Exhibit 10.3


RESTRICTED STOCK UNIT
AGREEMENT


for


Non-Employee
Directors


RESTRICTED STOCK
UNIT AGREEMENT (this “Agreement”), dated as of the Grant Date, by and between
the Grantee and Hexcel Corpo­ra­tion (the “Corpo­ration”).


W
I  T  N  E  S  S  E  T  H:


WHEREAS,
the Corporation has adopted the Hexcel Corporation 2003 Incentive Stock Plan
(the “Plan”); and


WHEREAS, the Board
of Directors of the Corporation (the “Board”) has determined that it is
desirable and in the best interests of the Corporation to grant to the Grantee
restricted stock units (“RSUs”) as an incentive for the Grantee to advance the
interests of the Corporation.


NOW, THEREFORE,
the parties agree as follows:


1.       Notice of Grant; Incorporation of Plan.  Pursuant to the Plan and subject to the terms
and conditions set forth herein and therein, the Corporation hereby grants to
the Grantee the number of RSUs indicated on the Notice of Grant attached hereto
as Annex A, which Notice of Grant is incorporated by reference herein.  Unless otherwise provided herein, capitalized
terms used herein and set forth in such Notice of Grant shall have the meanings
ascribed to them in the Notice of Grant and capitalized terms used herein and
set forth in the Plan shall have the meanings ascribed to them in the Plan. The
Plan is incorporated by reference and made a part of this Agreement, and this
Agreement shall be subject to the terms of the Plan, as the Plan may be amended
from time to time, provided that any such amendment of the Plan must be made in
accordance with Section IX of the Plan. The RSUs granted herein constitute an
Award within the meaning of the Plan.


2.       Terms of Restricted Stock Units.  The grant of RSUs provided in Section 1
hereof shall be subject to the following terms, conditions and restrictions:


(a)       No Ownership.             The Grantee shall not possess any
incidents of ownership (including, without limitation, dividend and voting
rights) in shares of the Common Stock in respect of the RSUs until such RSUs
have vested and been distributed to the Grantee in the form of shares of Common
Stock.


(b)       Transfer of RSUs.        Except as provided in this Section 2(b),
the RSUs and any interest therein may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution and subject to the conditions set forth in the Plan
and this Agreement. Any attempt to transfer RSUs in contravention of this
Section is void ab initio. RSUs shall not be subject to execution,
attachment or other process. Notwithstanding the foregoing, the Grantee shall
be permitted to transfer RSUs to members of his or her immediate family (i.e.,
children, grandchildren or spouse), trusts for the benefit of such family
members, and partnerships or other entities whose only partners or equity
owners are such family 













members; provided,
however, that no consideration can be paid for the transfer of the RSUs and the
transferee of the RSUs must agree to be subject to all conditions applicable to
the RSUs (including all of the terms and conditions of this Agreement) prior to
transfer.


(c)       Vesting and Conversion of RSUs.  Subject to Sections 2(d) and 2(e), the RSUs
shall vest at the rate of 33-1/3% of the RSUs on each of the Grant Date and the
first and second anniversaries of the Grant Date, and shall be converted into
an equivalent number of shares of Common Stock that will be immediately
distributed to the Grantee on the second anniversary of the Grant Date; provided
that if the Grantee has delivered to the Corporation, on or prior to the
Required Date, an irrevocable written election to defer conversion of the RSUs
until such time as the Grantee’s service with the Corporation terminates, then
the RSUs will be converted into an equivalent number of shares of Common Stock
that will be immediately distributed to the Grantee on the date that Grantee’s
service with the Corporation terminates. Upon distribution of the shares of
Common Stock in respect of the RSUs, the Corporation shall issue to the Grantee
or the Grantee’s personal representative a stock certificate representing such
shares of Common Stock, free of any restrictions.  “Required Date” shall mean (i) if this grant
of RSUs is issued in connection with the Grantee’s initial election to the
Board of Directors, the Date of Grant; and (ii) otherwise, December 31 of the
calendar year prior to the calendar year in which this grant is issued.


(d)       Termination of Service as Director.


(i)            If the Grantee ceases to perform
services for the Corporation for any reason other than death, disability or
Cause, then (A) all RSUs that have vested on or prior to the date the Grantee
ceased to perform services for the Corporation shall be converted into an
equivalent number of shares of Common Stock and immediately distributed to the
Grantee, and (B) the Grantee shall forfeit all RSUs which have not yet become
vested as of the date the Grantee ceased to perform services for the
Corporation.


(ii)           In the event the Grantee dies or the
Grantee ceases to perform services for the Corporation because of disability,
all RSUs shall vest, be converted into an equivalent number of shares of Common
Stock and be immediately distributed to the Grantee.


(iii)          In the event the Grantee ceases to
perform services for the Corporation for Cause, then the Grantee shall forfeit
all RSUs, whether or not vested.


(e)       Change of Control.  In the event of a Change in Control (as
defined below), all RSUs shall vest, be converted into shares of Common Stock
and be immediately distributed to the Grantee.


3.         Equitable Adjustment.            The aggregate number of shares of
Common Stock subject to the RSUs shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or consolidation of shares or other capital adjustment, or
the payment of a stock dividend or other increase or decrease in such shares,
effected without the receipt of consideration by the Corporation, or other
change in corporate or capital structure. The Committee shall also make the
foregoing changes and any other changes, including changes in the classes of
securities available, to the extent 



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reasonably
necessary or desirable to preserve the intended benefits under this Agreement
in the event of any other reorganization, recapitalization, merger,
consolidation, spin-off, extraordinary dividend or other distribution or
similar transaction involving the Corporation.


4.         Taxes.  The Grantee shall pay to the Corporation
promptly upon request any taxes the Corporation reasonably determines it is
required to withhold under applicable tax laws with respect to the RSUs.  Such payment shall be made as provided in
Section VIII(f) of the Plan.


5.         No Right to Continued Service as
Director.  Nothing contained herein
shall be deemed to confer upon the Grantee any right to continue to serve as a
member of the Board.


6.         Miscellaneous


(a)          Governing
Law/Jurisdiction.  This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without reference to principles of conflict of laws.


(b)         Resolution of Disputes.  Any disputes arising under or in connection
with this Agreement shall be resolved by binding arbitration before a single
arbitrator, to be held in New York in accordance with the commercial rules and
procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator shall be final and subject to appeal only to the
extent permitted by law. Each party shall bear such party’s own expenses
incurred in connection with any arbitration; provided, however,
that the cost of the arbitration, including without limitation, reasonable
attorneys’ fees of the Grantee, shall be borne by the Corporation in the event
the Grantee is the prevailing party in the arbitration. Anything to the
contrary notwithstanding, each party hereto has the right to proceed with a
court action for injunctive relief or relief from violations of law not within
the jurisdiction of an arbitrator.


(c)          Notices.  Any notice required or permitted under this
Agreement shall be deemed given when delivered personally, or when deposited in
a United States Post Office, postage prepaid, addressed, as appropriate, to the
Grantee at the last address specified in Grantee’s records with the
Corporation, or such other address as the Grantee may designate in writing to
the Corporation, or to the Corporation, Attention:  Corporate Secretary, or such other address as
the Corporation may designate in writing to the Grantee.


(d)         Failure to Enforce Not
a Waiver.  The failure of either
party hereto to enforce at any time any provision of this Agreement shall in no
way be construed to be a waiver of such provision or of any other provision
hereof.


(e)          Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be an original but all of which together
shall represent one and the same agreement.


(f)            Modifications;
Entire Agreement; Headings.  This
Agreement cannot be changed or terminated orally. This Agreement and the Plan
contain the entire agreement between the parties relating to the subject matter
hereof.  The section headings herein are
intended for reference only and shall not affect the interpretation hereof.



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7.         Section 409A.


(a)                      It
is intended that this Restricted Stock Unit 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 Restricted
Stock Unit Agreement shall be interpreted for all purposes in accordance with
this intent.


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


8.         Definitions.               For purposes of this Agreement:


(I)                        “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.


(II)                    “Beneficial
Owner” (and variants thereof) shall have the meaning given in Rule 13d-3
promulgated under the Exchange Act.


(III)                A director will be
deemed to cease performing services for the Corporation for “Cause” if such
cessation is due to his fraud, dishonesty or intentional misrepresentation in
connection with his duties as a Director or his embezzlement, misappropriation
or conversion of assets or opportunities of the Corporation or any Subsidiary.


(IV)     “Change in Control” shall mean any of the
following events:


(1)  any Person is or becomes the Beneficial
Owner, directly or indirectly, of 40% or more of either (a) the then
outstanding Common Stock of the Corporation (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 Corporation (the “Total
Voting Power”); excluding, however, the following: (i) any acquisition by the
Corporation or any of its Controlled Affiliates, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation 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 Restricted Stock
Unit Agreement, constitute 



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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 Corporation’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; or


(3)  there is consummated a merger or
consolidation of the Corporation or any direct or indirect Subsidiary of the
Corporation or a sale or other disposition of all or substantially all of the
assets of the Corporation (“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 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 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 Corporation or all or substantially all of
the Corporation’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 Corporation or all or substantially all of the Corporation’s
assets either directly or through one or more subsidiaries); or


(4)   the approval by the stockholders of the
Corporation of a complete liquidation or dissolution of the Corporation.


(IV)                “Person” shall
have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) of the Exchange Act.



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Annex A


NOTICE OF
GRANT


RESTRICTED
STOCK UNIT AGREEMENT


HEXCEL CORPORATION 2003 INCENTIVE STOCK PLAN


The
following member of the Board of Directors of Hexcel Corporation, a Delaware
corporation (“Hexcel”), has been granted Restricted Stock Units in accordance
with the terms of this Notice of Grant and the Restricted Stock Unit Agreement
to which this Notice of Grant is attached.


The
terms below shall have the meanings ascribed to them below when used in the
Restricted Stock Unit Agreement.


 


	
  Grantee

  	
   

  
	
   

  	
   

  
	
  Address of Grantee

  	
   

  
	
   

  	
   

  
	
  Grant Date

  	
   

  
	
   

  	
   

  
	
  Aggregate Number of RSUs Granted

  	
   

  
	
   

  	
   

  



 


IN WITNESS WHEREOF, the parties
hereby agree to the terms of this Notice of Grant and the Restricted Stock Unit
Agreement to which this Notice of Grant is attached and execute this Notice of
Grant and Restricted Stock Unit Agreement as of the Grant Date.


	
   

  	
   

  	
  HEXCEL CORPORATION

  
	
   

  	
   

  	
   

  
	
  Grantee

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Ira J. Krakower

  
	
   

  	
   

  	
  Senior Vice
  President

  



 



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