Exhibit
10.9


EMPLOYEE OPTION AGREEMENT


under the


Hexcel Corporation 2003
Incentive Stock Plan


 


EMPLOYEE OPTION
AGREEMENT, dated as of the Grant Date, by and between the Optionee and Hexcel
Corporation (the “Company”).


W
I  T  N  E  S  S  E  T  H:


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


WHEREAS, the
Compensation Committee (the “Committee”) of the Board of Directors of the
Company (the “Board”) has determined that it is desirable and in the best
interest of the Company to grant to the Optionee a stock option as an incentive
for the Optionee to advance the interests of the Company;


NOW, THEREFORE,
the parties agree as follows:


1.             Notice of Grant; Incorporation
of Plan.  A Notice of Grant is
attached hereto as Annex A and 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 Employee Option Agreement, and this Employee
Option 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 Option granted herein constitutes an Award within the meaning of the
Plan.


2.             Grant of Option.  Pursuant to the Plan and subject to the terms
and conditions set forth herein and therein, the Company hereby grants to the
Optionee the right and option (the “Option”) to purchase all or any part of the
Option Shares of the Company’s common stock, $.01 par value per share (the “Common
Stock”), which Option is not intended to qualify as an incentive stock option,
as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).


3.             Purchase Price.  The purchase price per share of the Option
Shares shall be the Purchase Price.


4.             Term of Option.


(a)  Expiration
Date; Term.  Subject to Section 4(c)
below, the Option shall expire on, and shall no longer be exercisable
following, the tenth anniversary of the Grant Date. The ten-year period from
the Grant Date to its tenth anniversary shall constitute the “Term” of the
Option.













(b)  Vesting
Period; Exercisability.  Subject to
Section 4(c) below, the Option shall vest and become exercisable at the rate of
33-1/3% of the Option Shares on each of the first three anniversaries of the
Grant Date.


(c)  Termination of Employment; Change in
Control.


(i)
For purposes of the grant hereunder, any transfer of employment by the Optionee
among the Company and its Subsidiaries shall not be considered a termination of
employment. If the Optionee’s employment with the Company is terminated for
Cause (as defined in the last Section hereof), the Option, whether or not then
vested, shall be automatically terminated as of the date of such termination of
employment. If the Optionee’s employment with the Company shall terminate other
than by reason of Retirement (as defined in the last Section hereof),
Disability (as defined in the last Section hereof), death or Cause, the Option
(to the extent then vested) may be exercised at any time within ninety (90)
days after such termination (but not beyond the Term of the Option).  The Option, to the extent not then vested,
shall immediately expire upon such termination.


If the Optionee dies or becomes Disabled (A) while
employed by the Company or (B) within 90 days after the termination of his or
her employment other than for Cause or Retirement, the Option shall (I) become
fully and immediately vested and exercisable and (II) remain exercisable for
one year from the date of death or Disability (but not beyond the Term of the
Option).


If the Optionee’s employment terminates by reason of
Retirement, (A) the Option shall, if not fully vested at the time of such
termination, continue to vest in accordance with Section 4(b) above, and (B)
the Option shall expire upon the earlier to occur of the three year anniversary
date of such Retirement and the expiration of the Term. If the Optionee dies
during the three year period immediately following the Retirement of the
Optionee, the Options shall (I) become fully and immediately vested and
exercisable and (II) remain exercisable for the remainder of the three-year
period from the date of Retirement (but not beyond the Term of the Option).


(ii) In the event of a Change in Control (as defined
in the last Section hereof), the Option shall immediately become fully vested
and exercisable and the post-termination periods of exercisability set forth in
Section 4(c)(i) hereof shall apply, except that the post-termination period of
exercisability shall be extended and the Option shall remain exercisable for a
period of two years from the date of such termination of employment, if, within
two years after a Change in Control, (A) the Optionee’s employment is
terminated by the Company other than by reason of Retirement, Cause, Disability
or death or (B) the Optionee terminates the Optionee’s employment for Good
Reason (as defined in the last Section hereof).


(d)         Forfeiture of Option
on Certain Conditions.


(i)             Notwithstanding
anything to the contrary contained in this Employee Option Agreement, should
the Optionee while an employee or after termination of employment fail to
comply with the “Protective Condition” (as defined in Section 4(d)(ii)), then
the Option, to the extent not already exercised, shall immediately expire upon
the Optionee’s failure to meet such condition.



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(ii)          “Protective Condition”
shall mean that the Optionee (A) complies with all terms and provisions of any
obligation of confidentiality to the Company contained in a written agreement
signed by the Optionee, and (B) does not engage, in any capacity, directly or
indirectly, including but not limited to as employee, agent, consultant,
manager, executive, owner or stockholder (except as a passive investor holding
less than a 5% equity interest in any enterprise) in any business entity
engaged in competition with the business conducted by the Company on the date
of the Optionee’s termination of employment with the Company anywhere in the
world (except that the Optionee may be employed by a competitor of the Company
so long as the Optionee’s duties and responsibilities do not relate directly or
indirectly to the business segment of the new employer which is competitive
with the business conducted by the Company).


5.             Adjustment Upon Changes in
Capitalization.


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


(b)  Any
adjustment under this Section 5 in the number of Option Shares and the Purchase
Price shall apply to only the unexercised portion of the Option. If fractions
of a share would result from any such adjustment, the adjustment shall be
rounded down to the nearest whole number of shares.


6.             Method of Exercising Option and
Withholding.


(a)  The Option
shall be exercised by the delivery by the Optionee to the Company at its
principal office (or at such other address as may be established by the
Committee) of written notice of the number of Option Shares with respect to
which the Option is exercised, accompanied by payment in full of the aggregate
Purchase Price for such Option Shares. 
Payment for such Option Shares shall be made (i) in U.S. dollars by
personal check, bank draft or money order payable to the order of the Company,
or by money transfers or direct account debits to an account designated by the
Company; (ii) through the delivery of shares of Common Stock with a Fair Market
Value equal to the total payment due from the Optionee; (iii) pursuant to a “cashless
exercise” program if such a program is established by the Company; or (iv) by
any combination of the methods described in (i) through (iii) above.


(b)  The Company’s
obligation to deliver shares of Common Stock upon the exercise of the Option
shall be subject to the payment by the Optionee of applicable federal, state,
local and other withholding tax, if any. 
The Company or a Subsidiary shall, to the extent permitted by law, have
the right to deduct from any payment of any kind 



 3
 









otherwise due to the Optionee any federal, state,
local or other taxes required to be withheld with respect to such payment.


7.             Transfer.  Except as provided in this Section 7, the
Option is not transferable otherwise than by will or the laws of descent and
distribution, and the Option may be exercised during the Optionee’s lifetime
only by the Optionee.  Any attempt to
transfer the Option in contravention of this Section 7 is void ab initio.  The Option shall not be subject to execution,
attachment or other process. 
Notwithstanding the foregoing, the Optionee and, after the death of the
Optionee the estate or any estate beneficiary of the Optionee, shall be
permitted to transfer the Option 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 other equity
owners are such family members; provided, however, that no consideration can be
paid for the transfer of the Option and the transferee of the Option must agree
to be subject to all conditions applicable to the Option prior to its transfer.


8.             No Rights in Option Shares.  The Optionee shall have none of the rights of
a stockholder with respect to the Option Shares unless and until shares of
Common Stock are issued upon exercise of the Option.


9.             No Right to Employment.  Nothing contained herein shall be deemed to
confer upon the Optionee any right to remain as an employee of the Company.


10.                                 Section
409A


(a)       It is intended
that this Employee Option 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 Employee Option
Agreement shall be interpreted for all purposes in accordance with this intent.


(b)       Notwithstanding
any term or provision of this Employee Option Agreement (including any term or
provision of the Plan incorporated herein by reference), the parties hereto
agree that, from time to time, the Company may, without prior notice to or
consent of the Optionee, amend this Employee Option Agreement to the extent
determined by the Company, in the exercise of its discretion in good faith, to
be necessary or advisable to prevent the inclusion in the Optionee’s gross income
pursuant to the Applicable Regulations of any compensation intended to be
deferred hereunder. The Company shall notify the Optionee as soon as reasonably
practicable of any such amendment affecting the Optionee.


11.           Governing Law/Jurisdiction.  This Employee Option 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.


12.           Resolution of Disputes.  Any disputes arising under or in connection
with this Employee Option 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 Optionee, shall be borne by the Company in the event the
Optionee is the prevailing party in the 



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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 within the jurisdiction of an arbitrator.


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


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


15.           Counterparts.  This Employee Option 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.


16.           Miscellaneous.  This Employee Option Agreement cannot be
changed or terminated orally.  This
Employee Option 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.


17.           Definitions.  For purposes of this Employee Option
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;


(III)
“Cause” shall mean (A) the willful and continued failure by the Optionee to
substantially perform the Optionee’s duties with the Company (other than any
such failure resulting from the Optionee’s incapacity due to physical or mental
illness) after a written demand for substantial performance is delivered to the
Optionee by the Company, which demand specifically identifies the manner in
which the Company believes that the Optionee has not substantially performed
the Optionee’s duties, or (B) the willful engaging by the Optionee in conduct
which is demonstrably and materially injurious to the Company or its
Subsidiaries, monetarily or otherwise. 
For purposes of clauses (A) and (B) of this definition, no act, or
failure to act, on the Optionee’s part shall be deemed “willful” unless done,
or omitted to be done, by the Optionee not in good faith and without the
reasonable belief that the Optionee’s act, or failure to act, was in the best
interest of the Company;


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


(1)     any Person is or becomes the Beneficial
Owner, directly or indirectly, of 40% or more of either (a) the then
outstanding Common Stock of the Company (the “Outstanding Common Stock”) or (b)
the combined voting power of the then 



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outstanding securities entitled to vote
generally in the election of directors of the Company (the “Total Voting Power”);
excluding, however, the following: (i) any acquisition by the Company or any of
its Controlled Affiliates, (ii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any of its
Controlled Affiliates and (iii) any Person who becomes such a Beneficial Owner
in connection with a transaction described in the exclusion within paragraph
(3) below; or


(2)  a change in the composition of the Board such
that the individuals who, as of the effective date of this Employee Option
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 Company’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 a member of the Incumbent Board;
but, provided, further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a person or legal entity other than
the Board shall not be considered a member of the Incumbent Board; or


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


(4)  the approval by the stockholders of the
Company of a complete liquidation or dissolution of the Company;


(V)   “Disability” (or becoming “Disabled”) shall
mean that, as a result of the Optionee’s incapacity due to physical or mental
illness or injury, he or she shall not have performed all or 



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substantially all
of his or her usual duties as an employee of the Company for a period of more
than one-hundred-fifty (150) days in any period of one-hundred-eighty (180)
consecutive days;


(VI)  “Good Reason” for termination by the Optionee
of the Optionee’s employment shall mean the occurrence (without the Optionee’s
express written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to
act described in paragraphs (1), (5) or (6) below, such act or failure to act
is corrected prior to the date of termination of the Optionee’s employment:


(1)  a significant adverse alteration in the
nature or status of the Optionee’s responsibilities, position or authority from
those in effect immediately prior to the Change in Control;


(2)  a reduction by the Company in the Optionee’s
annual base salary as in effect on the date hereof or as the same may be
increased from time to time;


(3)  the relocation of the Optionee’s principal
place of employment to a location more than fifty (50) miles from the Optionee’s
principal place of employment immediately prior to the Change in Control or the
Company’s requiring the Optionee to work anywhere other than at such principal
place of employment (or permitted relocation thereof) except for required
travel on the Company’s business to an extent substantially consistent with the
Optionee’s present business travel obligations;


(4)  the failure by the Company to pay to the
Optionee any portion of the Optionee’s current compensation, or to pay to the
Optionee any portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven (7) days of the date
such compensation is due;


(5)  the failure by the Company to continue in
effect any compensation plan in which the Optionee participates immediately
prior to the Change in Control which is material to the Optionee’s total
compensation, or any substitute plans adopted prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by
the Company to continue the Optionee’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amount or timing of payment of benefits provided and the level
of the Optionee’s participation relative to other participants, as existed
immediately prior to the Change in Control; or


(6)  the failure by the Company to continue to
provide the Optionee with benefits substantially similar to those enjoyed by
the Optionee under any of the Company’s pension, savings, life insurance,
medical, health and accident, or disability plans in which the Optionee was
participating immediately prior to the Change in Control (except for
across-the-board changes similarly affecting all senior executives of the
Company and all senior executives of any Person in control of the Company), the
taking of any other action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the Optionee of any material
fringe benefit enjoyed by the Optionee at the time of the Change in Control, or
the failure by the Company to provide the Optionee with the number of paid
vacation days to which the Optionee is entitled on the basis of 



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years of service with the
Company in accordance with the Company’s normal vacation policy in effect at
the time of the Change in Control.


The Optionee’s right to terminate the Optionee’s
employment for Good Reason shall not be affected by the Optionee’s incapacity
due to physical or mental illness. The Optionee’s continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.


For purposes of any determination regarding the
existence of Good Reason, any claim by the Optionee that Good Reason exists
shall be presumed to be correct unless the Company establishes to the Board by
clear and convincing evidence that Good Reason does not exist;


(VII)      “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


(VIII)    “Retirement” shall mean termination of the
Optionee’s employment, other than by reason of death or Cause, either (A) at or
after age 65 or (B) at or after age 55 after five (5) years of employment by
the Company (or a Subsidiary thereof).


 



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Annex A


NOTICE OF
GRANT


EMPLOYEE
STOCK OPTION


HEXCEL
CORPORATION 2003 INCENTIVE STOCK PLAN


 


The following
employee of Hexcel Corporation, a Delaware corporation or a Subsidiary, has
been granted an option to purchase shares of the Common Stock of Hexcel, $.01
par value, in accordance with the terms of this Notice of Grant and the
Employee Option Agreement to which this Notice of Grant is attached.


The following is a
summary of the principal terms of the option which has been granted.  The terms below shall have the meanings
ascribed to them below when used in the Employee Option Agreement.


	
  Optionee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   Address of
  Optionee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Foreign Sub Plan, if applicable

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Grant Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Purchase Price

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Aggregate Number of Shares Granted (the “Option
  Shares”)

  	
   

  	
   

  
									



 


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


	
   

  	
  

  	
  HEXCEL CORPORATION

  	
   

  	
   

  
	
  Optionee

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Ira J. Krakower

  	
   

  
	
   

  	
   

  	
   

  	
  Sr. Vice President