CHANGE IN CONTROL AGREEMENTChange of Control Agreement |
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EXHIBIT 10.1
CHANGE IN CONTROL AGREEMENT
This
CHANGE IN CONTROL AGREEMENT (the “ Agreement
”) is entered into on April 1, 2008 (the “
Effective
Date ”) by and between Celanese Corporation (the
“ Company
”) and David N. Weidman (the “ Executive
”).
The
Company considers it essential to foster the continued
employment of key management personnel. The Board
of Directors of the Company (the “Board”
) believes that it is in the best interests of the Company and
its stockholders to assure the Company will have the continued
dedication of Executive, notwithstanding the possibility,
threat or occurrence of a Change in Control. The
Board believes it is imperative to diminish the inevitable
distraction of Executive by virtue of the personal
uncertainties and risks created by a pending or threatened
Change in Control and to encourage Executive’s full
attention and dedication to the Company currently and in the
event of any threatened or pending Change in
Control. The Company also requests, and the
Executive desires to give the Company, certain assurances with
regard to the protection of Confidential Information and
Intellectual Property of the Company and its
Affiliates. Therefore, the Company and the
Executive have entered into this Agreement.
In
consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the
parties agree as follows:
1.
Definitions:
a.
“Affiliate” shall mean, when used with respect
to any person or entity, any other person or entity which controls,
is controlled by or is under common control with the specified
person or entity. As used in the immediately preceding
sentence, the term "control" (with correlative meanings for
"controlled by" and "under common control with") shall mean, with
respect to any entity, the ownership, directly or indirectly, of
fifty percent (50%) or more of the outstanding equity interests in
such entity. !
b.
“
Beneficial
Owner ” shall have the meaning given such term in Rule
13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the “ Exchange
Act ”).
c.
“
Cause
” shall mean (i) Executive’s willful failure to perform
Executive’s duties hereunder (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
Executive of such failure, (ii) conviction of, or a plea of nolo
contendere to, (x) a felony 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) Executive’s willful malfeasance or willful misconduct
which is demonstrably injurious to the Company or its Affiliates,
(iv) any act of fraud by Executive, (v) any material violation of
the Company’s code of conduct, (vi) any material violation of
the Company’s policies concerning harassment or
discrimination, (vii) Executive’s conduct that causes
material harm to the business reputation of the Company or its
Affiliates, or (viii) Executive’s breach of the provisions of
Sections 7 (Confidentiality; Intellectual Property) or 8
(Non-Competition; Non-Solicitation) of this Agreement.
d.
A
“ Change In
Control” will be deemed to have occurred for purposes
hereof, upon any one of the following events: (a) any person
(within the meaning of Sections 13(d) and 14(d) of the Exchange
Act), other than the Company (including its subsidiaries,
directors, and executive officers) has become the Beneficial Owner
of thirty percent (30%) or more of the combined voting power of the
Company’s then outstanding common stock or equivalent in
voting power of any class or classes of the Company’s
outstanding securities ordinarily entitled to vote in elections of
directors (“ Voting
Securities ”) (other than as a result of an issuance
of securities by the Company approved by Incumbent Directors, or
open market purchases approved by Incumbent Directors at the time
the purchases are made); (b) individuals who constitute the Board
as of the Effective Date (the “Incumbent
Directors ”) have ceased for any reason to constitute
at least a majority thereof, provided that any person becoming a
director after the Effective Date whose election, or nomination for
election by the Company’s stockholders, was approved by a
majority of the directors comprising the Incumbent Board, either by
a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director
without objection to such nomination shall be an Incumbent
Director; provided, however, that no individual initially elected
or nominated as a director of the Company as a result of an actual
or threatened election contest with respect to the election or
removal of directors (“ Election
Contest ”) or other actual or threatened solicitation
of proxies or consents by or on behalf of any Person other than the
Board (“ Proxy
Contest ”), including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest,
shall be deemed an Incumbent Director; (c) the stockholders of the
Company approve a reorganization, merger, consolidation, statutory
share exchange or similar form of corporate transaction, or the
sale or other disposition of all or substantially all of the
Company’s assets (a “ Transaction
”), unless immediately following such Transaction, (i) all or
substantially all of the Persons who were the Beneficial Owners of
the Voting Securities outstanding immediately prior to such
Transaction are the Beneficial Owners of more than 50% of the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the
entity resulting from such Transaction (including, without
limitation, an entity which as a result of such Transaction owns
the Company or all or substantially all of the Company’s
assets or stock either directly or through one or more
subsidiaries, the “ Surviving
Entity ”) in substantially the same proportions as
their ownership, immediately prior to such Transaction, of the
Voting Securities, (ii) no Person is the Beneficial Owner of 30% or
more of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors
of the Surviving Entity, and (iii) at least a majority of the
members of the board of directors of the Surviving Entity are
Incumbent Directors; or (d) approval by the Company’s
stockholders of a complete liquidation and dissolution of the
Company.
However,
if in any circumstance in which the foregoing definition would
be operative and with respect to which the income tax under
Section 409A of the Code would apply or be imposed, but where
such tax would not apply or be imposed if the meaning of the
term “Change in Control” met the requirements of
Section 409A(a)(2)(A)(v) of the Code, then the term
“Change in Control” herein shall mean, but only
for the transaction so affected, a “change in control
event” within the meaning of Treas. Reg.
§1.409A–3(i)(5).
e.
“Change In Control Protection Period”
shall mean that period commencing on the date that the Company or a
third party publicly announces an event that, if consummated, would
constitute a Change In Control and ending (i) on the date that the
circumstances giving rise to the announcement of the event are
abandoned or withdrawn, or (ii) if such transaction is consummated,
two years after the Change In Control.
f.
“COBRA” shall mean those
provisions of the Consolidated Omnibus Budget Reconciliation Act of
1986, as amended, related to continuation of group health and
dental plan coverage as set forth in Code section
4980B.
g.
“
Code
” shall mean the Internal Revenue Code of 1986, as amended
from time to time.
h.
“Competitive Business” shall mean businesses
that compete with products and services offered by the Company in
those countries where the Company or any of its Affiliates
manufactures, produces, sells, leases, rents, licenses or otherwise
provides its products or services during the two (2) years
preceding the Termination Date (including, without limitation,
businesses which the Company or its Affiliates have specific plans
to conduct in the future that were disclosed or made available to
Executive), provided that, if Executive’s duties were limited
to particular product lines or businesses during such period, the
Competitive Business shall be limited to those product lines or
businesses in those countries for which the Executive had such
responsibility.
i.
“Confidential Information” shall mean any
non-public, proprietary or confidential information, including
without limitation trade secrets, know-how, research and
development, software, databases, inventions, processes, formulae,
technology, designs and other intellectual property, information
concerning finances, investments, profits, pricing, costs,
products, services, vendors, customers, clients, partners,
investors, personnel, compensation, benefits, recruiting, training,
advertising, sales, marketing, promotions, government and
regulatory activities and approvals concerning the past, current or
future business, activities and operations of the Company, its
Affiliates and/or any third party that has disclosed or provided
any of same to the Company or its Affiliates on a confidential
basis. “Confidential Information” also
includes any information designated as a trade secret or
proprietary information by operation of law or otherwise, but shall
not be limited by such designation. “Confidential
Information” shall not include any information that is (i)
generally known to the industry or the public other than as a
result of Executive’s breach of this covenant; (ii) made
legitimately available to Executive by a third party without breach
of any confidentiality obligation; or (iii) required by law to be
disclosed; provided that Executive shall give prompt written notice
to the Company of such requirement, disclose no more information
than is so required, and cooperate with any attempts by the Company
to obtain a protective order or similar treatment.
k.
“Fiscal Year” shall mean the fiscal year
of the Company.
l.
“Good Reason” shall mean any of the following
conditions which occurs without the consent of the
Executive: (i) a material diminution in the Executive's
base salary or annual bonus opportunity; (ii) a
material diminution in the Executive's authority, duties, or
responsibilities (including status, offices, titles and reporting
requirements); (iii)
a material change in the geographic
location at which the Executive must perform his duties; (iv)
failure of the Company to pay compensation or benefits when due, or
(v) any other
action or inaction that constitutes a material breach by the
Company of this Agreement. The conditions described
above will not constitute “Good Reason” unless the
Executive provides written notice to the Company of the existence
of the condition described above within 90 days after the initial
existence of such condition. In addition, the conditions
described above will not constitute “Good Reason”
unless the Company fails to remedy the condition within a period of
thirty (30) days after receipt of the notice described in the
preceding sentence. If the Company fails to remedy the
condition within the period referred to in the preceding sentence,
Executive may terminate his employment with the Company for
“Good Reason” within in the next thirty (30) days
following the expiration of the cure period.
m.
“Notice of Termination” shall mean a notice
which shall indicate the general reasons for the termination
employment and the circumstances claimed to provide a basis for
termination of employment or other Separation of Service under the
provision so indicated.
n.
“Person” shall mean any person, firm,
partnership, joint venture, association, corporation or other
business organization, entity or enterprise
whatsoever.
o.
“Restricted Period” shall be (i)
one year from the Termination Date in the event of a Separation
from Service that occurs during the Service Term (as defined
hereinafter) other than in the case of an involuntary Separation
from Service without Cause, (ii) in the case of an involuntary
Separation from Service without Cause during the Service Term, an
amount of time in whole months equal to the number of months’
salary the Company agrees to provide to Executive in severance,
whether paid over time or in a lump sum; and (iii) two years from
the Termination Date in the event of a Separation from Service
following a Change In Control where Executive receives the Change
In Control Payment (as defined hereinafter).
p.
“Separation from Service ” shall mean
an event after which the Executive shall no
longer
provide
services
to the
members of the Controlled Group , whether voluntarily
or involuntarily as determined by the Committee (as hereafter
defined) in accordance with
Treas. Reg. §1.409A-1(h) (1)
.
A
Separation from Service shall occur
when
Executive has experienced a
termination of employment from the
members of the Controlled Group .
Executive
shall be
considered to have experienced a termination of employment when the
facts and circumstance s indicate that the
Executive and the Company reasonably anticipate
that either (i) no further services will be performed for
the members of the
Controlled Group after a certain date,
or (ii) that the level of bona fide services the
Executive
will
perform for the members of the
Controlled Group after such date
(whether as an e mployee or as an
independent contractor) will permanently decrease to no more than
20% of the average level of bona fide services performed
by such
Executive (whether as an
e
mployee or
an independent contractor) over the immediately preceding 36-month
period (or the full period of
services to the members of the Controlled Group if the
Executive
has
been
providing services to the members of the Controlled Group
less than
36 months). If Executive
is on
military leave, sick leave, or other bona fide leave of
absence,
the
employment relationship between the
Executive and the
members of
the Controlled Group shall be treated as
continuing intact, provided that the period of such leave does not
exceed 6 months, or if lo nger, so long as the
Executive retains a right to
reemployment with the members of the
Controlled Group under an applicable
statute or by contract. If the period of a military
leave, sick leave, or other bona fide leave of absence exceeds
6 months and the
Executive does not retain a
right to reemployment under an applicable statute or by contract,
the employment relationship shall be considered to be terminated
for purposes of this
Agreement as of the first day
immediately following the end of such 6-month period. In
applying the provisions of this paragraph, a leave of absence shall
be considered a bona fide leave of absence only if there is a
reasonable expectation that the
Executive will return to
p erform services for
any members of the Controlled Group .
Notwithstanding the foregoing provisions , if Executive
provides
services for the Company
as
both an
e mployee and as
a non-employee d
irector,
to the extent permitted by Treas. Reg. §1.409A-1(h)(5) the
services provided by such Executive
as
a non-employee d
irector
shall not be taken into account in det ermining whether the
Executive has experienced
a Separation from
Service .
q.
“Target Bonus” shall mean the target
bonus for Executive under any
annual
bonus plan in effect from time to
time as determined by the
Compen sation Committee
(the
“Committee” ) or the
Board.
r.
“Termination Date” shall mean the
date upon
which a Separation from Service with respect to an Executive
occurs .
2.
Term of Change In Control Agreement .
a.
This
Agreement shall be for an initial term (the “ Initial
Term ”) of two years and shall continue to renew for
consecutive two year terms thereafter (a “ Renewal
Term ”), unless either party shall give written notice
to the other (a “ Notice of
Non-Renewal ”) that such agreement shall not renew at
least ninety days prior to the expiration of the Initial Term or
Renewal Term then in effect. Notwithstanding the
foregoing, the Company may not give a Notice of Non-Renewal during
the Change In Control Protection Period.
b.
This
Agreement, except those provisions which shall survive under
Section 11(k), shall terminate upon the termination of
Executive’s employment for any reason other than the
termination of Executive’s employment during the Change In
Control Protection Period (x) by the Company without Cause or (y)
by the Executive with Good Reason. No payment under this
Agreement will be due to Executive upon termination of
Executive’s employment for any reason other than as specified
in (x) or (y) above.
3.
Executive’s Incumbent Position .
a.
Unless
notified otherwise by the Board, Executive shall serve as Chairman
and Chief Executive Officer ( “Executive’s
Incumbent Position”) . In such position,
Executive shall have such duties and authority as shall be
determined from time to time by the Board. Executive
shall also serve as a member of the Board without additional
compensation. The period during which the Executive
shall be employed by the Company shall be called the “
Service
Term .”
b.
Except
as provided in Section 5, (i) either Company or Executive may
terminate the employment relationship at any time, with or without
Cause or Good Reason, (ii) this Agreement shall not be construed as
giving the Executive any right to be retained in the employ of the
Company or its Affiliates, (iii) the Company may at any time
terminate the Executive free from any liability of any claim under
this Agreement, except as expressly provided herein; and (iv) the
Company may demote Executive at any time in its absolute and sole
discretion without liability to the Executive.
c.
During
the Service Term, Executive will devote Executive’s full
business time and best efforts to the performance of
Executive’s duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise
which would conflict or interfere with the rendition of such
services either directly or indirectly, without the prior written
consent of the Board; provided that nothing herein shall preclude
Executive, (i) subject to the prior approval of the Board, from
accepting appointment to or continuing to serve on any board of
directors or trustees of any business corporation or any charitable
organization or (ii) from participating in charitable activities or
managing personal investments; provided in each case, and in the
aggregate, that such activities do not conflict or interfere with
the performance of Executive’s duties hereunder or conflict
with Sections 7 or 8. Executive shall promote the
goodwill of the Company with its employees, customers,
stockholders, vendors, and the general public. During
the Service Term, reasonable business expenses incurred by
Executive in the performance of Executive’s duties hereunder
and to support the goodwill and business relationships of the
Company shall be reimbursed by the Company in accordance with
Company policies.
4.
Obligations of the Company upon Change In Control with Respect to
Long-Term Incentive Awards and Deferred Compensation.
The
effect of a change in control on any long-term incentive
awards (cash or equity) or deferred compensation previously
granted to the Executive under the 2008 Deferred Compensation
Plan, 2004 Stock Incentive Plan or the 2004 Deferred
Compensation Plan, as amended, (the “ Long-Term
Incentive
Awards ”) shall be governed by the terms and
conditions of the applicable individual award agreements or
deferral agreements and the Celanese Corporation 2008 Deferred
Compensation Plan, the 2004 Stock Incentive Plan or the 2004
Deferred Compensation Plan, as amended (collectively, the
“ Long-Term
Incentive
Award Agreements ”), and shall not be governed by
this Agreement.
5.
Termination of Employment Connected with a Change In
Control.
a.
Upon
Executive’s Separation from Service during the Change In
Control Protection Period, Executive shall receive the Change In
Control Payment if and only if the following conditions
occur:
(i)
The
Change In Control is consummated;
(ii)
Executive
is employed in the Executive Incumbent Position or some
substantially equivalent or higher position for the Company as of
the commencement of the Change In Control Protection
Period;
(iii)
Executive’s
employment is terminated either by the Company without Cause or by
the Executive with Good Reason such that a Separation from Service
occurs;
(iv)
Within
fifty (53) days after both conditions in Sections 5(a)(i) and
5(a)(iii), or at the expiration of twenty - one (21)
days following the presentation of the release, Executive executes
a release of all claims, known or unknown, against the Company, its
Affiliates, and their respective agents in a form satisfactory to
the Company similar to that attached hereto as Exhibit A and does
not timely revoke such release before the expiration of seven days
following his or her execution of the release; and
(v)
Within
fifty (53) days after both conditions in Sections 5(a)(i) and
5(a)(iii), Executive reaffirms in writing in a manner satisfactory
to the Company his or her obligations under Sections 7 and 8 of
this Agreement.
b.
The
“Change
In Control Payment” shall be equal
to two times the sum of (i) Executive’s then current
annualized base salary; and (ii) the higher of (x)
Executive’s Target Bonus in effect on the last day of the
Fiscal Year that ended immediately prior to the year in which the
Termination Date occurs, or (y) the average of the cash bonuses
paid by the Company to Executive for the three Fiscal Years
preceding the Termination Date.
c.
The
Change In Control Payment shall be paid in a single lump sum to
Executive six (6) months and one day after the Executive’s
Termination Date, together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code.
d.
Provided
that (i) all of the conditions in Section 5(a) are met, (ii)
Executive makes a timely COBRA election, and (iii) Executive has
complied in all material respects with regard to the obligations of
Sections 7 and 8 of this Agreement, if the Executive timely remits
to the Company the applicable “COBRA” premiums for such
coverage, the Company will continue to provide group health and
dental coverage under the Company’s medical plan for
Executive and his or her dependents during the Restricted Period;
and will reimburse Executive for all premiums paid by Executive for
such continued coverage. Such reimbursements will be
made within thirty (30) days after Executive’s payment of
such premiums (or submission of a request for reimbursement and
satisfactory proof of such payment) but in no event later than on
or before the last day of the Executive’s tax year following
the tax year in which the expense was incurred. The
amount of COBRA premiums and health and dental expenses eligible
for reimbursement during Executive’s tax year may not affect
the COBRA premiums and health and dental expenses eligible for
reimbursement in any other tax year.
e.
Certain
Further Payments Due Executive
(i)
In
the event that any amount or benefit paid or distributed to
Executive pursuant to this Agreement and/or any amounts or benefits
otherwise paid or distributed to Executive by the Company that are
treated as parachute payments under Section 280G of the Code (such
payments, collectively, the “ Covered Payments
”), are or become subject to the tax imposed under Section
4999 of the Code or any similar tax that may hereafter be imposed
(the “ Excise Tax ”),
the Company will pay to Executive an additional amount (the “
Tax Reimbursement
Payment ”), such that the net amount retained by
Executive with respect to such Covered Payments, after deduction of
any Excise Tax (as well as any penalties and interest thereon) on
the Covered Payments and any Federal, state and local income tax,
payroll tax, and Excise Tax on the Tax Reimbursement Payment
provided for by this subsection (e), but before deduction for any
Federal, state or local income or employment tax withholding on
such Covered Payments, will be equal to the amount of the Covered
Payments, together with an amount equal to the product of any
deductions disallowed to Executive for federal, state, or local
income tax purposes because of the inclusion of the Tax
Reimbursement Payment in Executive’s adjusted gross income
multiplied by the highest applicable marginal rate of federal,
state, or local income taxation, respectively, for the calendar
year in which the Tax Reimbursement Payment is to be
made. The time for payment of the Tax Reimbursement
Payment is set forth in subsection (e)(v) below. The Tax
Reimbursement Payment is intended to place the Executive in the
same position he would have been in if the Excise Tax did not
apply.
(ii)
For
purposes of determining whether any of the Covered Payments will be
subject to the Excise Tax and the amount of such Excise
Tax,
(A)
such
Covered Payments will be treated as “parachute
payments” within the meaning of Section 280G of the Code, and
all “parachute payments” in excess of the “base
amount” (as defined under Section 280G(b)(3) of the Code)
will be treated as subject to the Excise Tax, unless, and except to
the extent that, in the good faith judgment of a public accounting
firm appointed by the Company or tax counsel selected by such
accounting firm (the “ Accountants ”),
the Company has a reasonable basis to conclude that such Covered
Payments (in whole or in part) either do not constitute
“parachute payments” or represent reasonable
compensation for personal services actually rendered
(within
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