Exhibit 4.6
LYONDELL CHEMICAL COMPANY
1999 LONG-TERM INCENTIVE PLAN
FORM OF NONQUALIFIED STOCK OPTION AWARD AGREEMENT
Lyondell Chemical Company (the "Company") hereby grants on
___________, ____ (the "Grant Date") to [PARTICIPANT] (the "Optionee"), an
employee of the Company, a right (the "Option") to purchase from the Company up
to but not exceeding in the aggregate [OPTIONS] shares of Common Stock, par
value $1.00 per share, of the Company ("Common Stock") at $___ per share (the
"Exercise Price"), such number of shares and such price per share being subject
to adjustment as provided in Section 11 of the Lyondell Chemical Company 1999
Long-Term Incentive Plan (the "Plan"), and further subject to the following
terms and conditions:
1. RELATIONSHIP TO PLAN.
This Option is intended to be a nonqualified stock option within the
meaning of Section 83 of the Code. This Option is subject to all of the terms,
conditions and provisions of the Plan and administrative interpretations
thereunder, if any, which have been adopted by the Committee thereunder and are
in effect on the date hereof. Except as defined herein, capitalized terms shall
have the same meanings ascribed to them under the Plan.
2. EXERCISE SCHEDULE.
(a) This Option shall become exercisable in three cumulative
installments, with one-third of the Option Shares becoming exercisable on
February 3, 2001, an additional one-third of the Option Shares becoming
exercisable on February 3, 2002, and the final one-third of the Option
Shares becoming exercisable on February 3, 2003. The Optionee must be in
continuous Employment from the Grant Date through the date of
exercisability of each installment in order for the Option to become
exercisable with respect to additional shares of Common Stock on such date.
For purposes of this Award Agreement, "Employment" means employment with
the Company or its parent or any of its Subsidiaries.
(b) This Option shall become fully exercisable, irrespective of the
limitations set forth in subparagraph (a) above, provided that the Optionee
has been in continuous Employment since the Grant Date, upon termination of
Employment due to death, Disability or Retirement, or upon a Change in
Control.
(c) This Option shall become fully exercisable, irrespective of the
limitations set forth in subparagraph (a) above, provided that the Optionee
has been in continuous Employment since the Grant Date, if, at any time
prior to February 3, 2003 the Fair Market Value per share of Common Stock
is greater than or equal to two times the
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Exercise Price for at least 5 consecutive trading days.
(d) For purposes of this Award Agreement, the following definitions
apply:
(i) "Disability" means a permanent and total disability as
defined in the Company's Executive Long-Term Disability Plan.
(ii) "Retirement" means a termination of employment initiated
voluntarily by the Optionee (i) on or after age 65 or (ii) on or after
age 55 with 10 years of participation service as credited under the
Company's qualified defined benefit pension plan.
(iii) "Change in Control" shall be deemed to have
occurred as of the date that one or more of the following occurs:
(a) Individuals who, as of the date hereof, constitute the
entire Board of Directors of the Company ("Incumbent Directors") cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority
of the then Incumbent Directors shall be considered as though such
individual was an Incumbent Director, but excluding, for this purpose
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 under the Securities Exchange Act of
1934, as amended ("Exchange Act") or other actual or threatened
solicitation of proxies or consents by or on behalf of any Person (as
defined below) other than the Board;
(b) The stockholders of the Company shall approve (A) any
merger, consolidation or recapitalization of the Company (or, if the
capital stock of the Company is affected, any subsidiary of the
Company), or any sale, lease, or other transfer (in one transaction or
a series of transactions contemplated or arranged by any party as a
single plan) of all or substantially all of the assets of the Company
(each of the foregoing being an "Acquisition Transaction") where (1)
the shareholders of the Company immediately prior to such Acquisition
Transaction would not immediately after such Acquisition Transaction
beneficially own, directly or indirectly, shares or other ownership
interests representing in the aggregate eighty percent (80%) or more
of (a) the then outstanding common stock or other equity interests of
the corporation or other entity surviving or resulting from such
merger, consolidation or recapitalization or acquiring such assets of
the Company, as the case may be (the "Surviving Entity") (or of its
ultimate parent corporation or other entity, if any), and (b) the
Combined Voting Power of the then outstanding Voting Securities of the
Surviving Entity (or of its ultimate parent corporation or other
entity, if any) or (2) the Incumbent Directors at the time of the
initial approval of such Acquisition Transaction would not
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immediately after such Acquisition Transaction constitute a majority
of the Board of Directors, or similar managing group, of the Surviving
Entity (or of its ultimate parent corporation or other entity, if
any), or (B) any plan or proposal for the liquidation or dissolution
of the Company; or
(c) Any Person shall be or become the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of securities of the Company representing in the aggregate
more than twenty percent (20%) of either (A) the then outstanding
shares of common stock of the Company ("Common Shares") or (B) the
Combined Voting Power of all then outstanding Voting Securities of the
Company; provided, however, that notwithstanding the foregoing, a
Change in Control shall not be deemed to have occurred for purposes of
this Subsection (iii):
(1) Solely as a result of an acquisition of securities by the
Company which, by reducing the number of Common Shares or other
Voting Securities outstanding, increases (a) the proportionate
number of Common Shares beneficially owned by any Person to more
than twenty percent (20%) of the Common Shares then outstanding,
or (b) the proportionate voting power represented by the Voting
Securities beneficially owned by any Person to more than twenty
percent (20%) of the Combined Voting Power of all then
outstanding Voting Securities; or
(2) Solely as a result of an acquisition of securities
directly from the Company except for any conversion of a security
that was not acquired directly from the Company,
provided, further, that if any Person referred to in paragraph (1) or
(2) of this Subsection (iii) shall thereafter become the beneficial
owner of any additional Common Shares or other Voting Securities of
the Company (other than pursuant to a stock split, stock dividend or
similar transaction), then a Change in Control shall be deemed to have
occurred for purposes of this Subsection (iii).
(d) For purposes of this Section 2(d)(iii):
(1) "Affiliate" shall mean, as to a specified Person,
another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control with, the specified Person, within the meaning of such
terms as used in Rule 405 under the Securities Act of 1933, as
amended ("Securities Act"), or any successor rule.
(2) "Combined Voting Power" shall mean the aggregate votes
entitled to be cast generally in the election of the Board of
Directors, or similar managing group, of a corporation or other
entity by holders of then outstanding Voting Securities of such
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corporation or other entity.
(3) "LCR" shall mean LYONDELL-CITGO Refining Company Ltd.
(from and after January 1, 1999, LYONDELL-CITGO Refining LP), a
Limited Liability Company organized under the laws of the State
of Texas.
(4) "Person" shall mean any individual, entity (including,
without limitation, any corporation, partnership, trust, joint
venture, association or governmental body) or group (as defined
in Sections 14(d)(3) or 15(d)(2) of the Exchange Act and the
rules and regulations thereunder); provided, however, that Person
shall not include the Company or LCR, any of their subsidiaries,
any employee benefit plan of the Company or LCR or any of their
majority-owned subsidiaries or any entity organized, appointed or
established by the Company, LCR or such subsidiaries for or
pursuant to the terms of any such plan.
(5) "Voting Securities" shall mean all securities of a
corporation or other entity having the right under ordinary
circumstances to vote in an election of the Board of Directors,
or similar managing group, of such corporation or other entity.
3. TERMINATION OF OPTION: The Option hereby granted shall terminate
and be of no force and effect with respect to any shares of Common Stock not
previously purchased by the Optionee upon the first to occur of:
(a) close of business on ___________;
(b) with respect to
(i) the portion of the Option exercisable upon termination (or which
becomes exercisable upon termination due to death, Disability or
Retirement), the expiration of (A) 90 days following the Optionee's
termination of Employment by the Company for reasons other than for cause
(as determined by the Committee), death, Disability or Retirement, or (B)
one year following the Optionee's termination of Employment by reason of
death, Disability or Retirement; and
(ii) the portion of the Option not exercisable upon termination for
any reason other than death, Disability or Retirement, the date of the
Optionee's termination of Employment; or
(c) the date of the Optionee's termination of Employment for any
reason other than those described in (b) above.
4. EXERCISE OF OPTION. Subject to the limitations set forth herein
and in the
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Plan, this Option may be exercised by written notice provided to the Company as
set forth in Section 5. Such written notice shall (a) state the number of shares
of Common Stock with respect to which the Option is being exercised and (b) be
accompanied by a check, cash or money order payable to Lyondell Chemical Company
in the full amount of the purchase price for any shares of Common Stock being
acquired or, at the option of the Optionee, accompanied by Common Stock
theretofore owned by such Optionee for at least six months that is equal in
value to the full amount of the purchase price (or any combination of cash,
check or such Common Stock). For purposes of determining the amount, if any, of
the purchase price satisfied by payment in Common Stock, such Common Stock shall
be valued at its Fair Market Value on the date of exercise. Any Common Stock
delivered in satisfaction of all or a portion of the purchase price shall be
appropriately endorsed for transfer and assignment to the Company.
The Optionee agrees that he will not exercise the Option granted
pursuant hereto, and that the Company will not be obligated to issue any Option
Shares pursuant to this Award Agreement, if the exercise of the Option or the
issuance of such shares would constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of any governmental authority
or any stock exchange or transaction quotation system. Whether or not the
options and shares covered by the Plan have been registered pursuant to the
Securities Act, the Company may, at its election, require the Optionee to give a
representation in writing in form and substance satisfactory to the Company to
the effect that he is acquiring such shares for his own account for investment
and not with a view to, or for sale in connection with, the distribution of such
shares or any part thereof.
If any law or regulation requires the Company to take any action with
respect to the shares specified in such notice, the time for delivery thereof,
which would otherwise be as promptly as possible, shall be postponed for the
period of time necessary to take such action.
Notwithstanding anything to the contrary contained herein, the
Company, acting through the Committee, hereby reserves the right to deliver cash
in lieu of Option Shares upon the exercise of the Option. In such event, the
amount of cash to be paid shall be equal to the number of Option Shares that
would otherwise have been delivered multiplied by the excess of the Fair Market
Value of a share of Common Stock on the date of exercise over $12.9125.
5. NOTICES. Notice of exercise of the Option must be made in the
following manner, using such forms as the Company may from time to time provide:
(a) by registered or certified United States mail, postage prepaid, to
Lyondell Chemical Company, Attn: Corporate Secretary, 0000 XxXxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, in which case the date of exercise shall
be the date of mailing; or
(b) by hand delivery or otherwise to Lyondell Chemical Company, Attn:
Corporate Secretary, 0000 XxXxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
in which case the date of exercise shall be the date when receipt is
acknowledged by the Company.
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Notwithstanding the foregoing, (i) in the event that the address of the
Company is changed prior to the date of any exercise of this Option, notice of
exercise shall instead be made pursuant to the foregoing provisions at the
Company's current address, or (ii) in the event that the Committee delegates
the administration of option exercises to a third party administrator pursuant
to Section 3 of the Plan, notice of exercise shall instead be made pursuant to
the written instructions given to the Optionee by the third party
administrator with respect to option exercise.
Any other notices provided for in this Award Agreement or in the Plan
shall be given in writing and shall be deemed effectively delivered or given
upon receipt or, in the case of notices delivered by the Company to the
Optionee, five days after deposit in the United States mail, postage prepaid,
addressed to the Optionee at the address specified at the end of this Award
Agreement or at such other address as the Optionee hereafter designates by
written notice to the Company.
6. ASSIGNMENT OF OPTION. The Optionee's rights under the Plan and
this Award Agreement are personal; no assignment or transfer of the Optionee's
rights under and interest in this Option may be made by the Optionee otherwise
than by will or by the laws of descent and distribution; and this Option is
exercisable during his lifetime only by the Optionee. Notwithstanding the
foregoing, the Option is transferable by the Optionee to (i) the children or
grandchildren of the Optionee ("Immediate Family Members"), (ii) a trust or
trusts for the exclusive benefit of such Immediate Family Members ("Immediate
Family Member Trusts"), or (iii) a partnership or partnerships in which such
Immediate Family Members have at least ninety-nine percent (99%) of the equity,
profit and loss interests ("Immediate Family Member Partnerships"). Subsequent
transfers of a transferred Option shall be prohibited except by will or the laws
of descent and distribution, unless such transfers are made to the original
Optionee or a person to whom the original Optionee could have made a transfer in
the manner described herein. No transfer shall be effective unless and until
written notice of such transfer is provided to the Committee, in the form and
manner prescribed by the Committee. Following transfer, any the Option shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, and, except as otherwise provided herein, the
term "Optionee" shall be deemed to refer to the transferee. The consequences of
termination of employment shall continue to be applied with respect to the
original Optionee, following which the Options shall be exercisable by the
transferee only to the extent and for the periods specified in the Plan and this
Award Agreement.
After the death of the Optionee, exercise of the Option shall be permitted
only by the Optionee's executor or the personal representative of the Optionee's
estate (or by his assignee, in the event of a permitted assignment) and only to
the extent that the Option was exercisable on the date of the Optionee's death.
7. STOCK CERTIFICATES. Certificates representing the Common Stock
issued pursuant to the exercise of the Option will bear all legends required by
law and necessary or advisable to effectuate the provisions of the Plan and this
Option.
8. CERTAIN LIMITS. Notwithstanding the foregoing, unless otherwise
provided by the Company pursuant to a separate written agreement or plan
covering the
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Optionee, to the extent an Optionee would be subject to the excise tax under
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), on
the amounts payable pursuant to this Award Agreement and such other amounts or
benefits the Optionee receives from the Company, any person whose actions result
in a change of ownership covered by Section 280G(b)(2) of the Code or any person
affiliated with the Company or such person, required to be included in the
calculation of parachute payments for purposes of Sections 280G and 4999 of the
Code, the amounts vested pursuant to this Award Agreement shall be automatically
reduced to an amount one dollar less than that which, when combined with such
other amounts, would subject the Optionee to such excise tax.
9. WITHHOLDING. No certificates representing shares of Common Stock
purchased hereunder shall be delivered to or in respect of an Optionee unless
the amount of all federal, state and other governmental withholding tax
requirements imposed upon the Company with respect to the issuance of such
shares of Common Stock has been remitted to the Company or unless provisions to
pay such withholding requirements have been made to the satisfaction of the
Committee. The Committee may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required in connection
with this Option. The Optionee may pay all or any portion of the taxes required
to be withheld by the Company or paid by the Optionee in connection with the
exercise of all or any portion of this Option by delivering cash, or by electing
to have the Company withhold shares of Common Stock, or by delivering previously
owned shares of Common Stock, having a Fair Market Value determined in
accordance with the Plan equal to the amount required to be withheld or paid.
The Optionee must make the foregoing election on or before the date that the
amount of tax to be withheld is determined.
10. SHAREHOLDER RIGHTS. The Optionee shall have no rights of a
shareholder with respect to shares of Common Stock subject to the Option unless
and until such time as the Option has been exercised and ownership of such
shares of Common Stock has been transferred to the Optionee.
11. SUCCESSORS AND ASSIGNS. This Award Agreement shall bind and
inure to the benefit of and be enforceable by the Optionee, the Company and
their respective permitted successors and assigns (including personal
representatives, heirs and legatees), except that the Optionee may not assign
any rights or obligations under this Award Agreement except to the extent and in
the manner expressly permitted herein.
12. NO EMPLOYMENT GUARANTEED. No provision of this Award Agreement
shall confer any right upon the Optionee to continued employment with the
Company or any Subsidiary.
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13. GOVERNING LAW. This Award Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Texas.
LYONDELL CHEMICAL COMPANY
Date:____________________ Signed:_________________________________
Name:___________________________________
Title:__________________________________
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