Document:

Exhibit
10.3(a)

 

Annex I

 

HEXCEL CORPORATION

2003 INCENTIVE STOCK PLAN

As Amended and Restated December 11, 2003

 

I. 
Purpose

 

The
Hexcel Corporation 2003 Incentive Stock Plan (the “Existing Plan”) was approved
by the Board on December 12, 2002 and adopted on March 18, 2003 by
the stockholders of the Corporation as an amendment and restatement of the Old
Incentive Stock Plan and the Old Broad Based Plan (the Old Incentive Stock Plan
together with the Old Broad Based Plan to be collectively referred to as the
“Amended and Restated Plans”).  The
Existing Plan combined the Amended and Restated Plans into one plan and
increased the number of shares available under the Amended and Restated Plans.  Upon the Effective Date, each Award (as
defined in the Amended and Restated Plans) which was outstanding under either
of the Amended and Restated Plans became an Award outstanding under the
Existing Plan, and continued to be subject to the same terms and conditions to
which such Award was subject prior to the adoption of the Existing Plan.

 

This
Amended and Restated Hexcel Corporation 2003 Incentive Stock Plan (this “Plan”)
was approved by the Board on, and became effective on, December 11, 2003.

 

This Plan is
intended to attract, retain and provide incentives to Employees, officers,
Directors and consultants of the Corporation, and to thereby increase overall
stockholders’ value.  This Plan
generally provides for the granting of stock, stock options, stock appreciation
rights, restricted shares, other stock-based awards or any combination of the
foregoing to the eligible participants.

 

II.  Definitions

 

(a)                                  “Award”
includes, without limitation, stock options (including incentive stock options
within the meaning of Section 422(b) of the Code) with or without stock
appreciation rights, dividend equivalent rights, stock awards, restricted share
awards, or other awards that are valued in whole or in part by reference to, or
are otherwise based on, the Common Stock (“other Common Stock-based Awards”),
all on a stand-alone, combination or tandem basis, as described in or granted
under this Plan.

 

(b)                                 “Award
Agreement” means a written agreement setting forth the terms and conditions of
each Award made under this Plan.

 

(c)                                  “Board”
means the Board of Directors of the Corporation.

 

(d)                                 “Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

(e)                                  “Committee”
means the Compensation Committee of the Board or such other committee of the
Board as may be designated by the Board from time to time to administer this
Plan.

 

 

(f)                                    “Common
Stock” means the $.01 par value common stock of the Corporation.

 

(g)                                 “Corporation”
means Hexcel Corporation, a Delaware corporation.

 

(h)                                 “Director”
means a member of the Board.

 

(i)                                     “Effective
Date” means March 18, 2003.

 

(j)                                     “Employee”
means an employee of the Corporation or a Subsidiary.

 

(k)                                  “Fair
Market Value” means the closing price for the Common Stock as reported in
publications of general circulation from the New York Stock Exchange
Consolidated Transactions Tape on such date, or, if there were no sales on the
valuation date, on the next preceding date on which such closing price was
recorded; provided, however, that the Committee may specify some other
definition of Fair Market Value in good faith with respect to any particular Award.

 

(l)                                     “Old
Broad Based Plan” means the Hexcel Corporation 1998 Broad Based Incentive Stock
Plan, dated as of February 5, 1998, as amended on February 3, 2000,
February 1, 2001 and January 10, 2002

 

(m)                               “Old
Incentive Stock Plan” means the Hexcel Corporation Incentive Stock Plan, dated
as of February 21, 1996, which Plan was amended and restated
January 30, 1997, further amended on December 10, 1997, further
amended on March 25, 1999, further amended on December 2, 1999, amended
and restated on February 3, 2000, amended and restated on
December 19, 2000, and further amended on January 10, 2002

 

(n)                                 “Participant”
means an Employee, officer, Director or consultant who has been granted an
Award under this Plan.

 

(o)                                 “Subsidiary”
means any corporation or other entity, whether domestic or foreign, in which
the Corporation has or obtains, directly or indirectly, a proprietary interest
of more than 50% by reason of stock ownership or otherwise.

 

III. 
Eligibility

 

Any
Employee, officer, Director or consultant of the Corporation or a Subsidiary
selected by the Committee is eligible to receive an Award pursuant to
Section VI hereof.

 

IV.  Plan Administration

 

(a)                                  Except
as otherwise determined by the Board, this Plan shall be administered by the
Committee.  The Board, or the Committee
to the extent determined by the Board, shall periodically make determinations
with respect to the participation of Employees, officers, Directors and
consultants in this Plan and, except as otherwise required by law or this Plan,
the grant terms of Awards, including vesting schedules, price, restriction or
option period, dividend rights, post-retirement and termination rights, payment
alternatives such as cash, stock, contingent awards or other means of payment
consistent with the purposes of this Plan, and

 

2

 

such other terms and
conditions as the Board or the Committee deems appropriate which shall be
contained in an Award Agreement with respect to a Participant.

 

(b)                                 The
Committee shall have authority to interpret and construe the provisions of this
Plan and any Award Agreement and make determinations pursuant to any Plan
provision or Award Agreement which shall be final and binding on all
persons.  No member of the Committee
shall be liable for any action or determination made in good faith, and the
members shall be entitled to indemnification and reimbursement in the manner
provided in the Corporation’s Certificate of Incorporation, as it may be
amended from time to time.

 

The Committee shall have the authority at the time of the grant of any
Award to provide for the conditions and circumstances under which such Award
shall be forfeited.  The Committee shall
have the authority to accelerate the vesting of any Award and the time at which
any Award becomes exercisable. The Committee shall have the authority to cancel
an Award (with the consent of the Participant holding such Award) on such terms
and conditions as the Committee shall determine.

 

V.  Capital Stock Subject to the Provisions of
this Plan

 

(a)                                  The
capital stock subject to the provisions of this Plan shall be shares of
authorized but unissued Common Stock and shares of Common Stock held as
treasury stock.  Subject to adjustment
in accordance with the provisions of Section XI, and subject to
Section V(c) below, the maximum number of shares of Common Stock that
shall be available for grants of Awards under this Plan shall be 14,233,848,
which, as of the Effective Date, includes (i) 8,483,918 shares of Common Stock
subject to outstanding grants of Awards under this Plan, and (ii) 5,749,930
shares of Common Stock available for future grants of Awards under this Plan.

 

(b)                                 The
grant of a restricted share Award shall be deemed to be equal to the maximum
number of shares which may be issued under the Award.  Awards payable only in cash will not reduce the number of shares
available for Awards granted under this Plan.

 

(c)                                  There
shall be carried forward and be available for Awards under this Plan, in
addition to shares available for grant under paragraph (a) of this
Section V, all of the following: 
(i) shares represented by Awards which are cancelled, forfeited,
surrendered, terminated, paid in cash or expire unexercised; and (ii) the
excess amount of variable Awards which become fixed at less than their maximum
limitations.

 

VI.  Awards Under This Plan

 

As the
Board or Committee may determine, the following types of Awards and other
Common Stock-based Awards may be granted under this Plan on a stand-alone,
combination or tandem basis:

 

(a)                                  Stock
Option.  A right to buy a
specified number of shares of Common Stock at a fixed exercise price during a
specified time, all as the Committee may determine.

 

(b)                                 Incentive
Stock Option.  An Award which
may be granted only to Employees in the form of a stock option which shall
comply with the requirements of Code Section 422 or any successor
section as it may be amended from time to time. The exercise price of any
incentive

 

3

 

stock option shall not be
less than 100% of the Fair Market Value of the Common Stock on the date of
grant of the incentive stock option Award. 
Subject to adjustment in accordance with the provisions of
Section XI, the aggregate number of shares which may be subject to
incentive stock option Awards under this Plan shall not exceed the maximum
number of shares provided in paragraph (a) of Section V above.  To the extent that the aggregate Fair Market
Value of Common Stock with respect to which options intended to be incentive
stock options are exercisable for the first time by any individual during any
calendar year exceeds $100,000, such options shall be treated as options which
are not incentive stock options.

 

(c)                                  Stock
Option in lieu of Compensation Election. 
A right given with respect to a year to a Director, officer or key
Employee to elect to exchange annual retainers, fees or compensation for stock
options.

 

(d)                                 Stock
Appreciation Right.  A right which
may or may not be contained in the grant of a stock option or incentive stock
option to receive the excess of the Fair Market Value of a share of Common
Stock on the date the option is surrendered over the option exercise price or
other specified amount contained in the Award Agreement.

 

(e)                                  Restricted
Shares.  A transfer of Common Stock
to a Participant subject to forfeiture until such restrictions, terms and
conditions as the Committee may determine are fulfilled.

 

(f)                                    Dividend
or Equivalent.  A right to receive
dividends or their equivalent in value in Common Stock, cash or in a
combination of both with respect to any new or previously existing Award.

 

(g)                                 Stock Award.  An unrestricted transfer of ownership of
Common Stock.

 

(h)                                 Other
Stock-Based Awards.  Other
Common Stock-based Awards which are related to or serve a similar function to
those Awards set forth in this Section VI.

 

VII.  Award Agreements

 

Each
Award under this Plan shall be evidenced by an Award Agreement setting forth
the terms and conditions of the Award and executed by the Corporation and
Participant.

 

VIII.  Other Terms and Conditions

 

(a)                                  Assignability.  Unless provided to the contrary in any
Award, no Award shall be assignable or transferable except by will, by the laws
of descent and distribution and during the lifetime of a Participant, the Award
shall be exercisable only by such Participant. 
No Award granted under this Plan shall be subject to execution,
attachment or process.

 

(b)                                 Termination
of Employment or Other Relationship.  The Committee shall determine the disposition of the grant of
each Award in the event of the retirement, disability, death or other
termination of a Participant’s employment or other relationship with the
Corporation or a Subsidiary.

 

(c)                                  Rights as a
Stockholder.  A Participant
shall have no rights as a stockholder with respect to shares covered by an
Award until the date the Participant is the holder of record.  No

 

4

 

adjustment will be made
for dividends or other rights for which the record date is prior to such date.

 

(d)                                 No Obligation
to Exercise.  The grant of an
Award shall impose no obligation upon the Participant to exercise the Award.

 

(e)                                  Payments by
Participants.  The Committee
may determine that Awards for which a payment is due from a Participant may be
payable:  (i) in U.S. dollars by
personal check, bank draft or money order payable to the order of the
Corporation, by money transfers or direct account debits; (ii) through the
delivery or deemed delivery based on attestation to the ownership of shares of
Common Stock with a Fair Market Value equal to the total payment due from the
Participant; (iii) pursuant to a “cashless exercise” program if established by
the Corporation; (iv) by a combination of the methods described in (i) through
(iii) above; or (v) by such other methods as the Committee may deem
appropriate.

 

(f)                                    Withholding.  Except as otherwise provided by the
Committee, (i) the deduction of withholding and any other taxes required by law
will be made from all amounts paid in cash and (ii) in the case of payments of
Awards in shares of Common Stock, the Participant shall be required to pay the
amount of any taxes required to be withheld prior to receipt of such stock, or
alternatively, a number of shares the Fair Market Value of which equals the
amount required to be withheld may be deducted from the payment.

 

(g)                                 Maximum
Awards.  The maximum number of
shares of Common Stock that may be issued to any single Participant pursuant to
options under this Plan is equal to the maximum number of shares provided for
in paragraph (a) of Section V.

 

IX.  Termination, Modification and Amendments

 

(a)                                  The
Committee may at any time terminate this Plan or from time to time make such
modifications or amendments of this Plan as it may deem advisable; provided,
however, that no amendments to this Plan which require stockholder approval
under applicable law, rule or regulation shall become effective unless the same
shall be approved by the requisite vote of the Corporation’s stockholders.

 

(b)                                 No
termination, modification or amendment of this Plan may adversely affect the
rights conferred by an Award without the consent of the recipient thereof.

 

5

 

X.  Recapitalization

 

The
aggregate number of shares of Common Stock as to which Awards may be granted to
Participants, the number of shares thereof covered by each outstanding Award,
and the per share price thereof set forth in each outstanding Award, shall all
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without receipt of consideration
by the Corporation, or other change in corporate or capital structure;
provided, however, that any fractional shares resulting from any such
adjustment shall be eliminated.  The
Committee shall also make the foregoing changes and any other changes,
including changes in the classes of securities or other consideration
available, to the extent it is deemed necessary or desirable to preserve the
intended benefits of this Plan for the Corporation and the Participants in the
event of any other reorganization, recapitalization, merger, consolidation,
spin-off, extraordinary dividend or other distribution or similar transaction.

 

XI.  No Right to Employment

 

No
person shall have any claim or right to be granted an Award, and the grant of
an Award shall not be construed as giving a Participant the right to be
retained in the employ of, or in any other relationship with, the Corporation
or a Subsidiary. Further, the Corporation and each Subsidiary expressly reserve
the right at any time to dismiss a Participant free from any liability, or any
claim under this Plan, except as provided herein or in any Award Agreement
issued hereunder or in any other agreement applicable between a Participant and
the Corporation or a Subsidiary.

 

XII.  Governing Law

 

To the
extent that federal laws do not otherwise control, this Plan shall be construed
in accordance with and governed by the laws of the State of Delaware.

 

XIII.  Savings Clause

 

This
Plan is intended to comply in all aspects with applicable laws and
regulations.  In case any one more of
the provisions of this Plan shall be held invalid, illegal or unenforceable in
any respect under applicable law and regulation, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and the invalid, illegal or unenforceable provision shall be
deemed null and void; however, to the extent permissible by law, any provision
which could be deemed null and void shall first be construed, interpreted or
revised retroactively to permit this Plan to be construed in compliance with
all applicable laws so as to foster the intent of this Plan.

 

XIV.  Effective Date and Term

 

This
Plan shall be effective as of the Effective Date.

 

This Plan shall terminate on the tenth anniversary
date of the Effective Date.  No Awards
shall be granted after the termination of this Plan.

 

6Exhibit
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 (to the extent then vested) may be exercised at
any time within one year after the Optionee’s death or Disability (but not beyond
the Term of the Option).  The Option, to
the extent not then vested, shall immediately expire upon such death or
disability.

 

If
the Optionee’s employment terminates by reason of Retirement, the Option shall
(A) become fully and immediately vested and exercisable and (B) remain
exercisable for three years from the date of such 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 three 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).

 

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

 

2

 

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 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 shall 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.                                 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.

 

3

 

11.                                 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 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.

 

12.                                 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.

 

13.                                 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.

 

14.                                 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.

 

15.                                 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.

 

16.                                 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,

 

4

 

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 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 pursuant to
the terms of each then existing Stockholders Agreement or 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

 

5

 

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
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)   “Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time;

 

(VII)  “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

 

6

 

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 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;

 

(VIII)                    “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;

 

(IX)                           “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);

 

(X)                               “Stockholders Agreement” shall mean any
stockholders agreement, governance agreement or other similar agreement between
the Company and a holder or holders of Voting Securities; and

 

(XI)                           “Voting Securities” means Common Stock and
any other securities of the Company entitled to vote generally in the election
of directors of the Company.

 

7

 

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

  	
   

  
	
   

  	
   

  
	
  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

  

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]