EXECUTIVE DEFERRED COMPENSATION AND CONSULTING
AGREEMENT
THIS AGREEMENT is
entered into as of June 7, 1995, at Pleasanton, California, between
HEXCEL CORPORATION, a Delaware corporation
(“HEXCEL”), and Wayne C. Pensky
(“Employee”), on the basis of the following facts and
understandings:
R E C I T A L S
:
A.
Employee is a key executive of Hexcel and has made 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. 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.
Hexcel’s Executive Compensation Committee of the Board of
Directors has authorized it to enter into this Executive Deferred
Compensation Agreement with Employee.
AGREEMENT
NOW, THEREFORE, in
consideration of the services rendered in the past and 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 65
th
birthday, Employee shall receive a monthly amount of
consulting and retirement income payments, without any
specification as to
the amount allocated to
either, computed pursuant to Exhibit “A” which has been
initialed by the parties and attached hereto. Such payments
shall commence the calendar month following Employee’s
retirement or 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.
1.2
Retirement Before Age 65 . If Employee retires or
otherwise ceases to be employed by Hexcel after his 40
th
birthday but prior to his 65 th
birthday, his consulting and retirement income payments,
without any specification as to the amount allocated to either,
computed pursuant to said Exhibit “A”, shall commence
the calendar month following his 65 th
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 reflected on Exhibit
“B”, which has been initialed by the parties and
attached hereto.
If
Employee retires or otherwise ceases to be employed by Hexcel after
his 40 th
birthday but prior to his 58 th
birthday, his consulting and retirement income payments shall
be the same as under Section 1.2 except that until Employee attains
the age of 58, the obligation of Hexcel under Section 6.2 (i.e.,
medical and dental insurance) shall be in effect only if Employee
promptly reimburses Hexcel on its written demand for its costs of
such medical and dental insurance under the group plan.
Employee shall not be entitled to any benefits
under this Agreement if Employee ceases to be employed by Hexcel
prior to attaining his 40 th
birthday.
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1.3
Possible Lump Sum, Etc. 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 either (a) the applicable lump sum
benefit reflected on Exhibit “B”, or (b) 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 obligations under Paragraph
3.
2.
DEATH BENEFITS . If Employee dies after his 40
th
birthday but prior to commencement of payments to him
pursuant to Sections 1.1 or 1.2, there 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 reflected in Exhibit “B”. In lieu of said
monthly pension, on the condition that Hexcel, in its sole
discretion, consents thereto in writing, such beneficiary may elect
either (a) the applicable lump sum death benefit reflected on
Exhibit “B” or (b) any other form of pension benefit
actuarially equivalent thereto, based on the actuarial assumptions
used in constructing Exhibit “B”, such election to be
made by written notice to Hexcel, in form satisfactory to Hexcel,
within sixty (60) days following the Employee’s death.
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, should Employee retire after this 65 th
birthday but has not as yet received 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.
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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 payments 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 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) man days (on
the basis of seven-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 . In order to protect
Hexcel’s benefits under Section 3.1 and its trade secrets in
the field of engineered materials (e.g., high technology,
lightweight structural materials and specialty chemicals and
resins) and other products being manufactured or marketed by Hexcel
or developed for manufacture or marketing at the time of
Employee’s retirement or termination of employment, or the
trade secrets of any business acquired by Hexcel within six months
after retirement or termination of such employment if said
acquisition was in the process of negotiation at
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the time of such
retirement or termination (herein-after collectively designated
“Hexcel’s Business”), Employee agrees that at all
times prior to his retirement or termination of employment and
during so much of the ten-year period following such retirement or
termination that Hexcel, or any of its successors, assigns or
affiliated companies carries on any portion of Hexcel’s
business, Employee shall not directly or indirectly, as a partner,
substantial owner, employee, associate, consultant, agent or
otherwise, engage in any activity related to or competitive with
Hexcel’s business in any county in the St
