Exhibit 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 at 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.

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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 65th birthday, Employee shall receive a
monthly amount of consulting and retirement income payments, without any
specification as to

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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 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 said Exhibit “A”, 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 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
40th birthday but prior to his 58th 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 40th 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 40th 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 65th 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 State of California, or
in any other state, territory or foreign country within which Hexcel carries on
Hexcel’s Business or in which any of its products are sold either prior or
subsequent to the date hereof.

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 Exhibit “A”
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 effective date of such
termination.  Notwithstanding such employment credit, the amounts computed in
accordance with such formulas are only payable to Employee 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.

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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 in 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 Employees 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, covenant 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 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 legal and equitable remedies and 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.

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5.             MININUM PAYMENT.

5.1           Prior Agreement.  If Employee was a party to a prior agreement
with Hexcel concerning executive deferred compensation and consulting payments,
and Employee becomes entitled to receive payments hereunder, Employee shall be
entitled to receive, at a minimum, the amount payable to him as of December 31,
1981 under the terms of such prior agreement, which amounts are set forth in
Exhibit “C” which has been initialed by the parties and attached hereto.

5.2           Change in Control.  If there is a change in control of Hexcel and
Employee becomes entitled to receive payments hereunder, Employee shall be
entitled to receive at a minimum, the amounts payable to him as of December 31,
1981, under the terms of such prior agreement, which amounts are set forth in
Exhibit “C”.

For purposes of this Section 5.2, a “change in control of Hexcel” shall mean a
change in control of a nature that would be required to be reported in response
to Item     5(f) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 (“Exchange Act”); provided that, without
limitation, such a change in control shall be deemed to have occurred if (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act
is or becomes the beneficial owner, directly or indirectly, of securities of
Hexcel representing thirty percent (30%) or more of the combined voting power of
the Company’s then outstanding securities; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of Hexcel cease for any reason to constitute at least a
majority thereof unless the election of each director, who was not a director at
the beginning of the period, was approved by a vote of at least two-thirds of
the directors

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then still in office who were directors at the beginning of the period.

6.             INSURANCE BENEFITS.

6.1           Life Insurance.  Hexcel shall keep in force and pay for life
insurance for Employee shall Employee retire or otherwise cease to be employee
Hexcel (“termination”) in the following amounts so long as (subject to Section
6.3) Employee has not received all the payments to which Employee is entitled
under this Agreement:

(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 Exhibits “A”, “B” and “C”) at the time of
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

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.

(b)           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
Exhibits “A”, “B”

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and “C”) at the time of termination, provided such insurance shall not exceed
the amount of the life insurance on Employee in effect at the time of
termination.

Example:

Salary $80,000

Employee Insurance $240,000

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.

6.2           Medical and Dental Insurance.  Hexcel, at its expenses, 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 6.1.

6.3           Termination of Benefits. Notwithstanding anything set forth
herein, Employee shall not be entitled to any benefits under Sections 6.1 and
6.2 should Employee receive a lump sum benefit hereunder or after Employee’s
75th birthday.

7.             RIGHT OF PARITES.

7.1           Change of Beneficiary.  Employee shall have the right at any time
to change the person or persons designated as beneficiary or contingent
beneficiary on Exhibit “D” attached hereto, by written notice to Hexcel in form
satisfactory to Hexcel.  Such change of beneficiary shall become effective upon
receipt and approval by Hexcel.

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

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7.3           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.

8.             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.

9.             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.

10.           MISCELLANEOUS. This Agreement replaces any former agreements
between Employee and Hexcel relating to executive deferred compensations and
consulting.  All payments received pursuant to this Agreement shall be subject
to applicable payroll taxes and taxes withholding.  This agreement shall inure
to the benefit

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

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 California law applicable to
contracts made and to be performed within the State of California.  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.

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/ Wayne C. Pensky

 

 

By

/s/ Rodney P. Jenks, Jr.

Employee’s Signature

 

 

 

Vice President,

 

 

 

 

General Counsel &

 

 

 

 

Secretary

 

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AMENDMENT TO

EXECUTIVE DEFERRED COMPENSATION AND CONSULTING AGREEMENT

This Agreement is entered into as of June 7, 1995, between HEXCEL CORPORATION
(“Hexcel”) and Wayne C. Pensky (“Employee”).

WHEREAS, Employee and Hexcel have entered into an Executive Deferred
Compensation and Consulting Agreement dated June 7, 1995; and

WHEREAS Employee and Hexcel wish to amend said Agreement relating to Change in
Control; excluding the CIBA Composites Transaction;

NOW THEREFORE, it is agreed to amend Section 5.2 “Change in Control” as follows:

5.2           Change in Control.  If there is a change in control of Hexcel and
Employee becomes entitled to receive payments hereunder, Employee shall be
entitled to receive, at a minimum, the amounts payable to him as of December 31,
1981, under the terms of such prior agreement, which amounts are set forth in
Exhibit “C”.

For purposes of this Section 5.2, a “change in control of Hexcel” shall mean a
change in control of a nature that would be required to be reported in response
to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (“Exchange Act”); provided that, without limitation, such a
change in control shall be deemed to have occurred if (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
beneficial owner, directly or indirectly, of securities of Hexcel representing
thirty percent (30%) or more of the combined voting power of the Company’s then
outstanding securities; or (ii) during any

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period of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of Hexcel cease for any reason to constitute
at least a majority thereof unless the election of each director, who was not a
director at the beginning of the period, was approved by a vote of at least
two-thirds of the directors then still in office who are directors at the
beginning of the period.

HEXCEL CORPORATION

/s/ Wayne C. Pensky

 

Employee’s Signature

 

 

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