EXHIBIT 10.34
PENSION BENEFITS FOR XXXXX X. XXXXXXX
The following is a description of the pension benefits to which Xxxxx
X. Xxxxxxx, President and Chief Executive Officer of Celanese Corporation (the
"Company") will be entitled to participate as part of his compensation package
with the Company, as described in Xx. Xxxxxxx'x employment agreement (the
"Employment Agreement"), which will be filed with the Securities and Exchange
Commission as Exhibit 10.25 to the Form 10-K to be filed for the fiscal year
ended December 31, 2004. This description is provided pursuant to Item
601(b)(10)(iii) of Regulation S-K.
Pursuant to the terms of the Employment Agreement, Xx. Xxxxxxx is
entitled to participate in the same pension benefit formula on substantially
similar terms as the members of the board of managers for Celanese AG, the
Company's indirect subsidiary, as summarized below.
The promised pension benefit becomes fully vested once Xx. Xxxxxxx
attains five (5) years of Company service and is paid after Xx. Xxxxxxx leaves
the Company and reaches the age of 60. The amount of the pension is calculated
as the product of the escalation factor of 1.8 %, the number of qualifying years
of service and the pensionable income. In this calculation the number of
qualifying years of service is limited to 30. Consequently, the maximum figure
is 54% of the pensionable income. Qualifying years of service are all complete
years of service since September 1, 2000, spent in Celanese Corporation and its
subsidiaries and in Hoechst Aktiengesellschaft and its subsidiaries.
The pensionable income is calculated as the sum of the average basic
annual salary of the last three calendar years prior to retirement and the
average annual bonus of the last three calendar years prior to retirement
insofar as these shall be qualifying years of service.
The following are offset against this pension: (i) employer financed
portion of the 401k plan administered by Celanese Americas Corporation in which
Xx. Xxxxxxx is entitled to participate; (ii) social security pension benefits
acquired during qualifying years of service at a rate of 50%; (iii) all claims
gained during the service years regarding the pension scheme financed by
Celanese AG; and (iv) equivalent annuities for capital payments from Celanese AG
or supra-company savings schemes or pension schemes to the extent that they are
financed by Celanese AG and are in respect of qualifying years of service.
Capital payments deferring from the start of pension benefit payments are
adjusted upwards until the beginning of pension benefit payments by applying an
appropriate rate of interest geared to the capital market.
In the event of an early disability, the pension benefit is paid for
the duration of the disability. From the age of 60 onwards, the payment is
continued at the same level as an old-age pension in case the disability
persists. In the event of death, the pension is to be paid to the spouse and
unmarried children entitled to maintenance. Certain other Celanese AG-financed
benefits, if any, granted in this case are offset against the survivors'
pension.
The pension benefit is adjusted annually, the adjustment being based on
the cost-of-living index in the country from which the pension payment is made.
A vested right to a pension is granted in the case of premature termination of
employment according to German law, but for no longer than 10 countable service
years.
In case of termination of the Employment Agreement by the Company prior
to the beneficiary having reached age 60 and without due cause for immediate
dismissal or if there has been no agreement to extend the Employment Agreement,
the pension benefit becomes payable upon reaching age 55 instead of 60. The
pension benefit, however, will be reduced linearly by 0.5% for each month
between the date of commencement of the pension benefit and that date on which
Xx. Xxxxxxx would attain 60 or the requirements of the "85-points-rule" are met,
whereby Xx. Xxxxxxx attains the age of 55 and his age plus the number of years'
service totals at least 85.
