Document:

Exhibit 10.1

EXECUTIVE  SEVERANCE 
AGREEMENT

AGREEMENT made as of the
20th day of March, 2006, between HEXCEL CORPORATION, a Delaware corporation
with offices at Stamford, Connecticut (the “Company”), and Robert G. Hennemuth
(the “Executive”).

WHEREAS, the Company is
engaged in the business of developing, manufacturing and marketing carbon
fibers, fabrics, high-performance composite materials and parts therefrom for
the commercial aerospace, space and defense, recreation and industrial markets
throughout the world, and hereafter may engage in other areas of business
(collectively,  the “Business”);

WHEREAS, the Executive,
as a result of training, expertise and personal application over the years, has
acquired and will continue to acquire considerable and unique expertise and
knowledge which are of substantial value to the Company in the conduct,
management and operation of the 
Business;

WHEREAS, the Company is
willing to provide the Executive with certain benefits in the event of the
termination of the Executive’s employment with the Company, including in the
event of a Change in Control (as hereinafter defined); and

WHEREAS, the Executive,
in consideration of receiving such benefits from the Company, is willing to
afford certain protection to the Company in regard to the confidentiality of
its information, ownership of inventions and competitive activities.

NOW, THEREFORE, in
consideration of the mutual covenants of the Executive and the Company and of
the Executive’s continued employment with the Company, the parties agree as
follows:

1.     Position
and Duties. The Executive shall initially serve as Senior Vice President,
Human Resources of the Company and shall have such duties, responsibilities,
and authority as he may have as of the date hereof (or any position to which he
may be promoted after the date hereof). The Executive shall devote
substantially all his working time and efforts to the business and affairs of
the Company.

2.     Place
of Performance. In connection with the Executive’s employment by the Company,
the Executive shall be based at the principal executive offices of the Company
in Stamford, Connecticut, except for required travel on the Company’s business.

 

3.     Termination.
The Executive’s employment hereunder may be terminated under the following circumstances:

(a)   Death.
The Executive’s employment hereunder shall automatically terminate upon his
death.

(b)   Disability.
The Company may terminate the Executive’s employment hereunder due to the
Executive’s inability to perform the customary duties of his employment by
reason of any medical or psychological illness or condition that is expected to
be permanent or of indefinite duration.

(c)   Cause.
The Company may terminate the Executive’s employment hereunder for Cause. The
following shall constitute Cause:

(i)        the
willful and continued failure by the Executive to substantially perform his
duties with the Company (other than any such failure resulting from the
Executive’s incapability due to physical or mental illness or any such actual
or anticipated failure after the issuance of a Notice of Termination by the
Executive for Good Reason) after demand for substantial performance is
delivered by the Company that specifically identifies the manner in which the
Company believes the Executive has not substantially performed his duties; or

(ii)       the
willful engaging by the Executive in misconduct that is demonstrably and
materially injurious to the Company, monetarily or otherwise including, but not
limited to, conduct that violates the covenant not to compete in Section 6
hereof. No act, or failure to act, on the Executive’s part shall be considered “willful”
unless done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company. Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause without (i) reasonable notice from the
Board to the Executive setting forth the reasons for the Company’s intention to
terminate for Cause, (ii) delivery to the Executive of a resolution duly
adopted by the affirmative vote of two-thirds or more of the Board then in
office (excluding the Executive if he is then a member of the Board) at a
meeting of the Board called and held for such purpose, finding that in the good
faith opinion of the Board, the Executive was guilty of the conduct herein set
forth and specifying the particulars thereof in detail, (iii) an
opportunity for the Executive, together with his counsel, to be heard before
the Board, and (iv) delivery to the Executive of a Notice of Termination
from the Board specifying the particulars thereof in detail.

(d)   Good
Reason. The Executive may terminate his employment hereunder for Good
Reason. The following shall constitute Good Reason:

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(i)        A
diminution in the Executive’s position, duties, responsibilities or authority
(except during periods when the Executive is unable to perform all or
substantially all of his duties or responsibilities on account of illness
(either physical or mental) or other incapacity);

(ii)       A
reduction in the Executive’s annual rate of base salary as in effect on the
date hereof or as the same may be increased from time to time;

(iii)      Failure
by the Company to continue in effect any compensation plan in which the
Executive participates which is material to the Executive’s total compensation,
unless an equitable arrangement (embodied in an ongoing substitute plan) has
been made with respect to such plan, or failure by the Company to continue the
Executive’s participation therein (or in such substitute plan) on a basis not
materially less favorable to the Executive;

(iv)      Failure
by the Company to continue to provide the Executive with benefits substantially
similar to those enjoyed by the Executive under any of the Company’s pension,
savings, life insurance, medical, health and accident, or disability plans in
which the Executive was participating (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), or failure by the Company to continue to provide the Executive with
the number of paid vacation days per year equal to the greater of (i) 20
and (ii) the number to which the Executive is entitled in accordance with
the Company’s vacation policy;

(v)       Failure
to provide facilities or services which are suitable to the Executive’s
position;

(vi)      Failure
of any successor (whether direct or indirect, by purchase of stock or assets,
merger, consolidation or otherwise) to the Company to assume the Company’s
obligations hereunder or failure by the Company to remain liable to the
Executive hereunder after such assumption;

(vii)     Any  termination by the Company of the Executive’s
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements  of a Notice of
Termination contained in this Agreement;

(viii)    The
relocation of the Executive’s principal place of employment to a location more
than fifty (50) miles from the Executive’s principal place of employment as at
the date hereof; or

(ix)       Failure
to pay the Executive any portion of current or deferred compensation within
seven (7) days of the date such compensation is due.

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The
Executive’s continued employment shall not constitute consent to, or waiver of
rights with respect to, any circumstance constituting Good Reason hereunder;
provided, however, that the Executive shall be deemed to have waived his rights
pursuant to circumstances constituting Good Reason hereunder if he shall not
have provided the Company a Notice of Termination within ninety (90) days
following his knowledge of the occurrence of circumstances constituting Good
Reason.

(e)   Other
Than Death, Disability, Cause or Good Reason. (i) The Company may
terminate the Executive’s employment, other than as provided in Sections
(3)(a), (b) or (c) hereof, upon written notice to the Executive and (ii) the
Executive may terminate his employment with the Company, other than as provided
in Section 3(d) hereof,  upon
written notice to the Company.

(f)    Notice of Termination; Date of
Termination. Any termin-ation of the Executive’s employment by the Company
or by the Executive (other than a termination pursuant to Section 3(a) hereof)
shall be communicated by written Notice of Termination to the other party
hereto in accordance with Section 10. For purposes of this Agreement,

(i)  “Notice of Termination” shall mean a notice
which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated, and

(ii)       “Date
of Termination” shall mean (A) if the Executive’s employment is terminated
pursuant to Section 3(a), the date of his death, (B) if the Executive’s
employment is terminated pursuant to Section 3(b), thirty days after
Notice of Termination is given (provided that the Executive shall not have
returned substantially to  full-time
performance of the Executive’s duties during such thirty day period), (C) if
the Executive’s employment is terminated pursuant to Sections 3(c), (d) or
(e), the date specified in the Notice of Termination (provided that such date
shall not be more than thirty days from the date Notice of Termination is given
and, in the case of a termination for Cause, shall not be less than fifteen
days from the date Notice of Termination is given), or (D) if the
Executive terminates his employment and fails to provide written notice to the
Company of such termination, the date of such termination.

4.         Compensation
Upon Death, Disability or Termination. 

(a)   If the
Executive’s employment is terminated by his death, the Company shall pay the
Executive’s legal representative (i) at the time such payments are due,
the Executive’s full base salary through the Date of Termination at the rate in
effect at the Date of Termination and all other unpaid amounts, if any, to
which the Executive is entitled as of the Date of Termination including any
reimbursable business expenses and amounts earned under any compensation plan
or program (including the Bonus Plan), and (ii) within ten days following
the 

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date
of the Executive’s death, a lump sum payment in an amount by which (A) the
total amount received by the beneficiary or estate of the Executive as payment
under the basic insurance provided by and at the expense of the Company on the
Executive’s life is less than  (B) twice
the sum of (I) the Executive’s annual base salary in effect as of the Date
of Termination and (II) the Executive’s Average Annual Bonus (the term “Average
Annual Bonus” shall mean the average of the last three annual bonus amounts
awarded to the Executive under the Company’s Management Incentive Compensation
Plan, or any successor, alternate or supplemental plan (the “Bonus Plan”) or,
if the Executive has not participated in the Bonus Plan for three completed
annual award periods, the average of the annual bonus amounts awarded, provided
that any award made in respect of an annual award period in which the Executive
did not participate for the full period (the “Pro-Rata Award”) shall be
annualized for purposes of computing the Average Bonus Amount by multiplying
the Pro-Rata Award by a fraction, of which the numerator is 365 and the
denominator is the number of days during which the Executive participated in
such annual award period).

(b)   During any
period that the Executive fails to perform his duties hereunder as a result of
incapacity due to physical or mental illness the Executive shall continue to
receive his full base salary at the rate then in effect for such period (offset
by any payments to the Executive received pursuant to disability benefit plans
maintained by the Company) until his employment is terminated pursuant to Section 3(b) hereof;
and, within ten days following such termination, the Company shall pay the
Executive all unpaid amounts, if any, to which the Executive is entitled as of
the Date of Termination including any reimbursable business expenses and
amounts earned under any compensation plan or program (including the Bonus
Plan).

(c)   If the
Executive’s employment is terminated by the Company for Cause or by the
Executive for other than Good Reason, the Company shall at the time such
payments are due pay the Executive his full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given
and all other unpaid amounts, if any, to which the Executive is entitled as of
the Date of Termination including any reimbursable business expenses and
amounts earned under any compensation plan or program (including the Bonus
Plan), and the Company shall, thereafter, have no further obligations to the
Executive under this Agreement.

(d)   If (1) the
Company shall terminate the Executive’s employment other than for Disability
and other than for Cause or (2) the Executive shall terminate his
employment for Good Reason, then

(i)        the
Company shall pay the Execu­tive on the Date of Termination, by wire transfer
to the bank account designated by the Executive, the Executive’s full base
salary through the Date of Termination at the rate in effect at the time Notice
of Termination is given (disregarding any reduction in salary rate 

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which
would constitute a Good Reason) and all other unpaid amounts, if any, to which
the Executive is entitled as of the Date of Termination including any
reimbursable business expenses and amounts earned under any compensation plan
or program (including the Bonus Plan);

(ii)       in
lieu of any further salary payments to the Executive for periods subsequent to
the Date of Termination, the Company shall pay to the Executive on the Date of
Termination, by wire transfer to the bank account designated by the Execu­tive,
an amount equal to the product of (A) the sum of (1) the Executive’s
annual base salary in effect at the time the Notice of Termination is given
(disregarding any reduction in salary rate which would constitute a Good
Reason) and (2) the Executive’s Average Annual Bonus, and (B) (x) if
the Executive terminates his employment or the Company terminates the Executive’s
employment, in either case within two years after the occurrence of a Change in
Control,  the number three or (y) in
any other case, the number one; and

(iii)  the Company shall continue
the participation of the Executive for a period of one year (except, if the
Executive terminates his employment or the Company terminates the Executive’s
employment, in either case within two years after the occurrence of a Change in
Control, such period shall be three years), in all medical, health, life and
other employee “welfare” plans and programs in which the Executive participated
imme­diately prior to the Date of Termination, provided that the Executive’s
continued participation is possible under the general terms and provisions of
such plans and pro­grams. In the event that the Executive’s participation in
any such plan or program is barred, the Company shall by other means provide
the Executive with benefits equivalent to those which the Executive would other­wise
have been entitled to receive under such plans and programs from which his
continued participation is barred.

(e)   If the
Company shall terminate the Executive’s employment other than for Cause, or the
Executive shall terminate his employment for Good Reason, during the period of
a Potential Change in Control or at the request of a person who, directly or
indirectly, takes any action designed to cause a Change in Control, then the
Company shall make payments and provide benefits to the Executive under this
Agreement as though a Change in Control had occurred immediately prior to such
termination. A “Potential Change in Control” shall exist during the period
commencing at the time the Company enters into any agreement or arrangement
which, if consummated, would result in a Change in Control and ending at the
time such agreement or arrangement either (i) results in a Change in
Control or (ii) terminates, expires or otherwise becomes of no further
force or effect.

(f)    For
purposes of this Agreement, a “Change in Control” shall mean the first to occur
of the following events:

(1)   Any
person (as defined in Section 3(a)(9) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), as modified 

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and
used in Sections 13(d) and 14(d) of the Exchange Act) (a “Person”) is
or becomes the Beneficial Owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act), 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:  (x) any acquisition by the Company or
any of its Controlled Affiliates (an “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); (y) 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 Agreement, constitute the Board (such individuals shall
be hereinafter referred to as the “Incumbent Directors”) cease for any reason
to constitute at least a majority of the Board; provided, however, for purposes
of this definition, that any individual who becomes a director subsequent to
such effective date, whose election, or nomination for election by the Company’s
stockholders, was made or approved by a vote of at least a majority of the
Incumbent Directors (or directors whose election or nomination for election was
previously so approved) shall be considered a member of the Incumbent Board;
but, provided, further, that any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a person or legal entity other than the Board
shall not be considered a member of the Incumbent Board;

(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 pursuant to which (1) 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 securities entitled to vote
generally in the election of directors of the company resulting from such
Corporate Transaction (including, without limitation, a corporation 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 

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the
Outstanding Common Stock and Total Voting Power, as the case may be, and (2) immediately
following which the individuals who comprise the Board immediately prior
thereto constitute at least a majority of the board of directors of the company
resulting from such Corporate Transaction (including, without limitation, a
company which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries); or

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

(g)       Excise Tax.

(1)       Modified
Gross-Up. It shall be
determined whether this Section 4(g)(1) applies prior to any
determination pursuant to Section 4(g)(2) hereof.
This Section 4(g)(1) shall apply if “Total Payments” (as defined in Section 4(g)(1)(i))
are equal to or exceed one-hundred-and-ten percent (110%) of the “Safe Harbor
Amount”. The “Safe Harbor Amount” is the amount to which the Total
Payments would hypothetically have to be reduced so that no portion of the
Total Payments would be subject to the Excise Tax (as defined in Section 4(g)(1)(i)).

(i)        If any of the payments or benefits received or
to be received by the Executive in connection with a Change in Control or the
Executive’s termination of employment in respect of a Change in Control,
whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person (all such
payments and benefits, excluding the Gross-Up Payment, being hereinafter
referred to as the “Total Payments”) will be subject to the excise tax
(the “Excise Tax”) imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), the Company shall pay to
the Executive an additional amount (the “Gross-Up Payment”) such that
the net amount retained by the Executive, after deduction of any Excise Tax on
the Total Payments and any federal, state and local income and employment taxes
and Excise Tax upon the Gross-Up Payment, shall be equal to the Total Payments.

(ii)       For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (A) all of the Total Payments shall be treated as “parachute payments”
(within the meaning of Section 280G(b)(2) of the Code) unless, in the
opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the
Executive and selected by the accounting firm which was, immediately prior to
the Change in Control, the Company’s independent auditor (the “Auditor”),
such payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, (B) all
“excess parachute payments” within the meaning of Section 280G(b)(l) of
the Code shall be treated as subject to the Excise Tax unless, in the opinion
of Tax Counsel, such excess parachute payments (in whole 

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or in part) represent reasonable compensation
for services actually rendered (within the meaning of Section 280G(b)(4)(B) of
the Code) in excess of the base amount (within the meaning of Section 280G(b)(3) of
the Code) allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (C) the value of any noncash benefits or
any deferred payment or benefit shall be determined by the Auditor in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code. If the Auditor is prohibited by applicable law or regulation from
performing the duties assigned to it hereunder, then a different auditor,
acceptable to both the Company and the Executive, shall be selected. The fees
and expenses of Tax Counsel and the Auditor shall be paid by the Company. For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest marginal rate of taxation
in the state and locality of the Executive’s residence on the Date of
Termination (or if there is no Date of Termination, then the date on which the
Gross-Up Payment is calculated for purposes of this Section), net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.

(iii)      In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder in
calculating the Gross-Up Payment, the Executive shall repay to the Company,
within five (5) business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by the Executive,
to the extent that such repayment results in a reduction in the Excise Tax and
a dollar-for-dollar reduction in the Executive’s taxable income and wages for
purposes of federal, state and local income and employment taxes, plus interest
on the amount of such repayment at 120% of the rate provided in Section 1274(b)(2)(B) of
the Code. In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest, penalties or
additions payable by the Executive with respect to such excess) within five (5) business
days following the time that the amount of such excess is finally determined. The
Executive and the Company shall each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to the Total
Payments.

(2)       Valley. This Section 4(g)(2) shall
apply only if it has been previously determined that Section 4(g)(1) hereof
does not apply. This Section 4(g)(2) shall then apply if the “Total
Payments” (as defined in Section 4(g)(2)(i)) would be subject (in whole or
part) to the “Excise Tax” (as defined in 

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Section 4(g)(2)(i)) and
the Total Payments are less than one-hundred-and-ten percent (110%) of the “Safe
Harbor Amount” (as defined in Section 4(g)(1)).

(i)        Notwithstanding any other provisions of this
Agreement, in the event that any payment, benefit, property or right received
or to be received by the Executive in connection with a Change in Control or
the Executive’s termination of employment in respect of a Change in Control
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (all such
payments, benefits, properties and rights being hereinafter referred to as the “Total
Payments”) would be subject (in whole or part) to the tax (the “Excise
Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any successor provision (the “Code”), then the payments and
benefits provided under Section 4(d) or 4(e) hereof (“Severance
Payments”) which are cash shall first be reduced, and the noncash Severance
Payments shall thereafter be reduced, to the extent necessary so that no
portion of the Total Payments is subject to the Excise Tax, but only if (A) the
net amount of such Total Payments, as so reduced (and after subtracting the net
amount of federal, state and local income taxes on such reduced Total Payments)
is greater than or equal to (B) the net amount of such Total Payment
without such reduction (but after subtracting the net amount of federal, state
and local income taxes on such Total Payments and the amount of Excise Tax to
which the Executive would be subject in respect of such unreduced Total
Payments); provided, however, that the Executive may elect (by waiving the
receipt or enjoyment of all or any portion of the noncash Severance Payments at
such time and in such manner that the Severance Payments so waived shall not
constitute a “payment” within the meaning of Section 280G(b) of the
Code) to have the noncash Severance Payments reduced (or eliminated) prior to
any reduction of the cash Severance Payments.

(ii)       For purposes of determining whether and the extent to which
the Total Payments will be subject to the Excise Tax (A) no portion of the
Total Payments the receipt or enjoyment of which the Executive shall have
waived at such time and in such manner as not to constitute a “payment” within
the meaning of Section 280G(b) of the Code shall be taken into
account, (B) no portion of the Total Payments shall be taken into account
which, in the written opinion of tax counsel (“Tax Counsel”) reasonably
acceptable to the Executive and selected by the accounting firm (the “Auditor”)
which was, immediately prior to the Change in Control, the Company’s
Independent auditor, does not constitute a “parachute payment” within the
meaning of Section 280G(b)(4)(A) of the Code) and, in calculating the
Excise Tax, no portion of such Total Payments shall be taken into account
which, in the written opinion of Tax Counsel, constitutes reasonable
compensation for services actually rendered within the meaning of Section 280G(b)(4)(B) of
the Code, in excess of the Base Amount allocable to such reasonable
compensation, and (C) the value of any noncash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by the 

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Auditor in accordance with the principles
of Sections 280G(d)(3) and (4) of the Code. If the Auditor is
prohibited by applicable law or regulation from performing the duties assigned
to it hereunder, then a different auditor, acceptable to both the Company and
the Executive, shall be selected. The fees and expenses of Tax Counsel and the
Auditor shall be paid by the Company.

(3)   Other Terms. At the time that payments are made under this
Agreement, the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated and the basis
for such calculations including, without limitation, any opinions, or other
advice the Company has received from Tax Counsel, the Auditor or other advisors
or consultants (and all such opinions or advice shall be in writing, shall be
attached to the statement and shall expressly state that the Executive may rely
thereon). If the Executive objects to the Company’s calculations, the Company
shall pay to the Executive such portion of the payments as the Executive
determines is necessary to result in the proper application of Section 4(g)(1)(i) or
4(g)(2)(i) above. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or judicial
proceeding concerning the existence or amount of liability for Excise Tax with
respect to the Total Payments.

5.     No
Mitigation. The Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by the Executive to the Company, or otherwise.

6.     Non-Competition;
Non-Solicitation; Non-Disparagement.

(a)           The Executive acknowledges that, as a
senior  management employee, the
Executive will be involved, on a high level, in the development, implementation
and management of the Company’s global business plans, including those which
involve the Company’s finances, research, marketing, planning, operations, and
acquisition strategies. By virtue of the Executive’s position and knowledge of
the Company, the Executive acknowledges that his employment by a competitor of
the Company represents a serious competitive danger to the Company, and that
the use of the Executive’s experience and knowledge about the Company’s
business, strategies and plans by a competitor can and would constitute a
valuable competitive advantage over the Company. In view of the foregoing, and
in consideration of the payments made to the Executive under this Agreement,
the Executive covenants and agrees that, if the Executive’s employment is
terminated and the Company has fulfilled its obligations under this Agreement,
for a period of one year (or three years if the Executive receives payments
under clause (B)(x) of Section 4(d)(ii) hereof) after the Date
of Termination the Executive will not (A) engage, in any capacity,
directly or indirectly, including but not limited as employee, 

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agent, consultant,
manager, executive, owner or stockholder (except as a passive investor holding
less than a 5% equity interest in any enterprise) in any business entity
engaged in competition with the Business conducted by the Company on the Date
of Termination anywhere in the world, or (B) solicit a customer of the
Business in violation of clause (A); provided, that the Executive may be
employed by a competitor of the Company so long as the Executive’s duties and
responsibilities do not relate directly or indirectly to the business segment
of the new employer which is actually or potentially competitive with the
Business.

(b)           The Company (for itself and its
officers and directors) and the Executive mutually agree and covenant not to
disparage the reputation or character of the other.

7.     Assignment
of Inventions. The Executive agrees that all processes, technologies,
designs and inventions, including new contributions, improvements, ideas and
discoveries, whether patentable or not (collectively “Inventions”), conceived,
developed, invented or made by the Executive prior to the Date of Termination
shall belong to the Company, provided that such Inventions grew out of the
Executive’s work with the Company or any of its subsidiaries or affiliates, are
related in any manner to the business (commercial or experimental) of the
Company or any of its subsidiaries or affiliates or are conceived or made on
the Company’s time or with the use of the Company’s facilities or materials. At
the request of the Company, the Executive shall (i) promptly disclose such
Inventions to the Company, (ii) assign to the Company, without additional
compensation, all patent and other rights to such Inventions for the United
States and foreign countries, (iii) sign all papers necessary to carry out
the foregoing, and (iv) give testimony or otherwise take action in support
of the Executive’s status as the inventor of such Inventions, in each case at
the Company’s expense.

8.     Confidentiality.
In addition to any obligation regarding Inventions, the Executive acknowledges
that the  trade secrets and confidential
and proprietary information of the Company, its subsidiaries and affiliates,
including without limitation:

(a)   unpublished
information concerning:

(i)        research
activities and plans,

(ii)       marketing
or sales plans,

(iii)      pricing
or pricing strategies,

(iv)      operational
techniques, and

(v)       strategic
plans;

(b)   unpublished
financial information, including information concerning revenues, profits and
profit margins;

 12
 

 

(c)   internal
confidential manuals; and

(d)   any “material
inside information” as such phrase is used for purposes of the Securities
Exchange Act of 1934, as amended; all constitute valuable, special and unique
information of the Company, its subsidiaries and affiliates. In recognition of
this fact, the Executive agrees that the Executive will not disclose any such
trade secrets or confidential or proprietary information (except (i) information
which becomes publicly available without violation of this Agreement, (ii) information
of which the Executive, prior to disclosure by the Executive, did not know and
should not have known was disclosed to the Executive by a third party in
violation of any other person’s confidentiality or fiduciary obligation, (iii) disclosure
required in connection with any legal process (provided the Executive promptly
gives the Company written notice of any legal process seeking to compel such
disclosure and reasonably cooperates in the Company’s attempt to eliminate or
limit the scope of such disclosure) and (iv) disclosure while employed by
the Company which the Executive reasonably and in good faith believes to be in
or not opposed to the interests of the Company) to any person, firm,
corporation, association or other entity, for any reason or purpose whatsoever,
nor shall the Executive make use of any such information for the benefit of any
person, firm, corporation or other entity except on behalf of the Company, its
subsidiaries and affiliates.

9.     Binding
Agreement. This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts would
still be payable to him hereunder if he had continued to live, all such
amounts, unless otherwise provided in this Agreement, shall be paid to the
Executive’s devisee, legatee, or other designee or, if there be no such
designee, to the Executive’s estate.

10.   Notice.
Notices, demands and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered,
if delivered personally, or mailed by United States certified or registered
mail, return receipt requested, postage prepaid, and when received if delivered
otherwise, addressed as follows:

	
  

  	
  If to the Executive:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  241 Plymouth Road

  
	
   

  	
   

  	
  West Palm Beach, Florida 33405

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Company:

  
	
   

  	
   

  	
  Hexcel Corporation

  
	
   

  	
   

  	
  281 Tresser Blvd.

  
	
   

  	
   

  	
  Stamford, CT 06901-3238

  
	
   

  	
   

  	
   

  

 

 13
 

 

 

	
   

  	
   

  	
  Attn: General Counsel

  

or to such other address as any party may have
furnished to the other in writing in accordance herewith, except that notices
of change of address shall be effective only upon receipt.

11.   General
Provisions. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive (or, if applicable, his legal representative)  and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Connecticut without
regard to its conflicts of law principles.

12.   Validity
and Enforceability. The invalidity or unenforceabi­lity of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. It is
the desire and intent of the parties that the provisions of Sections 6, 7 and 8
hereof shall be enforceable to the fullest extent permitted by applicable law
or public policy. If any such provision or the application thereof to any
person or circumstance shall, to any extent, be construed to be invalid or
unenforceable in whole or in part, then such provision shall be construed in a
manner so as to permit its enforceability to the fullest extent permitted by
applicable law or public policy. In any case, the remaining provisions or the
application thereof to any person or circumstance other than those to which
they have been held invalid or unenforceable, shall remain in full force and
effect.

13.   Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.

14.   Arbitration.
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators in the State of Connecticut, in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator’s award in any court having jurisdiction; provided, however,
that the Company shall be entitled to seek a restraining order or injunction in
any court of competent jurisdiction to prevent any continuation of any
violation of the provisions of Sections 6, 7 or 8 hereof.

 14
 

 

15.   Entire
Agreement. This Agreement is the entire agreement or understanding between
the Company and the Executive regarding the subject matter hereof.

16.   Remedies.
The Executive agrees that in addition to any other remedy provided at law or in
equity or in this Agreement, the Company shall be entitled to a temporary
restraining order and both preliminary and permanent injunctions restraining
Executive from violating any provision of Sections 6, 7 and 8 hereof. In the
event the Company fails to make any payment to the Executive when due, the
Executive, in addition to any other remedy available at law or in equity, shall
be entitled to interest on such unpaid amounts from the date such payment was
due to the date actual payment is received by the Executive, at the legal rate
applicable to unpaid judgments. The Company shall pay to the Executive all legal,
audit, and actuarial fees and expenses as a result of the termination of
employment, including all such fees and expenses incurred in contesting,
arbitrating or disputing any action or failure to act by the Company or in
seeking to obtain or enforce any right under this Agreement or any other plan,
arrangement or agreement with the Company, provided that the Executive has
obtained a final determination supporting at least part of his claim and there
has been no determination that the balance of his claim was made in bad faith.

17.   Consent
to Jurisdiction and Forum. The Executive hereby expressly and irrevocably
agrees that any action, whether at law or in equity, permitted to be brought by
the Company under this Agreement may be brought in the State of Connecticut or
in any federal court therein. The Executive hereby irrevocably consents to
personal jurisdiction in such court and to accept service of process in
accordance with the provisions of the laws of the State of Connecticut. In the
event the Company commences any such action in the State of Connecticut or in
any Federal court therein, the Company shall reimburse the Executive for the
reasonable expenses incurred by the Executive in his appearance in such forum
which are in addition to the expenses the Executive would have incurred by
appearing in the forum of the Executive’s residence at that time, including but
not limited to additional legal fees.

18.   Term of
Agreement.     The term of this
Agreement (the “Term”) shall begin on March 20, 2006 (the “Effective Date”)
and shall end on the third anniversary thereof; provided however that,
commencing on the third anniversary of the Effective Date and on each
subsequent anniversary of the Effective Date (each such anniversary, a “Renewal
Date”), the Term shall automatically be extended for one additional year
unless, not later than the date which is one year prior to such Renewal Date,
the Company shall have given notice to the Executive not to extend the Term for
such one additional year.

 15
 

 

 

	
  

  	
  HEXCEL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
     /s/  Ira J. Krakower

  
	
   

  	
   

  	
  Name: Ira J. Krakower

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
     /s/  Robert G. Hennemuth

  
	
   

  	
   

  	
  Executive

  

 

 16Exhibit 10.2

Executive
Deferred Compensation Agreement

The Executive Deferred
Compensation and Consulting Agreement, better known as EDCA, is a
non-qualified, unfunded, supplemental pension plan for key executives.

Each year benefits are
accrued at one and one-half percent of that year’s base salary plus bonus
payment and added to the prior year accrual balance. That accumulated benefit
is then given a present value based on group annuity mortality tables and the
current PBGC immediate interest rate. At retirement the monthly accrued present
value benefit is payable as a 10-year certain and life annuity. The Plan
also provides for the continuation of life, medical and dental benefits at
retirement based on certain criteria as outlined in the Agreement.

 

 

 

EXECUTIVE
DEFERRED COMPENSATION

AND
CONSULTING AGREEMENT

THIS AGREEMENT is entered
into as of March 20, 2006 (“Effective Date”), at Stamford,
Connecticut, between HEXCEL CORPORATION,
a Delaware corporation (“Hexcel” or the “Company”), and Robert G. Hennemuth
(“Employee”), on the basis of the following facts and understandings:

RECITALS

A.          Employee is a key executive of Hexcel
and is expected to make substantial contributions to its success.

B.           Hexcel wishes to provide certain
retirement, death and similar benefits for Employee in the expectation that
such benefits will serve as an incentive to Employee to continue in the employ
of Hexcel until his retirement or death and as an incentive to protect Hexcel’s
trade secrets and other confidential and proprietary information. Hexcel also
wishes to receive the benefits of Employee’s advice and consultation following
retirement, which will be compensated for by the payments to be made hereunder.

C.           The Compensation Committee of Hexcel’s
Board of Directors (the “Board”) has authorized Hexcel to enter into this
Executive Deferred Compensation Agreement with Employee.

 

 1
 

 

 

AGREEMENT

NOW,
THEREFORE, in consideration of the services to be rendered in
the future by Employee, the parties hereto agree as follows:

1.             RETIREMENT AND CONSULTING INCOME

1.1.        Normal Retirement. If Employee
retires or otherwise ceases to be employed by Hexcel on or after his 65th birthday, Employee shall receive a monthly
amount of consulting and retirement income payment, without any specification
as to the amount allocated to either. Such payments shall commence the calendar
month following Employee’s retirement or other termination of employment and
shall continue for one hundred twenty (120) such payments or until payment for
the month in which Employee dies, whichever is the last to occur.

Retirement Before
Age 65. If Employee retires or otherwise ceases to be
employed by Hexcel after his 40th birthday but prior to his 65th birthday, his consulting and retirement income
payments, without any specification as to the amount allocated to either,
computed pursuant to Section 1.2, shall commence the calendar month
following his 65th birthday and shall continue for one hundred
twenty (120) such payments or until payment for the month in which Employee
dies, whichever is the last to occur. Should the Employee request that such
payments commence at an earlier date and Hexcel, in its sole and absolute
discretion, consents thereto in writing, the monthly amounts payable shall be
the amount actuarially reduced to reflect the appropriate benefit according to
the employee’s age.

 

 2
 

 

 

Employee shall not
be entitled to any benefits under this Agreement if Employee ceases to be
employed by Hexcel prior to attaining his 40th birthday.

1.2.        The monthly consulting and retirement
income payments shall be equal to one-twelfth (1/12th) of the following: One and one-half
percent (1 1/2%) of the aggregate base salary and incentive cash bonuses paid
to Employee by Hexcel subsequent to the Effective Date, multiplied by a
fraction, the numerator of which shall be the total number of whole calendar
months of Employee’s employment by Hexcel subsequent to the Effective Date and
the denominator of which will be 67. In no event shall such fraction exceed 1
(67/67).

1.3.        Benefits. In lieu of the payments
described in Sections 1.1 and 1.2, and provided that Hexcel, in its sole and
absolute discretion, consents thereto in writing, Employee may elect any other
form of retirement benefit actuarially equivalent thereto. Employee’s election
of benefits under this Section 1.3 shall not relieve Employee of his
obligation under Paragraph 3.

2.             DEATH BENEFITS. If Employee dies after his 40th birthday but prior to his 65th birthday and prior to commencement of payments
to him pursuant to Sections 1.1 or 1.2, benefit will be payable to his
designated beneficiary in lieu of any amount specified in Paragraph 1, a
monthly pension for the balance of such beneficiary’s lifetime which is
actuarially equivalent to the lump sum death benefit. In lieu of said monthly
pension, on the condition that Hexcel, in its sole discretion, consents thereto
in writing, such beneficiary may elect any other form of pension benefit
actuarially equivalent thereto, based on the actuarial assumptions, such
election to be made by written notice to Hexcel, in form satisfactory to
Hexcel, within sixty (60) days following the Employee’s death.

 

 3
 

 

 

If Employee dies
after commencement of payments to him pursuant to Sections 1.1 or 1.2, but
prior to the receipt of 120 such payments or after his 65th birthday, but prior to receiving the first
payment under Section 1.1, his designated beneficiaries shall receive such
payments until the aggregate number of payments to Employee and his beneficiary
totals 120.

3.             AGREEMENTS OF EMPLOYEE. As a material part of the
consideration for this Agreement and as a condition precedent to Hexcel’s
obligation to make each payment to Employee or Employee’s successors hereunder,
Employee agrees as follows:

3.1.        Consultation Services. For a
period of ten years following the effective date of retirement or other
termination of employment, Employee shall render consultation services to
Hexcel from time to time upon request of Hexcel, in all areas of Hexcel’s
business; provided, however, that Hexcel shall only make such requests at
reasonable times and locations in light of Employee’s other commitments, and
upon reasonable prior notice; and provided further that the extent of said
consultation services shall be limited to not more than ten (10) working
days (on the basis of eight-hour work days) per year unless agreed to by
Employee. The parties acknowledge that Employee, while providing consultation
services hereunder, will be acting in the capacity of an independent contractor
and not an employee, and Hexcel shall not have the power to direct or control
the manner in which Employee performs his duties as consultant. Hexcel shall
reimburse Employee for any expenses incurred by Employee in carrying out his
obligations, provided such expenses were approved in advance by Hexcel in
writing.

3.2.        Competitive Activity. Employee
acknowledges that the pursuit of Competitive Activity, as defined below, would
necessarily involve the use or disclosure of Confidential Information. To
forestall such disclosure, use, and breach, to protect Hexcel’s 

 

 4
 

 

 

benefits under Section 3.1,
and in consideration of the benefits provided Employee under Sections l,
Employee agrees that for a period of ten (10) years after termination of
his employment, or so long as he is receiving benefits under this Agreement,
whichever is the shorter period, he shall not, directly or indirectly, (i) divert
or attempt to divert from Hexcel or its successors, assigns, or affiliated
companies (“Hexcel Companies”) any business of any kind in which it or they are
engaged at the time of Employee’s termination or any business acquired by one
of the Hexcel Companies within six months after such termination if said
acquisition was in the process of negotiation at the time of such termination
(hereinafter collectively designated “Hexcel’s Business”), including, without
limitation, the solicitation of or interference with any of its or their
customers; (ii) solicit for employment any person employed by any of the
Hexcel Companies; or (iii) engage (as a partner, substantial owner,
employee, associate, consultant, agent or otherwise) in any business activity
that is or may be competitive with Hexcel’s Business in any county of any state
or in any territory or foreign country where any of the Hexcel Companies
conducts any portion of Hexcel’s Business (“Competitive Activity”), unless
Employee can prove that any action taken in contravention of this subsection
3.2(iii) was done without the use in any way of Confidential Information.

4.             CONDITIONS TO PAYMENT OF COMPENSATION.

4.1. No Vested Benefit. The parties
acknowledge that the sums payable to Employee hereunder increase pursuant to
the formula set forth in Section 1.2 based upon the length of Employee’s
employment with Hexcel - i.e., Employee receives credit in such formulas over the
period of his employment. Hexcel may, at any time upon thirty (30) days’ prior
written notice to Employee, terminate Employee’s right to receive such credit
for future employment with Hexcel, which shall not, however, affect such credit
accrued up to the 

 

 5
 

 

 

effective date of such
termination. Notwithstanding such employment credit, the amounts computed in
accordance with such formulas are payable to Employee only on the terms and
subject to the conditions contained in this Agreement, including, without limitation,
the conditions specified in Sections 4.2 and 4.3.

4.2. Termination of Employment. Causes. Hexcel’s
obligation to make payments to Employee hereunder is subject to the condition
precedent that Hexcel has not terminated Employee’s employment by reason of
Employee’s theft, fraud, embezzlement or felony, provided that the foregoing is
directly connected with his employment and Hexcel determines, in its sole and
absolute discretion, that such act is inimical to its best interests, or by
reason of violation of Section 3.2 hereof, or for wrongfully disclosing
any secret process or imparting any confidential information, or intentionally
doing any other act materially inimical to the best interests of Hexcel. In
case of any such termination of Employee’s employment by Hexcel, all of
Employee’s rights and benefits hereunder shall terminate.

4.3. Breaches of Agreement. Hexcel’s
obligation to make payments to Employee hereunder is subject to the further
conditions precedent (a) that Employee has not breached or violated any
term, convenant or provision of this Agreement, including, without limitation,
those set forth in Section 3.2, and (b) Employee has not engaged in
any of the acts mentioned in Section 4.2 while an employee of Hexcel,
which acts are discovered subsequent to Employee’s retirement or other
termination of employment. In case of any such breach or violation under clause
(a) or if Employee has engaged in the acts referred to in clause (b) all
of Employee’s rights and benefits hereunder shall terminate.

4.4. Preservation of Remedies. In addition to
the conditions precedent to Hexcel’s obligations hereunder for any payments or
benefits, Hexcel shall also be entitled to all of its 

 

 6
 

 

 

legal and equitable
remedies resulting from any breach or violation of this Agreement by Employee,
including, without limitation, recovery from Employee of all damages resulting
from such breach or violation.

5.             CHANGE IN CONTROL. If there is a change of
control of Hexcel, Employee’s right to receive payments the effective date of
such change in control shall vest. Employee shall have the option to receive a
lump sum payment equal to the present value of such payments within thirty (30)
days of such change in control, or to receive payments pursuant to the terms of
Section 1.

5.1         The term “Change in Control” shall mean
any of the following events:

(a)                 Any person (as defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as
modified and used in Sections 13(d) and 14(d) of the Exchange Act) (a
“Person”) is or becomes the Beneficial Owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of 40% or more of
either (1) the then outstanding common stock of the Company (the “Outstanding
Common Stock”) or (2) 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:  (A) any acquisition by the Company or
any of its Controlled Affiliates (an “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) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any of its
Controlled 

 

 7
 

 

 

Affiliates; and (C) any
Person who becomes such a Beneficial Owner in connection with a transaction
described in the exclusion within paragraph (c) below; or

(b)                A change in the composition of
the Board such that the individuals who, as of the effective date of this
Agreement, constitute the Board (such individuals shall be hereinafter referred
to as the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of this definition, that
any individual who becomes a director subsequent to such effective date, whose
election, or nomination for election by the Company’s stockholders, was made or
approved by a vote of at least a majority of the Incumbent Directors (or
directors whose election or nomination for election was previously so approved)
shall be considered a member of the Incumbent Board; but, provided, further,
that any such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person or
legal entity other than the Board shall not be considered a member of the
Incumbent Board; or

(c) 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 pursuant to
which (1) 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 securities
entitled to 

 

 8
 

 

 

vote generally in the
election of directors of the company resulting from such Corporate Transaction
(including, without limitation, a corporation 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 (2) immediately following which the individuals who
comprise the Board immediately prior thereto constitute at least a majority of
the board of directors of the company resulting from such Corporate Transaction
(including, without limitation, a company which as a result of such transaction
owns the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries); or

(d)                the approval by the stockholders
of the Company of a complete liquidation or dissolution of the Company:

6.             RIGHTS OF PARTIES.

6.1.        Change of Beneficiary. Employee
shall have the right at any time to change the person or persons designated as
beneficiary or contingent beneficiary on the Beneficiary Designation form
attached hereto or by written notice to Hexcel in form satisfactory to Hexcel.
Such change of beneficiary shall become effective upon receipt and approval by
Hexcel. If Employee is married, such change of beneficiary shall be subject to
the written consent of Employee’s spouse.

6.2.        No Employment Agreement. Nothing
contained in this Agreement shall be construed as giving to Employee the right
to continued employment with Hexcel.

 

 9
 

 

 

6.3.        Other Retirement Plans. Nothing
in this Agreement shall affect any right the Employee may otherwise have to
participate in or under any retirement plan of Hexcel or other entity.

7.             NOTICES. Any notice required or permitted to be
given under this Agreement shall be sufficient if in writing and sent by
prepaid certified or registered mail to his last known residence in the case of
Employee, or its principal office in the case of Hexcel.

8.             TRANSFER OF INTEREST. Except as otherwise
expressly provided herein, Employee agrees, on behalf of his heirs, legatees,
personal representatives and designated beneficiaries, that this Agreement and
the rights, interests and benefits hereunder shall not be sold, assigned,
conveyed, hypothecated, or otherwise transferred, and no such interest shall be
subject to any liabilities or obligations of any bankruptcy proceedings, claims
or creditors, attachment, garnishment, execution, levy or other legal process
against any such person or his property, provided, however, that if Employee is
indebted to Hexcel for any reason whatsoever at the time of any distribution or
distributions, Hexcel shall have the right to apply so much of such
distribution as may be necessary to satisfy Employee’s indebtedness to Hexcel.

9.             ARBITRATION.

9.1.        Arbitrable Claims. All disputes
between Employee (and his attorneys, successors, and assigns) and Hexcel (and
its affiliates, shareholders, directors, officers, employees, agents,
successors, attorneys, and assigns) of any kind whatsoever, including without
limitation, all disputes relating in any manner to the employment or
termination of Employee, and all disputes arising under this Agreement (“Arbitrable
Claims”) shall be resolved by arbitration. All persons and entities specified
in the preceding sentence (other than 

 

 10
 

 

 

Hexcel and Employee)
shall be considered third-party beneficiaries of the rights and obligations
created by this Section on Arbitration. Arbitrable Claims shall include,
but are not limited to, contract (express or implied) and tort claims of all
kinds, as well as all claims based on any federal, state, or local law,
statute, or regulation, excepting only claims under applicable workers’
compensation law and unemployment insurance claims. Arbitration shall be final
and binding upon the parties and shall be the exclusive remedy for all
Arbitrable Claims, except that Hexcel may, at its option, seek injunctive
relief and damages in court for any breach of Section 3.2 of this
Agreement. Subject to the foregoing sentence, THE PARTIES HEREBY WAIVE ANY
RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.

9.2.        Procedure. Arbitration of
Arbitrable Claims shall be in accordance with the Employment Dispute Resolution
Rules of the American Arbitration Association (“AAA Employment Rules”),
except as provided otherwise in this Agreement. Arbitration shall be initiated
by providing written notice to the other party with a statement of the claim(s) asserted,
the facts upon which the claim(s) are based, and the remedy sought. In any
arbitration, the burden of proof shall be allocated as provided by applicable
law. Either party may bring an action in court to compel arbitration under this
agreement and to enforce an arbitration award. Otherwise, neither party shall
initiate or prosecute any lawsuit or administrative action in any way related
to any Arbitrable Claim. The Federal Arbitration Act shall govern the
interpretation and enforcement of this Section.

9.3         Arbitrator Selection and Authority.
All disputes involving Arbitrable Claims shall be decided by a single
arbitrator. The arbitrator shall be selected by mutual agreement of the parties
within thirty (30) days of the mailing or hand delivery, as applicable, 

 

 11
 

 

 

of the notice initiating
the arbitration. If the parties cannot agree on an arbitrator, then the
complaining party shall notify the AAA and request selection of an arbitrator
in accordance with the AAA Employment Rules. The arbitrator shall have the same
authority as a court to award equitable relief, damages, costs, and fees as
provided by law for the particular claim(s) asserted. The fees of the
arbitrator shall be paid by the losing party, as identified by the arbitrator.
The arbitrator shall have exclusive authority to resolve all Arbitrable Claims,
including, but not limited to, any claim that all or any part of this Agreement
is void or unenforceable.

9.4.        Confidentiality. All proceedings
and documents prepared in connection with any Arbitrable Claim shall be
confidential and, unless otherwise required by law, the subject matter thereof
shall not be disclosed to any person other than the parties to the proceeding,
their counsel, witnesses and experts, the arbitrator, and, if involved, the
court and court staff. All documents filed with the arbitrator or with a court
shall be filed under seal. The parties shall stipulate to all arbitration and
court orders necessary to effectuate fully the provisions of this subsection
concerning confidentiality.

9.5.        Continuing Obligations. The
rights and obligations of Employee and Hexcel set forth in this Section 9
shall survive the termination of Employee’s employment and the expiration of
this Agreement.

10.           INSURANCE BENEFITS

10.1.      Life Insurance. Subject to Sections
10.3 and 10.4, Hexcel shall keep in force and pay for life insurance for
Employee should Employee retire or otherwise cease to be employed by Hexcel (“termination”)
in the following amounts so long as Employee has not received all of the
payments to which Employee is entitled under this Agreement.

 

 12
 

 

 

(a) For the period prior to the time Employee has
received any payments under this Agreement and prior to the Employee’s 65th birthday, an amount equal to two (2) times
the present value of Employee’s potential payments hereunder (in accordance
with Section 1.2 at the time of termination), provided such insurance
shall not exceed the amount of life insurance on Employee in effect at the time
of retirement or other termination.

Example:

Salary $80,000

Employee Insurance
$240,000

Present Value of
Potential Payments $200,000

Then lesser of

2 X $200,000 =
$400,000

Insurance at term
= $240,000

Therefore,
$240,000 life insurance.

After Employee’s 65th birthday, but only while Employee is receiving
payments under this Agreement, an amount equal to one (1) times the
present value of Employee’s potential payments hereunder (in accordance with Section 1.2
at the time of retirement or other termination), provided such insurance shall
not exceed the amount of life insurance on Employee in effect at the time of
termination.

Example:

Salary $80,000

Employee Insurance
$240,000

 

 13
 

 

 

Present Value of
Potential Payments $200,000

Then lesser of

1 X $200,000 =
$200,000

Employee Insurance
= $240,000

Therefore,
$200,000 life insurance.

10.2.      Medical and Dental Insurance. Hexcel,
at its expense, shall continue to cover Employee in its group medical and
dental insurance plan during those periods life insurance is maintained for
Employee pursuant to Section 10.1.

10.3.      Termination of Benefits. Notwithstanding
anything set forth herein, Employee shall not be entitled to any benefits under
Sections 10.1 and 10.2 should Employee receive a lump sum benefit hereunder or
after Employee’s 75th birthday.

10.4.      Eligibility. Notwithstanding
anything set forth herein, Hexcel shall have no obligations under sections 10.1
or 10.2 unless all of the following conditions precedent are satisfied:

(a) At the time of Employee’s retirement or other
termination, he was employed by Hexcel for not less than five (5) years;
and

(b)                Employee was not terminated for
any reason set forth in Section

4.2; and

(c) Employee is in full compliance with his
obligations under this Agreement, including without limitation his obligations
under Section 3.2.

11.           MISCELLANEOUS. All payments
received pursuant to this Agreement shall be subject to applicable payroll
taxes and taxes withholding. This Agreement shall inure to the 

 

 14
 

 

 

benefit of and be binding
upon the successors and assigns of Hexcel and the heirs, legatees, personal
representatives and designated beneficiaries of Employee.

The parties
understand and agree that the preceding Sections recite the sole consideration
for this Agreement and that no representation or promise has been made by
Employee or Hexcel in regard to the subject matter of this Agreement, except as
expressly set forth in this Agreement. This Agreement shall supersede all prior
or contemporaneous agreements and understandings between the parties whether
written or oral, express or implied, with respect to executive deferred
compensation, except to the extent that the provisions of any such agreement
have been expressly referred to in this Agreement as having continued effect.

This Agreement may
not be modified, amended, or terminated except by an instrument in writing,
signed by each of the parties.

Notwithstanding
anything to the contrary contained in this Agreement, if any provisions hereof,
or the application thereof to any circumstance, is held invalid for any reason
whatsoever, such invalid provision shall be severable and shall not affect any
other provision hereof or the application thereof to any other circumstances
which can be given effect without such invalid provisions or application. This
Agreement is entered into in contemplation of and shall be interpreted and
enforced in accordance with Delaware law. For convenience, references to the
Employee herein are masculine, but shall be deemed to include the feminine
gender if Employee is female. Paragraph and Section headings have been
inserted for convenience only, and in no way shall be used to interpret or
otherwise affect the terms of this Agreement.

 

 15
 

 

 

TO EVIDENCE THEIR
AGREEMENT to the foregoing, the parties have executed this Agreement the day
and year first above written.

	
  

  	
   

  	
   

  	
  HEXCEL CORPORATION

  
	
   

  	
   

  	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ ROBERT G.
  HENNEMUTH

  	
   

  	
  By

  	
  /s/ IRA J. KRAKOWER

  
	
  Robert G.
  Hennemuth

  	
   

  	
   

  	
  Ira J. Krakower

  
	
   

  	
   

  	
   

  	
  Senior Vice President

  

 

 

 16
 

 

 

DESIGNATION
OF BENEFICIARY

Primary Beneficiary(ies):

 

 

Secondary
Beneficiary(ies) in event Primary Beneficiary(ies) dies prior to receipt of all
payments due:

 

 

Employee shall have the
right to change the above beneficiary designations by written notice in
accordance with the provisions of Section 6.1 of the Agreement.

 

 

To be signed only in the
event a primary beneficiary other than Employee’s spouse is named:

 

 

Designation of
beneficiary approved this _____ day of ____________________.

 

 

	
   

  	
   

  
	
   

  	
  Spouse of Employee

  

 

 17

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