Exhibit 10.3

 

Adopted by the Board of Directors

July 22, 2013

 

HEXCEL CORPORATION

EXECUTIVE SEVERANCE POLICY

 

DATED AUGUST 1, 2013

 

1.              Purpose.  This Executive Severance Policy (the “Policy”) has
been adopted by the Compensation Committee (the “Committee”) of Hexcel
Corporation (the “Company”) effective August 1, 2013. The purpose of the policy
is to establish the terms and conditions applicable to a termination of
employment of an executive employee who has received an offer letter of
employment from the Company that expressly extends the provisions of the Policy
to such executive (the “Executive”). The Committee shall have full discretionary
authority to interpret and construe the provisions of the Policy and to make
determinations pursuant to the Policy. The Committee shall have the authority,
in its discretion, to amend or terminate the Policy, but no amendment or
termination shall adversely affect any rights that have become vested in the
Executive by virtue of the application of the Policy. The Company in writing
shall notify the Executive of any such amendment of termination but in no event
shall any such amendment or termination be effective as to the Executive earlier
than (i) one year after the notice or (ii) two years after the occurrence of a
Change in Control (as defined below). The Committee may apply the Policy in a
non-uniform manner among Executives and all other Persons affected hereunder.

 

2.              Termination.  The Executive’s employment with the Company may be
terminated under the following circumstances:

 

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

 

(b)         Disability. The Company may terminate the Executive’s employment due
to the Executive’s inability, due to physical or mental incapacity, to
substantially perform the Executive’s full time duties and responsibilities for
a period of ninety out of any consecutive one-hundred eighty days (as determined
by a medical doctor selected by Company and Executive) (“Disability”).  If the
Company and the Executive cannot agree on a medical doctor for purposes of such
determination of Disability, each party shall select a medical doctor and the
two doctors shall select a third who shall be the approved medical doctor for
this purpose.

 

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

 

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(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 terms of any
non -compete or confidentiality obligations applicable to the Executive.  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 (A) reasonable notice from the Board of
directors of the Company (the “Board”) to the Executive setting forth the
reasons for the Company’s intention to terminate for Cause, (B) 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/she 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,
(C) an opportunity for the Executive, together with the Executive’s counsel, to
be heard before the Board, and (D) delivery to the Executive of a Notice of
Termination from the Board specifying the particulars thereof in detail; or

 

(iii)                   a material breach of the terms of the Executive’s
employment which the Executive has not cured within 20 days after receipt of
notice from the Company that specifically identifies the manner in which the
Company believes the Executive has caused such breach.

 

(d)         Good Reason. The Executive may terminate his employment hereunder
for Good Reason. For purposes of this Policy, “Good Reason” shall mean
termination by the Executive of employment after the initial occurrence of any
of the following events without the Executive’s consent, unless such occurrence
has not resulted in a material negative change (within the meaning of
Section 1.409A-1(n)(2)(i) of the Treasury Regulations or any successor
provision) to the Executive in his/her service relationship with the Company:

 

(i)                         A material 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 of more than 10% in the Executive’s annual
rate of base salary as in effect on the date this Policy becomes applicable to
the Executive or as the same may be increased from time to time (except for
across-the-board reductions in salary similarly affecting all senior executives
of the Company and all senior executives of any Person in control of the
Company);

 

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(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 retirement, 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 weeks of paid vacation each calendar year in
accordance with the offer of employment;

 

(v)                     Failure by the Company to provide facilities or services
which are reasonably necessary for the performance of the Executive’s duties or
responsibilities or the exercise of the Executive’s authority;

 

(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 Policy; or

 

(viii)            Willful failure to pay the Executive any portion of current or
deferred compensation within thirty (30) days of the date such compensation is
due.

 

The Executive’s continued employment shall not constitute consent to, or waiver
of rights with respect to, any circumstance constituting Good Reason; provided,
however, that the Executive shall be deemed to have waived the Executive’s
rights regarding circumstances constituting Good Reason if he shall not have
provided the Company a Notice of Termination within ninety (90) days following
the Executive’s knowledge of the occurrence of circumstances constituting Good
Reason; and provided further, that the Executive shall have no rights with
respect to any circumstances constituting Good Reason upon the Company’s remedy
of such circumstances within thirty (30) days after its receipt of such notice
from the Executive or if the circumstances are based on Cause. Notwithstanding
the foregoing, there shall be no termination for Good Reason unless the
Executive gives Notice of Termination within two years after the initial
occurrence of the circumstances giving rise to 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

 

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Sections (2)(a), (b) or (c) hereof, upon written notice to the Executive and
(ii) the Executive may terminate 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 2(a) hereof) shall be communicated by written
Notice of Termination to the other party in accordance with Section 7.  For
purposes of this Policy:

 

(i)  “Notice of Termination” shall mean a notice which shall indicate the
specific termination provision in this Policy 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 2(a), the date of
death, (B) if the Executive’s employment is terminated pursuant to Section 2(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
employment and fails to provide written notice to the Company of such
termination, the date of such termination; provided, however, that if the date
of the Executive’s “separation from service” (as that term is defined in
Section 1.409A-1(h) of the Treasury Regulations or any successor provision) is
different than the date as determined in accordance with (A) through (D) above,
as applicable, the date of the Executive’s “separation from service” shall be
the “Date of Termination” for all purposes under this Policy.

 

4.                          Compensation Upon Death, Disability or Termination.

 

(a)         If the Executive’s employment with the Company is terminated for any
reason, in addition to the amounts and benefits provided pursuant to the
remainder of this Section 4, the Company shall pay or provide to the Executive
(i) any expense reimbursements owed to the Executive by the Company and (ii) all
benefits that are due to the Executive under the terms of the Company’s
broad-based benefit plans, programs and arrangements in accordance with the
terms of such plans, programs and arrangements.

 

(b)         If the Executive’s employment is terminated by 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 (ii) a bonus for the year in
which such termination of employment occurs equal to the Executive’s bonus as
determined under the Company’s MICP, or any successor, alternate or supplemental
plan (the “Bonus Plan”) for such year multiplied by a fraction, the numerator of
which is the number of days during such year that the Executive was

 

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employed by the Company and the denominator of which is 365 (the “Pro-Rata
Bonus”), at the time bonuses are customarily paid to senior level executives

 

(c)          If the Executive’s employment with the Company is terminated by
reason of the Executive’s Disability, then (i) the Executive shall receive
disability benefits in accordance with the terms of the long-term disability
program then in effect for senior executives of the Company, and (ii) the
Company shall pay to the Executive the Base Salary through the end of the month
immediately preceding the month in which such disability benefits commence, and
(iii) the Company shall pay the Pro-Rata Bonus to the Executive at the time
bonuses are customarily paid to senior level executives.

 

(d)         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 the full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given.

 

(e)          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 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 which would constitute a Good Reason);

 

(ii)                      notwithstanding any provision of the Bonus Plan to the
contrary, the Company shall pay to the Executive the Pro-Rata Bonus at the time
bonuses are customarily paid to senior level executives;

 

(iii)                   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, a cash lump sum 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 average of the last three annual bonus
amounts awarded to the Executive under the Bonus Plan for the last three plan
years completed prior to the Date of Termination (the “Average Annual Bonus,”
and (B) (x) if the Date of Termination is within two years after the occurrence
of a Change in Control, the number[_#_], or (y) if the termination is not
governed by the preceding clause (x), the number [_# ], where the applicable
multiples are set forth in the offer letter by reference hereto; and

 

(iv)                  the Company shall continue the participation of the
Executive for a period of [ # ] years (except if the Date of Termination is
within two years after the occurrence of a Change in Control, such period shall
be [ # ] years) in all medical, dental, hospitalization, life insurance and
other welfare and plans and programs, in each case in which the Executive
participated immediately prior to the

 

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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 the Executive’s continued
participation is barred.  Any benefits or payments to which the Executive is
otherwise entitled under this Section 4(e)(iv) shall be reduced to the extent
benefits of the same type are received by, or made available to, the Executive
by a subsequent employer during the applicable benefit continuation period
following the Date of Termination (and the Executive shall be obligated to
notify the Company in writing within ten days after such time as the Executive
receives any such benefits, or such time as any such benefits are made available
to the Executive). Notwithstanding anything in this Section 4(e)(iv) to the
contrary, if and to the extent that any benefits or payments receivable by the
Executive under any such plan or program (or in lieu of participation in any
such plan or program in which participation is barred) would not be excludible
from the Executive’s gross income, and if such non-excludible amounts (other
than non-excludible benefits or payments receivable by the Executive under the
Company’s medical or health plan during the period of time during which the
Executive would be entitled to COBRA continuation coverage under the Company’s
medical or health plan if the Executive elected such coverage and paid the
applicable premiums (hereinafter “Exempt Medical Benefits”)), in the aggregate,
could exceed the applicable dollar limit under Section 402(g)(1)(B) of the
Internal Revenue Code of 1986, as amended (the “Code”), for the year in which
the Executive’s Date of Termination occurs, and if any such amounts are not
otherwise exempt from Section 409A of the Code, then:

 

(A)                                           if the Executive is a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the
Date of Termination, then any such non-excludible amounts (other than Exempt
Medical Benefits) that would otherwise have been paid or provided to the
Executive during the first six months following the Date of Termination shall be
paid or provided instead to the Executive in a lump sum on the earlier of
(x) the date which is six months following the Date of Termination and (y) the
date of the Executive’s death, and not before; and

 

(B)                                           the amount of such benefits or
payments (other than Exempt Medical Benefits) receivable by the Executive under
any such plan or program in one taxable year shall not affect the amount of
benefits or payments Executive may be eligible to receive in any other taxable
year, the right to such benefits or payments under any such plan or program
shall not be subject to liquidation or exchange for any other benefit, and the
reimbursement under any such plan or program of an expense incurred by the
Executive shall be made on or before the last day of the Executive’s taxable
year following the year in which the expense was incurred.  The Executive shall
be responsible for submitting claims for reimbursement in a timely manner to
enable payment within the timeframe provided herein.

 

(f)           If the Company shall terminate the Executive’s employment other
than for Cause, or the Executive shall terminate employment for Good Reason, in
either case during the period of a Potential Change in Control or at the

 

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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 Policy 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.

 

(g)          For purposes of this Policy, 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 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 more than 50% of either (A) the combined fair market
value of the then outstanding stock of the Company (the “Total Fair Market
Value”) 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: (I) any acquisition by
the Company or any of its affiliates, (II) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of
its affiliates, (III) any Person who becomes such a Beneficial Owner in
connection with a transaction described in the exclusion within paragraph
(4) below and (IV) any acquisition of additional stock or securities by a Person
who owns more than 50% of the Total Fair Market Value or Total Voting Power of
the Company immediately prior to such acquisition; or

 

(2)         any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company that, together with any securities
acquired directly or indirectly by such Person within the immediately preceding
twelve-consecutive month period, represent 40% or more of the Total Voting Power
of the Company; excluding, however, any acquisition described in subclauses
(I) through (IV) of subsection (1) above; or

 

(3)         a change in the composition of the Board such that the individuals
who, as of the original effective date of this Policy, 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 an
Incumbent Director; 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 an Incumbent Director; provided
finally, however, that, as of any time, any member of the Board who has been a

 

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director for at least twelve consecutive months immediately prior to such time
shall be considered an Incumbent Director for purposes of this definition, other
than for the purpose of the first proviso of this definition; or

 

(4)         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 (A) pursuant to which all or
substantially all of the individuals and entities who are the Beneficial Owners,
respectively, of the outstanding Common Stock of the Company 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 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) 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 (B) 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); provided, however, that
notwithstanding anything to the contrary in subsections (1) through (4) above,
an event which does not constitute a change in the ownership of the Company, a
change in the effective control of the Company, or a change in the ownership of
a substantial portion of the assets of the Company, each as defined in
Section 1.409A-3(i)(5) of the Treasury Regulations (or any successor provision),
shall not be considered a Change in Control for purposes of this Policy.

 

(h)         Excise Tax.

 

(1)         Valley.

 

Notwithstanding any other provisions of this Policy, 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 Policy 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
Code, then the payments and benefits provided under Section 4(e) or 4(f) hereof
(“Severance Payments”) which are cash shall first be reduced on a pro rata
basis, and the non-cash Severance Payments shall thereafter be reduced on a pro
rata basis, 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

 

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(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 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.

 

(2) Other Terms.                                            At the time that
payments are made under this Policy, 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(h)(1)(i). 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 Policy by seeking other
employment or otherwise. Except as provided in the third sentence of
Section 4(e)(iv) with respect to benefits received by, or made available to, the
Executive by a subsequent employer, the amount of any payment or benefit
provided for in this Policy shall not be reduced by any compensation earned by
the Executive as the result of

 

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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.              Binding Policy.  This Policy 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 Policy, shall be paid to the
Executive’s devisee, legatee, or other designee or, if there be no such
designee, to the Executive’s estate.

 

7.              Notices.  Notices, demands and all other communications provided
for in this Policy shall be in writing and shall be deemed to have been duly
given as provided for in the offer letter.

 

8.              General Provisions.  Except as provided in Section 1, no
provision of this Policy may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by the
Executive (or, if applicable, the Executive’s legal representative) and the
Company.  No waiver by either the Executive or the Company at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Policy 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 Policy or the offer letter.  The validity,
interpretation, construction and performance of this Policy shall be governed by
the laws of the State of Connecticut without regard to its conflicts of law
principles.

 

9.              Validity and Enforceability.  The invalidity or unenforceability
of any provision of this Policy shall not affect the validity or enforceability
of any other provision of this Policy, which shall remain in full force and
effect.

 

10.       Arbitration.  Any dispute or controversy arising under or in
connection with this Policy shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in the State of Connecticut,
constituting an Employment Dispute Tribunal 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.

 

11.       Entire Policy. This Policy and the offer letter is the entire
agreement or understanding between the Company and the Executive regarding the
subject matter hereof.

 

12.       Remedies.  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

 

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to the Executive all legal, audit, and actuarial fees and expenses incurred by
the Executive during his lifetime 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 Policy or any other plan, arrangement or agreement
with the Company, provided that the Executive has obtained a final determination
supporting at least part of the Executive’s claim and there has been no
determination that the balance of the Executive’s claim was made in bad faith. 
Notwithstanding the preceding sentence, to the extent the payment of such fees
and expenses would constitute compensation or wages for Federal tax purposes,
then:

 

(a)                                 if the Executive is a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the Date of
Termination, then any such fees or expenses that would otherwise have been paid
to Executive during the first six months following the Date of Termination shall
be paid instead to the Executive in a lump sum on the earlier of (i) the date
which is six months following the Date of Termination and (ii) the date of the
Executive’s death, and not before; and

 

(b)                                 the amount of any such fees or expenses paid
to the Executive in one taxable year shall not affect the amount of such fees or
expenses the Executive may be eligible to receive in any other taxable year, the
Executive’s right to any such fees or expenses shall not be subject to
liquidation or exchange for any other benefit, and the reimbursement of any such
fees or expenses incurred by the Executive shall be made on or before the last
day of the Executive’s taxable year following the year in which the fee or
expense was incurred.  The Executive shall be responsible for submitting claims
for reimbursement in a timely manner to enable payment within the timeframe
provided herein.

 

13.       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 Policy 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 the 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; provided, however, that to the extent such
reimbursement would constitute compensation or wages for Federal tax purposes,
such reimbursement shall be subject to the requirements set forth in Sections
12(a) and (b) above.

 

14.       Code Section 409A.  The Executive and the Company intend that any
payment under this Policy shall, to the extent subject to Section 409A of the
Code, be paid in compliance with Section 409A and the Treasury Regulations
thereunder such that there shall be no adverse tax consequences, interest, or
penalties as a result of the payments, and the Company shall interpret the
Policy in accordance with Section 409A and the Treasury Regulations thereunder. 
The

 

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Executive and the Company agree to modify this Policy or the timing (but not the
amount) of any payment to the extent necessary to comply with Section 409A of
the Code and avoid application of any taxes, penalties, or interest thereunder. 
However, in the event that the amounts payable under this Policy are subject to
any taxes, penalties or interest under Section 409A, the Executive shall be
solely liable for the payment of any such taxes, penalties or interest.

 

*   *   *   *   *   *

 

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