Exhibit 10.28


 


PERFORMANCE BASED AWARD
AGREEMENT


under the


Hexcel Corporation 2003 Incentive Stock Plan


 


This
Performance Based Award Agreement (the “Agreement”), is entered into as of the
Grant Date, by and between Hexcel Corporation, a Delaware corporation (the “Company”),
and the Grantee.


 


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 Grantee shall be granted a
Performance Based Award (“PBA”) upon the terms and subject to the conditions
hereinafter contained.  Capitalized terms
used but not defined herein shall have the meanings assigned to them in the
Plan.


 


1.             Notice of Grant; Incorporation
of Plan. A Notice of Grant is attached hereto as Annex A and incorporated
by reference herein. This PBA may result in the Grantee being awarded up to
that number of unrestricted shares of Common Stock equal to the Maximum Share
Award as set forth in the Notice of Grant. 
Unless otherwise provided herein, capitalized terms used in this
Agreement and set forth in the Notice of Grant shall have the meanings ascribed
to them in the Notice of Grant and capitalized terms used in this Agreement and
set forth in the Plan shall have the meanings ascribed to them in the Plan. The
Plan is incorporated by reference and made a part of this Agreement, and this
Agreement shall be subject to the terms of the Plan, as the Plan may be amended
from time to time, provided that any such amendment of the Plan must be made in
accordance with Section IX of the Plan. The PBA granted hereunder constitutes
an Award within the meaning of the Plan.


 


2.             Performance Periods; Award of Unrestricted
Shares of Common Stock.


 


(a)           There are three Annual Performance
Periods (2010, 2011 and 2012) and a Long-Term Performance Period (2010-2012)
under this PBA.  Each Annual Performance
Period shall have performance measures identical to those selected by the
Committee under the Annual Cash Bonus Plan for that Annual Performance Period. The
performance measure for the Long-Term Performance Period is the RONCE
performance measure as set forth on Annex B.


 


(b)           As soon as practicable (but in no
event later than 75 days) after the end of each Annual Performance Period, the Company
shall determine  the Annual Performance
Share Award for such Annual Performance Period by multiplying the Annual Target
Share Award by the Annual Payout Percentage achieved for such Annual
Performance Period.


 


(c)           So long as the Grantee is employed by
the Company or a Subsidiary at the end of the Long-Term Performance Period, the
Grantee shall, at such time as the number of unrestricted shares of Common
Stock is determined under this subsection 2(c), become entitled to receive that
number of unrestricted shares of Common Stock equal to the greater of (i) the
number determined in accordance with the Share Award 


 

















 


Schedule
that appears on Annex B and (ii) the sum of the Annual Performance Share Awards
for each of the three Annual Performance Periods; provided  however
that if the sum of the Annual Performance Share Awards is greater than the
number determined in accordance with the Share Award Schedule that appears on
Annex B, and the Company does not attain the Threshold Level of the Long-Term
Performance Measure, then the number of unrestricted shares of Common Stock to
be received by the Grantee shall be equal to 75% of the sum of the Annual
Performance Share Awards. The Committee shall certify the degree of achievement
of the Long-Term Performance Measure promptly (but in no event later than 75
days) after the end of the Long-Term Performance Period.


 


3.
            Termination of Employment;
Pro-rata Award.


 


(a)           For purposes of the grant hereunder,
any transfer of employment by the Grantee 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.


 


(b)           If during the first Annual
Performance Period the Grantee dies or terminates employment due to Disability
or Retirement, or the Grantee’s employment is involuntarily terminated without
Cause or the Grantee terminates employment for Good Reason, then the Grantee
shall be entitled to receive that number of unrestricted shares of Common Stock
equal to the Annual Performance Share Award determined for the first Annual
Performance Period multiplied by a fraction equal to M/12, where M is the number
of partial or total months the Grantee is employed by the Company during the
first Annual Performance Period.


 


(c)           If during the second Annual
Performance Period the Grantee dies or terminates employment due to Disability
or Retirement, or the Grantee’s employment is involuntarily terminated without
Cause or the Grantee terminates employment for Good Reason, then the Grantee
shall be entitled to receive a number of unrestricted shares of Common Stock equal
to the lesser of (i) the sum of (A) the Annual Performance Share Award
determined for the first Annual Performance Period and (B) the Annual
Performance Share Award determined for the second Annual Performance Period multiplied
by a fraction equal to M/12, where M is the number of partial or total months
the Grantee is employed by the Company during the second Annual Performance
Period, and (ii) the PBA Target Share Award.


 


(d)           If during the third Annual
Performance Period the Grantee dies or terminates employment due to Disability
or Retirement, or the Grantee’s employment is involuntarily terminated without
Cause or the Grantee terminates employment for Good Reason, then the Grantee
shall be entitled to receive that number of unrestricted shares of Common Stock
to which the Grantee would have been entitled to receive under subsection 2(c) had
he been employed by the Company or a Subsidiary at the end of the Long-Term
Performance Period multiplied by a fraction equal to M/36, where M is the
number of partial or total months the Grantee is employed by the Company during
the Long-Term Performance Period.


 


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(e)           If, at any time during the Long-Term Performance
Period the Grantee terminates employment other than for Disability, Retirement
or Good Reason, or Grantee’s employment is terminated by the Company for Cause,
the Grantee shall receive no award and this PBA shall be null and void.


 


(f)            The Grantee shall become entitled to
receive shares of unrestricted Common Stock pursuant to Section 3(b) or
3(c) upon the date on which the Committee certifies the degree of
achievement of the applicable performance measure(s) for the Annual
Performance Period during which the Grantee’s employment terminated. The
Grantee shall become entitled to receive shares of unrestricted Common Stock
under Section 3(d) at the same time as the Grantee would have become
entitled to receive shares of unrestricted Common Stock under Section 2(c) if
the Grantee were employed by the Company or a Subsidiary at the end of the
Long-Term Performance Period.


 


4.             Change in Control.  If a Change in Control occurs anytime during
the Long-Term Performance Period and prior to the Grantee’s receiving any award
under this PBA, the Grantee shall immediately be awarded the PBA Target Share Award.  Delivery of the PBA Target Share Award shall
discharge any obligation to the Grantee under this PBA in its entirety and the
Grantee shall not be entitled to any additional award under this PBA.


 


5.             Transferability of PBA; No
Incidents of Ownership; Dividends


 


(a)           Except as provided in this Section 5(a),
the PBA may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, except by will or the laws of descent and distribution. Any
attempt to transfer the PBA in contravention of this Section 5(a) is
void ab initio.  The PBA shall not be
subject to execution, attachment or other process. Notwithstanding the
foregoing, the Grantee shall be permitted to transfer the PBA to members of his
or her immediate family (i.e., children, grandchildren or spouse), trusts for
the benefit of such family members, and partnerships or other entities whose
only partners or equity owners are such family members; provided, however, that
no consideration can be paid for the transfer of the PBA and the transferee of
the PBA must agree to be subject to all conditions applicable to the PBA (including
all of the terms and conditions of this Agreement) prior to transfer.


 


(b)           Except as set forth in Section 5(c),
the Grantee shall not possess any incidents of ownership (including, without
limitation, dividend and voting rights) in shares of Common Stock in respect of
the PBA unless and until the Grantee becomes entitled to receive unrestricted shares
of Common Stock.


 


(c)           If one or more cash dividends are
paid with respect to Common Stock during the Long-Term Performance Period then,
at the time unrestricted shares of Common Stock are distributed to the Grantee,
the Grantee shall receive a cash payment equal to the aggregate dividend amount
the Grantee would have received had Grantee owned such shares of Common Stock on
the dividend record date(s).


 


6.             Forfeiture of PBA on Certain
Conditions.  Grantee hereby
acknowledges that the Company has given or will give Grantee 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 Grantee further
acknowledges that the use of such information by Grantee other than in
furtherance of Grantee’s job 


 


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responsibilities
with the Company would be extremely detrimental to the Company and would cause
immediate and irreparable harm to the Company. 
In exchange for access to such confidential, proprietary or trade secret
information, Grantee hereby agrees as follows:


 


(a)           Notwithstanding anything to the
contrary contained in this Agreement, should the Grantee breach the “Protective
Condition” (as defined in Section (b)), then (I) the PBA, and any
RSUs acquired by the Grantee pursuant to the PBA, to the extent not previously
converted into PBA shares, shall immediately be cancelled upon such breach, (II) the
Grantee shall immediately deliver to the Company the number of PBA Shares the
Grantee received during the 180-day period immediately prior to such breach and
(III) if any PBA shares were sold during 180-day period immediately prior
to such breach, the Grantee shall immediately deliver to the Company all
proceeds of such sales. “PBA Shares” shall mean shares of Common Stock the
Grantee may receive pursuant to this Agreement. The PBA Shares and proceeds to
be delivered under clauses (II) and (III) may be reduced to reflect
the Grantee’s liability for taxes payable on such PBA Shares and/or proceeds.


 


(b)           “Protective Condition” shall mean
that (I) the Grantee 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 Grantee, or otherwise imposed on Grantee by
applicable law, and (II) during the time Grantee is employed by the
Company (or a Subsidiary) and for a period of one year after the Grantee’s
employment with the Company (or a Subsidiary) terminates, the Grantee 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 Grantee may be employed by a competitor of the Company within such one
year period so long as the duties and responsibilities of Grantee’s position
with such competitor do not involve the same or substantially similar duties
and responsibilities as those performed by the Grantee for the Company (or a
Subsidiary) in a business segment of the new employer which competes with the
business segment(s) with which the Grantee worked or had supervisory
authority over while employed by the Company (or a Subsidiary).


 


(c)           This paragraph (c) shall apply
if the Grantee is an executive officer or officer (as defined in Rule 3b-7or
Rule 3b-2 under the Securities Exchange Act of 1934). In accordance with
the Company’s policy adopted by the Board on the Potential Impact on
Compensation from Executive Misconduct, if it is determined, within eighteen
full calendar months after the date on which the Grantee became entitled to
receive any PBA Shares, that the Grantee engaged in misconduct resulting in the
inaccurate reporting of the Company’s financial results, and the number of PBA
Shares the Grantee became entitled to receive (the “Incorrect Number of Shares”)
was greater than the number of PBA shares that would have been awarded, paid or
delivered to, or realized by, the Grantee, if calculated based on the accurate
reporting of financial results (the “Correct Number of Shares”), then (I) if
the Grantee has not yet received the PBA Shares, the number of PBA Shares to
which the Grantee shall be entitled shall be immediately reduced from the
Incorrect Number of Shares to the Correct Number of Shares, (II) if the Grantee
has received the PBA Shares, then the Grantee shall immediately deliver to the
Company that number of PBA Shares equal to the difference between the Incorrect
Number of Shares and the Correct Number of Shares (the 


 


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“Forfeited
Shares”), and (III) if the Grantee has received the PBA Shares and sold
any of the Forfeited Shares, the Grantee shall immediately deliver to the
Company all proceeds from the sales of such Forfeited Shares. The PBA Shares
and proceeds to be delivered under clauses (II) and (III) may be
reduced to reflect the Grantee’s liability for taxes payable on such PBA Shares
and/or proceeds. The Company’s remedies set forth in this section 6(c) for
the Grantee engaging in misconduct resulting in the inaccurate reporting of the
Company’s financial results are in addition to any other remedies available to
the Company or imposed by law enforcement agencies, regulators or other
authorities.


 


(d)           In the event clause 6 is
unenforceable in the jurisdiction in which the Grantee is employed on the date
hereof, it nevertheless shall be enforceable to the full extent permitted by
the laws of the jurisdiction(s) in which the Grantee engages in any
activity prohibited by this clause 6.


 


7.             Issuance of Shares.  Subject to section 11(e) below, any
shares of unrestricted Common Stock to be issued to the Grantee under this PBA (i) shall
be delivered to the Grantee promptly, but in no event later than ten days,
after such time as the Grantee becomes entitled to receive such shares of
Common Stock, and (ii) may be issued in either certificated form or in
uncertificated form (via the Direct Registration System or otherwise).


 


8.             Equitable Adjustment.  The aggregate number of shares of Common
Stock subject to this PBA shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
subdivision or consolidation of shares or other capital adjustment, or the
payment of a stock dividend or other increase or decrease in such shares,
effected without the receipt of consideration by the 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 Agreement in the event of any other
reorganization, recapitalization, merger, consolidation, spin-off,
extraordinary dividend or other distribution or similar transaction involving
the Company.


 


9.             Taxes.  Upon the distribution
of unrestricted shares of Common Stock to the Grantee, absent a notification by
the Grantee to the Company (or an agent designated by the Company to administer
the Company’s stock incentive program) which is received by the Company or its
agent at least three business days prior to the date of such distribution, to
the effect that the Grantee will pay to the Company or a Subsidiary by check or
wire transfer any taxes (“Withholding Taxes”) the Company reasonably determines
it or a Subsidiary is required to withhold under applicable tax laws with
respect to such shares, the Company will reduce the number of shares of Common
Stock to be distributed to the Grantee in connection with such distribution by
a number of shares of Common Stock the Fair Market Value of which (as of the
date the Grantee becomes entitled to receive such shares) is equal to the total
amount of Withholding Taxes. In the event the Grantee elects to pay to the Company
or a Subsidiary the Withholding Taxes with respect to such shares by check or
wire transfer, the Company’s obligation to deliver such shares of Common Stock
shall be subject to receipt by the Company or Subsidiary of such payment in
available funds. 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
Grantee any federal, state, local or other taxes required to be withheld with
respect to such payment.


 


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10.           No Guarantee of Employment. 
Nothing set forth herein or in the Plan shall confer upon the Grantee any right
of continued employment for any period by the Company or a Subsidiary, or shall
interfere in any way with the right of the Company or Subsidiary to terminate
such employment.


 


11.           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 Grantee, 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 Grantee’s gross income pursuant to the Applicable Regulations of any
compensation intended to be deferred hereunder. The Company shall notify the
Grantee as soon as reasonably practicable of any such amendment affecting the
Grantee.


 


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


 


(d)           Except as otherwise specifically
provided herein, the time for distribution of unrestricted shares of Common
Stock under this PBA shall not be accelerated or delayed for any reason, unless
to the extent necessary to comply with or permitted under the Applicable
Regulations.


 


(e)           Notwithstanding any term or provision
of this Agreement to the contrary, if the Grantee is a specified employee (as
defined in Section 409A(a)(2)(B)(i) of the Code) as of the date of
his or her termination of employment, then any amounts payable to the Grantee under
this PBA on account of his or her termination of employment (including without
limitation any dividends payable to the Grantee pursuant to Section 5(c) if
payable on account of his or her termination of employment) shall be paid to
the Grantee upon the later of (i) the date such amounts would otherwise be
payable to the Grantee under this PBA without regard to this Section 11(e) and
(ii) the date which is six months following the date of the Grantee’s
termination of employment.  The preceding
sentence shall not apply in the event Grantee’s termination of employment is
due to his or her death.  If the Grantee
should terminate employment for a reason other than his or her death but
subsequently die during the six-month period described in subclause (ii) of
the first sentence above, such six-month period shall be deemed to end on the
date of the Grantee’s death.


 


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


 


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13.           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.


 


14.           Governing Law; Disputes. 
This Agreement shall be governed by and construed according to the laws of the
State of Delaware, without regard to the conflicts of laws provisions thereof.
Any disputes arising under or in connection with this Agreement shall be
resolved by binding arbitration before a 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.


 


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


 


16.           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.


 


17.           Definitions.  For
purposes of this Agreement:


 


(a)           “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;


 


(b)           “Annual Cash Bonus Plan” shall mean
the Company’s Management Incentive Compensation Plan, or any successor or
replacement annual cash bonus plan adopted by the Board or the Committee;


 


(c)           “Annual Payout Percentage” with
respect to an Annual Performance Period shall mean the percentage of target
cash award certified by the Committee under the Annual Cash Bonus Plan for such
Annual Performance Period;


 


(d)           “Annual Performance Period” shall
mean each of the three calendar years 2010, 2011 and 2012;


 


(e)           “Annual Performance Share Award”
shall be determined as set forth in Section 2(b);


 


(f)            “Annual Target Share Award” shall
mean one-third of the PBA Target Share Award;


 


(g)           “Beneficial Owner” (and variants
thereof) shall have the meaning given in Rule 13d-3 promulgated under the
Exchange Act and, only to the extent such meaning 


 


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is
more restrictive than the meaning given in Rule 13d-3, the meaning
determined in accordance with Section 318(a) of the Code;


 


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


 


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


 


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


 


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


 


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


 


(m)   “Long-Term Performance Measure” is defined on
Annex B;


 


(n)   “Long-Term Performance Period” shall mean the
period beginning on January 1, 2010 and ending on December 31, 2012;


 


(o)   “Maximum Share Award” is the maximum amount
of unrestricted shares of Common Stock that can be awarded to the Grantee under
this PBA, and is set forth on Annex A;


 


(p)    “PBA Target Share Award” shall mean one-half
of the Maximum Share Award set forth on Annex A;


 


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


 


(r)  
“Retirement” shall mean termination of the Grantee’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); and


 


(s)   
“Threshold Level” is defined on Annex B.


 


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Annex A


 


NOTICE OF GRANT


PERFORMANCE BASED AWARD


 


The following employee of Hexcel Corporation, a Delaware corporation,
or a Subsidiary, has been granted a Performance Based Award in accordance with
the terms of this Notice of Grant and the Agreement to which this Notice of
Grant is attached.


 


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


 


	
  Grantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address
  of Grantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Foreign
  Sub Plan, if applicable

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Grant
  Date

  	
   

  	
  February 1,
  2010

  
	
   

  	
   

  	
   

  
	
  Maximum
  number of unrestricted shares of Common Stock which may be granted as a
  result of this PBA (“Maximum Share Award”)

  	
   

  	
   

  



 


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


 


	
   

  	
  HEXCEL CORPORATION

  
	
  Grantee

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Ira J. Krakower

  
	
   

  	
   

  	
  Senior
  Vice President

  



 


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Annex B


 


The
“Long-Term Performance Measure” shall be Return on Net Capital Employed, or
“RONCE,” as defined on Exhibit I attached hereto.


 


The
“Target Level” of the Long-Term Performance Measure shall be   %.


 


The
“Threshold Level” of the Long-Term Performance Measure shall be   %.


 


The
“PBA Target Share Award” to be awarded is 50% of the Maximum Share Award (as
defined on Annex A).


 


Share Award Schedule


 


	
  Degree of Attainment of Target Level of 

  Long-Term Performance Measure

  	
   

  	
  Percentage of PBA Target Share Award

  to be awarded to Grantee

  
	
   

  	
   

  	
   

  
	
  120% or more

  	
   

  	
  200%

  
	
   

  	
   

  	
   

  
	
  100%

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  
	
  80%

  	
   

  	
  50%

  
	
   

  	
   

  	
   

  
	
  less than 80%

  	
   

  	
  0

  



 


Interpolation
shall be used, on a ratable basis, to determine the number of unrestricted shares
of Common Stock to be awarded when the degree of attainment of the Long-Term Performance
Measure is between two percentages in the left hand column above.


 


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Exhibit I


HEXCEL CORPORATION


Definition and Computation
of RONCE


For Purposes Of


Performance Share Awards for
2010-2012 Performance Cycle


 


Computation:


 


“RONCE”
shall be computed by dividing the Average Return by the Average Capital Employed
and expressed as a percentage:


 


Average Return


 






 


Average Capital Employed


 


Definitions:


 


“Average
Capital Employed” shall mean the sum of Net Capital Employed as of December 31,
2009, December 31, 2010, December 31, 2011 and December 31, 2012,
divided by four.


 


“Average
Return” shall mean the sum of the Return for the calendar years of 2010, 2011
and 2012, divided by three.


 


“Cash”
as of a particular date shall mean cash and cash equivalents of the Company and
its Subsidiaries as of such date, as reported in its financial statements.


 


“Consolidated
Operating Income” shall mean the operating income of the Company and its
Subsidiaries as reported in its financial statements.


 


“Equity
in Earnings from Affiliated Companies” shall mean the equity in earnings from
affiliated companies of the Company and its Subsidiaries as reported in its
financial statements.


 


“Net
Capital Employed” as of a particular date shall mean the sum of Shareholder’s
Equity and Total Debt as of such date, minus Cash as of such date.


 


“Other
Income (Expense), Net” of the Company shall be any expense or income arising
from transactions outside the ordinary course of business including but not
limited to any of the sale or purchase of debt or equity securities of the
Company, debt refinancing or prepayment of debt, judgment or settlement of
claims or litigation, acquisitions or divestitures, termination of a pension
plan, the sale or purchase of tangible or intangible assets and the impairment
of tangible and intangible assets.


 


“Return”
for a particular period shall mean the sum of Consolidated Operating Income,
Equity in Earnings from Affiliated Companies and Other Income (Expense), Net
for such period.


 


“RONCE”
is an acronym for Return on Net Capital Employed.


 


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“Shareholder’s
Equity” as of a particular date shall mean total stockholder’s equity of the
Company as reported in its financial statements as of such date.


 


“Total
Debt” as of a particular date shall mean the sum of “notes payable and current
maturities of capital lease obligations” and “long-term notes payable and
capital lease obligations” of the Company and its Subsidiaries as of such date,
as reported in its financial statements.


 


The
Compensation Committee shall retain its powers to make appropriate adjustments
to the RONCE performance goal to reflect the impact of unusual, non-recurring
or extraordinary income or expense not reflected in such goal as defined, as
authorized under the Company’s 2003 Incentive Stock Plan.


 


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