Exhibit
10.38


 


 


 


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 date that is thirty days after
the Grant Date, an irrevocable written election to defer conversion of the RSUs
until such time as the Grantee’s service as a member of the Board 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 as a member of the Board terminates. Upon the 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.


 


(d)       Termination of
Service as Director.


 


                                    (i)    If the
Grantee ceases to be a member of the Board 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 be a member of the Board 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 be a member of the Board.


 


                                    (ii)   In the
event the Grantee dies or the Grantee ceases to be a member of the Board
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 be a member of the Board 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 reasonably necessary or desirable to
preserve the intended benefits under this Agreement in 


 


 


2





















 


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.         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.


 


7.         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.


 


8.         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.


 


9.         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.


 


10.       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.


 


11.       Miscellaneous.  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.


 


12.       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.


 


3





















 


 


(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 being a member of the Board 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 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 Corporation’s stockholders, was
made or approved pursuant to the terms of each then existing Stockholders
Agreement or 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 


 


4





















 


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;


 


 


(V)       “Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time.


 


(VI)     “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.


 


(VII)    “Stockholders Agreement”
shall mean any stockholders agreement, governance agreement or other similar
agreement between the Corporation and a holder or holders of Voting Securities.


 


                                    (VIII)   “Voting Securities” means Common Stock and
any other securities of the Corporation entitled to vote generally in the
election of directors of the Corporation.


 


 


 


5





















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

  



 


6