10-K/A 1 j2953_10ka.htm 10-K/A

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C.  20549

 

FORM 10–K/A

(Amendment No. 3)

 

ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

 

For the Fiscal Year Ended December 31, 2002

 

 

or

 

 

o

Transition Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934

 

 

For the transition period from                  to                  

 

 

Commission File Number 1-8472

 

Hexcel Corporation

(Exact name of registrant as specified in its charter)

 

Delaware

 

94-1109521

(State of Incorporation)

 

(I.R.S. Employer Identification No.)

 

281 Tresser Boulevard
Stamford, Connecticut  06901

(Address of principal executive offices and zip code)

 

 

 

Registrant’s telephone number, including area code:  (203) 969-0666

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of each class

 

Name of each exchange on which registered

COMMON STOCK

 

NEW YORK STOCK EXCHANGE
PACIFIC STOCK EXCHANGE

 

 

 

Securities registered pursuant to Section 12(g) of the Act:

7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2011

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes       ý       No       o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K/A or any amendment to this Form 10-K/A.  ý

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes     ý     No     o

 

The aggregate market value as of June 30, 2002 of voting common stock held by non-affiliates of the registrant:  $102,107,859

 

The number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding as of July 7, 2003

COMMON STOCK

 

38,632,738

 

 

 

EXPLANATORY NOTE

 

The purpose of this Amendment No. 3 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 3, 2003, as amended by Amendment No. 1 and Amendment No. 2 to the Annual Report on Form 10-K filed on March 31, 2003 and April 29, 2003, respectively, is to file the consolidated financial statements of Asahi-Schwebel Co. Ltd., as required by Rule 3-09(a) of Regulation S-X, and the consolidated financial statements of Hexcel S.A. and Hexcel Holdings (UK) Limited, which are required by Rule 3-16(a) of Regulation S-X.  In addition, Note 25 “Supplemental Guarantor Information” is now included in the consolidated financial statements of Hexcel Corporation pursuant to Rule 3-10 of Regulation S-X.  This amendment consists solely of a cover page, this explanatory note, the information required by Item 15 of Form 10-K (Exhibits, Financial Statement Schedules and Reports on Form 8-K), a signature page, and the principal executive officer and principal financial officer certifications required to be included herein.  In accordance with Rule 12b-15 promulgated pursuant to the Securities Exchange Act of 1934, the complete text of Item 15, as amended, is included herein.  However, with respect to the financial statements and financial statement schedules, other than the inclusion of Note 25 to the consolidated financial statements of Hexcel Corporation, the consolidated financial statements of Asahi-Schwebel Co. Ltd., Hexcel S.A. and Hexcel Holdings (UK) Limited, and the Reports of Independent Accountants relating to the financial statements of NITTOBO ASCO Glass Fiber Co., Ltd. (a 50% owned equity investee of Asahi-Schwebel Co. Ltd.) and Asahi-Schwebel (Taiwan) Co., Ltd. (a wholly-owned subsidiary of, and consolidated with, Asahi-Schwebel Co. Ltd.), no changes have been made.

 

1

 

PART IV

 

ITEM 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

 

a.  1. Financial Statements

 

i.                  The consolidated financial statements of Hexcel Corporation and Subsidiaries, the notes thereto, and the Report of Independent Auditors are listed on page 16 of this Annual Report on Form 10-K/A and are incorporated herein by reference.

ii.               The financial statements of BHA Aero Composite Parts Co. Ltd., the notes thereto, and the Independent Auditors’ Report are listed on page 16 of this Annual Report on Form 10-K/A and are incorporated herein by reference.

iii.            The consolidated financial statements of Asahi-Schwebel Co. Ltd. and Subsidiaries, the notes thereto, and the Independent Auditors’ Report are listed on page 16 of this Annual Report on Form 10-K/A and are incorporated herein by reference.

iv.           The consolidated financial statements of Hexcel S.A. and Subsidiaries, the notes thereto, and the Report of Independent Auditors are listed on page 16 of this Annual Report on Form 10-K/A and are incorporated herein by reference.

v.              The consolidated financial statements of Hexcel Holdings (UK) Limited and Subsidiaries, the notes thereto, and the Report of Independent Auditors are listed on page 16 of this Annual Report on Form 10-K/A and are incorporated herein by reference.

 

2. Financial Statement Schedules

 

The financial statement schedule and the Report of Independent Auditors required by Item 15(a)(2) are listed on page 16 of this Annual Report on Form 10-K/A and are incorporated herein by reference.

 

b.  Reports on Form 8-K

 

Current Report on Form 8-K dated October 23, 2002, relating to third quarter of 2002 financial results.

 

Current Report on Form 8-K dated December 20, 2002, relating to announcement of signed agreements to issue equity securities and planned refinancing of existing senior credit facility.

 

c.  Exhibits

 

Exhibit No.

 

Description

 

 

 

2.1

 

Asset Purchase Agreement dated March 31, 2000 between Hexcel Corporation and Britax Cabin Interiors, Inc. (incorporated herein by reference to Exhibit 2.1 to Hexcel’s Current Report on Form 8-K dated May 10, 2000).

 

 

 

3.1

 

Restated Certificate of Incorporation of Hexcel Corporation (incorporated herein by reference to Exhibit 1 to Hexcel’s Registration Statement on Form 8-A dated July 9, 1996, Registration No. 1-08472).

 

 

 

3.2

 

Certificate of Amendment of the Restated Certificate of Incorporation of Hexcel Corporation (incorporated herein by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

3.3

 

Amended and Restated Bylaws of Hexcel Corporation (incorporated herein by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

4.1

 

Indenture dated as of January 21, 1999 between Hexcel Corporation and The Bank of New York, as trustee, relating to the issuance of the 9 3/4% Senior Subordinated Notes

 

2

 

 

 

due 2009 (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-4 (No. 333-71601), filed on February 2, 1999).

 

 

 

4.2

 

Indenture dated as of August 1, 1986 between Hexcel and the Bank of California, N.A., as trustee, relating to the 7% Convertible Subordinated Notes due 2011 of the Company (incorporated herein by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997).

 

 

 

4.2(a)

 

Instrument of Resignation, Appointment and Acceptance, dated as of October 1, 1993 (incorporated herein by reference to Exhibit 4.10 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993).

 

 

 

4.3

 

Indenture, dated as of March 19, 2003 among Hexcel Corporation, the Guarantors named therein and Wells Fargo Bank Minnesota, National Association, as trustee, relating to the 9.875% Senior Secured Notes due 2008 (incorporated herein by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

4.4

 

Certificate of Designation of Series A Convertible Preferred Stock of Hexcel Corporation (incorporated herein by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

4.5

 

Certificate of Designation of Series B Convertible Preferred Stock of Hexcel Corporation (incorporated herein by reference to Exhibit 4.6 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.1

 

Credit and Guaranty Agreement, dated as of March 19, 2003, by and among Hexcel Corporation, Hexcel Composites Limited, Hexcel Composites GmbH (Austria), Hexcel Composites GmbH (Germany), the Guarantors named therein, the lenders from time to time party thereto, Fleet Capital Corporation, as Administrative Agent, Fleet National Bank, London U.K. branch, trading as FleetBoston Financial, as Fronting Bank and Issuing Bank, Fleet National Bank, as Issuing Bank, and Fleet Securities Inc., as Lead Arranger (incorporated herein by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.2

 

Security Agreement, dated as of March 19, 2003, by and among Hexcel Corporation, Clark-Schwebel Corporation, Hexcel Pottsville Corporation, Clark-Schwebel Holding Corp., CS Tech-Fab Holding, Inc. and Fleet Capital Corporation, as Administrative Agent (incorporated herein by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.3*

 

Hexcel Corporation 2003 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.4*

 

Hexcel Corporation Incentive Stock Plan as amended and restated January 30, 1997 (incorporated herein by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8, Registration No. 333-36163).

 

 

 

10.4(a)*

 

Hexcel Corporation Incentive Stock Plan as amended and restated January 30, 1997 and further amended December 10, 1997 (incorporated herein by reference to Exhibit 10.5(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997).

 

 

 

10.4(b)*

 

Hexcel Corporation Incentive Stock Plan, as amended and restated on January 30, 1997, and further amended on December 10, 1997 and March 25, 1999 (incorporated herein by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 filed on

 

3

 

 

 

July 26, 1999).

 

 

 

10.4(c)*

 

Hexcel Corporation Incentive Stock Plan, as amended and restated on January 30, 1997, and further amended on December 10, 1997, March 25, 1999 and December 2, 1999 (incorporated by reference to Exhibit 10.3(c) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).

 

 

 

10.4(d)*

 

Hexcel Corporation Incentive Stock Plan, as amended and restated on February 3, 2000 (incorporated herein by reference to Annex A of the Company’s Proxy Statement dated March 31, 2000).

 

 

 

10.4(e)*

 

Hexcel Corporation Incentive Stock Plan, as amended and restated on December 19, 2000 (incorporated herein by reference to Exhibit 10.3(e) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.4(f)*

 

Hexcel Corporation Incentive Stock Plan, as amended and restated on December 19, 2000 and further amended on January 10, 2002 (incorporated herein by reference to Exhibit 10.3(f) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.5*

 

Hexcel Corporation 1998 Broad Based Incentive Stock Plan (incorporated herein by reference to Exhibit 4.3 of the Company’s Form S-8 filed on June 19, 1998, Registration No. 333-57223).

 

 

 

10.5(a)*

 

Hexcel Corporation 1998 Broad Based Incentive Stock Plan, as amended on February 3, 2000 (incorporated by reference to Exhibit 10.1 to Hexcel’s Quarterly Report on Form  10-Q for the Quarter ended June 30, 2000).

 

 

 

10.5(b)*

 

Hexcel Corporation 1998 Broad Based Incentive Stock Plan, as amended on February 3, 2000, and further amended on February 1, 2001 (incorporated herein by reference to Exhibit 10.4(b) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.5(c)*

 

Hexcel Corporation 1998 Broad Based Incentive Stock Plan, as amended on February 3, 2000, and further amended on February 1, 2001 and January 10, 2002 (incorporated herein by reference to Exhibit 10.4(c) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.5(d)*

 

Hexcel Corporation 1998 Broad Based Incentive Stock Plan, as amended on February 3, 2000, and further amended on February 1, 2001, January 10, 2002 and December 12, 2002 (incorporated herein by reference to Exhibit 10.4(d) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).

 

 

 

10.6*

 

Hexcel Corporation Management Stock Purchase Plan (incorporated herein by reference to Exhibit 10.9 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 1997).

 

 

 

10.6(a)*

 

Hexcel Corporation Management Stock Purchase Plan, as amended on March 25, 1999 (incorporated herein by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 filed on July 26, 1999).

 

 

 

10.6(b)*

 

Hexcel Corporation Management Stock Purchase Plan, as amended on March 25, 1999 and December 2, 1999 (incorporated by reference to Exhibit 10.5(b) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).

 

 

 

10.6(c)*

 

Hexcel Corporation Management Stock Purchase Plan, as amended and restated on February 3, 2000 (incorporated herein by reference to Annex B of the Company’s Proxy Statement dated March 31, 2000).

 

4

 

10.6(d)*

 

Hexcel Corporation Management Stock Purchase Plan, as amended and restated on December 19, 2000 (incorporated herein by reference to Exhibit 10.5(d) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.6(e)*

 

Hexcel Corporation Management Stock Purchase Plan, as amended and restated on March 19, 2003 (incorporated herein by reference to Exhibit 10.6(e) to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.7*

 

Hexcel Corporation Management Incentive Compensation Plan, as amended and restated on December 19, 2000 and as further amended on February 27, 2002 (incorporated herein by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.8*

 

Hexcel Corporation Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.9*

 

Form of Employee Option Agreement (2003) (incorporated herein by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).

 

 

 

10.10*

 

Form of Employee Option Agreement (2002) (incorporated herein by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.11*

 

Form of Employee Option Agreement (2000) (incorporated herein by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.12*

 

Form of Employee Option Agreement Special Executive Grant (2000) dated December 20, 2000 (incorporated by reference to Exhibit 10.8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.13*

 

Form of Employee Option Agreement Special Executive Grant (1999) dated December 2, 1999 (incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).

 

 

 

10.14*

 

Form of Employee Option Agreement (1999) dated December 2, 1999 (incorporated by reference to Exhibit 10.8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).

 

 

 

10.15*

 

Form of Employee Option Agreement (1999) (incorporated herein by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1999).

 

 

 

10.16*

 

Form of Employee Option Agreement (1998) (incorporated herein by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 1998).

 

 

 

10.17*

 

Form of Employee Option Agreement (1997) (incorporated herein by reference to Exhibit 10.4 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 1997).

 

 

 

10.18*

 

Form of Employee Option Agreement (1996) (incorporated herein by reference to Exhibit 10.5 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1996).

 

5

 

10.19*

 

Form of Employee Option Agreement (1995) (incorporated herein by reference to Exhibit 10.6 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1996).

 

 

 

10.20*

 

Form of Retainer Fee Option Agreement for Non-Employee Directors (2003) (incorporated herein by reference to Exhibit 10.19 the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).

 

 

 

10.21*

 

Form of Retainer Fee Option Agreement for Non-Employee Directors (2000) (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form  10-K for the fiscal year ended December 31, 2000).

 

 

 

10.22*

 

Form of Retainer Fee Option Agreement for Non-Employee Directors (1999) (incorporated by reference to Exhibit 10.14 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).

 

 

 

10.23*

 

Form of Retainer Fee Option Agreement for Non-Employee Directors (1998) (incorporated herein by reference to Exhibit 10.11 to Hexcel’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998).

 

 

 

10.24*

 

Form of Retainer Fee Option Agreement for Non-Employee Directors (1997) (incorporated herein by reference to Exhibit 10.8 to Hexcel’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997).

 

 

 

10.25*

 

Form of Option Agreement (Directors) (incorporated herein by reference to Exhibit 10.13 to Hexcel’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995).

 

 

 

10.26*

 

Form of Supplemental Compensation Option Agreement (Directors) (incorporated herein by reference to Exhibit 10.23 to Hexcel’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.27*

 

Form of Performance Accelerated Restricted Stock Unit Agreement (December 20, 2000) (incorporated herein by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.28*

 

Form of Performance Accelerated Restricted Stock Unit Agreement (Special Executive Grant December 2, 1999) (incorporated by reference to Exhibit 10.19 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).

 

 

 

10.29*

 

Form of Performance Accelerated Restricted Stock Unit Agreement (December 2, 1999) (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).

 

 

 

10.30*

 

Form of Performance Accelerated Restricted Stock Unit Agreement (1999) (incorporated herein by reference to Exhibit 10.2 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1999).

 

 

 

10.31*

 

Form of Performance Accelerated Restricted Stock Unit Agreement (1998) (incorporated herein by reference to Exhibit 10.2 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1998).

 

 

 

10.32*

 

Form of Performance Accelerated Restricted Stock Unit Agreement (1997) (incorporated herein by reference to Exhibit 10.5 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 1997).

 

 

 

10.33*

 

Form of Performance Accelerated Restricted Stock Unit Agreement (1996) (incorporated herein by reference to Exhibit 10.9 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1996).

 

6

 

10.34*

 

Form of Restricted Stock Unit Agreement (2003) (incorporated herein by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).

 

 

 

10.35*

 

Form of Restricted Stock Unit Agreement (2002) (incorporated herein by reference to Exhibit 10.31 to Hexcel’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.36*

 

Form of Reload Option Agreement (1997) (incorporated herein by reference to Exhibit 10.8 of Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 1997).

 

 

 

10.37*

 

Form of Reload Option Agreement (1996) (incorporated herein by reference to Exhibit 10.10 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1996).

 

 

 

10.38*

 

Form of Exchange Performance Accelerated Stock Option Agreement (incorporated Herein by reference to Exhibit 10.3 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 1998).

 

 

 

10.39*

 

Form of Performance Accelerated Stock Option Agreement (Director) (incorporated herein by reference to Exhibit 10.6 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 1997).

 

 

 

10.40*

 

Form of Performance Accelerated Stock Option (Employee) (incorporated herein by reference to Exhibit 10.7 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 1997).

 

 

 

10.41*

 

Form of Grant of Restricted Stock Unit Agreement (incorporated herein by reference to Exhibit 10.3 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1999).

 

 

 

10.42*

 

Form of Grant of Restricted Stock Unit Agreement (incorporated herein by reference to Exhibit 10.10 to Hexcel’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 1997).

 

 

 

10.43*

 

Hexcel Corporation 1997 Employee Stock Purchase Plan, as amended and restated as of March 19, 2003 (incorporated herein by reference to Exhibit 10.43 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.44*

 

Employment Agreement dated as of July 30, 2001 between Hexcel Corporation and David E. Berges (incorporated by reference herein to Exhibit 10.37 to Hexcel’s Registration Statement on Form S-4 (No. 333-66582), filed on August 2, 2001).

 

 

 

10.44(a)*

 

Amendment, dated December 12, 2002, to Employment Agreement dated as of July 30, 2001 between Hexcel Corporation and David E. Berges (incorporated herein by reference to Exhibit 10.43(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).

 

 

 

10.44(b)*

 

Employee Option Agreement dated as of July 30, 2001 between Hexcel Corporation and David E. Berges (incorporated by reference herein to Exhibit 10.37(a) to Hexcel’s Registration Statement on Form S-4 (No. 333-66582), filed on August 2, 2001).

 

 

 

10.44(c)*

 

Employment Option Agreement (performance-based option) dated as of July 30, 2001 between Hexcel Corporation and David E. Berges (incorporated by reference herein to Exhibit 10.37(b) to Hexcel’s Registration Statement on Form S-4 (No. 333-66582), filed on August 2, 2001).

 

7

 

10.44(d)*

 

Restricted Stock Agreement dated as of July 30, 2001 between Hexcel Corporation and David E. Berges (incorporated by reference herein to Exhibit 10.37(c) to Hexcel’s Registration Statement on Form S-4 (No. 333-66582), filed on August 2, 2001).

 

 

 

10.44(e)*

 

Supplemental Executive Retirement Agreement dated as of July 30, 2001 between Hexcel Corporation and David E. Berges (incorporated by reference herein to Exhibit 10.37(d) to Hexcel’s Registration Statement on Form S-4 (No. 333-66582), filed on August 2, 2001).

 

 

 

10.44(f)*

 

Letter Agreement dated August 1, 2001 between Hexcel Corporation and David E. Berges (incorporated by reference herein to Exhibit 10.37(e) to Hexcel’s Registration Statement on Form S-4 (No. 333-66582), filed on August 2, 2001).

 

 

 

10.44(g)*

 

Letter Agreement dated August 28, 2001 between Hexcel Corporation and David E. Berges (incorporated herein by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001).

 

 

 

10.45*

 

Letter dated December 2, 1999 from Hexcel Corporation to Stephen C. Forsyth, regarding the Company’s Management Incentive Compensation Plan for 1999 (incorporated by reference to Exhibit 10.35 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999).

 

 

 

10.45(a)*

 

Supplemental Executive Retirement Agreement dated as of May 10, 2000 between Hexcel Corporation and Stephen C. Forsyth (incorporated herein by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2000).

 

 

 

10.45(b)*

 

Amendment to Agreements, dated as of October 11, 2000 by and between Hexcel Corporation and Stephen C. Forsyth (incorporated herein by reference to Exhibit 10.8 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2000).

 

 

 

10.45(c)*

 

Amendment to Amendments to Agreements, dated as of November 21, 2000, by and between Hexcel Corporation and Stephen C. Forsyth (incorporated herein by reference to Exhibit 10.39(c) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.45(d)*

 

First Amendment to Supplemental Executive Retirement Agreement dated as of July 30, 2001 between Hexcel Corporation and Stephen C. Forsyth (incorporated herein by reference to Exhibit 10.43(d) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.46*

 

Letter dated December 2, 1999 from Hexcel Corporation to Ira J. Krakower, regarding the Company’s Management Incentive Compensation Plan for 1999 (incorporated herein by reference to Exhibit 10.40 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.46(a)*

 

Supplemental Executive Retirement Agreement dated as of May 10, 2000 between Hexcel and Ira J. Krakower (incorporated herein by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2000).

 

 

 

10.46(b)*

 

Amendment to Agreements, dated as of October 11, 2000 by and between Hexcel Corporation and Ira J. Krakower (incorporated herein by reference to Exhibit 10.7 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2000).

 

 

 

10.46(c)*

 

First Amendment to Supplemental Executive Retirement Agreement dated as of July 30, 2001 between Hexcel Corporation and Ira J. Krakower (incorporated herein by reference to Exhibit 10.44(c) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

8

 

10.47*

 

Form of Executive Severance Agreement between Hexcel and certain executive officers dated as of February 3, 1999 (incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1999).

 

 

 

10.48*

 

Form of Executive Severance Agreement between Hexcel and certain executive officers dated as of February 3, 1999 (incorporated herein by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 1999).

 

 

 

10.49*

 

Amendment to Agreements, dated as of October 11, 2000 by and between Hexcel Corporation and William Hunt (incorporated herein by reference to Exhibit 10.14 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2000).

 

 

 

10.49(a)*

 

Amendment to Amendments to Agreements, dated as of November 21, 2000, by and between Hexcel Corporation and William Hunt (incorporated herein by reference to Exhibit 10.45(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.50*

 

Amendment to Agreements, dated as of October 11, 2000 by and between Hexcel Corporation and David Tanonis (incorporated herein by reference to Exhibit 10.12 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2000).

 

 

 

10.51*

 

Amendment to Agreements, dated as of October 11, 2000 by and between Hexcel Corporation and Joseph Shaulson (incorporated herein by reference to Exhibit 10.9 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 2000).

 

 

 

10.51(a)*

 

Amendment to Amendments to Agreements, dated as of November 21, 2000, by and between Hexcel Corporation and Joseph Shaulson (incorporated herein by reference to Exhibit 10.48(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

 

 

 

10.52

 

Lease Agreement, dated as of September 15, 1998, by and among Clark-Schwebel Corporation (a wholly-owned subsidiary of Hexcel) as lessee, CSI Leasing Trust as lessor, and William J. Wade as co-trustee for CSI Leasing Trust (incorporated herein by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 1998).

 

 

 

10.53

 

Amended and Restated Governance Agreement, dated as of March 19, 2003, among LXH L.L.C., LXH II, L.L.C., GS Capital Partners 2000 L.P., GS Capital Partners 2000 Offshore, L.P., GS Capital Partners 2000 Employee Fund, L.P., GS Capital Partners 2000 GmbH & Co. Beteiligungs KG, Stone Street Fund 2000, L.P. and Hexcel Corporation (incorporated herein by reference to Exhibit 10.53 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.54

 

Stockholders Agreement, dated as of March 19, 2003, among Berkshire Fund V, Limited Partnership, Berkshire Fund VI, Limited Partnership, Berkshire Fund V Investment Corp., Berkshire Fund VI Investment Corp., Berkshire Investors LLC, Greenbriar Co-Investment Partners L.P, Greenbriar Equity Fund, L.P. and Hexcel Corporation (incorporated herein by reference to Exhibit 10.54 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.55

 

Amended and Restated Registration Rights Agreement, dated as of March 19, 2003, by and among Hexcel Corporation, LXH, L.L.C., LXH II, L.L.C., GS Capital Partners 2000 L.P., GS Capital Partners 2000 Offshore, L.P., GS Capital Partners 2000 Employee Fund, L.P., GS Capital Partners 2000 GmbH & Co. Beteiligungs KG and Stone Street Fund 2000, L.P. (incorporated herein by reference to Exhibit 10.55 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

9

 

10.56

 

Registration Rights Agreement, dated as of March 19, 2003, among Hexcel Corporation, Berkshire Fund V, Limited Partnership, Berkshire Fund VI, Limited Partnership, Berkshire Investors LLC, Greenbriar Co-Investment Partners L.P. and Greenbriar Equity Fund, L.P. (incorporated herein by reference to Exhibit 10.56 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.57

 

Agreement, dated October 11, 2000, by and among Hexcel Corporation, LXH, L.L.C. and LXH II, L.L.C. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 13, 2000).

 

 

 

10.58

 

Consent and Termination Agreement, dated as of October 11, 2000, by and between Hexcel Corporation and Ciba Specialty Chemicals Holding Inc. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated October 13, 2000).

 

 

 

10.59

 

Purchase Agreement, dated as of June 15, 2001, among Hexcel Corporation and Credit Suisse First Boston Corporation, Deutsche Banc Alex. Brown Inc., Goldman, Sachs & Co. and J.P. Morgan Securities Inc (incorporated herein by reference to Exhibit 10.56 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).

 

 

 

10.60

 

Stock Purchase Agreement, dated as of December 18, 2002, by and among Hexcel Corporation, Berkshire Investors LLC, Berkshire Fund V, Limited Partnership, Berkshire Fund VI, Limited Partnership, Greenbriar Equity Fund, L.P. and Greenbriar Co-Investment Partners, L.P. (incorporated herein by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated December 20, 2002).

 

 

 

10.61

 

Stock Purchase Agreement, dated as of December 18, 2002, by and among Hexcel Corporation, GS Capital Partners 2000, L.P., GS Capital Partners 2000 Offshore, L.P., GS Capital Partners 2000 Employee Fund, L.P., GS Capital Partners 2000 GmbH & Co. Beteiligungs KG and Stone Street Fund 2000, L.P. (incorporated herein by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K dated December 20, 2002).

 

 

 

10.62

 

Purchase Agreement, dated as of March 7, 2003, among Goldman, Sachs & Co., Fleet Securities, Inc. and Hexcel Corporation (incorporated herein by reference to Exhibit 10.62 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.63

 

Exchange and Registration Rights Agreement dated as of March 19, 2003 among Hexcel Corporation, Clark-Schwebel Holding Corp., Clark-Schwebel Corporation, Hexcel Pottsville Corporation and CS Tech-Fab Holding, Inc. (incorporated herein by reference to Exhibit 10.63 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.64

 

Pledge and Security Agreement, dated as of March 19, 2003, between Hexcel Corporation, Clark-Schwebel Holding Corp., Clark-Schwebel Corporation, Hexcel Pottsville Corporation, CS Tech-Fab Holding, Inc. and Hexcel International, and HSBC Bank USA, as Joint Collateral Agent (incorporated herein by reference to Exhibit 10.64 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.65

 

Collateral Agency Agreement, dated as of March 19, 2003, by and among Hexcel Corporation, HSBC Bank USA, as Joint Collateral Agent, Well Fargo Bank Minnesota, National Association, as trustee, and the representatives of the holders of Parity Lien Debt who may become a party thereto (incorporated herein by reference to Exhibit 10.65 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

10.66

 

Intercreditor and Agency Agreement dated as of March 19, 2003, by and among HSBC

 

10

 

 

 

Bank USA, as Joint Collateral Agent, Fleet Capital Corporation, as Intercreditor Agent and Security Trustee, Fleet Capital Corporation, as Administrative Agent under the Existing Credit Facility, Well Fargo Bank Minnesota, National Association, as trustee, and each other Credit Facility Agent that may become a party thereto (incorporated herein by reference to Exhibit 10.66 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

12.1

 

Statement regarding the computation of ratio of earnings to fixed charges for the Company (incorporated herein by reference to Exhibit 12.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).

 

 

 

21.1

 

Subsidiaries of the Company (incorporated herein by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).

 

 

 

23.1

 

Consent of Independent Auditors - PricewaterhouseCoopers LLP (Hexcel Corporation).

 

 

 

23.2

 

Consent of Independent Auditors - PricewaterhouseCoopers LLP (Hexcel S.A. and Hexcel Holdings (UK) Limited).

 

 

 

23.3

 

Consent of Independent Auditors - PricewaterhouseCoopers (NITTOBO ASCO Glass Fiber Co., Ltd.).

 

 

 

23.4

 

Consent of Independent Auditors - PricewaterhouseCoopers (Asahi-Schwebel (Taiwan) Co., Ltd.).

 

 

 

23.5

 

Consent of Independent Auditors – Deloitte Touche Tohmatsu (BHA Aero Composite Parts Co. Ltd.).

 

 

 

23.6

 

Consent of Independent Auditors – Deloitte Touche Tohmatsu (Asahi-Schwebel Co., Ltd.).

 

 

 

24.1

 

Powers of Attorney (included on signature page and incorporated herein by reference to Exhibit 24.1 to the Company’s Annual Report on Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 2002, filed on March 31, 2003).

 

 

 

99.1

 

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

99.2

 

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

* Indicates management contract or compensatory plan or arrangement.

 

11

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Stamford, State of Connecticut.

 

 

Hexcel Corporation

 

 

 

 

 

July 10, 2003

 

/s/ STEPHEN C. FORSYTH

 

(Date)

 

Stephen C. Forsyth

 

 

 

Chief Financial Officer

 

 

KNOWN TO ALL PERSONS BY THESE PRESENTS, that each of Sandra L. Derickson and Peter M. Sacerdote constitutes and appoints Stephen C. Forsyth his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

Signature

 

Title

 

Date

 

 

 

 

 

/s/ DAVID E. BERGES*

 

Chairman of the

 

July 10, 2003

(David E. Berges)

 

Board of Directors, President and
Chief Executive Officer
(Principal Executive Officer)

 

 

 

 

 

 

 

/s/ STEPHEN C. FORSYTH

 

Executive Vice President and

 

July 10, 2003

(Stephen C. Forsyth)

 

Chief Financial Officer
(Principal Financial Officer)

 

 

 

 

 

 

 

/s/ WILLIAM J. FAZIO*

 

Corporate Controller

 

July 10, 2003

(William J. Fazio)

 

(Principal Accounting Officer)

 

 

 

 

 

 

 

/s/ JOEL S. BECKMAN*

 

Director

 

July 10, 2003

(Joel S. Beckman)

 

 

 

 

 

 

 

 

 

/s/ H. ARTHUR BELLOWS, JR.*

 

Director

 

July 10, 2003

(H. Arthur Bellows, Jr.)

 

 

 

 

 

 

 

 

 

/s/ SANDRA L. DERICKSON

 

Director

 

July 10, 2003

(Sandra L. Derickson)

 

 

 

 

 

 

 

 

 

/s/ JAMES J. GAFFNEY*

 

Director

 

July 10, 2003

(James J. Gaffney)

 

 

 

 

 

12

 

/s/ SANJEEV K. MEHRA*

 

Director

 

July 10, 2003

(Sanjeev K. Mehra)

 

 

 

 

 

 

 

 

 

/s/ LEWIS RUBIN*

 

Director

 

July 10, 2003

(Lewis Rubin)

 

 

 

 

 

 

 

 

 

/s/ PETER M. SACERDOTE

 

Director

 

July 10, 2003

(Peter Sacerdote)

 

 

 

 

 

 

 

 

 

/s/ ROBERT J. SMALL*

 

Director

 

July 10, 2003

(Robert J. Small)

 

 

 

 

 

 

 

 

 

/s/ MARTIN L. SOLOMON*

 

Director

 

July 10, 2003

(Martin L. Solomon)

 

 

 

 

 

 

*By:

/s/ STEPHEN C. FORSYTH

 

 

Stephen C. Forsyth
Attorney-in-fact

 

 

13

 

CERTIFICATIONS

 

I, David E. Berges, certify that:

 

1.            I have reviewed this annual report on Form 10-K/A (Amendment No. 3) of Hexcel Corporation;

 

2.             Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

 

3.             Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

 

4.             The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

 

a)          designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

b)         evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

 

c)          presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

 

5.             The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors:

 

a)          all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

 

b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

 

6.             The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

 

July 10, 2003

 

/s/ DAVID E. BERGES

(Date)

 

David E. Berges

 

 

Chairman of the Board of Directors,
President and Chief Executive Officer

 

14

 

I, Stephen C. Forsyth, certify that:

 

1.             I have reviewed this annual report on Form 10-K/A (Amendment No. 3) of Hexcel Corporation;

 

2.             Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

 

3.             Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

 

4.             The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

 

a.           designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

b.          evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

 

c.           presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

 

5.             The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

 

a.           all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

 

b.          any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

 

6.             The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

 

July 10, 2003

 

/s/ STEPHEN C. FORSYTH

(Date)

 

Stephen C. Forsyth

 

 

Executive Vice President and
Chief Financial Officer

 

15

 

Consolidated Financial Statements

 

Description

 

Management Responsibility for Consolidated Financial Statements

Report of Independent Auditors

Consolidated Financial Statements Hexcel Corporation and Subsidiaries:

Consolidated Balance Sheets as of December 31, 2002 and 2001

Consolidated Statements of Operations for each of the three years ended December 31, 2002

Consolidated Statements of Stockholders’ Equity (Deficit) and Comprehensive Income (Loss) for each of the three years ended December 31, 2002

Consolidated Statements of Cash Flows for each of the three years ended December 31, 2002

Notes to the Consolidated Financial Statements

 

Independent Auditors’ Report

Financial Statements BHA Aero Composite Parts Co. Ltd.:

Balance Sheets as of December 31, 2002 and 2001

Statements of Operations for each of the three years ended December 31, 2002

Statements of Owners’ Equity for each of the three years ended December 31, 2002

Statements of Cash Flows for each of the three years ended December 31, 2002

Notes to the Financial Statements

 

Independent Auditors’ Report

Consolidated Financial Statements Asahi-Schwebel Co. Ltd. and Subsidiaries:

Consolidated Balance Sheets as of March 31, 2003 and 2002

Consolidated Statements of Operations and Unappropriated Retained Earnings for each of the three years ended March 31, 2003

Consolidated Statements of Comprehensive Income (Loss) for each of the three years ended March 31, 2003

Consolidated Statements of Cash Flows for each of the three years ended March 31, 2003

Notes to the Consolidated Financial Statements

Report of Independent Accountants to the Shareholders of Asahi-Schwebel (Taiwan) Co., Ltd.

Report of Independent Accountants to the Shareholders of NITTOBO ASCO Glass Fiber Co., Ltd.

 

Report of Independent Auditors

Consolidated Financial Statements Hexcel S.A. and Subsidiaries:

Consolidated Balance Sheets as of December 31, 2002 and 2001

Consolidated Statements of Operations for the years ended December 31, 2002 and 2001

Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the years ended December 31, 2002 and 2001

Consolidated Statements of Cash Flows for the years ended December 31, 2002 and 2001

Notes to the Consolidated Financial Statements

 

Report of Independent Auditors

Consolidated Financial Statements Hexcel Holdings (UK) Limited and Subsidiaries:

Consolidated Balance Sheets as of December 31, 2002 and 2001

Consolidated Statements of Operations for the years ended December 31, 2002 and 2001

Consolidated Statements of Stockholders’ Equity (Deficit) and Comprehensive Income for the years ended December 31, 2002 and 2001

Consolidated Statements of Cash Flows for the years ended December 31, 2002 and 2001

Notes to the Consolidated Financial Statements

 

Report of Independent Auditors on Financial Statement Schedule

Schedule of Valuation and Qualifying Accounts

 

16

 

Management Responsibility for Consolidated Financial Statements

 

Hexcel management has prepared and is responsible for the consolidated financial statements and the related financial data contained in this report.  These financial statements, which include estimates, were prepared in accordance with accounting principles generally accepted in the United States of America.  Management uses its best judgment to ensure that such statements reflect fairly the consolidated financial position, results of operations and cash flows of the Company.

 

Hexcel maintains accounting and other control systems which management believes provide reasonable assurance that financial records are reliable for purposes of preparing financial statements, and that assets are safeguarded and accounted for properly.  Underlying this concept of reasonable assurance is the premise that the cost of control should not exceed benefits derived from control.

 

The Audit Committee of the Board of Directors reviews and monitors the financial reports and accounting practices of Hexcel.  These reports and practices are reviewed regularly by management and by the Company’s independent accountants, PricewaterhouseCoopers LLP, in connection with the audit of the Company’s consolidated financial statements.  The Audit Committee, composed solely of outside directors, meets periodically, separately and jointly, with management and the independent accountants.

 

 

/s/ DAVID E. BERGES

 

David E. Berges

Chief Executive Officer

 

 

/s/ STEPHEN C. FORSYTH

 

Stephen C. Forsyth

Chief Financial Officer

 

 

/s/ WILLIAM J. FAZIO

 

William J. Fazio

Chief Accounting Officer

 

17

 

Report of Independent Auditors

 

To the Board of Directors and
Stockholders of Hexcel Corporation:

 

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of stockholders’ equity (deficit) and comprehensive income (loss) and of cash flows present fairly, in all material respects, the financial position of Hexcel Corporation and its subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.  These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

 

As discussed in Notes 1 and 3 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” effective January 1, 2002.

 

 

/s/ PRICEWATERHOUSECOOPERS LLP

 

PricewaterhouseCoopers LLP
Stamford, Connecticut
February 28, 2003, except for Notes 2 and 8 which are as of March 19, 2003 and Note 25 which is as of July 8, 2003

 

18

 

Hexcel Corporation and Subsidiaries

Consolidated Balance Sheets
As of December 31,

 

 

 

Unaudited
Pro Forma
(see Note 24)

 

 

 

 

 

(In millions, except per share data)

 

2002

 

2002

 

2001

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

12.6

 

$

8.2

 

$

11.6

 

Accounts receivable, net

 

117.3

 

117.3

 

140.5

 

Inventories, net

 

113.6

 

113.6

 

131.7

 

Prepaid expenses and other assets

 

9.2

 

9.2

 

4.4

 

Total current assets

 

252.7

 

248.3

 

288.2

 

 

 

 

 

 

 

 

 

Net property, plant and equipment

 

309.4

 

309.4

 

329.2

 

Goodwill, net

 

74.4

 

74.4

 

72.4

 

Investments in affiliated companies

 

34.0

 

34.0

 

56.9

 

Other assets

 

46.9

 

42.0

 

42.7

 

 

 

 

 

 

 

 

 

Total assets

 

$

717.4

 

$

708.1

 

$

789.4

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Notes payable and current maturities of capital lease obligations

 

$

6.2

 

$

621.7

 

$

17.4

 

Accounts payable

 

54.9

 

54.9

 

58.6

 

Accrued compensation and benefits

 

37.6

 

37.6

 

42.6

 

Accrued interest

 

15.9

 

19.1

 

18.8

 

Business consolidation and restructuring liabilities

 

10.5

 

10.5

 

33.4

 

Other accrued liabilities

 

35.3

 

35.3

 

33.7

 

Total current liabilities

 

160.4

 

779.1

 

204.5

 

 

 

 

 

 

 

 

 

Long-term notes payable and capital lease obligations

 

512.4

 

—

 

668.5

 

Long-term retirement obligations

 

48.1

 

48.1

 

31.3

 

Other non-current liabilities

 

8.3

 

8.3

 

17.7

 

Total liabilities

 

729.2

 

835.5

 

922.0

 

 

 

 

 

 

 

 

 

Commitments and contingencies (see Note 16)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mandatorily redeemable convertible preferred stock, 125,000 series A shares and 125,000 series B shares authorized, issued and outstanding

 

96.4

 

—

 

—

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

Preferred stock, no par value, 20.0 shares of stock authorized, no shares issued or outstanding

 

—

 

—

 

—

 

Common stock, $0.01 par value, 100.0 shares of stock authorized, shares issued of 39.8 at December 31, 2002 and 39.4 at December 31, 2001

 

0.4

 

0.4

 

0.4

 

Additional paid-in capital

 

311.6

 

288.2

 

287.7

 

Accumulated deficit

 

(385.7

)

(381.5

)

(367.9

)

Accumulated other comprehensive loss

 

(21.2

)

(21.2

)

(39.7

)

 

 

(94.9

)

(114.1

)

(119.5

)

Less- Treasury stock, at cost, 1.3 shares at December 31, 2002 and 1.2 shares at December 31, 2001

 

(13.3

)

(13.3

)

(13.1

)

Total stockholders’ equity (deficit)

 

(108.2

)

(127.4

)

(132.6

)

Total liabilities and stockholders’ equity (deficit)

 

$

717.4

 

$

708.1

 

$

789.4

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

19

 

Hexcel Corporation and Subsidiaries

Consolidated Statements of Operations
For the Years Ended December 31,

 

(In millions, except per share data)

 

2002

 

2001

 

2000

 

 

 

 

 

 

 

 

 

Net sales

 

$

850.8

 

$

1,009.4

 

$

1,055.7

 

Cost of sales

 

689.5

 

818.6

 

824.3

 

 

 

 

 

 

 

 

 

Gross margin

 

161.3

 

190.8

 

231.4

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

85.9

 

120.9

 

123.9

 

Research and technology expenses

 

14.7

 

18.6

 

21.2

 

Business consolidation and restructuring expenses

 

0.5

 

58.4

 

10.9

 

Impairment of goodwill and other purchased intangibles

 

—

 

309.1

 

—

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

60.2

 

(316.2

)

75.4

 

 

 

 

 

 

 

 

 

Litigation gain

 

9.8

 

—

 

—

 

Interest expense

 

(62.8

)

(64.8

)

(68.7

)

Gain (loss) on early retirement of debt

 

0.5

 

(2.7

)

—

 

Gain on sale of Bellingham aircraft interiors business

 

—

 

—

 

68.3

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

7.7

 

(383.7

)

75.0

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

11.3

 

40.5

 

26.3

 

 

 

 

 

 

 

 

 

Income (loss) before equity in earnings (losses)

 

(3.6

)

(424.2

)

48.7

 

Equity in earnings (losses) of and write-downs of an investment in affiliated companies

 

(10.0

)

(9.5

)

5.5

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(13.6

)

$

(433.7

)

$

54.2

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

Basic

 

$

(0.35

)

$

(11.54

)

$

1.47

 

Diluted

 

$

(0.35

)

$

(11.54

)

$

1.32

 

 

 

 

 

 

 

 

 

Weighted average shares:

 

 

 

 

 

 

 

Basic

 

38.4

 

37.6

 

36.8

 

Diluted

 

38.4

 

37.6

 

45.7

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

20

 

Hexcel Corporation and Subsidiaries

Consolidated Statements of Stockholders’ Equity (Deficit) and Comprehensive Income (Loss)
For the Years Ended December 31, 2002, 2001 and 2000

 

 

 

Common Stock

 

Retained
Earnings
(Accumulated
Deficit)

 

Accumulated
Other
Comprehensive
Income (Loss)

 

Treasury
Shares

 

Total
Stockholders’
Equity (Deficit)

 

Comprehensive
Income (Loss)

 

(In millions)

 

Par

 

Additional
Paid-in
Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2000

 

$

0.4

 

$

273.6

 

$

11.6

 

$

(4.8

)

$

(10.7

)

$

270.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

54.2

 

 

 

 

 

54.2

 

$

54.2

 

Currency translation adjustment

 

 

 

 

 

 

 

(10.2

)

 

 

(10.2

)

(10.2

)

Minimum pension obligation

 

 

 

 

 

 

 

(5.0

)

 

 

(5.0

)

(5.0

)

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

39.0

 

Activity under stock plans and other

 

 

 

7.1

 

 

 

 

 

(0.5

)

6.6

 

 

 

Balance, December 31, 2000

 

$

0.4

 

$

280.7

 

$

65.8

 

$

(20.0

)

$

(11.2

)

$

315.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

(433.7

)

 

 

 

 

(433.7

)

$

(433.7

)

Currency translation adjustment