereto, or (ii) payment is made
by wire transfer as provided for in Section 6.2(b) of the Plan on or before the
distribution dates set forth in the Plan.
13
<PAGE>
38. The amendment and restatement of the Certificate of Incorporation
and Bylaws of Hexcel be, and they hereby are, approved.
39. Hexcel, Reorganized Hexcel, their officers, and all parties in
interest be, and they hereby are, authorized, empowered and directed to issue,
execute, deliver, file or record any agreement, document or security, and take
any action necessary or appropriate, to implement, effectuate and consummate the
Plan in accordance with its terms, including, without limitation, any agreement,
release, amendment or restatement of Hexcel's Certificate of Incorporation and
Bylaws, the agreements annexed or referred to in the Plan and/or the Disclosure
Statement and the issuance of the Rights, without further application to or
order of this Court.
40. All actions authorized to be taken pursuant to the Plan,
including, without limitation the amendment and restatement of Hexcel's
Certificate of Incorporation and Bylaws, shall be effective as of the Effective
Date pursuant to this Order without any further action by the stockholders or
directors of the Debtor, the Debtor in Possession or Reorganized Hexcel.
14
<PAGE>
41. Hexcel, Reorganized Hexcel and their officers be, and hereby are,
authorized to execute and file any and all documents necessary or appropriate to
effectuate or evidence any or all corporate actions authorized to be taken
pursuant to the Plan or the Disclosure Statement, and any or all such documents
shall be accepted by each of the respective State filing offices and recorded in
accordance with applicable State law and shall become effective in accordance
with their terms and the provisions of State law as of the Effective Date.
42. This Order shall constitute all approvals and consents required,
if any, by the laws, rules or regulations of any State or any other governmental
authority with respect to the implementation or consummation of the Plan, and
any other documents, instruments or agreements, and any amendments or
modifications thereto, and any other acts referred to in or contemplated by the
Plan, the Disclosure Statement and any other documents, instruments or
agreements, and any amendments or modifications thereto, including the issuance
of the Rights and conducting the Rights Offering.
43. By operation of Section 1145 of the Bankruptcy Code, the
distribution of Reorganized Hexcel
15
<PAGE>
Common Stock (including, but not limited to, that issuable on exercise of the
Rights and that distributable to creditors in Class 10 under the Plan) and the
Rights to be issued and distributed under the Plan, shall be exempt from
registration under Section 5 of the Securities Act of 1933, as amended, and any
State or local law requiring registration for offer or sale of a security or
registration or licensing of an issuer of, or broker or dealer in a security.
All such securities so issued shall be freely transferable by the initial
recipients thereof, except for any securities received by an underwriter within
the meaning of Section 1145(b) of the Bankruptcy Code.
44. The Plan and the Disclosure Statement constitute a solicitation
to the holders of Hexcel Common Stock for the approval of the Hexcel Corporation
New Long Term Incentive Plan, a copy of which is annexed as Exhibit G to the
Disclosure Statement, and the acceptance of the Hexcel Corporation New Long Term
Incentive Plan by the holders of Hexcel Common Stock is hereby confirmed. Entry
of this Order constitutes evidence of stockholder approval of the Hexcel
Corporation New Long Term Incentive Plan, for purposes of compliance with Rule
16b-3 issued under Securities Exchange Act of 1934, as amended.
16
<PAGE>
45. Pursuant to Section 1146 of the Bankruptcy Code, the issuance,
transfer or exchange of notes or equity securities under the Plan, the creation
of any mortgage, deed or trust or other security interest, the making or
assignment of any lease or sublease, or the making or delivery of any deed or
other instrument of transfer under, in furtherance of, or in connection with the
Plan, including the agreements executed in connection with (i) the sale of
Hexcel's Chandler, Arizona manufacturing plant, electromagnetic technology and
other assets to Northrop Grumman Corporation, and (ii) the sale of Hexcel's four
European subsidiaries comprising its Europeans resins business, and any of the
other transactions contemplated under the Plan be, and they hereby are, exempt
from any stamp, real estate transfer, mortgage recording or other similar tax.
46. The Standby Purchase Commitment among Hexcel, the Equity
Committee and Mutual Series Fund Inc. ("Mutual Series"), dated October 24, 1994
(the "Standby Purchase Commitment"), a copy of which is annexed to the Plan as
Exhibit B, and the exhibits thereto (including, but not limited to, the form of
Secured Promissory Note, Security Agreement and Registration Rights Agreement),
be,
17
<PAGE>
and they hereby are, approved and the Standby Purchase Commitment constitutes,
and such Secured Promissory Note, Security Agreement and Registration Rights
Agreement when executed and delivered pursuant to the Standby Purchase
Commitment will constitute, the legal, valid and binding obligations of
Reorganized Hexcel enforceable against Reorganized Hexcel in accordance with
their respective terms.
47. Pursuant to Section 1123(a)(5) of the Bankruptcy Code, Hexcel,
Reorganized Hexcel and their officers be, and they hereby are, authorized and
directed to consummate the transactions contemplated by the Standby Purchase
Commitment, Secured Promissory Note, Security Agreement and Registration Rights
Agreement in accordance with their terms without further approval or action by
either the directors or stockholders of Hexcel or Reorganized Hexcel, which
approval has been, and shall be deemed to have been, given for all purposes.
48. The Registration Rights Agreement for Affiliates between Hexcel
and certain present and future holders of its equity securities who qualify as
Eligible Holders as defined therein, a copy of which is annexed to the Plan as
Exhibit E be, and it hereby is, approved and
18
<PAGE>
when executed and delivered by Hexcel shall be the legal, valid and binding
obligation of Reorganized Hexcel enforceable against Reorganized Hexcel in
accordance with its terms.
49. The commitment letter, dated January 6, 1995, between Hexcel and
Citicorp USA, Inc. ("Citicorp") (the "Commitment Letter") and the facility fees
letter, dated January 6, 1995, between Hexcel and Citicorp (the "Facility Fees
Letter"), shall be the legal, valid and binding obligations of Hexcel
enforceable against Hexcel in accordance with their terms. Hexcel, Reorganized
Hexcel and their officers be, and they hereby are, authorized and directed to
negotiate, execute, deliver, and perform a working capital credit agreement,
security agreement and other loan documents (collectively, the "Loan Documents")
substantially in accordance with the terms set forth in the Commitment Letter
and the Facility Fees Letter. Upon execution and delivery of the Loan
Documents, said Loan Documents shall be the legal, valid and binding obligation
of Reorganized Hexcel enforceable against Reorganized Hexcel in accordance with
their terms.
50. The validity, enforceability, perfection and first priority of
the security interests and liens granted
19
<PAGE>
pursuant to the Loan Documents, be, and they hereby are, authorized and
approved, without any further act required by Citicorp.
51. Hexcel, Reorganized Hexcel and their officers be, and they hereby
are, authorized and directed to negotiate, execute, and deliver an Amended and
Restated BNP Reimbursement Agreement, with exhibits and schedules thereto, in
conformity with the terms set forth in Article IV of the Plan and the Amended
and Restated BNP Reimbursement Agreement and any documents delivered in
connection therewith shall be, and they hereby are, approved and when executed
and delivered by Reorganized Hexcel shall be the legal, valid and binding
obligation of Reorganized Hexcel enforceable against Reorganized Hexcel in
accordance with their terms. Execution and delivery of an Amended and Restated
BNP Reimbursement Agreement in form mutually satisfactory to the Proponents and
BNP shall be a condition to the Effective Date in addition to those conditions
set forth in Article X of the Plan.
52. Pursuant to Section 9.3 of the Plan, on the Effective Date, all
rights, claims, causes of action, avoiding powers, suits and proceedings arising
under Sections 544, 545, 547, 548, 549, 550 and 553 of the
20
<PAGE>
Bankruptcy Code shall be extinguished whether or not then pending.
53. None of Hexcel, Reorganized Hexcel, Mutual Series, the Creditors'
Committee, the Equity Committee or any of their respective members, officers,
directors, employees, attorneys, advisors or agents shall have or incur any
liability to any holder of a Claim or Equity Interest for any act or omission in
connection with, or arising out of, the pursuit of confirmation of the Plan, the
conduct of the business or affairs of Hexcel as a debtor in possession, the
consummation of the Plan or the administration of the Plan or the property to be
distributed under the Plan except for willful misconduct or gross negligence,
and, in all respects, Hexcel, Reorganized Hexcel, the Creditors' Committee, the
Equity Committee, Mutual Series and each of their respective members, officers,
directors, employees, advisors and agents shall be entitled to rely upon the
advice of counsel with respect to their duties and responsibilities under the
Plan and retain the benefit, if any, of any immunity available to Committee
members.
54. Upon the Effective Date, any and all claims held by Hexcel
against any present or former officers or
21
<PAGE>
directors shall be forever waived, released and discharged, and will not be
retained or enforced by Reorganized Hexcel.
55. Upon the Effective Date, to the fullest extent allowable under
applicable bankruptcy law, any and all claims and causes of action, whether
direct or derivative, against any present or former officer or director of
Hexcel by any holder of a Claim or Interest under the Plan shall be forever
waived, released and discharged, and not retained or enforced by such holder.
56. Upon the cure of all defaults, if any, under the IDRB's, on the
Effective Date the IDRB's shall be Reinstated.
57. Payment of all past due principal and interest due under the
Subordinated Debentures, including compound interest at the contract rate of 7%
or such other rate as determined by the Court, on the Effective Date shall
constitute the cure of all defaults under the Subordinated Debentures and the
Subordinated Debenture Indenture, and the Subordinated Debentures and the
Subordinated Debenture Indenture shall be Reinstated.
58. Pursuant to Exhibit C of the Standby Purchase Commitment, the
initial Board of Directors shall be comprised of John J. Lee, Dr. George S.
Springer, Franklin
22
<PAGE>
S. Wimer, Marshall S. Geller, Peter Langerman, Joseph Harrosh, Robert L. Witt,
Peter D. Wolfson and the new Chief Executive Officer of Hexcel commencing with
his employment by Hexcel. If Mutual Series owns more than 50% of the
outstanding common stock of Hexcel upon the conclusion of the Subscription
Rights Period, Mutual Series shall designate one additional director. If Mutual
Series owns less than 25% of the outstanding common stock of Hexcel upon
conclusion of the Subscription Rights Period, the directors nominated by the
Equity Committee, together with the directors nominated by mutual agreement of
the Equity Committee and Mutual Series, will select one additional director.
The new Board of Directors will select (with the approvals of at least two of
the nominees of the Equity Committee) one of the directors as initial Chairman.
The initial Board of Directors of Hexcel shall hold office until the first post-
consummation annual meeting of stockholders of Hexcel, and until such directors'
successors shall be elected and qualified. The first post-consummation annual
meeting of stockholders shall be held not earlier than nine months after the
Effective Date unless otherwise agreed by the board designees of Mutual Series
and the Equity Committee.
23
<PAGE>
59. Pending selection of a new Chief Executive Officer mutually
acceptable to the Board nominees of the Equity Committee and Mutual Series, John
J. Lee will continue as Chief Executive Officer of Reorganized Hexcel. When the
new Chief Executive Officer takes office, (a) Mr. Lee will resign as an officer
of Hexcel and will be retained as a consultant by Hexcel for strategic planning,
reporting to the Chief Executive Officer and Board of Directors of Hexcel under
a two year agreement, subject to termination at the end of the first year by
resolution of the Board of Directors delivered to Mr. Lee not earlier than
60 days and not later than 30 days prior to the end of the first year; (b) Mr.
Lee will receive (i) base compensation (salary and fees) of $180,000 per year
during the first year, $230,000 during the second year, plus the same benefits
provided to him in his interim employment agreement approved by the Bankruptcy
Court; (ii) appropriate bonus opportunity determined by the Board of Directors
based upon attainment of the goals established by the Board of Directors; (iii)
stock options for approximately .625% of Reorganized Hexcel's fully diluted
common stock (without giving effect to the conversion of the 7% Convertible
Subordinated Debentures due 2011) at a price equal to the average of the
24
<PAGE>
daily average prices of the stock for the 20 trading days beginning 30 calendar
days following the conclusion of the Subscription Rights Period; (iv) such
options will vest in equal monthly installments over the two-year term of the
consulting agreement, subject to being fully vested upon any early termination
thereof (other than for cause or voluntary resignation) and will be exercisable
until the later of three years following the Effective Date or one year after
expiration of the consulting agreement.
60. Pursuant to the Stipulation and Order attached to the Disclosure
Statement as Exhibit H, on the Effective Date the PVSC Claims (as defined in
said Exhibit H) shall be settled, and the Debtor's objection to the PVSC Claims
as well as any other claims assertable by the Debtor, Debtor in Possession or
Trustee, or successor predicated on bankruptcy law are dismissed with prejudice
and, in the interim, all litigation between the Debtor in Possession and PVSC as
to the Objection is stayed. The fact of this stay shall not be used by any
party in prejudice of any other party's rights to discovery, withdrawal of the
reference or otherwise. This stay may be terminated on three days written and
faxed notice if the Effective Date has not occurred by April 1, 1995.
25
<PAGE>
61. Until the entry of a Final Decree in this Chapter 11 Case, this
Court shall retain jurisdiction over Reorganized Hexcel and this Chapter 11 Case
for all purposes including those listed in Article XI of the Plan and to enforce
compliance with any orders of the type referred to in Section 1142 of the
Bankruptcy Code.
62. The reversal or modification of this Order on appeal shall not
affect the validity of the Plan or any other agreement or action authorized by
this Order as to any entity acting in good faith, whether or not that entity
knows of the appeal, unless this Order is stayed pending appeal.
63. Nothing contained in the Confidentiality Order dated February 24,
1994 shall prohibit members of the Equity Committee and the Creditors' Committee
from trading in securities of or claims against Hexcel or Reorganized Hexcel.
MISCELLANEOUS
64. All applications for final allowances of compensation and
reimbursement of disbursements pursuant to Sections 330 and 503(b) of the
Bankruptcy Code shall be
26
<PAGE>
filed with the Court and served upon the Debtor within forty-five days from and
after the Effective Date.
65. Reorganized Hexcel and the Equity Committee shall have the
exclusive right (except as to (i) Claims or applications for bonuses of the
Debtor's officers, directors and employees and (ii) applications for allowances
of compensation and reimbursement of expenses under Sections 330 and 503 of the
Bankruptcy Code) to make and file objections to Administrative Expense Claims
and Claims and shall serve a copy of each objection upon the holder of the
Administrative Expense Claim or Claim to which the objection is made as soon as
practicable, but in no event later than thirty days after the Effective Date;
provided, however that the Equity Committee shall not file an objection (other
than with respect to (i) Claims or applications for bonuses of the Debtor's
officers, directors and employees and (ii) applications for allowances of
compensation and reimbursement of expenses under Sections 330 and 503 of the
Bankruptcy Code), without first making prior demand that Reorganized Hexcel file
such an objection and ten days having elapsed without such objection being filed
by Reorganized Hexcel.
27
<PAGE>
66. Within fifteen days after entry of this Order or within such
further time as the Court may allow, the Proponents shall (a) mail to all known
creditors, shareholders and other parties in interest notice of the entry of
this Order and (b) publish such notice on one occasion in the national editions
of THE WALL STREET JOURNAL, THE NEW YORK TIMES and THE OAKLAND TRIBUNE.
Dated: Oakland, California
January 10, 1995 at 11:30 a.m.
/s/
----------------------------
HONORABLE LESLIE TCHAIKOVSKY
UNITED STATES BANKRUPTCY JUDGE
APPROVED AS TO FORM:
KRONISH, LIEB, WEINER & HELLMAN
By: /s/
-------------------------------------
Co-Counsel for the Debtor
MARCUS MONTGOMERY WOLFSON P.C.
By: /s/
-------------------------------------
Counsel to the Official Committee
of Equity Security Holders
PILLSBURY MADISON & SUTRO
By: /s/
-------------------------------------
Counsel to the Official
Creditors' Committee
28
<PAGE>
EXHIBIT A
SUBSCRIPTION RIGHTS PLAN
RECITAL
This Subscription Rights Plan (this "Plan") is adopted by Hexcel
Corporation ("Hexcel") pursuant to, and as of the Effective Date of, the First
Amended Plan of Reorganization proposed by the Debtor and the Official Committee
of Equity Security Holders under Chapter 11 of the Bankruptcy Code, dated
November 7, 1994 (the "Chapter 11 Plan"), as confirmed by the Bankruptcy Court
in Hexcel's chapter 11 case. Except as otherwise provided herein, capitalized
terms used in this Plan have the meanings assigned to them in the Chapter 11
Plan.
TERMS OF PLAN
1. THE SUBSCRIPTION RIGHTS.
1.1 This Plan authorizes the distribution of 1.21273 rights to
subscribe for additional shares of Reorganized Hexcel Common Stock as described
below ("Subscription Right"), with respect to each share of Hexcel Common Stock,
par value $.01 per share (the "Common Stock"), issued and outstanding as of the
close of business on the Effective Date (the "Record Date"), other than shares
of Reorganized Hexcel Common Stock issued by Reorganized Hexcel on the Effective
Date. Each Subscription Right entitles the holder to purchase one share of
Reorganized Hexcel Common Stock for an aggregate of approximately 8,864,865
shares of Reorganized Hexcel Common Stock (the "Offered Shares"), subject to
rounding as provided herein. Each holder of record of Common Stock (other than
shares of Reorganized Hexcel Common Stock issued by Reorganized Hexcel on the
Effective Date) on the Record Date (an "Original Holder") shall be deemed to
have received a distribution of such Subscription Rights. Original Holders and
transferees of the Basic Subscription Rights of Original Holders are referred to
herein as "Holders."
<PAGE>
1.2 Each Subscription Right entitles the Holder thereof:
1.2.1 to the right (each, a "Basic Subscription Right") to
purchase one Offered Share at a purchase price of
$4.625 per share; plus
1.2.2 in the case of Original Holders, conditioned upon such
Original Holder's qualifying as an Eligible Rights
Holder (as defined in Section 1.3(c) of this Plan),
such Original Holder also has the right to purchase any
desired number of Offered Shares from the Stockholder
Pool at a purchase price of $4.625 per share (the
"Oversubscription Rights"), subject to Proration as
provided herein. OVERSUBSCRIPTION RIGHTS ARE NOT
TRANSFERABLE AND MAY NOT BE EXERCISED BY ANY HOLDER
OTHER THAN AN ELIGIBLE RIGHTS HOLDER.
The "Oversubscription Pool" consists of all Offered Shares subject to Basic
Subscription Rights that expire unexercised. The "Standby Pool" consists of 25%
of the Oversubscription Pool remaining after the first 108,108 shares of
Reorganized Hexcel Common Stock have been allocated for purchase by John J. Lee
pursuant to the Chapter 11 Plan (the "Designated Shares"). The "Stockholder
Pool" consists of the Oversubscription Pool remaining after excluding the
Standby Pool and the Designated Shares.
1.3 For purposes of this Plan:
(a) "BENEFICIAL RIGHTS HOLDER" means a person or entity who is listed on
the records of any Nominee as the beneficial owner of any Common Stock held in
the name of such Nominee (either of record or through another Nominee) as of the
close of business on the Record Date.
(b) "ELIGIBLE BENEFICIAL RIGHTS HOLDER" means a Beneficial Rights Holder
on whose behalf a Nominee has, at such Beneficial
2
<PAGE>
Rights Holder's direction, exercised in accordance with the terms of this Plan,
all Basic Subscription Rights issued to or for the account of such Nominee by
Reorganized Hexcel pursuant to this Plan with respect to Common Stock
beneficially owned by such Beneficial Rights Holder.
(c) "ELIGIBLE RIGHTS HOLDER" means (i) an Original Holder, other than a
Nominee, who has exercised, in accordance with the terms of this Plan, all
Basic Subscription Rights issued to such holder by Reorganized Hexcel pursuant
to the Chapter 11 Plan, and (ii) a Nominee to the extent acting on behalf of an
Eligible Beneficial Rights Holder, regardless of whether such Nominee has
exercised less than all of the Basic Subscription Rights issued to it pursuant
to the Chapter 11 Plan.
(d) "NOMINEE" means any bank, trust company, depositary or securities
broker or dealer which holds Common Stock, either of record or beneficially
through another Nominee, on the Record Date otherwise than as the beneficial
owner thereof.
1.4 A Nominee may only exercise Oversubscription Rights on behalf of
Eligible Beneficial Rights Holders who beneficially own Basic Subscription
Rights registered in that Nominee's name. Hexcel may prescribe the procedures
for verifying that Nominees are exercising Oversubscription Rights only on
behalf of Eligible Beneficial Rights Holders. All questions concerning the
validity of any exercise of Basic Subscription Rights or Oversubscription Rights
and the proper Proration of shares in the Stockholder Pool, will be determined
by Hexcel or by the Subscription Agent, and such determinations shall be final
and binding. For purposes of administering this Plan, including without
limitation for purposes of determining whether Oversubscription Rights have been
properly exercised and for purposes of Proration, (i) in the event that any
person or entity has accounts with more than one Nominee through which such
person or entity is listed as the beneficial owner of Common Stock as of the
close of business on the Record Date, then each account or group of accounts of
that person or entity with each different Nominee will be treated by Hexcel or
by the Subscription Agent as a separate Beneficial Rights Holder, and (ii) in
the event that a Beneficial Rights Holder is also a Record Holder of Hexcel
Common Stock, then Hexcel and the Subscription Agent will treat that person or
entity in its
3
<PAGE>
capacity as a Record Holder of Hexcel Common Stock as being separate from that
person or entity in its capacity as a Beneficial Rights Holder; accordingly, a
person or entity which owns shares of Common Stock either through separate
Nominees or both of record and through one or more Nominees may be treated by
Hexcel and the Subscription Agent as multiple persons or entities for purposes
of Proration and other matters under this Plan.
2. SUBSCRIPTION PRICE.
The Subscription Price for each share of Reorganized Hexcel Common
Stock is $4.625. The aggregate Subscription Price for any subscription shall be
rounded up to the nearest whole cent.
3. PRORATION.
3.1 The number of shares of Reorganized Hexcel Common Stock issuable
upon the exercise of Basic Subscriptions Rights shall not be subject to
proration.
3.2 If the aggregate number of shares of Reorganized Hexcel Common
Stock subscribed for through the exercise of Oversubscription Rights is more
than the number of shares available in the Stockholder Pool, the available
shares will be apportioned among the Eligible Rights Holders who exercised their
Oversubscription Rights in proportion to the number of Basic Subscription Rights
originally issued by Hexcel to, and exercised by, each Eligible Rights Holder
through repeated application of the proration procedure described in the next
paragraph, and subject to rounding as provided in Section 6.2 of this Plan.
Each time the following procedure is applied, the "number of shares of
Reorganized Hexcel Common Stock remaining in the Stockholder Pool" shall mean
the number of shares in the Stockholder Pool not apportioned by prior
applications of the procedures described in this paragraph. The number of
shares of Reorganized Hexcel Common Stock remaining in the Stockholder Pool
shall be apportioned among all those Eligible Rights Holders who
4
<PAGE>
have not yet been apportioned (through previous applications of this procedure)
the full number of shares subscribed for by them in their respective exercises
of Oversubscription Rights. Apportionment among them shall be based on the
ratio of the number of Basic Subscription Rights originally issued by Hexcel to,
and exercised by, each Eligible Rights Holder; provided, that if the number of
shares so apportioned to any Eligible Rights Holder exceeds the number of shares
subscribed for by that Eligible Rights Holder's exercise of Oversubscription
Rights, then the excess shall not be apportioned, and that Eligible Rights
Holder shall thereafter not be apportioned any additional shares should there be
further applications of this procedure. This procedure shall be repeated until
either (i) all of the shares in the Stockholder Pool shall have been apportioned
and there are no shares left in the Stockholder Pool for further apportionment,
or (ii) a sufficient number of shares has been apportioned to all Eligible
Rights Holders to satisfy all of their exercised Oversubscription Rights,
whichever occurs first.
4. SUBSCRIPTION PERIOD.
The Subscription Rights will be exercisable only during the period
(the "Subscription Period") commencing 15 days after the Effective Date and
expiring at 5:00 P.M., Eastern Standard Time, on the first Business Day that
occurs not less than 45 days after the Effective Date (the "Subscription Rights
Expiration Date"). After the Subscription Rights Expiration Date, unexercised
Subscription Rights will be null and void. Hexcel shall not be obligated to
honor any purported exercise of Subscription Rights received after the
Subscription Rights Expiration Date, regardless of when the documents relating
to such exercise were sent, except pursuant to the Guaranteed Delivery
Procedures described below.
5. DISTRIBUTION OF CERTIFICATES.
5.1 As soon as practicable after the Effective Date,
5
<PAGE>
but not later than 15 days thereafter, Hexcel shall distribute to Original
Holders transferable certificates ("Subscription Rights Certificates") in the
form attached to and governed by this Plan, representing the Subscription Rights
issued to Original Holders pursuant to this Plan.
5.2 As soon as practicable after the Subscription Rights Expiration
Date, Hexcel shall distribute to Holders who have duly exercised their
Subscription Rights stock certificates representing that number of shares of
Reorganized Hexcel Common Stock subscribed for and to be issued in accordance
with the terms of this Plan.
5.3 Subscription Rights Certificates shall be executed on behalf of
Hexcel by its Chairman, Vice Chairman, Chief Executive Officer or President,
under its corporate seal reproduced thereon attested by its Secretary or an
Assistant Secretary. The signature of any of these officers on the certificate
may be manual or facsimile.
6. NO FRACTIONAL REORGANIZED HEXCEL COMMON STOCK.
6.1 The number of Basic Subscription Rights issuable to any Holder
will be rounded to the nearest whole number, with .50 Basic Subscription Right
being rounded up to the next whole Basic Subscription Right.
6.2 No fractional shares of Reorganized Hexcel Common Stock shall be
issued. The number of shares of Reorganized Hexcel Common Stock issuable to any
Holder pursuant to the exercise of Oversubscription Rights will be rounded down
to the next lowest whole number of shares.
6.3 No Subscription Rights may be divided in such a way as to permit
the holder to receive a greater number of shares
6
<PAGE>
of Reorganized Hexcel Common Stock than the number to which such Subscription
Rights entitles its Holder, except that a depositary, bank, trust company, or
securities broker or dealer holding shares of Common Stock on the Record Date
for more than one beneficial owner may, upon proper showing to the Subscription
Agent, exchange its Subscription Rights Certificate to obtain Subscription
Rights Certificates for each beneficial owner on the Record Date.
7. SUBSCRIPTION AND OTHER AGENTS.
7.1 Hexcel shall appoint an agent to act in administering the
Subscription Rights (the "Subscription Agent") under this Plan. Hexcel may also
appoint an escrow agent for the receipt of funds on exercise of Subscription
Rights and a transfer agent for the registration and transfer of the
Subscription Rights and Reorganized Hexcel Common Stock. The terms of Hexcel's
agreements with such agents, regarding the form of certificates,
countersignatures, procedures for assignment or exercise, or the like, shall be
deemed adopted by Hexcel as part of this Plan.
7.2 All questions concerning the Subscription Rights will be
determined by Hexcel (or the Subscription Agent, as permitted below), whose
determinations will be final and binding. Hexcel may waive any defect or
irregularity, or permit a defect or irregularity to be corrected within such
time as it may determine, or reject the purported exercise of any Subscription
Right. The Subscription Agent may exercise all the rights of Hexcel under this
Plan, including determination of the timeliness, validity, form and eligibility
of any exercise of Subscription Rights, calculation of shares of Reorganized
Hexcel Common Stock subscribed for, calculation of any required proration and
any other actions required for the orderly distribution of the Subscription
Rights and Reorganized Hexcel Common Stock. Subscriptions will not be deemed to
have been received or accepted until all irregularities have been waived or
cured within such time as Hexcel or the Subscription Agent
7
<PAGE>
determines in its sole discretion. Neither Hexcel nor the Subscription Agent
will be under any duty to give notification of any defect or irregularity in
connection with the submission of Subscription Rights Certificates or incur any
liability for failure to give such notification.
8. RESERVATION OF REORGANIZED HEXCEL COMMON STOCK.
Hexcel shall at all times reserve and hold available for issuance the
number of shares of Reorganized Hexcel Common Stock required to be issued
pursuant to the Subscription Rights.
9. EXERCISE OF SUBSCRIPTION RIGHTS.
9.1 ONCE A HOLDER HAS EXERCISED THE SUBSCRIPTION RIGHTS IN THE MANNER
PROVIDED BELOW, THE SUBSCRIPTION IS IRREVOCABLE.
9.2 Subscription Rights may be exercised by delivering to the
Subscription Agent during the Subscription Period, the properly completed and
executed Subscription Rights Certificate, with any required signature
guarantees, together with payment in full of the aggregate Subscription Price
for all shares subscribed for pursuant to the Subscription Rights (whether
through the exercise of Basic Subscription Rights or the Oversubscription
Rights). Such payment in full must be by (a) check or bank draft drawn upon a
U.S. bank or postal, telegraphic or express money order payable to the
Subscription Agent or the Escrow Agent, as set forth in the Instructions, or (b)
wire transfer of funds to the account specified for such purpose designated in
the Subscription Rights Certificates. The Subscription Price will be deemed to
have been received by the Subscription Agent only upon (i) clearance of any
uncertified check, (ii) receipt by the Subscription Agent or Escrow Agent of any
certified check or bank draft drawn upon a U.S. bank or of
8
<PAGE>
any postal, telegraphic or express money order or (iii) receipt of good funds in
the account designated in the Subscription Rights Certificates. If paying by
uncertified personal check, please note that the funds paid thereby may take at
least five Business Days to clear. ACCORDINGLY, HOLDERS WHO WISH TO PAY THE
SUBSCRIPTION PRICE BY MEANS OF UNCERTIFIED PERSONAL CHECK ARE URGED TO MAKE
PAYMENT SUFFICIENTLY IN ADVANCE OF THE SUBSCRIPTION RIGHTS EXPIRATION DATE TO
ENSURE THAT SUCH PAYMENT IS RECEIVED AND CLEARS BY SUCH DATE AND ARE URGED TO
CONSIDER PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S CHECK, MONEY ORDER OR WIRE
TRANSFER OF FUNDS.
9.3 The Subscription Agent may elect to treat subscriptions
accompanied by payment of an insufficient amount as a subscription for the
number of shares of Reorganized Hexcel Common Stock whose Subscription Price is
paid by the amount received. Payments in an amount greater than the aggregate
Subscription Price required by the stated Basic Subscription and
Oversubscription shall be treated as subscriptions for the amounts stated on the
Subscription Rights Certificate only; excess amounts shall be refunded in due
course after the Subscription Rights Expiration Date.
9.4 The permitted methods of delivery and the address to which
Subscription Rights Certificates and payment of the Subscription Price should be
delivered shall be set forth in the Instructions which will be delivered with
the Subscription Rights Certificates.
9.5 If a Holder wishes to exercise Subscription Rights, but time will
not permit such Holder to cause the Subscription Rights Certificate to reach the
Subscription Agent on or prior to the Subscription Rights Expiration Date, such
Subscription Rights may nevertheless be exercised if all of the following
conditions (the "Guaranteed Delivery Procedures") are met:
9.5.1 such Holder has caused payment in full of the aggregate
Subscription
9
<PAGE>
Price for all shares being subscribed for pursuant to
the Basic Subscription Rights or Oversubscription
Rights to be received (in the manner set forth above)
by the Subscription Agent on or prior to the
Subscription Rights Expiration Date;
9.5.2 the Subscription Agent receives, on or prior to the
Subscription Rights Expiration Date, a guarantee notice
(a "Notice of Guaranteed Delivery"), substantially in
the form provided with the Instructions, from a member
of a registered national securities exchange or a
member of the National Association of Securities
Dealers, Inc. (the "NASD"), or from a commercial bank
or trust company having an office or correspondent in
the United States (each, an "Eligible Institution"),
stating the name of the exercising Holder, the number
of Rights represented by the Subscription Rights
Certificate or Subscription Rights Certificates held by
such exercising Holder, the number of shares being
subscribed for pursuant to the Subscription Rights, and
guaranteeing the delivery to the Subscription Agent of
any Subscription Rights Certificate evidencing such
Subscription Rights within five days following the date
of the Notice of Guaranteed Delivery; and
9.5.3 the properly completed Subscription Rights Certificate
evidencing the
10
<PAGE>
Subscription Rights being exercised, with any required
signature guarantees, is received by the Subscription
Agent within five days following the date of the Notice
of Guaranteed Delivery relating thereto.
The Notice of Guaranteed Delivery may be delivered to the Subscription Agent as
set forth in the Instructions, or may be transmitted to the Subscription Agent
by telegram or facsimile transmission, as permitted by the Subscription Agent
and set forth in the Instructions.
9.6 Unless a Subscription Rights Certificate (i) provides that the
shares to be issued pursuant to the exercise of Subscription Rights represented
thereby are to be delivered to the Holder or (ii) is submitted for the account
of an Eligible Institution, signatures on such Subscription Rights Certificate
must be guaranteed by an Eligible Institution.
9.7 Nominees and others who hold shares of Common Stock for the
account of others, should notify the respective beneficial owners of such shares
as soon as possible to ascertain such beneficial owners' intentions and to
obtain instructions with respect to the Subscription Rights. If the beneficial
owner so instructs, the record holder of such Subscription Right should complete
Subscription Rights Certificates and submit them to the Subscription Agent with
the proper payment. In addition, beneficial owners of Common Stock or
Subscription Rights held through such a Holder should contact the Holder and
request the Holder to effect transactions in accordance with the beneficial
owner's instructions.
9.8 The Instructions should be read carefully and followed in detail.
DO NOT SEND SUBSCRIPTION CERTIFICATES TO HEXCEL CORPORATION. BENEFICIAL RIGHTS
HOLDERS SHOULD PROMPTLY SUBMIT INSTRUCTIONS TO THEIR NOMINEE AS TO THE EXERCISE
OF THEIR SUBSCRIPTION RIGHTS WITH APPROPRIATE PAYMENT, AND SHOULD NOT SEND THEM
TO HEXCEL OR THE SUBSCRIPTION AGENT.
11
<PAGE>
THE METHOD OF DELIVERY OF SUBSCRIPTION RIGHTS CERTIFICATES AND
PAYMENT OF THE SUBSCRIPTION PRICE TO THE SUBSCRIPTION AGENT WILL BE AT THE
ELECTION AND RISK OF THE HOLDERS, BUT IF SENT BY MAIL IT IS RECOMMENDED THAT
SUCH CERTIFICATES AND PAYMENTS BE SENT BY MAIL, PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO ENSURE
DELIVERY TO THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE SUBSCRIPTION RIGHTS EXPIRATION DATE. BECAUSE
UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR,
HOLDERS ARE STRONGLY URGED TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED
OR CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
10. METHOD OF TRANSFERRING RIGHTS.
10.1 Basic Subscription Rights and the corresponding Subscription
Rights Certificates may be transferred by Holders. Subject to compliance with
applicable securities laws, the Basic Subscription Rights evidenced by a
Subscription Rights Certificate may be transferred in whole by endorsing the
Subscription Rights Certificate for transfer in accordance with the
Instructions. A portion of the Basic Subscription Rights evidenced by a single
Subscription Rights Certificate (but not fractional Basic Subscription Rights)
may be transferred by delivering to the Subscription Agent a Subscription Rights
Certificate properly endorsed for transfer, with instructions to register such
portion of the Basic Subscription Rights evidenced thereby in the name of the
transferee (and to issue a new Subscription Rights Certificate to the transferee
evidencing such transferred Basic Subscription Rights). In such event, a new
Subscription Rights Certificate evidencing the balance of the Basic Subscription
Rights will be issued to the holder or, if the holder so instructs, to an
additional transferee. THE OVERSUBSCRIPTION RIGHTS ARE NOT TRANSFERABLE.
10.2 Holders wishing to transfer all or a portion of their Basic
Subscription Rights (but not fractional Basic Subscription Rights) should allow
a sufficient amount of time prior to the Subscription Rights Expiration Date for
(i) the transfer instructions to be received and processed by the Subscription
Agent, (ii) a new Subscription Rights Certificate to be issued and transmitted
to the
12
<PAGE>
transferee or transferees with respect to transferred Basic Subscription Rights,
and to the Holder with respect to retained Basic Subscription Rights, if any,
and (iii) the Basic Subscription Rights evidenced by such new Subscription
Certificates to be exercised or sold by the recipients thereof. Neither Hexcel
nor the Subscription Agent shall have any liability to a transferee or
transferor of Rights if Subscription Rights Certificates are not received in
time for exercise prior to the Subscription Rights Expiration Date.
10.3 Except for the fees charged by the Subscription Agent, the
transfer agent and the Escrow Agent, if any (all of which will be paid by
Hexcel), all commissions, fees and other expenses (including brokerage
commissions and transfer taxes) incurred in connection with the purchase, sale
or exercise of Subscription Rights will be for the account of the Holder, and
none of such commissions, fees or expenses will be paid by Hexcel or the
Subscription Agent.
11. AMENDMENTS TO PLAN.
Hexcel reserves the right to amend the terms, procedures for
subscription, form of Subscription Rights Certificate and other provisions of
this Plan prior to the distribution of the Subscription Rights Certificates,
provided, that such amendment shall not affect the number of shares of
Reorganized Hexcel Common Stock purchasable hereunder by the Holders or reduce
the Subscription Period below 30 days.
13
<PAGE>
EXHIBIT A TO SUBSCRIPTION RIGHTS PLAN
SERIAL NO. _________
HEXCEL CORPORATION
SUBSCRIPTION RIGHTS CERTIFICATE
[***Name and Address of holder] Number of Basic
Subscription Rights:
____________________
This certifies that the above-named person, or registered assigns, is
the registered holder of _________________________________________________ Basic
Subscription Rights to purchase Common Stock, par value $.01 per share, of
Hexcel Corporation (the "CORPORATION"), subject to the terms, provisions and
conditions of the Subscription Rights Plan of the Corporation (the "RIGHTS
PLAN"), which are hereby incorporated herein by reference and made a part
hereof. Except as otherwise provided herein, capitalized terms used herein have
the meanings assigned to them in the Rights Plan.
Pursuant to the First Amended Plan of Reorganization, dated
November 7, 1994, proposed by the Corporation and by the Official Committee of
Equity Security Holders and confirmed by the United States Bankruptcy Court for
the Northern District of California on ________ __, 1995, each stockholder has
been granted Subscription Rights to purchase additional shares of Common Stock
as set forth in the Rights Plan. Reference is made to the Rights Plan and the
First Amended Disclosure Statement, dated November 7, 1994 ("DISCLOSURE
STATEMENT"), for a more complete description of the Corporation, the
Subscription Rights and the Common Stock purchasable hereunder.
This Subscription Rights Certificate shall not be valid or obligatory
for any purpose unless and until it shall have been countersigned by the
Subscription Rights Agent.
Witness the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Dated: __________, 1995
[Seal]
ATTEST: Hexcel Corporation
By:
- ------------------------- ------------------------------
Secretary
Countersigned:
[***Subscription Agent]
By:
-----------------------
14
<PAGE>
FOR YOUR SUBSCRIPTION TO BE EFFECTIVE, A COMPLETED SUBSCRIPTION CERTIFICATE MUST
BE RECEIVED BY *** ________________________ (THE "SUBSCRIPTION AGENT") AT ITS
ADDRESS BELOW NO LATER THAN 5:00 P.M. EASTERN STANDARD TIME ON ________ __, 1995
ACCOMPANIED BY PAYMENT TO [*** BANK], AS ESCROW AGENT FOR THE CORPORATION, IN
THE AMOUNT OF THE TOTAL OF THE SUBSCRIPTION PRICE FOR THE NUMBER OF SHARES OF
COMMON STOCK SUBSCRIBED FOR THROUGH THE EXERCISE OF BASIC SUBSCRIPTION RIGHTS
AND THE OVERSUBSCRIPTION RIGHTS. SEE INSTRUCTIONS FOR PERMITTED MEANS OF
PAYMENT.
ITEM 1. BASIC SUBSCRIPTION. COMPLETE ITEMS A AND B BELOW.
The undersigned desires to purchase, and hereby irrevocably subscribes for, the
number of shares of Common Stock indicated below, at the price of $4.625 per
share:
A. Each Basic Subscription Right entitles the holder to purchase one share
of Common Stock at a Subscription Price of $4.625 per share. You can exercise
all or any portion of the number of Basic Subscription Rights held by you as
indicated on the face of the Subscription Rights Certificate, provided that you
may not exercise a fractional Basic Subscription Right.
NUMBER OF BASIC SUBSCRIPTION RIGHTS EXERCISED:
TO EXERCISE ALL OF THE BASIC SUBSCRIPTION RIGHTS REPRESENTED BY THE SUBSCRIPTION
RIGHTS CERTIFICATE, CHECK BOX (1).
TO EXERCISE LESS THAN ALL OF THE BASIC SUBSCRIPTION RIGHTS REPRESENTED BY THE
SUBSCRIPTION RIGHTS CERTIFICATE, CHECK BOX (2) AND FILL IN THE NUMBER OF SHARES
FOR WHICH YOU WISH TO SUBSCRIBE.
(1) / / I wish to exercise all of my Basic Subscription Rights
at $4.625 per share.
OR
(2) / / I wish to exercise my Basic Subscription Rights to
subscribe for the following number of shares:
_______________________________________________
(must be a whole number not exceeding the total number of
Basic Subscription Rights represented by this certificate)
15
<PAGE>
B. Compute the BASIC subscription price:
x $4.625 = $
------------------------- ---------------------
No. of shares subscribed Total Price
for (no fractions) (round fraction to next
highest whole cent)
ITEM 2. OVERSUBSCRIPTION
NOTE: OVERSUBSCRIPTION RIGHTS MAY ONLY BE EXERCISED BY ELIGIBLE RIGHTS HOLDERS
(THAT IS, HOLDERS OF COMMON STOCK AS OF THE CLOSE OF BUSINESS ON THE EFFECTIVE
DATE UNDER THE FIRST AMENDED PLAN OF REORGANIZATION WHO EXERCISE ALL OF THE
BASIC SUBSCRIPTION RIGHTS ISSUED TO THEM OR THEIR ACCOUNT PURSUANT TO SUCH PLAN
OR ANY BANK, TRUST COMPANY, DEPOSITARY OR SECURITIES BROKER OR DEALER WHICH
HOLDS SUBSCRIPTION RIGHTS AS NOMINEE ON BEHALF OF AN ELIGIBLE BENEFICIAL RIGHTS
HOLDER, AS DEFINED IN THE RIGHTS PLAN).
In addition to shares subscribed for by exercise of the Basic Subscription
Rights, the undersigned desires to purchase, if available, and hereby
irrevocably subscribes for, the number of shares of Common Stock indicated below
through the exercise of Oversubscription Rights. The actual number of shares of
Common Stock available for Oversubscriptions depends on the number of Basic
Subscription Rights exercised by all holders thereof and other factors, and is
subject to proration as set forth in the Rights Plan. The undersigned
understands that the Total Price shown below must be paid with this
subscription, and that any excess payment resulting from proration will be
refunded.
___________________ x $4.625 = $____________
No. of shares Total Price
(no fractions) (round fraction to next
highest whole cent)
PAYMENT TO [*** BANK AS ESCROW AGENT FOR THE CORPORATION] IN THE
AMOUNT OF THE TOTAL PURCHASE PRICE FOR THE SHARES SUBSCRIBED FOR BY
THE EXERCISE OF BASIC SUBSCRIPTION RIGHTS AND THE OVERSUBSCRIPTION
RIGHTS MUST ACCOMPANY THIS SUBSCRIPTION.
IMPORTANT NOTE: NO SUBSCRIPTION WILL BE ACCEPTED WITHOUT PAYMENT IN
THE FULL AMOUNT OF THE PURCHASE PRICE DUE IN CONNECTION WITH THE
EXERCISE OF BOTH THE BASIC SUBSCRIPTION RIGHTS AND THE
OVERSUBSCRIPTION RIGHTS.
16
<PAGE>
PAYMENT IN AMOUNTS INSUFFICIENT TO COVER THE STATED SUBSCRIPTIONS WILL
BE TREATED AS SUBSCRIPTIONS FOR THE NUMBER OF SHARES PURCHASABLE BY
SUCH LESSER AMOUNT. PAYMENT IN AMOUNTS GREATER THAN REQUIRED BY THE
STATED SUBSCRIPTIONS WILL BE TREATED AS PAYMENT FOR THE STATED
SUBSCRIPTIONS ONLY, AND THE EXCESS PAYMENT WILL BE REFUNDED.
Each holder of Subscription Rights, by signing below, certifies that he, she or
it has been provided with a copy of the Plan and the Disclosure Statement.
Dated: , 1995
---------- -------------------------
Print Name of Holder
-------------------------
Authorized Signature
Note: The signature must correspond with the name
as written and the name must be that of the
registered owner.
Guaranteed by:
Note: If shares of Common Stock are to be delivered to a person other than the
one in whose name this certificate is issued, the signature must be guaranteed
by a bank or trust company having an office or correspondent in the United
States, a member of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc.
If Common Stock is to be issued in a different name, please complete the
following:
---------------------------------
Name for Registration
---------------------------------
Mailing Address
---------------------------------
City State Zip Code
* * * * * * * * * *
17
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned owner of the Subscription Rights
represented by this Subscription Rights Certificate hereby sells, assigns and
transfers unto the Assignee, ______________________________, having an address
at _______________________________________________________ _________________
__________________________, _________________ of the Basic Subscription Rights
of the undersigned represented by this Subscription Rights Certificate and does
hereby irrevocably constitute and appoint________________
_____________________________________ Attorney to transfer said rights on the
books of Hexcel Corporation, a Delaware corporation, maintained for such
purpose, with full power of substitution in the premises.
Dated: , 1995
------------ ----------------------------------
Print Name of Holder
----------------------------------
Authorized Signature
Note: The signature must correspond
with the name as written and the name
must be that of the registered owner.
Guaranteed by:
Note: The signature must be guaranteed by a bank or trust company having an
office or correspondent in the United States, a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc.
18
<PAGE>
GENERAL INSTRUCTIONS
The following Instructions should be read carefully and followed in detail.
DO NOT SEND SUBSCRIPTION RIGHTS CERTIFICATES TO HEXCEL CORPORATION.
INSTRUCTIONS FOR BANKS, BROKERS AND OTHER NOMINEE HOLDERS ONLY.
11.0.1 If you are the holder of record, but not the beneficial owner, of
any of the shares for which you are listed as the record holder,
you should have received Subscription Rights in the names of the
beneficial owners of which you notified the Corporation. You
should forward Subcription Rights Instructions, as well as a copy
of the Plan and Disclosure Statement, to such beneficial owners.
11.0.2 No fees or commissions or other remuneration will be payable to
any broker in connection with the solicitation of subscriptions
from beneficial owners. Upon written request, the Corporation
will reimburse you for customary mailing and handling expenses
incurred in forwarding the Subscription Rights Certificate and
accompanying solicitation packages to your clients, not in excess
of proxy solicitation rates or reimbursement approved by the New
York Stock Exchange.
11.0.3 If you have any question regarding this Subscription Right or the
procedures for its transmittal to beneficial owners, or if you
need additional copies of the Plan and the Disclosure statement,
please contact:
***SUBSCRIPTION AGENT
[ADDRESS]
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL DEEM
YOU, OR ANY OTHER PERSON, THE AGENT OF THE CORPORATION OR THE SUBSCRIPTION
AGENT, OR AUTHORIZE YOU OR ANY PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF THE CORPORATION OR THE SUBSCRIPTION AGENT WITH
RESPECT TO THE PLAN, THE SUBSCRIPTION RIGHTS OR THE COMMON STOCK, EXCEPT
FOR THE STATEMENTS CONTAINED IN THE PLAN AND DISCLOSURE STATEMENT AS
APPROVED BY THE UNITED STATES BANKRUPTCY COURT.
19
<PAGE>
INSTRUCTIONS FOR RECORD OWNERS AND TRANSFEREES ONLY.
If you are a registered owner, or a transferee, of the Subscription
Rights represented by this Subscription Rights Certificate, you must complete
this Subscription Rights Certificate and it must be received by the Subscription
Agent, properly completed with a check in the amount of the total subscription
price (in connection with the exercise of the Basic Subscription Rights and the
Oversubscription Rights, if any), at the following address on or after
***_____________, 1995 and no later than 5:00 p.m EST on ***________, 1995.
NOTE: Transferees may not exercise Oversubscription Rights. Also, registered
owners who are Nominees may, to the extent acting as a nominee, only exercise
Oversubscription Rights on behalf of beneficial owners and only to the extent
permitted under the Rights Plan.
***SUBSCRIPTION AGENT
[ADDRESS]
PAYMENT: Payment in full must be by (a) check or bank draft drawn
upon a U.S. bank or postal, telegraphic or express money order payable to
***_________________________, as Subscription Agent, or (b) wire transfer of
funds to the account maintained by the Subscription Agent for such purpose at
[***wire transfer instructions to be inserted]. The Subscription Price will be
deemed to have been received by the Subscription Agent only upon (i) clearance
of any uncertified check, (ii) receipt by the Subscription Agent of any
certified check or bank draft drawn upon a U.S. bank or of any postal,
telegraphic or express money order or (iii) receipt of good funds in the
Subscription Agent's account at ***________________.
Holders are strongly urged to pay, or arrange for payment, by means of
certified or cashier's check, money order or wire transfer of funds. If paying
by uncertified personal check, please note that the funds paid thereby may take
at least five business days to clear. ACCORDINGLY, HOLDERS OF SUBSCRIPTION
RIGHTS WHO WISH TO PAY THE SUBSCRIPTION PRICE BY MEANS OF UNCERTIFIED PERSONAL
CHECK ARE URGED TO MAKE PAYMENT SUFFICIENTLY IN ADVANCE OF THE SUBSCRIPTION
RIGHTS EXPIRATION DATE TO ENSURE THAT SUCH PAYMENT IS RECEIVED AND CLEARS BY
SUCH DATE AND ARE URGED TO CONSIDER PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S
CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
IMPORTANT NOTE: Neither the Corporation nor the Subscription Agent
can be responsible for Subscription Rights not received on or prior to 5:00 p.m.
EST on the Subscription Rights Expiration Date, whether lost, stolen or delayed.
The Rights Plan provides for GUARANTEED DELIVERY PROCEDURES by delivery through
a bank, broker or other eligible institution. Please refer to the Rights Plan.
Any questions or requests for assistance concerning the method of
exercising Subscription Rights or requests for additional copies of the Rights
Plan, the Instructions or the Guaranteed Delivery Procedures for late
subscriptions should be directed to the Subscription Agent at (***) ________.
20
<PAGE>
EXHIBIT B TO CONFIRMATION ORDER
REVISE SECTION 1.36 OF THE PLAN TO READ AS FOLLOWS:
1.36 ELIGIBLE RIGHTS HOLDER means (i) a Record Holder of Hexcel Common
Stock, other than a Nominee, who has exercised , in accordance with the terms of
the Rights Plan, all Basic Subscription Rights issued to such holder by
Reorganized Hexcel pursuant to the Plan, and (ii) a Nominee to the extent acting
on behalf of an Eligible Beneficial Rights Holder, regardless of whether such
Nominee has exercised less than all of the Basic Subscription Rights issued to
it pursuant to the Plan.
ADD THE FOLLOWING DEFINITIONS TO ARTICLE I OF THE PLAN:
1.88 BENEFICIAL RIGHTS HOLDER means a person or entity who is listed on
the records of any Nominee as the beneficial owner of any Common Stock held in
the name of such Nominee (either of record or through another Nominee) as of the
close of business on the Effective Date.
1.89 ELIGIBLE BENEFICIAL RIGHTS HOLDER means a Beneficial Rights Holder on
whose behalf a Nominee has, at such Beneficial Rights Holder's direction,
exercised in accordance with the terms of the Rights Plan, all Basic
Subscription Rights issued to or for the account of such Nominee by Reorganized
Hexcel pursuant to the Plan with respect to Common Stock beneficially owned by
such Beneficial Rights Holder.
1.90 NOMINEE means any bank, trust company, depositary or securities
broker or dealer which holds Common Stock, either of record or beneficially
through another Nominee, on the Effective Date otherwise than as the beneficial
owner thereof.
REPLACE THE THIRD SENTENCE OF SECTION 4.11(b) OF THE PLAN WITH THE FOLLOWING:
In addition, under the Rights Plan an Eligible Rights Holder will have the right
to exercise his Oversubscription Rights and thereby subscribe for all or a
portion of the shares of Reorganized Hexcel Common Stock, if any, which are in
the Stockholder Pool, subject to Proration in accordance with the terms of the
Rights Plan; provided
<PAGE>
that Nominees may only exercise Oversubscription Rights on behalf of Eligible
Beneficial Rights Holders with respect to whose Common Stock Basic Subscription
Rights were issued to or for the account of such Nominee.
ADD THE FOLLOWING TO THE END OF SECTION 5.2(g) OF THE PLAN:
A Nominee may only exercise Oversubscription Rights on behalf of Eligible
Beneficial Rights Holders who beneficially own Basic Subscription Rights
registered in that Nominee's name. Under the Rights Plan, Reorganized Hexcel
may prescribe the procedures for verifying that Nominees are exercising
Oversubscription Rights only on behalf of Eligible Beneficial Rights Holders.
ADD THE FOLLOWING TO THE END OF SECTION 5.2 OF THE PLAN:
(h) ADMINISTRATION OF RIGHTS PLAN. All questions concerning the
Subscription Rights, including but not limited to questions as to the validity
of any exercise of Basic Subscription Rights or Oversubscription Rights and the
proper Proration of shares in the Stockholder Pool, will be determined by
Reorganized Hexcel or by the Subscription Agent under the Rights Plan, and such
determinations shall be final and binding. For purposes of administering the
Rights Plan, including without limitation for purposes of determining whether
Oversubscription Rights have been properly exercised and for purposes of
Proration, (i) in the event that any person or entity has accounts with more
than one Nominee through which such person or entity is listed as the beneficial
owner of Common Stock as of the close of business on the Effective Date, then
each account or group of accounts of that person or entity with each different
Nominee will be treated by Reorganized Hexcel or by the Subscription Agent under
the Rights Plan as a separate Beneficial Rights Holder, and (ii) in the event
that a Beneficial Rights Holder is also a Record Holder of Hexcel Common Stock,
then Reorganized Hexcel and the Subscription Agent under the Rights Plan will
treat that person or entity in its capacity as a Record Holder of Hexcel Common
Stock as being separate from that person or entity in its capacity as a
Beneficial Rights Holder.
<PAGE>
EXHIBIT 99.2
HEXCEL CORPORATION
LONG-TERM INCENTIVE PLAN
------------
I. PURPOSE
The purpose of the Hexcel Corporation Long-Term Incentive Plan (the
"Plan") is to attract and retain and provide incentives to Employees, officers,
directors and consultants of the Corporation, and to thereby increase overall
shareholders' value. The 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) "Award" includes, without limitation, stock options (including
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.
(b) "Award Agreement" means a written agreement setting forth the
terms and conditions of each Award made under this Plan.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(e) "Committee" means the Executive Compensation and Organization
Committee of the Board or such other committee of the Board as may be designated
by the Board from time to time to
<PAGE>
administer this Plan the members of which shall consist solely of members of the
Board who are "disinterested persons" within the meaning of Rule 16b-3 of the
Exchange Act and are "outside directors" for purposes of Code Section
162(m)(4)(C) of the Code.
(f) "Common Stock" means the $.01 par value common stock of the
Corporation.
(g) "Corporation" means Hexcel Corporation, a Delaware corporation.
(h) "Employee" means an employee of the Corporation or a Subsidiary.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Fair Market Value" means the closing price for the Common Stock
as reported in publications of general circulation for the New York Stock
Exchange Composite Transactions 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 with respect to any particular Award.
(k) "Participant" means an Employee, officer, director or consultant
who has been granted an Award under the Plan.
(l) "Plan Year" means a calendar year.
(m) "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.
III. ELIGIBILITY
Any Employee, officer, director (other than a director described in
the next sentence) or consultant of the Corporation or Subsidiary selected by
the Committee is eligible to receive an Award. A director shall not be eligible
if he is (i) a member of
2
<PAGE>
the Committee; (2) a member of a Committee administering any other stock option,
stock appreciation, stock bonus or other stock plan of the Corporation of any
Subsidiary unless such plan does not permit participation by directors; or (3) a
former (within one year) member of the Committee or any committee administering
any other such plan.
IV. PLAN ADMINISTRATION
(a) Except as otherwise determined by the Board, the 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 the 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 the 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.
(c) The Committee shall have the authority at any time to provide for
the conditions and circumstances under which Awards shall be forfeited.
3
<PAGE>
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 X, 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 1,000,000.
(b) Any shares ceasing to be subject to a stock option or incentive
stock option because of the surrender of such option in lieu of exercise shall
become again available for Awards under the Plan. 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 the Plan.
(c) There shall be carried forward and be available for Awards under
the Plan, in addition to shares available for grant under paragraph (a) of this
Section V, all of the following: (i) any unused portion of the limit set forth
in paragraph (a) of this Section V; (ii) shares represented by Awards which are
cancelled, forfeited, surrendered, terminated, paid in cash or expire
unexercised; and (iii) the excess amount of variable Awards which become fixed
at less than their maximum limitations.
VI. 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.
4
<PAGE>
(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 X, 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 Code Section 422 requires certain provisions to be set forth in a written
plan, said provisions are incorporated herein by this reference.
(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 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.
(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.
5
<PAGE>
VII. AWARD AGREEMENTS
Each Award under the Plan shall be evidenced by an Award Agreement
setting forth the terms and conditions of the Award and executed by the
Corporation and Participant.
VIII. 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.
(b) TERMINATION OF EMPLOYMENT. 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.
(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 broker-assisted "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.
6
<PAGE>
(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) RESTRICTIONS ON SALE AND EXERCISE. With respect to officers and
directors for purposes of Section 16 of the Exchange Act, and if required to
comply with rules promulgated thereunder, (i) no Award providing for exercise,
a vesting period, a restriction period or the attainment of performance
standards shall permit unrestricted ownership of Common Stock by the Participant
for at least six months from the date of grant, and (ii) Common Stock acquired
pursuant to this Plan (other than Common Stock acquired as a result of the
granting of a "derivative security") may not be sold for at least six months
after acquisition.
(h) 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 provides for in paragraph (a) of
Section V.
IX. TERMINATION, MODIFICATION AND AMENDMENTS
(a) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares
of the capital stock of the Corporation present or represented and entitled to
vote at a duly held stockholders meeting.
(b) The Board may at any time terminate the Plan or from time to time
make such modifications or amendments of the Plan as it may deem advisable;
provided, however, that the Board shall not make any material amendments to the
Plan without the approval of at least the affirmative vote of the holders of a
majority of the outstanding shares of the capital stock of the Corporation
7
<PAGE>
present or represented and entitled to vote at a duly held stockholders meeting.
(c) No termination, modification or amendment of the Plan may
adversely affect the rights conferred by an Award without the consent of the
recipient thereof.
X. 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 price per share thereof in each such 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 may also make the foregoing changes and any other
changes, including changes in the classes of securities available, to the extent
it is deemed necessary or desirable to preserve the intended benefits of the
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.
XI. NO RIGHT TO EMPLOYMENT
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 the 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 the Plan, except as provided herein or in any
Award Agreement issued hereunder.
8
<PAGE>
XII. GOVERNING LAW
To the extent that federal laws do not otherwise control, the Plan
shall be construed in accordance with and governed by the laws of the State of
California.
XIII. SAVINGS CLAUSE
This Plan is intended to comply in all aspects with applicable laws
and regulations, including, with respect to those Employees who are officers or
directors for purposes of Section 16 of the Exchange Act, Rule 16b-3 under the
Exchange Act. 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 (including Rule 16b-3), 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 (including Rule 16b-3) so as to foster the intent of this Plan.
XIV. EFFECTIVE DATE AND TERM
This Plan shall become effective immediately upon the effectiveness of
the plan of reorganization filed by the Corporation with the United States
Bankruptcy Court in the Corporation's Chapter 11 case which was commenced on
December 6, 1993 (the "Plan of Reorganization"), subject to approval by
stockholders of the Corporation within twelve months of such adoption as
provided in Code Section 422(b)(1) and Rule 16b-3(b). Awards granted prior to
such approval by the stockholders shall be subject to such approval. The Plan
shall terminate on the tenth anniversary of the effective date of the Plan. No
awards shall be granted after the termination of the Plan.
9
