CELANESE CORPORATION PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT
EXHIBIT 10.3
CELANESE
CORPORATION
PERFORMANCE-BASED
RESTRICTED STOCK UNIT AGREEMENT
THIS
AGREEMENT is made effective as of April 2, 2007 (the "Date of Grant"), between
Celanese Corporation (the "Company") and <<NAME>>> (the
"Participant").
R E C I T
A L S:
WHEREAS,
the Company has adopted the Plan (as defined below), the terms of which are
hereby incorporated by reference and made a part of this Agreement;
and
WHEREAS,
the Committee has determined that it would be in the best interests of the
Company and its stockholders to grant to the Participant an award of
performance-based Restricted Stock Units, subject to the terms set forth herein,
which award shall constitute an "Other Stock-Based Award" pursuant to Section 8
of the Plan;
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth, the
parties agree as follows:
1. Definitions. Whenever
the following terms are used in this Agreement, they shall have the meanings set
forth below. Capitalized terms not otherwise defined herein shall
have the same meanings as in the Plan. Other capitalized terms are set forth in
Schedule A annexed hereto
(a) Business
Day: Any day other than Saturday or Sunday or any other
day on which banks in the State of Texas are required by law to be
closed.
(b) Cause: "Cause"
as defined in an employment agreement or change in control agreement between the
Company or its subsidiaries and the Participant or, if not defined therein or if
there is no such agreement, (i) the Participant's willful failure to perform
Participant's duties to the Company (other than as a result of total or partial
incapacity due to physical or mental illness) for a period of 30 days following
written notice by the Company to the Participant of such failure, (ii)
commission of (x) a felony (other than traffic-related) under the laws of the
United States or any state thereof or any similar criminal act in a jurisdiction
outside the United States or (y) a crime involving moral turpitude, (iii)
Participant's willful malfeasance or willful misconduct which is demonstrably
injurious to the Company, (iv) any act of fraud by the Participant or (v) the
Participant's breach of the provisions of any confidentiality, noncompetition or
nonsolicitation to which the Participant is subject.
(c) Disability: The
Participant becomes physically or mentally incapacitated and is therefore unable
for a period of six consecutive months or for an aggregate of nine months in any
24 consecutive month period to perform Participant's duties.
(d) Good
Reason: "Good Reason" as defined in an employment agreement or
change in control agreement between the Company or its subsidiaries and the
Participant or, if not defined therein or if there is no such agreement, (i) a
substantial diminution in Participant's position or duties; adverse change in
reporting lines, or assignment of duties materially inconsistent with his
position (other than in connection with an increase in responsibility or a
promotion), (ii) any reduction in Participant's base salary or annual bonus
opportunity or (iii) failure of the Company to pay compensation or benefits when
due, in each case which is not cured within 30 days following the Company's
receipt of written notice from Participant describing the event constituting
Good Reason.
(e) Performance
Period: Each of the applicable periods set forth on Schedule A
to this Agreement.
(f) Performance
Targets: The performance targets described in Schedule A to
this Agreement.
(g) Plan: The
Celanese Corporation 2004 Stock Incentive Plan, as amended from time to
time.
(h) Retirement: Voluntary
resignation on or after Participant has attained age 65.
2. Grant of Restricted Stock
Units; Dividend Equivalents. The Company hereby grants to the
Participant, subject to adjustment as set forth in the Plan,
<<NUMBER>>1performance-based Restricted Stock Units
(together with the Restricted Stock Units credited pursuant to the succeeding
provisions of this Section 2, the "RSUs"). The RSUs shall be
subject to the terms and conditions set forth herein. The Participant
shall be entitled to be credited with dividend equivalents with respect to the
RSUs, calculated as follows: on each date that a cash dividend is paid by the
Company while the RSUs are outstanding, the Participant shall be credited with
an additional number of RSUs equal to the number of whole Shares (valued at Fair
Market Value on such date) that could be purchased on such date with the
aggregate dollar amount of the cash dividend that would have been paid on the
RSUs had the RSUs been issued as Shares. The additional RSUs credited
under this Section shall be subject to the same terms and conditions applicable
to the RSUs originally awarded hereunder, including, without limitation, for
purposes of vesting, forfeiture and the crediting of additional dividend
equivalents, and for all relevant purposes shall be allocated among the various
Performance Periods on the same basis as the RSUs to which they
relate.
2
3. Vesting of Restricted Stock
Units.
(a) Subject
to the provisions of this Section 3, an aggregate of <<NUMBER>>2 RSUs shall be eligible to vest, respectively,
as of the end of Period 1, Period 2, Period 3 and Period 4, as such terms are
defined on Schedule A attached hereto. Subject to the provisions of
this Section 3, any RSUs which shall not have vested at the end of the
applicable Performance Period noted above (but in no event more than an
aggregate of the lesser of (1) 1,500 RSUs or (2) the excess of (x) 3 RSUs over (y) the aggregate number of vested
RSUs for Periods 1-4 (disregarding for purposes of this clause (y) any RSUs
attributable to dividend equivalents credited over periods 1-4) (such lesser
number being referred to as the "Cap RSUs")) shall again be eligible to vest as
of the end of Period 5, as defined on Schedule A attached hereto.
(b) Subject
to Sections 3(c) and 3(d) below, if the Participant continues in Employment
through the end of a Performance Period, a percentage of the RSUs eligible to
vest at the end of that Performance Period (the "Eligible RSUs") shall vest
based on the extent to which the Performance Targets are achieved for such
Performance Period, as set forth on Schedule A attached hereto.
(c) Change in
Control. Upon the occurrence of a Change in Control, RSUs, to
the extent not previously canceled, shall become vested as if Performance
Targets for all remaining Performance Periods had been met at target levels and
any remaining RSUs shall be canceled without consideration.
(d) Termination of
Employment.
(i) General. Except
as provided in paragraph (ii) below, if the Participant's Employment with the
Company and its Affiliates terminates for any reason, the RSU's, to the extent
not then vested, shall be immediately canceled by the Company without
consideration.
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(ii) In the
event that the Participant's Employment is terminated (A) by the Company without
Cause, (B) by the Participant with Good Reason or (C) due to the Participant's
death, Disability or Retirement, then:
(w) all
Eligible RSUs which did not vest as of the end of a Performance Period ending
prior to the date of such termination shall be immediately canceled by the
Company without consideration;
(x) all
Eligible RSUs which are scheduled to vest as of the end of a Performance Period
ending on or after the date of such termination shall remain outstanding until
the end of the applicable Performance Period; provided, however, that
unless the date of termination occurs within the last 12 months
of Period 5, no Eligible RSUs referred to in this clause (x) may
remain outstanding to the end of Period 5;
(y) the
number of eligible RSUs referred to in clause (x) above which become vested as
of the end of the applicable Performance Period shall be equal to the product of
(1) the number of such Eligible RSUs (but in the event of a termination
occurring within the last 12 months of Period 5, not more than the Cap RSUs), as
adjusted if applicable, multiplied by (2) the percentage of such Eligible RSUs
which would have become vested under Section 3(b) above if the Participant had
continued in Employment through the end of the applicable Performance Period,
multiplied by (3) a fraction the numerator of which is the number of full and
partial months during the applicable Performance Period through and including
the date of termination (but in no event shall the numerator be less than twelve
(12)) and the denominator of which is the number of months in such Performance
Period, such product to be rounded down to the nearest whole number;
and
(z) upon
determination of the number of Eligible RSUs which become vested pursuant to
clause (y) above, all remaining Eligible RSUs which were scheduled to but did
not vest as of the end of the applicable Performance Period shall be canceled
without consideration.
4. Settlement of
RSUs. Except to the extent the Participant has elected that
delivery be deferred or that delivery be made in installments, in either case in
accordance with the rules and procedures prescribed by the Board or a committee
thereof (which rules and procedures, among other things, shall be consistent
with the requirements of Section 409A of the Code), as soon as practicable (but
in no event later than 2 ½ months) following the end of the applicable
Performance Period (or, in the event of a Change in Control, immediately prior
to the occurrence of such Change in Control), the Company shall deliver to the
Participant, in complete settlement of all vested RSUs, a number of Shares equal
to the number of Eligible RSUs which become vested as of the end of such
Performance Period (or as of such Change in Control), as determined hereunder
or, in the sole discretion of the Company, an amount of cash equal to the Fair
Market Value of such number of Shares on the settlement date.
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5. No Right to Continued
Employment. Neither the Plan nor this Agreement shall be
construed as giving the Participant the right to be retained in Employment.
Further, the Company or its Affiliate may at any time terminate the
Participant's Employment, free from any liability or any claim under the Plan or
this Agreement, except as otherwise expressly provided herein.
6. Legend on
Certificates. The certificates representing the Shares issued
in respect of the RSUs shall be subject to such stop transfer orders and other
restrictions as the Committee may determine is required by the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which such Shares are listed, any applicable federal or
state laws and the Company's Certificate of Incorporation and Bylaws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
7. Transferability. An
RSU may not be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant otherwise than by will or by the
laws of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.
8. Withholding. The
Participant may be required to pay to the Company or its Affiliate and the
Company or its Affiliate shall have the right and is hereby authorized to
withhold from any payment due or transfer made with respect to the RSUs or from
any compensation or other amount owing to a Participant the amount (in cash,
Shares, other securities, other Awards or other property) of any applicable
withholding taxes in respect of the vesting and or settlement of RSUs (including
withholding of Shares otherwise deliverable in settlement of RSUs) and to take
such action as may be necessary in the discretion of the Company to satisfy all
obligations for the payment of such taxes.
9. Securities
Laws. Upon the acquisition of any Shares pursuant to the
vesting of the RSUs, the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
10. Notices. Any
notice under this Agreement shall be addressed to the Company in care of its
General Counsel, addressed to the principal executive office of the Company and
to the Participant at the address last appearing in the personnel records of the
Company for the Participant or to either party at such other address as either
party hereto may hereafter designate in writing to the other. Any
such notice shall be deemed effective upon receipt thereof by the
addressee.
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11. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of laws provisions thereof.
12. Restricted Stock Units
Subject to Plan. By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received and read a
copy of the Plan. The RSUs and the Shares issued upon vesting thereof
are subject to the Plan, which is hereby incorporated by reference In
the event of a conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and provisions of the Plan
shall govern and prevail.
13. Signature in
Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
* * * * *
IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto.
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CELANESE
CORPORATION
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|
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Agreed
to this ____ day of __________, 2007
________________________________
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1
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Number
to equal maximum number of RSUs which can vest (i.e. 150% of
target).
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SCHEDULE
A
· Performance
Periods: April
1, 2007 – September 30, 2008 ("Period 1")
April 1, 2007 – September 30, 2009 ("Period 2")
April 1, 2007 – September 30, 2010
("Period 3")
April 1, 2007 – September 30, 2011
("Period 4")
April 1, 2007 – September 30, 2012
("Period 5")
· Performance
Target: Based on "Total Shareholder Return" of the
Company
("Company
TSR")
· Certain
Definitions:
"Peer Group Companies" means
the companies listed on Appendix A attached hereto.
"Peer TSR Percentile" means a
calculated percentile of the Total Shareholder Return for the Peer Group
Companies for a Performance Period. For this purpose, the 25th Peer
TSR Percentile is calculated as follows. First determine the number
of Peer Group Companies for which there are TSR calculations. Call
this number N. Rank the companies from lowest to highest, measured by
TSR. The company with the lowest TSR would be first, the second
lowest would be second, etc. Next, compute 25% of
(N+1). Call this number K. For example, if N is 11, K
would be 25% of (11+1) or 3 and, if N is 10, K would be 25% of (10+1), or
2.75. Next, determine the company (C) whose rank corresponds to the
integer portion of K (for example, if K is 3, the relevant company would be the
third lowest ranked company and, if K is 2.75, the relevant company would be the
second lowest ranked company. If K is a whole number, the 25th Peer
TSR Percentile corresponds to the TSR for C. If K is not a whole
number, the 25th Peer
TSR Percentile is determined by adding to the TSR of C the amount determined by
(1) calculating the difference between C’s TSR and the TSR of the company with
an immediately higher ranking and (2) multiplying that difference by the decimal
portion of K. For example, if there were 10 companies, so that K was
2.75, and C’s TSR was 22% and the TSR of the company ranked immediately above C
was 29%, the 25th Peer
TSR Percentile would equal 27.25% (22% plus (.75) times (29%-22%).
The 50th and
75th Peer
TSR Percentile is determined in the same manner as the 25th Peer
TSR Percentile, except that 50% and 75%, respectively, is used, rather than 25%,
in the relevant calculations.
"Stretch Percentage" means
the percentage of RSUs (100%) that will become vested if the Company TSR for a
Performance Period equals or exceeds the 75th Peer
TSR Percentile.
"Target Percentage" means the
percentage of RSUs (66.67%) that will become vested if the Company TSR for a
Performance Period equals the 50th Peer
TSR Percentile.
"Threshold Percentage" means
the percentage of RSUs (33.33%) that will become vested if the Company TSR for a
Performance Period equals the 25th Peer
TSR Percentile.
"Total Shareholder Return" or
"TSR" means the calculation of stock price growth and gross dividends for a
company over the relevant period in such manner as the Compensation Committee
shall determine, including by reference to Bloomberg or other outside
sources. Such method shall take into account and make appropriate
adjustments for changes in capitalization affecting the Peer Group Companies'
stock.
· Company
Performance:
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o
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The
percentage of Eligible RSUs which become vested as of the end of Period 1,
Period 2, Period 3 and Period 4, respectively, shall be determined based
on Company TSR compared to Peer TSR Percentiles over the applicable
Performance Period according to the following
chart.
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Company
TSR
Compared
to Peer TSR Percentile
|
Below
25th
|
At
25th
|
Between
25th
and
50th
|
At
50th
|
Between
50th
and
75th
|
At
or
Above
75th
|
|
Target
Share Payout
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0%
|
Threshold
Percentage
|
Interpolate
|
Target
Percentage
|
Interpolate
|
Stretch
Percentage
|
|
o
|
The
percentage of Eligible RSUs which become vested as of the end of Period 5
shall be determined based on Company TSR compared to Peer TSR Percentiles
over that Performance Period according to the following
chart.
|
|
Company
TSR
Compared
to Peer TSR Percentile
|
Below
75th
|
At
or Above 75th
|
|
Target
Share Payout
|
0%
|
Stretch
Percentage
|
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APPENDIX
A
PEER GROUP
COMPANIES
Airgas,
Inc.
Albermarle
Corp.
Chemtura
Corp
Xxxxxxx
Chemical Co.
FMC
Corp.
Huntsman
Corp
Lubrizol
PPG
Industries, Inc.
Rockwood
Holdings, Inc.
Rohm and
Xxxx Co
Nalco
Holding Co
In the event that the common stock of
any Peer Group Company ceases to be publicly traded during the Performance
Period, the Committee shall have the authority to substitute the common stock of
any successor in interest to the stock or assets of such Peer Group Company,
provided that the common stock of such successor is publicly traded and provided
further that such successor is determined by the Committee to be an appropriate
Peer Group Company. If the Committee substitutes the common stock of
a successor, the Total Shareholder Return of such successor common stock shall
determine its TSR. If the Committee determines that the common stock
of a successor cannot or should not be substituted for the common stock of a
Peer Group Company that has ceased to be publicly traded, then TSR of such Peer
Group Company shall be based on Total Shareholder Return of such common stock as
of the date that such common stock ceases to be publicly traded or, at the
judgment of the Committee, wholly excluded from all
calculations.
