Document:

Exhibit 4.1

 

ASCENT SOLAR
TECHNOLOGIES, INC.

2008 RESTRICTED STOCK PLAN

 

1.
  Purposes
of the Plan.     The purposes of this 2008
Restricted Stock Plan are to attract and retain the best available personnel
for positions of substantial responsibility, to provide additional incentives
to Eligible Employees, Consultants and Directors, and to promote the success of
the Company’s business.

 

2.   Definitions.
    As used herein, the following definitions shall apply:

 

a.                       “  Applicable Law ” means the legal requirements
relating to the administration of the Plan under applicable federal, state,
local and foreign corporate, tax and securities laws, and the rules and
requirements of any stock exchange or quotation system on which the Common
Stock is listed or quoted.

 

b.                      “  Award ” means an award of Covered Shares to a Grantee pursuant to Section 5
of the Plan.

 

c.                       “ Award Agreement ” means the agreement, notice and/or terms or conditions by
which an Award is evidenced, documented in such form (including by electronic
communication) as may be approved by the Committee.

 

d.                      “ Board ” means
the Board of Directors of the Company.

 

e.                       “ Change in Control ” means the happening of any of the
following:

 

i.                                          any one person, or more than one person
acting as a group, acquires ownership of stock of the Company that, together
with stock held by such person or group, possesses more than 50 percent of
the total fair market value or total voting power of the stock of the Company;
provided, however, that if any one person, or more than one person acting as a
group, is considered to own more than 50 percent of the total fair market
value or total voting power of the stock of the Company, the acquisition of
additional stock by the same person or persons will not be considered a Change
in Control. Notwithstanding the foregoing, an increase in the percentage of
stock of the Company owned by any one person, or persons acting as a group, as
a result of a transaction in which the Company acquires its stock in exchange
for property will be treated as an acquisition of stock of the Company for
purposes of this subsection (i);

 

 

ii.                                       during any period of 12 consecutive months,
individuals who at the beginning of such period constituted the Board (together
with any new or replacement directors whose election by the Board, or whose
nomination for election by the Company’s shareholders, was approved by a vote
of at least a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the directors then in office; or

 

 

iii.                                    any one person, or more than one person
acting as a group, acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by the person or persons) assets
from the Company, outside of the ordinary course of business, that have a gross
fair market value equal to or more than 50 percent of the total gross fair
market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions. For purposes of this subsection (iii), “gross
fair market value” means the value of the assets of the Company, or the value
of the assets being disposed of, determined without regard to any liabilities
associated with such assets. Notwithstanding anything to the contrary in this
Agreement, the following shall not be treated as a Change in Control under this
subsection (iii): (A) a transfer of assets from the Company to a
shareholder of the Company (determined immediately before the asset transfer); (B) a
transfer of assets from the Company to an entity, 50 percent or more of
the total value or voting power of which is owned, directly or indirectly, by
the Company; (C) a transfer of assets from the Company to a person, or
more than one person acting as a group, that owns, directly or indirectly,
50 percent or more of the total value or voting power of all the
outstanding stock of the Company; or (D) a transfer of assets from the
Company to an entity, at least 50 percent of the total value or voting
power of which is owned, directly or indirectly, by a person described in (iii)(C) above.

 

f.                         “  Code ” means the Internal Revenue Code of 1986, as amended.

 

g.                      “ Committee ”
means a committee of Directors appointed by the Board in accordance with Section 4
of the Plan.

 

1

 

h.                      “  Common Stock ” means the Common Stock, $0.0001
par value, of the Company.

 

i.                          “ Company ”
means Ascent Solar Technologies, Inc., a Delaware corporation.

 

j.                          “ Consultant ”
means any person, including an advisor, engaged by the Company or a Parent or
Subsidiary to render services to such entity

 

k.                       “ Covered Share ” means a Share that is subject to an Award.

 

l.                          “ Date of Grant ” means the date on which the Committee makes the determination
granting the Award, or such other later date as is determined by the Committee.

 

m.                    “ Date of Termination ” means the date on which a Grantee’s
employment or service as a Director, whichever is applicable, terminates.

 

n.                      “ Director ”
means a member of the Board.

 

o.                      “ Eligible Employee ” means any person who is employed by the Company or any Parent
or Subsidiary of the Company.

 

p.                      “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

q.                      “  Fair Market Value ” means, as of any date, the value
of Common Stock determined as follows:

 

i.                                         If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq Global Market or The Nasdaq Capital Market, its Fair
Market Value shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system for the
day of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems
reliable;

 

ii.                                      If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal
or such other source as the Administrator deems reliable; or

 

iii.                                   In the absence of an established market for
the Common Stock, the Fair Market Value shall be determined in good faith by
the Committee.

 

r.                         “  Grantee ” means an individual to whom an Award has been granted.

 

s.                       “  Officer ” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

 

t.                         “  Parent ” means a corporation, whether now or hereafter existing, in an
unbroken chain of corporations ending with the Company if each of the
corporations other than the Company holds at least 50 percent of the
voting shares of one of the other corporations in such chain.

 

u.                      “  Plan ” means this 2008 Ascent Solar Technologies, Inc.
Restricted Stock Plan, as it may be amended from time to time.

 

v.                      “  Rule 16b-3 ” means Rule 16b-3 of the
Exchange Act or any successor to Rule 16b-3, as in effect when discretion
is being exercised with respect to the Plan.

 

w.                    “  Section 16(b) ” means Section 16(b) of
the Exchange Act.

 

x.                        “  Share ” means a share of the Common Stock, as adjusted in accordance
with Section 7 of the Plan.

 

y.                      “  Subsidiary ” means a corporation, domestic or foreign, of which not less
than 50 percent of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.

 

3.   Shares Subject to the Plan.
    Subject to the provisions of Section 7 of the Plan
and except as otherwise provided in this Section 3, the maximum aggregate
number of Shares that may be subject to Awards is initially 750,000 Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock. If an Award
expires without having been vested in full the remaining Shares 

 

2

 

that were subject to the
Award shall become available for future Awards under the Plan (unless the Plan
has terminated). The Board may from time to time determine the appropriate
methodology for calculating the number of Shares issued pursuant to the Plan.
No more than 200,000 Shares may be granted pursuant to Awards to an individual
Grantee in any calendar year.

 

	
  4.

  	
  Administration
  of the Plan.

  

 

	
   

  	
  a.

  	
  Multiple
  Administrative Bodies.
      The Plan may be administered by different Committees
  with respect to different groups of Grantees.

  
	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  Section 162(m) .    To the extent that
  the Committee determines it to be desirable to qualify Awards granted
  hereunder as “performance-based compensation” within the meaning of Section 162(m) of
  the Code, the Plan shall be administered by a Committee of two or more
  “outside directors” within the meaning of Section 162(m) of the
  Code.

  
	
   

  	
   

  	
   

  
	
   

  	
  ii.

  	
  Rule 16b-3
  .    To the extent desirable to qualify transactions
  hereunder as exempt under Rule 16b-3, the transactions contemplated
  hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.

  
	
   

  	
   

  	
   

  
	
   

  	
  iii.

  	
  Other
  Administration .    Other than as provided above, the
  Plan shall be administered by (A) the Board or (B) a Committee,
  which committee shall be constituted to satisfy Applicable Laws.

  
	
   

  	
   

  	
   

  
	
   

  	
  iv.

  	
  Binding
  Effect
  .    The Committee’s decisions, determinations and
  interpretations shall be final and binding on all Grantees and any other
  holders of Awards.

  
	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Subject to the provisions
  of the Plan, the Committee shall have the authority, in its sole and absolute
  discretion:

  
	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  to determine the Fair
  Market Value of the Common Stock, in accordance with Section 2(p) of
  the Plan;

  
	
   

  	
   

  	
   

  
	
   

  	
  ii.

  	
  to select the Eligible
  Employees, Consultants and Directors to whom Awards will be granted under the
  Plan;

  
	
   

  	
   

  	
   

  
	
   

  	
  iii.

  	
  to determine whether,
  when, to what extent and in what amounts Awards are granted under the Plan;

  
	
   

  	
   

  	
   

  
	
   

  	
  iv.

  	
  to determine the number of
  Shares to be covered by each Award granted under the Plan;

  
	
   

  	
   

  	
   

  
	
   

  	
  v.

  	
  to determine the forms of
  Award Agreements, which need not be the same for each grant or for each
  Grantee, for use under the Plan;

  
	
   

  	
   

  	
   

  
	
   

  	
  vi.

  	
  to determine the terms and
  conditions, not inconsistent with the terms of the Plan, of any Award granted
  under the Plan. Such terms and conditions, which need not be the same for
  each grant or for each Grantee, include, but are not limited to, any waiver
  of forfeiture restrictions, and any restriction or limitation regarding any
  Award or the Shares relating thereto, based in each case on such factors as
  the Committee shall determine;

  
	
   

  	
   

  	
   

  
	
   

  	
  vii.

  	
  to construe and interpret
  the terms of the Plan and Awards;

  
	
   

  	
   

  	
   

  
	
   

  	
  viii.

  	
  to prescribe, amend and
  rescind rules and regulations relating to the Plan, including, without
  limiting the generality of the foregoing, rules and regulations relating
  to the operation and administration of the Plan to accommodate the specific
  requirements of local and foreign laws and procedures;

  
	
   

  	
   

  	
   

  
	
   

  	
  ix.

  	
  to modify or amend each
  Award (subject to Section 9 of the Plan);

  
	
   

  	
   

  	
   

  
	
   

  	
  x.

  	
  to authorize any person to
  execute on behalf of the Company any instrument required to effect the grant
  of an Award previously granted by the Committee;

  
	
   

  	
   

  	
   

  
	
   

  	
  xi.

  	
  to determine the terms and
  restrictions applicable to Awards;

  
	
   

  	
   

  	
   

  
	
   

  	
  xii.

  	
  to provide any notice or
  other communication required or permitted by the Plan in either written or
  electronic form; and

  
	
   

  	
   

  	
   

  
	
   

  	
  xiii.

  	
  to make all other
  determinations deemed necessary or advisable for administering the Plan.

  

 

3

 

5.                    Eligibility and General
Conditions of Awards.

 

a.
         Eligibility.
    Awards may be granted to Eligible Employees,
Consultants and Directors. If otherwise eligible, an Eligible Employee,
Consultant or Director who has been granted an Award may be granted additional
Awards.

 

b.
        Committee
Action.     The Committee acting in its sole and
absolute discretion shall have the right to grant Awards to Eligible Employees,
Consultants and Directors under the Plan from time to time. Subject to the
terms of the Plan, the Committee may grant Awards to any Eligible Employee,
Consultant or Director, in such amount and upon such terms and conditions as
shall be determined by the Committee in its sole and absolute discretion. Each
Award shall be evidenced by an Award Agreement, and to the extent not set forth
in the Plan, the terms and conditions of each Award, which need not be the same
for each grant or for each Grantee, shall be set forth in an Award Agreement.
Each Award Agreement shall set forth the conditions, if any, under which the Grantee’s
interest in the Covered Shares will be forfeited.

 

c.
         Forfeiture
Conditions.     The Committee may make each
grant of an Award (if, when and to the extent that the grant becomes effective)
subject to one, or more than one, objective employment, performance or other
forfeiture condition which the Committee acting in its sole and absolute
discretion deems appropriate under the circumstances for Eligible Employees,
Consultants or Directors generally or for a Grantee in particular, and the
related Award Agreement shall set forth each such condition and the deadline
for satisfying each such forfeiture condition. A Grantee’s nonforfeitable and
vested interest in the Covered Shares shall depend on the extent to which each
such condition is timely satisfied. Unless otherwise provided in the Award
Agreement, the Covered Shares shall vest in a series of three (3) successive
equal annual installments over the three (3)-year period measured from the Date
of Grant. A Share certificate shall be issued (subject to the conditions, if
any, described in this Section 5) to, or for the benefit of, the Grantee
with respect to the number of Covered Shares for which a grant has become
effective as soon as practicable after the Date of Grant.

 

d.         Code Section 162(m) Provisions.

 

i.                                          Notwithstanding any other provision of the
Plan, if the Compensation Committee of the Board (the “Compensation Committee”)
determines at the time an Award is granted to an Eligible Employee, Consultant
or Director that such Eligible Employee, Consultant or Director is, or may be
as of the end of the tax year for which the Company would claim a tax deduction
in connection with such Award, a “covered employee” within the meaning of Section 162(m)(3) of
the Code, and to the extent the Compensation Committee considers it desirable
for compensation delivered pursuant to such Award to be eligible to qualify for
an exemption from the limit on tax deductibility of compensation under Section 162(m) of
the Code, then the Compensation Committee may provide that this Section 5(d) is
applicable to such Award under such terms as the Compensation Committee shall
determine.

 

ii.                                       If an Award is subject to this Section 5(d),
then the lapsing of restrictions thereon and the distribution of Covered Shares
pursuant thereto, as applicable, shall be subject to satisfaction of one, or
more than one, objective performance targets. The Compensation Committee shall
determine the performance targets that will be applied with respect to each
Award subject to this Section 5(d) at the time of grant, but in no
event later than 90 days after the commencement of the period of service
to which the performance target(s) relate. The performance criteria
applicable to Awards subject to this Section 5(d) will be one or more
of the following criteria: (A) stock price; (B) market share; (C) sales;
(D) earnings per share, core earnings per share or variations thereof; (E) return
on equity; (F) costs; (G) revenue; (H) cash to cash cycle; (I) days
payables outstanding; (J) days of supply; (K) days sales outstanding;
(L) cash flow; (M) operating income; (N) profit after tax; (O) profit
before tax; (P) return on assets; (Q) return on sales; (R) inventory
turns; (S) invested capital; (T) net operating profit after tax; (U) return
on invested capital; (V) total shareholder return; (W) earnings; (X) return
on equity or average shareowners’ equity; (Y) total shareowner return; (Z) return
on capital; (AA) return on investment; (BB) income or net income; (CC)
operating income or net operating income; (DD) operating profit or net
operating profit; (EE) operating margin; (FF) return on operating revenue; (GG)
contract awards or backlog; (HH) overhead or other expense reduction; (II) growth
in shareowner value relative to the moving average of the S&P 500
Index or a peer group index; (JJ) credit rating; (KK) strategic plan
development and implementation; (LL) net cash provided by operating activities;
(MM) gross margin; (NN) economic value added; (OO) customer satisfaction; (PP)
financial return ratios; (QQ) market performance; (RR) production capacity;
(SS) production volume; (TT) achievement of photovoltaic conversion efficiency;
(UU) production yields; (VV) EBITDA; (WW) EBIT; (XX) market
capitalization; (YY) liquidity; (ZZ) strategic partnerships; (AAA) production
agreements and relationships; and (BBB) product certifications.

 

iii.                                    Notwithstanding any contrary provision of the
Plan, the Compensation Committee may not increase the number of shares granted
pursuant to any Award subject to this Section 5(d), nor may it waive the
achievement of any performance target established pursuant to this Section 5(d).

 

4

 

iv.                                   Prior to the payment of any Award subject to
this Section 5(d), the Compensation Committee shall certify in writing
that the performance target(s) applicable to such Award was met.

 

v.                                      The Compensation Committee shall have the
power to impose such other restrictions on Awards subject to this Section 5(d) as
it may deem necessary or appropriate to ensure that such Awards satisfy all
requirements for “performance-based compensation” within the meaning of Code
section 162(m)(4)(C) of the Code, the regulations promulgated
thereunder, and any successors thereto.

 

e.
    Dividends and Voting
Rights.     Unless otherwise provided in the
Award Agreement, the Grantee shall have the right to receive any cash dividends
which are paid with respect to any of his or her Covered Shares after the Date
of Grant and before the first day that the Grantee’s interest in such Covered
Shares is forfeited or becomes nonforfeitable and vested. If an Award Agreement
provides that a Grantee has no right to receive a cash dividend when paid, such
Award Agreement may set forth the conditions, if any, under which the Grantee
will be eligible to receive one, or more than one, payment in the future to
compensate the Grantee for the fact that he or she had no right to receive any
cash dividends on his or her Covered Shares when such dividends were paid. If
an Award Agreement calls for any such payments to be made, the Company shall
make such payments from the Company’s general assets, and the Grantee shall be
no more than a general and unsecured creditor of the Company with respect to
such payments. If a stock dividend is declared on such a Covered Share after
the grant is effective but before the Grantee’s interest in such Covered Share
has been forfeited or has become nonforfeitable and vested, such stock dividend
shall be treated as part of the grant of the Covered Shares, and a Grantee’s interest
in such stock dividend shall be forfeited or shall become nonforfeitable and
vested at the same time as the Share with respect to which the stock dividend
was paid is forfeited or becomes nonforfeitable and vested. If a dividend is
paid other than in cash or stock, the disposition of such dividend shall be
made in accordance with such rules as the Committee shall adopt with
respect to each such dividend. Unless otherwise provided in the Award
Agreement, the Grantee shall have the right to vote the Covered Shares related
to his or her Award after the Date of Grant of such Covered Shares but before
his or her interest in such Covered Shares has been forfeited or has become
nonforfeitable and vested.

 

f.
    Satisfaction of
Forfeiture Conditions.     A Covered Share shall
cease to be restricted at such time as a Grantee’s interest in such Covered
Share becomes nonforfeitable and vested in accordance with the terms of the
Plan and the Award Agreement, and the certificate representing such share shall
be reissued as soon as practicable thereafter and shall be transferred to the
Grantee.

 

g.
    Termination of
Employment or Service as a Director.     In the
event that a Grantee’s employment or service as a Director terminates for any
reason, then, unless otherwise provided by the Award Agreement, and subject to Section 7
of the Plan:

 

i.                                        With respect to the portion of an Award that
is forfeitable immediately before the Date of Termination, the Covered Shares
shall thereupon automatically be forfeited; and

 

ii.                                     With respect to the portion of an Award that
is nonforfeitable and vested immediately before the Date of Termination, the
Covered Shares shall promptly be settled by delivery to the Grantee (or the
Grantee’s beneficiary, in the event of the death of the Grantee) of a number of
unrestricted Shares equal to the aggregate number of the Grantee’s
nonforfeitable and vested Covered Shares.

 

h.
    Nontransferability
of Awards.     Until such time as it becomes
nonforfeitable and vested in accordance with the terms of the Plan and the
Award Agreement, no Award, no right under any Award, and no Covered Shares may
be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Grantee otherwise than by will or by the laws of descent and distribution
or to the Company, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Subsidiary; provided, that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance.

 

i.
    Escrow of Covered
Shares.     Any certificates representing the
Covered Shares issued under the Plan shall be issued in the Grantee’s name,
but, if the applicable Award Agreement so provides, the Covered Shares will be
held by a custodian designated by the Committee (the “Custodian”). Each
applicable Award Agreement providing for the transfer of Covered Shares to the
Custodian shall appoint the Custodian as attorney-in-fact for the Grantee for
the term specified in the applicable Award Agreement, with full power and
authority in the Grantee’s name, place and stead to transfer, assign and convey
to the Company any Covered Shares held by the Custodian for such Grantee, if
the Grantee forfeits the Covered Shares under the terms of the applicable Award
Agreement. During the period that the Custodian holds the shares subject to
this Section 5(i), the Grantee will be entitled to all rights, except as
otherwise provided in the Plan or the applicable Award Agreement, applicable to
Shares not so held.

 

j.
    Other Restrictions.
    The Committee shall impose such other restrictions on
any Award as it may deem advisable including, without limitation, restrictions
under Applicable Law. The Committee may also require that Grantees make cash 

 

5

 

payments at the time of
grant or upon lapsing of restrictions. An Award shall not be granted and Shares
shall not be issued pursuant to an Award unless the grant of such Award and the
issuance and delivery of such Shares shall comply with all relevant provisions
of Applicable Law, and shall be further subject to the approval of counsel for
the Company with respect to such compliance. Any certificate issued to evidence
Covered Shares may bear such legends and statements, and shall be subject to
such transfer restrictions, as the Committee deems advisable to assure
compliance with Applicable Law and the requirements of this Section 5(j).
As a condition to the issuance of Shares under this Plan, the Committee may
require the Grantee to represent and warrant that the Shares will be held for
investment and not with a view of resale or distribution to the public. No
Shares may not be issued under this Plan until the Company has obtained the
consent or approval of every regulatory body, federal or state, having
jurisdiction over such matters as the Board deems advisable. Each person who
acquires the right to ownership of Shares by bequest or inheritance may be
required by the Committee to furnish reasonable evidence of such right of
ownership. In addition, the Board may require such consents and releases of
taxing authorities as the Board deems advisable. Additionally, as a condition
to the issuance of shares under this Plan, the Grantee shall be required to
become a party to the then-current version of any shareholder agreement that is
in effect among the holders of a majority of the Company’s equity securities.

 

k.
    Certificate Legend.
    In addition to any legends placed on certificates
pursuant to Section 5(j) above, each certificate representing Covered
Shares shall bear the following legend:

 

The sale or other transfer
of the Shares of stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain restrictions on
transfer as set forth in the Ascent Solar Technologies, Inc. Restricted
Stock Plan, as amended, and in a Restricted Stock Agreement
dated                        .
A copy of the Plan and the Restricted Stock Agreement may be obtained from the
Chief Financial Officer of Ascent Solar Technologies, Inc.

 

l.
    Removal of
Restrictions.     Covered Shares shall become
freely transferable by the Grantee after they become nonforfeitable and vested.
Once the Covered Shares are released from the forfeiture restrictions, the
Grantee shall be entitled to have the legend required by Section 5(k) above
removed from the Grantee’s Share certificate.

 

6.   Tax
Withholding.     Upon each vesting event, the
Grantee must satisfy the federal, state, local or foreign income and social
insurance withholding taxes imposed by reason of the vesting of the Covered
Shares. Upon grant of an Award, the Grantee shall make an election with respect
to the method of satisfaction of such tax withholding obligation in accordance
with procedures established by the Administrator. Unless the Grantee delivers
to the Company or its designee within five (5) days after the occurrence
of the vesting event specified in Section 2 or Section 3 above a
certified check payable in the amount of all tax withholding obligations
imposed on the Grantee and the Company by reason of the vesting of the Covered
Shares, the Grantee’s actual number of vested Covered Shares shall be reduced
by the smallest number of whole Shares which, when multiplied by the Fair
Market Value of the Common Stock on the vesting date, is sufficient to satisfy
the amount of such tax withholding obligations.

 

7.   Adjustments
Upon Changes in Capitalization or Change of Control.

 

        a.
    Changes in
Capitalization.     Subject to any required
action by the shareholders of the Company, the number of Covered Shares, and
the number of Shares which have been authorized for issuance under the Plan but
as to which no Awards have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Award shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Covered Shares.

 

        b.
    Change in Control.
    Unless otherwise provided in the Award Agreement, in
the event of a Change in Control, then, as to each Grantee, 50 percent of
any Covered Shares that have not yet been forfeited and that are not yet nonforfeitable
and vested at the time such Change in Control is determined to have occurred
shall become nonforfeitable and vested immediately before such Change in
Control is determined to have occurred. Notwithstanding the foregoing and
anything else in this Plan, and unless otherwise provided in the Award
Agreement, if the employment of a Grantee is terminated by the Company or its
successor in connection with a Change in Control (as determined in the sole and
absolute discretion of the Committee), then all of such Grantee’s Covered
Shares that have not yet been forfeited and are not yet nonforfeitable and
vested at termination of employment shall become nonforfeitable and vested upon
termination of employment.

 

c.     Dissolution or Liquidation
..    Unless otherwise provided in the Award Agreement, in
the event of the dissolution or liquidation of the Company, then immediately
before such dissolution

 

6

 

or liquidation, any Covered
Shares that are not yet nonforfeitable and vested shall become nonforfeitable
and vested.

 

8.     Term of Plan.
    The Plan shall become effective upon its approval by
the shareholders of the Company within 12 months after the earlier of the
date of its adoption by the Board or the date of its approval by the
shareholders. Such shareholder approval shall be obtained in the manner and to
the degree required under applicable federal and state law. The Plan shall
continue in effect until the tenth anniversary of adoption of the Plan by the
Board, unless terminated earlier under Section 9 of the Plan.

 

9.      Amendment
and Termination of the Plan.

 

        a.
    Amendment and
Termination.     The Board may at any time
amend, alter, suspend or terminate the Plan.

 

        b.
    Shareholder Approval.
    The Company shall obtain shareholder approval of any
Plan amendment to the extent necessary and desirable to comply with Applicable
Law. Such shareholder approval, if required, shall be obtained in such a manner
and to such a degree as is required by the Applicable Law.

 

        c.
    Effect of Amendment
or Termination.     No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Grantee,
unless mutually agreed otherwise between the Grantee and the Committee, which
agreement must be in writing and signed by the Grantee and the Company.

 

10.      Liability
of Company.

 

        a.
    Inability to Obtain
Authority.     The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

 

        b.
    Grants Exceeding
Allotted Shares.     If the Shares covered by an
Award exceeds, as of the date of grant, the number of Shares that may be issued
under the Plan without additional shareholder approval, such Award shall be
void with respect to such excess Covered Shares, unless shareholder approval of
an amendment sufficiently increasing the number of Shares subject to the Plan
is timely obtained in accordance with Section 9 of the Plan.

 

11.      Reservation
of Shares.     The Company, during the term of
the Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

 

12.      Rights
of Grantees.     Neither the Plan nor any Award
shall confer upon an Grantee any right with respect to continuing the Grantee’s
employment or service as a Consultant or Director, nor shall they interfere in
any way with the Grantee’s right or the Company’s right to terminate such
employment or service as a Consultant or Director at any time, with or without
cause.

 

13.      Construction.
    The Plan shall be construed under the laws of the State
of Delaware, to the extent not preempted by federal law, without reference to
the principles of conflict of laws.

 

7Exhibit 10.2

 

RESTRICTED STOCK UNIT AGREEMENT

for

Non-Employee Directors

 

RESTRICTED STOCK UNIT
AGREEMENT (this “Agreement”), dated as of the Grant Date, by and between the
Grantee and Hexcel Corporation (the “Corporation”).

 

W  I
T  N  E  S  S  E  T  H:

 

WHEREAS, the Corporation
has adopted the Hexcel Corporation 2003 Incentive Stock Plan (the “Plan”); and

 

WHEREAS, the Board of
Directors of the Corporation (the “Board”) has determined that it is desirable
and in the best interests of the Corporation to grant to the Grantee restricted
stock units (“RSUs”) as an incentive for the Grantee to advance the interests
of the Corporation.

 

NOW, THEREFORE, the
parties agree as follows:

 

1.       Notice of Grant; Incorporation of Plan.  Pursuant to the Plan and subject to the terms
and conditions set forth herein and therein, the Corporation hereby grants to
the Grantee the number of RSUs indicated on the Notice of Grant attached hereto
as Annex A, which Notice of Grant is incorporated by reference herein.  Unless otherwise provided herein, capitalized
terms used herein and set forth in such Notice of Grant shall have the meanings
ascribed to them in the Notice of Grant and capitalized terms used herein and
set forth in the Plan shall have the meanings ascribed to them in the Plan. The
Plan is incorporated by reference and made a part of this Agreement, and this
Agreement shall be subject to the terms of the Plan, as the Plan may be amended
from time to time, provided that any such amendment of the Plan must be made in
accordance with Section IX of the Plan. The RSUs granted herein constitute
an Award within the meaning of the Plan.

 

2.       Terms of Restricted Stock Units.  The grant of RSUs provided in Section 1
hereof shall be subject to the following terms, conditions and restrictions:

 

(a)       No Ownership.             The Grantee shall not possess any
incidents of ownership (including, without limitation, dividend and voting
rights) in shares of the Common Stock in respect of the RSUs until such RSUs
have vested and been distributed to the Grantee in the form of shares of Common
Stock.

 

(b)       Transfer of RSUs.        Except as provided in this Section 2(b),
the RSUs and any interest therein may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution and subject to the conditions set forth in the Plan
and this Agreement. Any attempt to transfer RSUs in contravention of this Section is
void ab initio. RSUs shall not be subject to execution, attachment or
other process. Notwithstanding the foregoing, the 

 

1

 

Grantee shall be
permitted to transfer RSUs to members of his or her immediate family (i.e.,
children, grandchildren or spouse), trusts for the benefit of such family
members, and partnerships or other entities whose only partners or equity
owners are such family members; provided, however, that no consideration can be
paid for the transfer of the RSUs and the transferee of the RSUs must agree to
be subject to all conditions applicable to the RSUs (including all of the terms
and conditions of this Agreement) prior to transfer.

 

(c)       Vesting and Conversion of RSUs.  Subject to Sections 2(d) and 2(e), the
RSUs shall vest daily in proportion to the time elapsed between the Grant Date
and the first anniversary of the Grant Date, and shall be converted into an
equivalent number of shares of Common Stock that will be immediately
distributed to the Grantee on the first anniversary of the Grant Date; provided
that if the Grantee has delivered to the Corporation, on or prior to the
Required Date, an irrevocable written election to defer conversion of the RSUs
until such time as the Grantee separates from service with the Corporation,
then the RSUs will be converted into an equivalent number of shares of Common
Stock that will be immediately distributed to the Grantee on the date on which
the Grantee separates from service with the Corporation. Upon distribution of
the shares of Common Stock in respect of the RSUs, the Corporation shall issue
to the Grantee or the Grantee’s personal representative a stock certificate
representing such shares of Common Stock, free of any restrictions.  “Required Date” shall mean (i) if this
grant of RSUs is issued in connection with the Grantee’s initial election to
the Board of Directors, the Date of Grant; and (ii) otherwise, December 31
of the calendar year prior to the calendar year in which the grant occurs.

 

(d)       Separation from Service.

 

(i)        If the Grantee separates from service with the
Corporation for any reason other than death, disability or Cause, then (A) all
RSUs that have vested on or prior to the date the Grantee separated from
service with the Corporation shall be converted into an equivalent number of
shares of Common Stock and immediately distributed to the Grantee, and (B) the
Grantee shall forfeit all RSUs which have not yet become vested as of the date
the Grantee separated from service with the Corporation.

 

(ii)       In the event the Grantee dies or the Grantee separates
from service with the Corporation because of disability, all RSUs shall vest,
be converted into an equivalent number of shares of Common Stock and be
immediately distributed to the Grantee.

 

(iii)      In the event the Grantee separates from
service with the Corporation for Cause, then the Grantee shall forfeit all
RSUs, whether or not vested.

 

(iv)      “Separation from service” (and variations thereof)
shall, for all purposes of this Agreement, have the meaning given in Section 1.409A-1(h) of
the Treasury Regulations (or any successor provision).

 

(e)   Change of Control.  In the event of a Change in Control (as
defined below) or of the termination of this Agreement within
twelve months of a complete liquidation or dissolution of the Corporation that
is taxed under Section 331 of the Code, all RSUs shall vest, be converted into shares of
Common Stock and be immediately distributed to the Grantee or (in the
event of a 

 

2

 

complete liquidation or dissolution of the Corporation) as soon as
administratively practicable thereafter.

 

(f)    Specified Employee.  Notwithstanding anything in sections 2(c), 2(d) or
6(b) to the contrary, if after the Date of Grant the Grantee subsequently
becomes an employee of the Corporation and is a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Internal
Revenue Code of 1986, as amended (the “Code”) as of the date of his or her
separation from service with the Corporation, then no RSUs convertible on
account of the Grantee’s separation from service shall be converted into shares
of Common Stock or distributed to the Grantee, and no costs for which the
Grantee may be entitled to reimbursement under Section 6(b) shall be
reimbursed, until the earlier of (i) the date which is six months after
the date of the Grantee’s separation from service and (ii) the date of the
Grantee’s death.

 

3.         Equitable Adjustment.            The
aggregate number of shares of Common Stock subject to the RSUs shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without the receipt of
consideration by the Corporation, or other change in corporate or capital
structure. The Committee shall also make the foregoing changes and any other
changes, including changes in the classes of securities available, to the
extent reasonably necessary or desirable to preserve the intended benefits
under this Agreement in the event of any other reorganization,
recapitalization, merger, consolidation, spin-off, extraordinary dividend or
other distribution or similar transaction involving the Corporation.

 

4.         Taxes.  The Grantee shall pay to the Corporation
promptly upon request any taxes the Corporation reasonably determines it is
required to withhold under applicable tax laws with respect to the RSUs.  Such payment shall be made as provided in Section VIII(f) of
the Plan.

 

5.         No Right to Continued Service as Director.  Nothing contained herein shall be deemed to
confer upon the Grantee any right to continue to serve as a member of the
Board.

 

6.         Miscellaneous

 

(a)          Governing Law/Jurisdiction. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to principles of conflict of
laws.

 

(b)         Resolution of Disputes. 
Any disputes arising under or in connection with this Agreement shall be
resolved by binding arbitration before a single arbitrator, to be held in New
York in accordance with the commercial rules and procedures of the
American Arbitration Association. Judgment upon the award rendered by the
arbitrator shall be final and subject to appeal only to the extent permitted by
law. Each party shall bear such party’s own expenses incurred in connection
with any arbitration; provided, however, that the cost of the
arbitration, including without limitation, reasonable attorneys’ fees of the
Grantee, shall be borne by the Corporation in the event the Grantee is the
prevailing party in the arbitration. Anything to the contrary notwithstanding,
each party hereto has the right to proceed with a court action for injunctive
relief or relief from violations of law not 

 

3

 

within the
jurisdiction of an arbitrator.  If any
costs of the arbitration borne by the Corporation in accordance herewith would
constitute compensation to the Grantee for Federal tax purposes, then the
amount of any such costs reimbursed to the Grantee in one taxable year shall
not affect the amount of such costs reimbursable to the Grantee in any other
taxable year, the Grantee’s right to reimbursement of any such costs shall not
be subject to liquidation or exchange for any other benefit, and the
reimbursement of any such costs incurred by the Grantee shall be made as soon
as administratively practicable, but in any event within ten (10) days,
after the date the Grantee is determined to be the prevailing party in the
arbitration.  The Grantee shall be
responsible for submitting claims for reimbursement in a timely manner to
enable payment within the timeframe provided herein.

 

(c)          Notices.  Any notice
required or permitted under this Agreement shall be deemed given when delivered
personally, or when deposited in a United States Post Office, postage prepaid,
addressed, as appropriate, to the Grantee at the last address specified in
Grantee’s records with the Corporation, or such other address as the Grantee
may designate in writing to the Corporation, or to the Corporation,
Attention:  Corporate Secretary, or such
other address as the Corporation may designate in writing to the Grantee.

 

(d)         Failure to Enforce Not a Waiver. 
The failure of either party hereto to enforce at any time any provision
of this Agreement shall in no way be construed to be a waiver of such provision
or of any other provision hereof.

 

(e)          Counterparts. 
This Agreement may be executed in two or more counterparts, each of
which shall be an original but all of which together shall represent one and
the same agreement.

 

(f)            Modifications; Entire Agreement; Headings. 
This Agreement cannot be changed or terminated orally. This Agreement
and the Plan contain the entire agreement between the parties relating to the
subject matter hereof.  The section
headings herein are intended for reference only and shall not affect the
interpretation hereof.

 

7.         Section 409A.

 

(a)                      It is intended that this Restricted Stock
Unit Agreement comply in all respects with the requirements of Sections 409A(a)(2) through
(4) of the Code and applicable Treasury Regulations and other generally
applicable guidance issued thereunder (collectively, the “Applicable
Regulations”), and this Restricted Stock Unit Agreement shall be interpreted
for all purposes in accordance with this intent.

 

(b)                     Notwithstanding any term or provision of
this Restricted Stock Unit Agreement (including any term or provision of the
Plan incorporated herein by reference), the parties hereto agree that, from
time to time, the Corporation may, without prior notice to or consent of the
Grantee, amend this Restricted Stock Unit Agreement to the extent determined by
the Corporation, in the exercise of its discretion in good faith, to be
necessary or advisable to prevent the inclusion in the Grantee’s gross income
pursuant to the Applicable Regulations of any 

 

4

 

compensation
intended to be deferred hereunder. The Corporation shall notify the Grantee as
soon as reasonably practicable of any such amendment affecting the Grantee.

 

(c)                      In the event
that the amounts payable under this Agreement are subject to any taxes,
penalties or interest under the Applicable Regulations, the Grantee shall be
solely liable for the payment of any such taxes, penalties or interest.

 

(d)                     Except as
otherwise specifically provided herein, the time for distribution of the RSUs
as provided in Section 2 shall not be accelerated or delayed for any
reason, unless to the extent necessary to comply with or permitted under the
Applicable Regulations.

 

8.         Definitions.               For purposes of this Agreement:

 

(I)                        “Affiliate” of any Person shall mean any
other Person that directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such first
Person.  The term “Control” shall have
the meaning specified in Rule 12b-2 under the Exchange Act.

 

(II)                    “Beneficial Owner” (and variants thereof)
shall have the meaning given in Rule 13d-3 promulgated under the Exchange
Act and, only to the extent such meaning is more restrictive than the
meaning given in Rule 13d-3, the meaning determined in accordance with Section 318(a) of
the Code.

 

(III)                A director will be deemed to separate from service with the Corporation
for “Cause” if such separation is due to his fraud, dishonesty or intentional
misrepresentation in connection with his duties as a Director or his
embezzlement, misappropriation or conversion of assets or opportunities of the
Corporation or any Subsidiary.

 

(IV)                “Change in Control” shall mean any of the
following events:

 

(i)      
  any
Person is or becomes the Beneficial Owner, directly or indirectly, of more than
50% of either (A) the combined fair market value of the then outstanding
stock of the Corporation (the “Total Fair Market Value”) or (B) the
combined voting power of the then outstanding securities entitled to vote
generally in the election of directors of the Corporation (the “Total Voting
Power”); excluding, however, the following: (a) any acquisition by the Corporation
or any of its Controlled Affiliates, (b) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Corporation or
any of its Controlled Affiliates, (c) any Person who becomes such a
Beneficial Owner in connection with a transaction described in the exclusion
within paragraph (iv) below and (d) any acquisition of additional
stock or securities by a Person who owns more than 50% of the Total Fair Market
Value or Total Voting Power of the Corporation immediately prior to such
acquisition; or

 

(ii)      
 any Person is or becomes the Beneficial
Owner, directly or Indirectly, of securities of the Corporation that, together
with any securities 

 

5

 

acquired directly or indirectly by such Person
within the immediately preceding twelve-consecutive month period, represent 40%
or more of the Total Voting Power of the Corporation; excluding, however, any
acquisition described in subclauses (a) through (d) of subsection (i) above;
or

 

(iii)      a change in the
composition of the Board such that the individuals who, as of the effective
date of this Agreement, constitute the Board (such individuals shall be
hereinafter referred to as the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board; provided, however, for purposes of
this definition, that any individual who becomes a director subsequent to such
effective date, whose election, or nomination for election by the Corporation’s
stockholders, was made or approved by a vote of at least a majority of the
Incumbent Directors (or directors whose election or nomination for election was
previously so approved) shall be considered an Incumbent Director; but,
provided, further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a person or legal entity other than the Board shall not be
considered an Incumbent Director; provided finally, however, that, as of any
time, any member of the Board who has been a director for at least twelve
consecutive months immediately prior to such time shall be considered an
Incumbent Director for purposes of this definition, other than for the purpose
of the first proviso of this definition; or

 

(iv)      there is
consummated a merger or consolidation of the Corporation or any direct or
indirect Subsidiary of the Corporation or a sale or other disposition of all or
substantially all of the assets of the Corporation (“Corporate Transaction”);
excluding, however, such a Corporate Transaction (A) pursuant to which all
or substantially all of the individuals and entities who are the Beneficial
Owners, respectively, of the outstanding Common Stock of the Corporation and
Total Voting Power immediately prior to such Corporate Transaction will
Beneficially Own, directly or indirectly, more than 50%, respectively, of the
outstanding common stock and the combined voting power of the  then
outstanding common stock and the combined voting power of the then outstanding
securities entitled to vote generally in the election of directors of the
company resulting from such Corporate Transaction (including, without
limitation, a company which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Corporate Transaction
of the Outstanding Common Stock and Total Voting Power, as the case may be, and
(B) immediately following which the individuals who comprise the Board
immediately prior thereto constitute at least a majority of the board of
directors of the company resulting from such Corporate Transaction (including,
without limitation, a company which as a result of such 

 

6

 

transaction
owns the Corporation or all or substantially all of the Corporation’s assets
either directly or through one or more subsidiaries);

 

provided, however, that notwithstanding anything to the contrary in
subsections (i) through (iv) above, an event which does not
constitute a change in the ownership of the Corporation, a change in the
effective control of the Corporation, or a change in the ownership of a
substantial portion of the assets of the Corporation, each as defined in Section 1.409A-3(i)(5) of
the Treasury Regulations (or any successor provision), shall not be considered
a Change in Control for purposes of this Agreement.

 

(V)                    “Person” shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) of
the Exchange Act and, only to the extent such meaning is more
restrictive than the meaning given in Section 3(a)(9) of the Exchange
Act (as modified as above), the meaning determined in accordance with Sections
1.409A-3(i)(5)(v)(B), (vi)(D) or (vii)(C) of the Treasury Regulations
(or any successor provisions), as applicable.

 

7

 

Annex A

 

NOTICE OF GRANT

RESTRICTED STOCK UNIT AGREEMENT

HEXCEL CORPORATION 2003 INCENTIVE
STOCK PLAN

 

The following member of
the Board of Directors of Hexcel Corporation, a Delaware corporation (“Hexcel”),
has been granted Restricted Stock Units in accordance with the terms of this
Notice of Grant and the Restricted Stock Unit Agreement to which this Notice of
Grant is attached.

 

The terms below shall
have the meanings ascribed to them below when used in the Restricted Stock Unit
Agreement.

 

	
  Grantee

  
	
   

  
	
  Address of Grantee

  
	
   

  
	
  Grant Date

  
	
   

  
	
  Aggregate Number of
  RSUs Granted

  

 

IN
WITNESS WHEREOF,
the parties hereby agree to the terms of this Notice of Grant and the
Restricted Stock Unit Agreement to which this Notice of Grant is attached and
execute this Notice of Grant and Restricted Stock Unit Agreement as of the
Grant Date.

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HEXCEL CORPORATION

  
	
  Grantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ira J. Krakower

  
	
   

  	
   

  	
  Senior Vice President

  

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]