Exhibit
10.1


EXECUTIVE  SEVERANCE 
AGREEMENT


AGREEMENT made as of the
27th day of April, 2007, between HEXCEL CORPORATION, a Delaware corporation
with offices at Stamford, Connecticut (the “Company”), and Wayne C. Pensky (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
and Chief Financial Officer 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
retirement, 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;


 



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(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:


11319 Bay Laurel St


Dublin, CA 94568


If
to the Company:


Hexcel Corporation


281 Tresser Blvd.


Stamford, CT  06901-3238



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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.



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15.   Entire
Agreement.  This Agreement is the
entire agreement or understanding between the Company and the Executive
regarding the subject matter hereof.  In
particular, the Executive Severance Agreement dated February 3, 1999 by and
between the Company and the Executive shall be void and of no further force or
effect.


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 April 27, 2007 (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.


19.   Section
409A



 15
 









(a)           It is intended that this Executive
Severance Agreement comply in all respects with the requirements of Sections
409A(a)(2) through (4) of the Code and applicable Treasury Regulations and
other generally applicable guidance issued thereunder (collectively, the “Applicable
Regulations”), and this Executive Severance Agreement shall be interpreted for
all purposes in accordance with this intent.


(b)           Notwithstanding any term or provision
of this Executive Severance Agreement, the parties hereto agree that, from time
to time, the Company may, without prior notice to or consent of the Executive,
amend this Executive Severance Agreement to the extent determined by the
Company, in the exercise of its discretion in good faith, to be necessary or
advisable to prevent the inclusion in the Executive’s gross income pursuant to
the Applicable Regulations of any compensation intended to be deferred hereunder.
The Company shall notify the Executive as soon as reasonably practicable of any
such amendment affecting the Executive.



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  HEXCEL CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Ira J. Krakower

  	
   

  
	
   

  	
   

  	
  Name: Ira J. Krakower

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Wayne C. Pensky

  	
   

  
	
   

  	
   

  	
  Executive

  	
   

  






 



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