Exhibit 10.3


 


January 21, 1999


 


Personal


 


Mr. W. Hunt


Hexcel Composites Ltd


Duxford


Cambridge


CB2  4QD


 


Dear Bill:


 


Your pension benefits


 


The pension provision made for you by Ciba was set out in a letter
dated 19 August 1992 from Mr. J.S. Fraser.  The purpose of this letter is to confirm that
Hexcel Composites Limited (the “Company”) is pleased to maintain your existing
pension promise as set out in Mr. Fraser’s letter.  This letter also clarifies your pension
promise and your life assurance and ill-health retirement benefits.


 


Retirement at Normal Retirement Date


 


Your Normal Retirement Date is your 65th birthday.  On retirement at this date you will receive
an annual pension of two-thirds of your Pensionable Salary over the year prior
to retirement.  Pensionable Salary is
your basic salary plus any further earnings which are pensionable under the
terms of the Hexcel Composites Limited Pension Scheme (the “HCL Scheme”).  For the avoidance of doubt your Pensionable
Salary will not be restricted by the earnings cap imposed by the Finance Act
1989.


 


Early Retirement from age 60


 


At your option, you may retire from the Company’s service on or after
your 60th birthday.  In such
circumstances you will receive an annual pension of two-thirds of your
Pensionable Salary over the year prior to retirement.


 


Leaving service benefits


 


On leaving service you will be entitled to an annual pension deferred
to your Normal Retirement Date.  The
annual deferred pension will be 1/720th of your Pensionable Salary
over the year prior to leaving service multiplied by the number of months from
the date


 


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you first joined a Ciba-Geigy pension scheme to the date of leaving
service (up to a maximum of 480 months).


 


This deferred pension is to be increased over the period between the
date of leaving and your Normal Retirement Date by the lesser of the increase
in the Retail Prices Index and 5% per year compound over this period.


 


If you choose to receive your deferred pension before your Normal
Retirement Date then a reduction will be applied for early payment on the same
basis as applies to deferred pensions in the HCL Scheme at the time of your
retirement.


 


Death after retirement (or after leaving service but before Normal
Retirement Date)


 


On death after retirement (or after leaving service but before Normal
Retirement Date) your widow will receive an annual pension of 60% of your own
pension.


 


Death in service


 


A lump sum of three times your Pensionable Salary will be paid.


 


An annual pension will be paid to your widow of 40% of the Pensionable
Salary earned over the year prior to your death.


 


Retirement on ill-health grounds


 


If, having obtained medical evidence, the Company decides that you are
unable to carry out your normal duties as a result of ill-health or disability
then you will be granted an annual pension of two-thirds of your Pensionable
Salary earned over the year prior to retirement.  On death after ill-health retirement an
annual pension of 60% of your own annual pension will be payable to your widow.


 


Lump sum option


 


On retirement you may take part of your benefits in lump sum form by
giving up part of your pension entitlement. 
Under current legislation, part of your benefits from the HCL Scheme and
your Standard Life personal pension may be taken as a lump sum free of
tax.  If you decide to take part of your
benefits as a lump sum then your pension promise will be reduced on the same
basis as applies as at the date of your retirement to members of the HCL Scheme
exchanging pension for a lump sum.


 


Any reduction in your pension promise as a result of taking a lump sum
will be ignored in calculating the widow’s pension promise in respect of death
after retirement.


 


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Your contributions


 


You will be required to contribute towards your pension arrangements at
the same percentage of your Pensionable Salary as is applicable to members of
the HCL Scheme from time to time (currently 4% of Pensionable Salary).  Since your benefits are based on Pensionable
Salary without restriction for the earnings cap, your contributions will also
be based on unrestricted Pensionable Salary. 
Your pension contributions will be paid to the HCL Scheme, subject to
Inland Revenue maximum contribution limits.


 


Post retirement increases


 


The pension payable to you (and the pension payable contingently to
your wife) in accordance with your promise will be increased annually in
payment by the lesser of 5% and the increase in the Retail Prices Index.  Further discretionary increases may be
provided if the Company believes this would be consistent with discretionary
increases awarded to pensioners of the HCL Scheme.


 


Provision of your benefits


 


Your pension promise will be provided from the aggregate of the following
sources:


 


1.               Your benefits from your Standard Life
personal pension in respect of contributions paid prior to 1 January 1998
when you joined the HCL Scheme.


 


2.               Your benefits in respect of the transfer
value paid from the Ciba Pension Scheme to the HCL Scheme in January 1998.  These benefits are set out in the appendix to
this letter.


 


3.               Your benefits in respect of pensionable
service in the HCL Scheme from 1 January 1998.  These will be the Inland Revenue maximum
benefits in respect of such service which, under current legislation, will be
the lesser of:


 


•                  1/30th
of the earnings cap for each year of service; and


 


•                  2/3rds
of the earnings cap less your benefits under 1 and 2 above.


 


4.               Direct payment of benefits from Hexcel
Composites Limited to the extent, if any, that 1, 2 and 3 above are
insufficient to provide the promised benefits. 
Any proceeds of life assurance and disability insurance policies
affected by the Company on your behalf will be used to finance such direct
payments – i.e., such proceeds will be used to finance your benefit promise and
not payable in addition to it.


 


5.               This letter is executed as a deed poll
with the intention of allowing your wife to benefit from the promises made in
this letter.


 


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Yours sincerely


 


	
   /s/ Stephen C. Forsyth

  	
   

  	
   /s/ Ira J. Krakower

  
	
  S C Forsyth, Director

  	
  I J Krakower, Director

  



 


executed as a deed poll for and on behalf of Hexcel Composites Limited


 


This is to confirm that Hexcel Corporation (which shall include its
successors and assigns) irrevocably guarantees all payments due William Hunt or
his wife pursuant to paragraph 4 above to the extent that Hexcel Composites
Limited fails for whatever reason to do so, in whatever form, including lump
sum, as required to be paid by Hexcel Composites Limited.


 


 


	
  /s/ John J. Lee

  	
   

  	
   

  
	
  John J. Lee

  	
   

  
	
  Chairman & CEO

  	
   

  



 


executed as a deed poll by Hexcel Corporation


 


 


Countersigned by W. Hunt to confirm his acceptance that this letter
replaces the letter of 19 August 1992 from Mr. J.S. Fraser of Ciba.


 


	
  /s/ William Hunt

  	
   

  	
   

  
	
  W. Hunt

  	
   

  



 


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Appendix to letter dated 21 January 1999


 


Mr. W. Hunt


 


Benefits from the HCL Pension Scheme in respect of the transfer value
received from the Ciba Pension Scheme in January 1998.


 


•                  A pension of
£39,900 per annum as at 1 January 1998, payable from your Normal
Retirement Date (i.e. your 65th birthday).


 


•                  A reduced
pension of £29,900 per annum as at 1 January 1998 on early retirement at
age 60.


 


•                  On retirement
between ages 60 and 65 the pension would be calculated pro rata.


 


•                  The pension as
at 1 January 1998 will be increased in line with the Retail Prices Index
over the period from 1 January 1998 to retirement.


 


•                  The pension will
increase in payment in line with normal HCL Scheme increases (i.e. in line with
the Retail Prices Index subject to an annual maximum increase of 5% and subject
to possible further discretionary increases if inflation exceeds 5% in a
particular year).


 


•                  On death, either
before or after retirement, a widow’s pension of 60% of the pension (including
increases up to the date of death) is payable.


 


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