LONG-TERM INCENTIVE PLAN PHANTOM UNIT AWARD AGREEMENT
LONG-TERM
INCENTIVE PLAN
By letter
dated April 1, 2008 (the “Grant Letter”),
LyondellBasell Industries AF S.C.A., a Luxembourg company (the “Company”), grants to
the recipient of the Grant Letter (the “Participant”) an
award under the LyondellBasell Industries AF S.C.A. Long-Term Incentive Plan
(the “Plan”),
as further described herein.
Effective
as of April 1, 2008 (the “Grant Date”), the
Company now grants to Participant and Participant accepts the number of Phantom
Units set forth in the Grant Letter (the “Award”). This
Award is subject to the terms and conditions of the Plan, this Award Agreement,
and the Grant Letter.
1. Relationship to the
Plan.
This
Award is subject to all of the terms and conditions of the Plan and to such
administrative requirements or interpretations as the Plan Administrator, acting
in its sole discretion, may adopt.
2. Definitions.
Except as
defined in this Award Agreement, capitalized terms have the meanings ascribed to
them in the Plan, and, if not defined therein, the Equity Purchase
Agreement.
“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. “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 (the “Supervisory Board”),
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 a Participant pursuant to this Award
Agreement.
“Award Agreement”
means this agreement which, together with the Plan, 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.
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“Cause” means (a) the
Participant’s continued and willful refusal to substantially perform his duties
(other than a willful refusal resulting from the Participant’s incapacity due to
physical or mental illness) after the Plan Administrator delivers a demand for
substantial performance that specifically identifies the Plan Administrator’s
determination of the manner in which the Participant has not substantially
performed his duties and the Participant’s performance is not cured to the Plan
Administrator’s reasonable satisfaction within thirty (30) days from that
demand; (b) the Participant’s engagement in willful misconduct or
dishonesty that is materially injurious, monetarily or otherwise, to the
Company, a Subsidiary, or an Affiliate; or (c) a Participant’s final
conviction of a felony. Notwithstanding the foregoing, a Participant
shall not be deemed terminated for Cause without (1) the Plan Administrator’s
reasonable written notice to a Participant setting forth the reasons the Plan
Administrator intends to characterize the Participant’s termination as a
termination for Cause and (2) the Participant’s opportunity, together with his
counsel, to be heard before the Plan Administrator. It is
specifically agreed that Cause shall exclude any act or omission by a
Participant in the good faith exercise of the Participant’s business judgment as
an officer.
“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 Participant’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
Plan Administrator; provided, however, that (i) such Deferral Election shall be
irrevocable and (ii) any Deferral Election must be made on the form provided by
the Plan Administrator.
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“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 Participant’s transfer from employment by the
Company to employment by any Subsidiary or Affiliate, the Participant’s transfer
from employment by any Subsidiary or Affiliate to Company employment, nor the
Participant’s transfer between Subsidiaries and/or Affiliates shall be deemed to
be a termination of Participant’s employment. Moreover, a
Participant’s employment shall not be deemed to terminate because the
Participant is absent from active employment due to temporary illness, during
authorized vacation, during temporary leaves of absence granted by the Company
or the employing Subsidiary or Affiliate for professional advancement,
education, health or government service, during military leave for any period if
the Participant 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. Termination of employment is governed by
the laws of employment of the country in which the Participant is
employed. Notwithstanding anything contained herein to the contrary,
no Participant who is a U.S. taxpayer shall be considered to have terminated
employment for purposes of the Plan and the Award Agreement unless the
Participant would be considered to have incurred a “separation from service”
within the meaning of Section 409A of the Code.
“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 Participant setting forth the terms and conditions pertaining
to Participant’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.
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“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.
“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) the Normal Vesting
Date; (b) 60 days following termination due to death, Disability,
involuntary termination without Cause, or Retirement; or (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 4(c) of this Award Agreement, and (2) any payment
that the Participant 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 the Plan.
“Plan Administrator”
means the Company or its Delegate (as such term is defined in the
Plan).
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“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, a 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 Plan Administrator 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).
“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.
“Valuation Date” means
the earlier of:
(a) December
31 of the year preceding the Normal Vesting Date; or
(b) the
December 31 that occurs on or immediately preceding (i) the date of involuntary
termination of a Participant’s Employment without Cause, or (ii) the date of the
termination of a Participant’s Employment due to death, Disability or
Retirement;
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 a Participant has made a
Deferral Election, the applicable Valuation Date shall be the valuation date as
specified in the Deferral Election.
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“Vesting Date” means
the earlier of (a) the third anniversary of the Grant Date (the “Normal Vesting Date”)
or (b) such other date specified for vesting of all or a portion of an award
pursuant to Section 3.
3.
Vesting.
(a) All
Phantom Units shall vest on the Normal Vesting Date; provided, however, that,
except as otherwise set forth in this Section 3, (i) the Participant must be in
continuous Employment at all times between the Grant Date and the Normal Vesting
Date, and (ii) in the event of termination of Employment prior to the Normal
Vesting Date, all Phantom Units shall be forfeited.
(b) If,
prior to the Normal Vesting Date, the Participant’s Employment with the Company
is terminated due to death, Retirement, Disability or involuntary termination
without Cause, then the Participant 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 his termination of Employment and the denominator of which is
1095. Any Phantom Units in excess of such number shall remain
unvested and shall be forfeited as of the date of his termination of
Employment.
(c) Notwithstanding
any provision in this Award Agreement to the contrary, the Participant 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 4(c) of this Award Agreement.
4.
Payment.
(a) The
Company shall pay, or cause the employing Subsidiary or Affiliate to pay, the
Participant 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 Plan Administrator, acting in its sole discretion,
decides to permit deferrals under the Plan, the Participant may elect to defer
the receipt of any payment to which he is entitled in satisfaction of the
Phantom Units by the completion of a valid Deferral Election.
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(c) The
Participant 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 Participant may not defer the receipt of
such dividend equivalents.
(d) Notwithstanding
any provision of this Agreement to the contrary, if upon the Participant’s
termination of employment during the term of this Agreement, the Participant is
providing services to “a corporation any stock in which is publicly traded on an
established securities market or otherwise” within the meaning of Section
409A(2)(B)(i) of the Code, then this Section 4(d) shall apply. If the
Participant is identified by the Plan Administrator as a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date on which
he has a separation from service (other than due to death) within the meaning of
Section 1.409A-1(h) of the Treasury Regulations, then any payment to which he
may become entitled in satisfaction of his vested Phantom Units under the terms
of this Plan shall not take place prior to the earlier of (i) the first business
day following the expiration of six months from the date of such separation from
service, (ii) the date of Participant’s death or (iii) such other date as
complies with the requirements of Section 409A of the Code.
5.
Tax Compliance Issues for
Participants who are U.S. Taxpayers.
For Participants who are U.S.
taxpayers:
(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 Participant, 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 Participant 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 Participant under this Agreement, plus
(ii) all other payments and benefits which Participant 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 Participant (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.
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6. Tax Compliance Issues for
Participants who are not U.S. Taxpayers.
For Participants who are not U.S.
taxpayers, Award payments are subject to compliance with the tax laws of the
applicable jurisdictions.
7. 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 Plan, or to take other
action that, in the Company’s opinion, is necessary to satisfy all tax
withholding obligations.
8. Successors and
Assigns.
This
Phantom Unit Award shall bind and inure to the benefit of and be enforceable by
the Participant, the Company and their respective successors and assigns
(including personal representatives, heirs and legatees), but the Participant
may not assign any rights or obligations under this Award Agreement except to
the extent and in the manner expressly permitted by the Plan.
9. Shareholder
Rights.
This
Award Agreement shall not confer any rights upon the Participant 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.
10. 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, or to any employment with
Management LLC, NAG or any other entity.
11. Arbitration of
Disagreements.
(a) For Participants Paid on a
U.S. Dollar Payroll: For Participants paid on a U.S. Dollar
payroll, 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.
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(b) For Participants Paid other
than on a U.S. Dollar Payroll: For Participants paid other
than on a U.S. Dollar payroll, any dispute, controversy or claim arising out of
or relating to this Award Agreement shall be settled by final and binding
arbitration conducted according to the laws of the Grand Duchy of
Luxembourg.
12. Governing
Law.
(a) For Participants Paid on a
U.S. Dollar Payroll: For Participants paid on a U.S. Dollar
payroll, this Award Agreement shall be governed by, and construed and enforced
according to, the laws of the State of Delaware.
(b) For Participants Paid other
than on a U.S. Dollar Payroll: For Participants paid other
than on a U.S. Dollar payroll, this Award Agreement shall be governed by, and
construed and enforced according to, the laws of the Grand Duchy of
Luxembourg.
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LYONDELLBASELL
INDUSTRIES AF S.C.A.
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By:
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Date
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C.
Xxxx xx Xxxx
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Senior
Vice President, Human Resources
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Date
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Participant
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