PHANTOM UNIT AWARD AGREEMENT
LYONDELLBASELL
INDUSTRIES AF S.C.A.
Effective
as of April 1, 2008 (the “Grant Date”),
LyondellBasell Industries AF S.C.A., a Luxembourg company (the “Company”), grants to
Xxxxxx Xxxx (“Executive”) and Executive accepts 68,992 Phantom Units (the “Award”), subject to
the terms and conditions set forth in this Agreement (the “Award
Agreement”).
1. Definitions.
“Affiliate” means,
with respect to any Person or entity, any other Person or entity that, directly
or indirectly, through one or more intermediaries, controls or is controlled by
or is under common control with such Person or entity. The term
“Control” means the power to direct the management and policies of a Person or
entity, affirmatively (by direction) and negatively (by veto), directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
“Appraised Unit
Value,” as of any date, shall mean the Appraised Value of NAG as of the
applicable Valuation Date divided by the number of outstanding NAG Units as of
such Valuation Date.
“Appraised Value,” as
of any date, shall mean the value of NAG that a willing buyer would pay to a
willing seller in an arm’s length transaction as of such date, determined by the
Supervisory Board of the Company, in its reasonable discretion and acting in
good faith following receipt of a valuation opinion regarding the range of
appropriate Appraised Values from a third-party accounting firm, investment
banking firm or other expert that regularly engages in the business of valuation
(a “Third Party
Appraiser”). The Appraised Value shall take into consideration all
valuation factors that the Supervisory Board or the Third Party Appraiser
considers relevant under the circumstances, which may include but not be limited
to (i) the nature and history of NAG’s business; (ii) the economic outlook in
general and the condition and outlook of NAG’s specific industry in particular;
(iii) the book value of the NAG Units and the financial condition of NAG’s
business; (iv) NAG’s earnings capacity; (v) the existence of enterprise goodwill
or other intangible value; and (vi) the market price of publicly traded stocks
of corporations engaged in the same or similar lines of business; provided,
however, that the Appraised Value shall not take into consideration any
discounts for lack of marketability of the NAG Units, any minority discount or
any control premium. If any Subsidiary of NAG has a class of publicly
traded equity securities, then the value of that Subsidiary for appraisal
purposes shall be based on the market value of those publicly traded
securities. The Third Party Appraiser shall deliver its opinion
regarding the range of appropriate Appraised Values of NAG as of the applicable
Valuation Date, and shall, to the extent commercially practicable, deliver such
opinion by a date no more than 21 days after the applicable Valuation
Date. The Supervisory Board shall use reasonable efforts to cause the
Third Party Appraiser to do so within such time period.
The
Supervisory Board shall, if it deems necessary or if requested by either
Management LLC or AI Petrochemicals LLC, request an opinion regarding the
fairness of such valuation to Management LLC and/or AI Petrochemicals LLC
performed by a reputable third party firm that regularly provides such
opinions. All parties will cooperate and use reasonable efforts to
ensure that the date of determination will comply with any legal requirements
with respect to timing of valuation and payment. The requesting party
shall bear all fees and expenses associated with obtaining a fairness
opinion.
“Award” means the
Phantom Units granted to the Executive pursuant to this Award
Agreement.
“Award Agreement”
means this agreement which sets forth the terms, conditions and limitations
applicable to this Award.
“Blavatnik Group”
means, collectively, (a) Mr. Xxxxxxx Xxxxxxxxx, his spouse, direct descendants,
siblings, parents, children of siblings, or grandchildren, grand nieces and
grand nephews, any other members of the immediate Blavatnik family, (b) any
trust or any entity directly or indirectly controlled by, or for the benefit of,
one or more members of the Blavatnik family described above, or (c) any trust (a
“Blavatnik Charitable
Trust”) (i) for the benefit of a charity created by any member
of the Blavatnik family described above, (ii) to which any such member of the
Blavatnik family described above is a substantial donor or grantor, (iii) the
estate, executor, administrator or committee of beneficiaries of any member of
the Blavatnik Group listed in clause (i) or (ii) of this
definition; provided that, in the case of
any Blavatnik Charitable Trust, a member of the Blavatnik Group described in
clause (i) or (ii) of this definition maintains control thereof. For
purposes of this definition only, “control” of a Blavatnik Charitable Trust
means the possession of the power to direct or cause the direction of management
and policies of such Blavatnik Charitable Trust in respect of the issued share
capital of NAG Holdings LLC owned by such Blavatnik Charitable
Trust.
“Board of Directors”
means, as to any Person, the board of directors (or similar governing body) of
such Person (or, if such Person is a partnership and does not have a board of
directors (or similar governing body), the board of directors (or similar
governing body) of such Person’s general partner) or, except with respect to the
definition of “Change of Control” any duly authorized committee
thereof.
“Board Service” means,
with respect to Executive, service on the Supervisory Board or the Board of
Directors of an Affiliate of the Company.
“Cause” means (a) the
Executive’s continued and willful refusal to substantially perform his duties
(other than a willful refusal resulting from the Executive’s incapacity due to
physical or mental illness) after the Company delivers a demand for substantial
performance that specifically identifies the Company’s determination of the
manner in which the Executive has not substantially performed his duties and the
Executive’s performance is not cured to the Company’s reasonable satisfaction
within thirty (30) days from that demand; (b) the Executive’s
engagement in willful misconduct or dishonesty that is materially injurious,
monetarily or otherwise, to the Company, a Subsidiary, or an Affiliate; or (c)
the Executive’s final conviction of a felony. Notwithstanding the
foregoing, the Executive’s Employment shall not be deemed terminated for Cause
without (1) the Company’s reasonable written notice to the Executive setting
forth the reasons the Company intends to characterize the Executive’s
termination as a termination for Cause and (2) the Executive’s opportunity,
together with his counsel, to be heard before the Company. It is
specifically agreed that Cause shall exclude any act or omission by the
Executive in the good faith exercise of the Executive’s business judgment as an
officer.
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“Change of Control”
for purposes of this Agreement, a Change of Control means the occurrence of any
of the following: (a) the Sponsor ceases to hold legally and
beneficially (i) issued share capital having the right to cast at least 51%
(or, following a Listing, at least 35%) of the votes capable of being cast in
general meetings of the Company or NAG or (ii) before a Listing, the right to
determine the composition of the majority of the board of directors or
equivalent body of the Company or NAG; (b) following a Listing, any Person or
group of Persons acting in concert (other than the Sponsor) owns, directly or
indirectly, a greater percentage of the issued share capital or issued share
capital with voting rights of the Company or NAG than the Sponsor or, at any
time, otherwise acquires control of the Company or NAG; (c) the replacement of a
majority of the Board of Directors of the Company or NAG over a two-year period
from the directors who constituted the Board of Directors of the Company or NAG,
as applicable, at the beginning of such period, and such replacement shall not
have been approved by a vote of at least a majority of the Board of Directors of
the Company or NAG, as applicable then still in office who either were members
of such Board of Directors at the beginning of such period or whose election as
a member of such Board of Directors was previously so approved; or (d) the
adoption by the stockholders of the Company or members of NAG of a plan or
proposal for the liquidation or dissolution of the Company or NAG, respectively,
or the sale of all or substantially all the assets of the Company or NAG,
respectively.
“Code” means the
Internal Revenue Code of 1986, as amended.
“Deferral Election”
means the Executive’s election of the date upon which the Company shall make a
distribution to him of his interest in any vested Phantom Units in accordance
with the terms of this Award Agreement, if and to the extent permitted by the
Company; provided, however, that (i) such Deferral Election shall be irrevocable
and (ii) any Deferral Election must be made on the form provided by the
Company.
“Disability” means a
permanent and total disability, as defined in the applicable long-term
disability plan or policy of the Company or its Subsidiaries.
“Employment” means
employment as an employee of the Company or any of its Subsidiaries or
Affiliates. Neither the Executive’s transfer from employment by the
Company to employment by any Subsidiary or Affiliate, the Executive’s transfer
from employment by any Subsidiary or Affiliate to Company employment, nor the
Executive’s transfer between Subsidiaries and/or Affiliates shall be deemed to
be a termination of Executive’s employment. Moreover, the Executive’s
employment shall not be deemed to terminate because the Executive is absent from
active employment due to temporary illness, during authorized vacation, during
temporary leaves of absence granted by the Company, the employing Subsidiary or
Affiliate for professional advancement, education, health or government service,
during military leave for any period if the Executive returns to active
Employment within 90 days after military leave terminates, or during any period
required to be treated as a leave of absence by any valid law or
agreement. Notwithstanding anything contained herein to the contrary,
the Executive shall not be considered to have terminated Employment for purposes
of this Award Agreement unless the Executive would be considered to have
incurred a “separation from service” within the meaning of Section 409A of the
Code.
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“Equity Interests”
means, with respect to any Person, all of the capital stock of such Person and
all warrants, options or other rights to acquire the capital stock of such
Person, including any contribution from shareholders without any issuance of
shares (but excluding any debt security that is convertible into, or
exchangeable for, such capital stock).
“Equity Purchase
Agreement” means that certain equity purchase agreement between
Management LLC and Executive setting forth the terms and conditions pertaining
to Executive’s equity investment in Management LLC., which has an equity
investment in NAG.
“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, administrative tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
“Holding Company”
means, in relation to a company, corporation or other legal entity, any
other company, corporation or other legal entity in respect of which
the former company, corporation or other legal entity is a
Subsidiary.
“IPO” means, with
respect to any entity, the first public offering of the common equity securities
of such entity pursuant to a registration statement (other than a Form S-8 or
successor form) filed with and declared effective by the United States
Securities and Exchange Commission or any similar transaction conducted outside
the United States.
“Listing” means a
listing of all or any of the share capital of the Company or any of its
Subsidiaries or any Holding Company or any of its Subsidiaries (excluding the
Sponsor (to the extent not a Subsidiary of the Company) and any such Holding
Company of the Company or any of its Subsidiaries, but in each case only if a
majority of the investments of such company are not constituted by the Company
or any of its Subsidiaries) on any investment exchange or any other sale or
issue by way of flotation or public offering or any equivalent circumstances in
relation to the Company or any of its Subsidiaries or any Holding Company of the
Company or any of its Subsidiaries (excluding the Sponsor (to the extent not a
Subsidiary of the Company) and any such Holding Company of the Company or any of
its Subsidiaries, but in each case only if a majority of the investments of such
company are not constituted by the Company or any of its Subsidiaries) in any
jurisdiction or country.
“Management LLC” means
LyondellBasell Management LLC, a Delaware limited liability
company.
“NAG” means NAG
Investments LLC, a Delaware limited liability company, which, directly or
indirectly, owns 12,987 Voting Redeemable Preference A Shares (“Preference A
Shares”) in Xxxx Limited (“Xxxx”), Access Industries Holdings LLC owns 13
Preference A Shares in Xxxx and Mr. Xxxxxxx Xxxxxxxxx owns 1,000 Voting
Redeemable Preference B Shares in Xxxx; Xxxx in turn indirectly owns all of the
outstanding Equity Interests of the Company, and shall include the surviving
entity in any merger or successor entity resulting from any conversion of
NAG.
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“NAG Unit” means a
unit representing limited liability company interests in NAG issued by NAG to
its members in exchange for capital contributions as evidence of such member’s
ownership interest in NAG. The term “NAG Unit” shall also
include the equity securities of any entity with which NAG shall be merged, or
into which it shall be converted, pursuant to its limited liability company
agreement and the laws of the State of Delaware.
“Parent” means BI S.à
x.x., a société à
responsabilité limitée incorporated under the laws of the Grand Duchy of
Luxembourg.
“Payment Date” means
the Payment Date specified in a valid Deferral Election or, if no Deferral
Election is made, the earliest of
(a) April
1, 2011;
(b) 60
days following termination of Employment or, if applicable, Board Service due to
the Executive’s death or Disability;
(c) 30
days following a Change of Control that meets the requirements of Section
409A(a)(2)(A)(v) and any related regulations or pronouncements.
Notwithstanding
the foregoing, (1) in no event shall any Payment Date occur prior to
January 2, 2009 except as otherwise permitted by Section 3(c) of this
Award Agreement, and (2) any payment that the Executive would have been entitled
to receive prior to January 2, 2009 but for the operation of this sentence shall
be made in full on January 2, 2009 without interest.
“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.
“Phantom Unit” means
the right to the Appraised Unit Value, if any, of a NAG Unit and is used solely
for the purpose of determining benefits under this Award Agreement.
“Retirement” means the
Participant’s voluntary termination of Employment on or after the earliest of
(a) age 65, (b) age 55 with 10 years of participation service credited under a
qualified defined benefit pension plan that is maintained by the Company, a
Subsidiary or an Affiliate and in which the Participant is eligible to
participate, or (c) with regard to a Participant whose primary place of
employment with the Company, any Subsidiary or an Affiliate is now or has ever
been outside the United States, whenever retirement is permitted under
applicable law and Participant is eligible to receive a retirement
benefit. The Company shall have the authority, in its sole
discretion, to determine the location of the Participant’s primary place of
employment and the applicable law.
“Specified NAG
Subsidiary” means any entity directly or indirectly owned by NAG that,
together with the Subsidiaries of such entity, accounts for a majority of the
consolidated assets or revenues of NAG, based on the latest available year-end
financial statements of NAG (which shall be audited if NAG prepares audited
financial statements in the ordinary course of business).
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“Sponsor” means (a)
the Blavatnik Group and/or (b) other funds, limited partnerships or companies
managed or controlled by Mr. Xxxxxxx Xxxxxxxxx, including Parent, for so long as
so managed or controlled.
“Subsidiary” means
with respect to any Person, (a) a corporation a majority of the voting Equity
Interests of which are at the time, directly or indirectly, owned by such
Person; (b) any other Person (other than a corporation), including, a
partnership, limited liability company, business trust or joint venture, in
which such Person, at the time thereof, directly or indirectly, has at least a
majority ownership interest entitled to vote in the election of directors,
managers or trustees thereof (or other Person performing similar functions); or
(c) for so long as LBI or any of its Subsidiaries has a 50% ownership interest
in Lyondell Bayer Manufacturing Maasvlakle VOF, Lyondell Bayer Manufacturing
Maasvlakle VOF.
“Supervisory Board”
means the Supervisory Board of the Company.
“Valuation Date” means
the earlier of: (a) December 31, 2010 or (b) the December 31 that
occurs on or immediately preceding the date of the Executive’s death or
Disability; provided, however, that if a Change of Control or an IPO of NAG or
an IPO of a Specified NAG Subsidiary (each a “Trigger Event”) has occurred
following the valuation date as determined pursuant to clause (a) or (b) above
and on or before the Payment Date, then the “Valuation Date” shall be the date
of the Trigger Event rather than the date set forth in clause (a) or (b) above
that would otherwise apply. Furthermore, in the event the Payment
Date occurs on or after the date of an IPO of NAG, the applicable Valuation Date
shall be the most recent preceding date upon which a sale of common equity
securities in NAG is reported by the principal securities exchange on which such
shares are traded. Notwithstanding the foregoing, if the Executive
has made a Deferral Election, the applicable Valuation Date shall be the
valuation date as specified in the Deferral Election.
“Vesting Date” means
the earlier of (a) April 1, 2011 or (b) such other date specified for vesting of
all or a portion of an award pursuant to Section 2.
2.
Vesting.
(a) All
Phantom Units shall vest on April 1, 2011; provided, however, that, except as
otherwise set forth in this Section 2, the Executive is continuously in
Employment or Board Service at all times between April 1, 2008 and April 1, 2011
(inclusive).
(b) Upon
death or Disability during Employment or Board Service, involuntary termination
without Cause, or Retirement, the Executive shall become vested in a reduced
number of Phantom Units, which shall be calculated by multiplying the number of
Phantom Units awarded under this Award Agreement by a fraction, the numerator of
which is the number of calendar days that have elapsed from the Grant Date
through the date of such event and the denominator of which is
1095; provided, however, that if the Executive dies or
becomes Disabled while engaged in Board Service that commenced immediately
following Retirement, then the numerator of such fraction shall be increased by
the number of calendar days that have elapsed from the date immediately after
Retirement to the date that he ceases to perform Board Service as a result of
death or Disability. Any Phantom Units in excess of such number shall
remain unvested and shall be forfeited as of the date of such
event.
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(c) Notwithstanding
any provision in this Award Agreement to the contrary, the Executive shall
become fully vested in all outstanding Phantom Units granted under this Award
Agreement upon the occurrence of a Change of Control or an IPO of
NAG.
(d) Upon
the exercise of a put option with regard to all or some of the Units that the
Participant has obtained as set forth in the Equity Purchase Agreement, the
Participant shall forfeit an equivalent number of any unvested Phantom
Units.
(e) No
vesting requirements shall apply to any dividend equivalents payable in
accordance with Section 3(c) of this Award Agreement.
3.
Payment.
(a) The
Company shall pay, or cause the employing Subsidiary or Affiliate to pay, the
Executive a lump-sum cash payment upon the Payment Date in an amount equal to
the product of (i) the number of vested Phantom Units multiplied by
(ii) the Appraised Unit Value as of the applicable Valuation
Date.
(b) From
and after such time as the Company, acting in its sole discretion, decides to
permit deferrals under the LyondellBasell Industries AF S.C.A. Long-Term
Incentive Plan (as effective April 1, 2008) (the “LTIP”), the Executive may
likewise elect to defer the receipt of any payment to which he is entitled under
the terms of this Agreement; provided, however, that no such Deferral
shall be valid unless and until the Company receives a completed valid Deferral
Election on or before December 31, 2008. Notwithstanding the
foregoing, both the Company and the Executive affirm and agree that the
Executive is not and at no time has been a participant in the LTIP.
(c) The
Executive shall be entitled to receive a payment that is equivalent to the
dividend payable on a particular date for a NAG Unit, multiplied by the number
of Phantom Units granted to him pursuant to this Award. The payment
of such dividend equivalents shall occur on the same date as the payment of
dividends on NAG Units. The Executive may not defer the receipt of
such dividend equivalents.
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4.
Tax Compliance
Issues.
(a) This
Award Agreement shall be interpreted and operated in a manner consistent with
Section 409A of the Code, so as to avoid adverse tax consequences in connection
with this Award of Phantom Units.
(b) Notwithstanding
the foregoing or any other provision of this Award Agreement to the contrary, in
the event it shall be determined that any payment or distribution in the nature
of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for
the benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Award Agreement or otherwise would
be subject to the excise tax imposed by Section 4999 of the Code (“Excise Tax”),
then the amount of “parachute payments” (as defined in Section 280G of the Code)
payable or required to be provided to Executive shall be automatically reduced
(a “Reduction”) to the minimum extent necessary to avoid imposition of such
Excise Tax if, and only if, by reason of the Reduction, the net after-tax
benefit shall exceed the net after-tax benefit if the Reduction were not
made. “Net after-tax benefit” for these purposes shall mean the sum
of (i) the total amount payable to Executive under this Agreement, plus
(ii) all other payments and benefits which Executive receives or is then
entitled to receive from the Company, a Subsidiary or an Affiliate that, alone
or in combination with the payments and benefits payable under this Agreement,
would constitute a “parachute payment” within the meaning of Section 280G
of the Code, less (iii) the amount of federal income taxes payable with respect
to the foregoing calculated at the maximum marginal income tax rate for each
year in which the foregoing shall be paid to the Executive (based upon the rate
in effect for such year as set forth in the Code at the time of the payment
under this Award Agreement), less (iv) the amount of excise taxes imposed
with respect to the payments and benefits described in (i) and (ii) above by
Section 4999 of the Code.
5.
Withholding.
The
Company has the right to deduct applicable taxes from any Phantom Unit Award
payment, withhold an appropriate amount of cash for payment of taxes required by
law at delivery or when cash vesting occurs under this Award Agreement, or to
take other action that, in the Company’s opinion, is necessary to satisfy all
tax withholding obligations.
6.
Successors and
Assigns.
This
Phantom Unit Award shall bind and inure to the benefit of and be enforceable by
the Executive, the Company and their respective successors and assigns
(including personal representatives, heirs and legatees), but the Executive may
not assign any rights or obligations under this Award Agreement except to the
extent and in the manner expressly permitted herein.
7.
Shareholder
Rights.
This
Award Agreement shall not confer any rights upon the Executive as a unitholder
of NAG or Management LLC or any right to receive NAG Units or any other form of
equity interest in NAG, or any equity interest in Management LLC.
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8.
No Right to
Employment.
No
provision of this Award Agreement shall confer any right to continued employment
with the Company, a Subsidiary or an Affiliate to any employment with Management
LLC, NAG or any other entity.
9.
Arbitration of
Disagreements.
Any
dispute, controversy or claim arising out of or relating to this Award Agreement
shall be settled by final and binding arbitration conducted by the American
Arbitration Association (the “AAA”) in the State of Delaware. The
arbitrator shall be selected by mutual agreement of the parties, if
possible. If the parties fail to reach agreement upon appointment of
an arbitrator within 30 days after one party receives the other party’s notice
of desire to arbitrate, the arbitrator shall be selected from a panel or panels
submitted by the AAA. The selection process to be used is set forth
in the rules of the AAA, but if the parties fail to select an arbitrator from
one or more panels, AAA shall not have the power to appoint an arbitrator but
shall continue to submit additional panels until an arbitrator has been
selected. All fees and expenses of the arbitration, including a
transcript if requested, will be borne by the parties equally.
10.
Governing
Law.
This
Award Agreement shall be governed by, and construed and enforced according to,
the laws of the State of Delaware.
|
LYONDELLBASELL
INDUSTRIES AF S.C.A.
|
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| April 1, 2008 |
By:
|
/s/ C. Xxxx xx Xxxx | |
|
Date
|
C.
Xxxx xx Xxxx
|
||
|
Senior
Vice President, Human Resources
|
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| April 1, 2008 | /s/ Xxxxxx Xxxx | ||
|
Date
|
Executive
|
||
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