Exhibit 10.1

 

FY 2011

 

REVISED EMPLOYEE OPTION AGREEMENT

under the

Hexcel Corporation 2003 Incentive Stock Plan

 

This Employee Option Agreement (the “Agreement”), is entered into as of the
Grant Date, by and between the Optionee and Hexcel Corporation, a Delaware
corporation (the “Company”).

 

The Company maintains the Hexcel Corporation 2003 Incentive Stock Plan (the
“Plan”).  The Compensation Committee (the “Committee”) of the Board of Directors
of the Company (the “Board”) has determined that the Optionee shall be granted a
Stock Option upon the terms and subject to the conditions hereinafter
contained.  Capitalized terms used but not defined herein shall have the meaning
assigned to them in the Plan.

 

1.             Notice of Grant; Acceptance of Agreement.  The aggregate number
of shares granted (the “Option Shares”) and the Grant Date shall be as set forth
under Optionee’s account on Merrill Lynch Benefits OnLine®.  Optionee will be
deemed to accept the terms and conditions of this Agreement by clicking the
“Accept” button on the Merrill Lynch Benefits OnLine® Award Acceptance screen
with regard to the Option.

 

2.             Incorporation of Plan.  The Plan is incorporated by reference and
made a part of this Agreement, and this Agreement shall be subject to the terms
of the Plan, as the Plan may be amended from time to time, provided that any
such amendment of the Plan must be made in accordance with Section IX of the
Plan.  The Option granted herein constitutes an Award within the meaning of the
Plan.

 

3.             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”).

 

4.             Purchase Price.  The Purchase Price per share of the Option
Shares is the Fair Market Value per share of Common Stock as of the Grant Date.

 

5.             Terms of Option.

 

(a)           Expiration Date; Term.  Subject to Section 5(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 5(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.

 

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(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.  Any change in employment that does not constitute a
“separation from service” within the meaning of Section 1.409A-1(h) of the
Treasury Regulations (or any successor provision) shall not be considered a
termination of employment.  Any change in employment that does constitute a
“separation from service” within the meaning of Section 1.409A-1(h) of the
Treasury Regulations (or any successor provision) shall 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 5(b) above, and (B) the Option shall expire upon the
earlier to occur of the five-year anniversary date of such Retirement and the
expiration of the Term. If the Optionee dies during the five-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 five-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 5(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.    Optionee hereby
acknowledges that the Company has given or will give Optionee access to certain
confidential, proprietary or trade secret information, which the Company
considers extremely valuable and which provides the Company with a competitive
advantage in the markets in which the Company develops or sells its products. 
The Optionee further acknowledges that the use of such information by Optionee
other than in furtherance of Optionee’s job responsibilities with the Company
would be extremely detrimental to the Company and would cause immediate and
irreparable harm to the

 

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Company.  In exchange for access to such confidential, proprietary or trade
secret information, Optionee hereby agrees as follows:

 

(i)            Notwithstanding anything to the contrary contained in this
Agreement, should the Optionee breach the “Protective Condition” (as defined in
Section (ii)), then (A) the Option, to the extent not previously exercised,
shall immediately be cancelled upon such breach, (B) the Optionee shall
immediately deliver to the Company the number of Option Shares the Optionee
received during the 180-day period immediately prior to such breach and (C) if
any Option Shares were sold during the 180-day period immediately prior to such
breach, the Optionee shall immediately deliver to the Company all proceeds of
such sales. “Option Shares” shall mean shares of Common Stock the Optionee may
receive pursuant to this Agreement. The Option Shares and proceeds to be
delivered under clauses (B) and (C) may be reduced to reflect (x) the exercise
price paid by the Optionee in connection with such Option Shares and (y) the
Optionee’s liability for taxes payable on such Option Shares and proceeds.

 

(ii)           “Protective Condition” shall mean that (A) the Optionee complies
with all terms and provisions of any obligation of confidentiality contained in
a written agreement with the Company (or a Subsidiary) signed by the Optionee,
or otherwise imposed on Optionee by applicable law, and (B) during the time
Optionee is employed by the Company (or a Subsidiary) and for a period of one
year after the Optionee’s employment with the Company (or a Subsidiary)
terminates, the Optionee 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 enterprise
then engaged in competition with the business conducted by the Company anywhere
in the world; provided, however, that the Optionee may be employed by a
competitor of the Company within such one year period so long as the duties and
responsibilities of Optionee’s position with such competitor do not involve the
same or substantially similar duties and responsibilities as those performed by
the Optionee for the Company (or a Subsidiary) in a business segment of the new
employer which competes with the business segment(s) with which the Optionee
worked or had supervisory authority over while employed by the Company (or a
Subsidiary).

 

(iii)          In the event any of clauses 5(d)(i), (ii) or (iii) are
unenforceable in the jurisdiction in which the Optionee is employed on the date
hereof, such clause(s) nevertheless shall be enforceable to the full extent
permitted by the laws of any jurisdiction in which the Optionee engages in any
activity prohibited by this clause 5(d).

 

(iv)          Notwithstanding any other provision in the Plan or this Agreement
to the contrary, whenever the Company may be entitled or required by law,
Company policy or the requirements of an exchange on which the Company’s shares
are listed for trading, to cause an Award to be forfeited or to recoup
compensation paid to the Optionee pursuant to the Plan, the Optionee shall
accept such forfeiture and comply with any Company request or demand for
recoupment.

 

6.             Adjustment Upon Changes in Capitalization.

 

(a)           The aggregate number of Option Shares and the Purchase Price shall
be proportionately 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

 

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capital structure.  The Committee shall also make the foregoing changes and any
other changes, including changes in the classes of securities available, to the
extent reasonably necessary or desirable to preserve the intended benefits under
this Agreement in the event of any other reorganization, recapitalization,
merger, consolidation, spin-off, extraordinary dividend or other distribution or
similar transaction involving the Company.

 

(b)           Any adjustment under this Section 6 in the number of Option Shares
and the Purchase Price shall be subject to Section 13 below and 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.

 

7.             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; (iv) by the Company withholding
shares of Common Stock with a Fair Market Value equal to the total payment due
from the Optionee; or (v) by any combination of the methods described in
(i) through (iv) 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 including Option Shares otherwise due to the
Optionee, any federal, state, local or other taxes required to be withheld with
respect to such payment.

 

8.             Transfer.  Except as provided in this Section 8, 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 8
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.

 

9.             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.

 

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10.           Issuance of Shares.  Any shares of Common Stock to be issued to
the Optionee under this Agreement may be issued in either certificated form, or
in uncertificated form (via the Direct Registration System or otherwise).

 

11.           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.

 

12.           Section 409A

 

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

 

(b)           Notwithstanding any term or provision of this 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 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.

 

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

 

13.           Modifications; Extensions.

 

(a)           Notwithstanding any term or provision of this Agreement (including
any term or provision of the Plan incorporated herein by reference), (i) no
Modification shall be made in respect to the Option if such Modification would
result in the Option constituting a deferral of compensation, and (ii) no
Extension shall be made in respect to the Option if such Extension would result
in the Option having an additional deferral feature from the Grant Date, in each
case within the meaning of applicable Treasury Regulations under Code section
409A.

 

(b)           Subject to subsection (d) below, a “Modification” for purposes of
subsection (a) means any change in the terms of the Option that may provide the
Optionee with a direct or indirect reduction in the Purchase Price of the
Option, regardless of whether the Optionee in fact benefits from the change in
terms.

 

(c)           Subject to subsection (d) below, an “Extension” for purposes of
subsection (a) means either (i) the provision to the Optionee of an additional
period of time within which to exercise the Option beyond the time originally
prescribed, or (ii) the conversion or exchange of the Option for a legally
binding right to compensation in a future taxable year, or (iii) the addition of
any feature for the deferral of compensation to the terms of the Option, or
(iv) any renewal of the Option that has the effect of (i) through (iii) above.

 

(d)           Notwithstanding subsections (b) and (c) above, it shall not be a
Modification or an Extension, respectively, to change the terms of an Option in
any of the ways or for any of the purposes provided in applicable Treasury
Regulations or other guidance under Section 409A of

 

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the Code as not resulting in a Modification or Extension for purposes of that
section.  In particular, it shall not be an Extension to extend the exercise
period of the Option to a date no later than the earlier of (i) the latest date
upon which the Option could have expired by its original terms under any
circumstances or (ii) the 10th anniversary of the Grant Date.

 

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

 

15.           Resolution of Disputes.  Any disputes arising under or in
connection with this Agreement shall be resolved by binding arbitration before
three arbitrators constituting an Employment Dispute Tribunal, to be held in
Connecticut 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. 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.

 

16.           Notices.  Any notice required or permitted under this Agreement
shall be deemed given when delivered personally, or when deposited in a United
States Post Office, postage prepaid, addressed, as appropriate, to the 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.

 

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

 

18.           Miscellaneous.  This Agreement cannot be changed or terminated
orally.  This Agreement and the Plan contain the entire agreement between the
parties relating to the subject matter hereof.  The section headings herein are
intended for reference only and shall not affect the interpretation hereof.

 

19.           Definitions.  For purposes of this Agreement:

 

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

 

(II)           “Beneficial Owner” (and variants thereof) shall have the meaning
given in Rule 13d-3 promulgated under the Exchange Act modified to reflect
ownership pursuant to Section 318(a) of the Code;

 

(III)         “Cause” shall have the meaning ascribed to such term in the
Executive Severance Agreement;

 

(IV)         “Change in Control” shall have the meaning ascribed to such term in
the Executive Severance Agreement;

 

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(V)           “Disability” (or becoming “Disabled”) shall have the meaning
ascribed to such term in the Executive Severance Agreement;

 

(VI)         “Executive Severance Agreement” shall mean the Employment
Agreement, Employment and Severance Agreement, or Executive Severance Agreement,
as applicable, between the Company and the Optionee, as amended from time to
time;

 

(VII)        “Good Reason” shall have the meaning ascribed to such term in the
Executive Severance Agreement;

 

(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, and shall include “persons acting as a group” within the meaning of
Section 1.409A-3(i)(5)(v)(B) of the Treasury Regulations (or any successor
provision); and

 

(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).

 

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