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| CE > SEC Filings for CE > Form 8-K on 12-Feb-2013 | All Recent SEC Filings |
12-Feb-2013
Change in Directors or Principal Officers, Financial Statements and Exhibits
(b) On February 6, 2013, Paul H. O'Neill notified Celanese Corporation (the
"Company") of his intent to retire, effective April 25, 2013, in accordance with
the Company's director retirement guideline.
(d) On February 6, 2013, the Board of Directors (the "Board") of the Company
increased the size of the Board from nine to ten members and elected Edward G.
Galante as a Class II member of the Board, effective February 11, 2013. There
are no arrangements or understandings between Mr. Galante and any other person
pursuant to which he was elected as a director.
Consistent with the compensation provided to all non-management directors, Mr. Galante will receive an annual director retainer fee of $85,000 in cash and $95,000 in time-vesting restricted stock units, to be pro rated accordingly from his date of election. The restricted stock units will vest in full one year from the date of grant. In addition, in accordance with Company policy, Mr. Galante will be reimbursed for actual expenses incurred on behalf of the Company.
Mr. Galante has been elected to serve on the Board until the Company's 2013 Annual Meeting of Stockholders on April 25, 2013, at which time he will be a nominee for election by the Company's stockholders.
A copy of the press release announcing Mr. Galante's election is furnished hereto as Exhibit 99.1.
(e) Each year, the Compensation Committee (the "Committee") of the Board adopts compensatory arrangements for the named executive officers. On February 6, 2013, the Committee took the actions set forth below.
2012 Annual Performance Bonus Plan
The Committee reviewed the Company's performance for 2012 and, because the threshold level of Operating EBITDA was not achieved for 2012, no cash bonuses were awarded to our chief executive officer, chief financial officer or any of the other named officers in the Company's proxy statement for its April 19, 2012 annual meeting currently employed by us (collectively, the "named executive officers").
2013 Annual Performance Bonus Award Targets The Committee approved target bonus levels for each of the named executive officers under the 2013 Annual Performance Bonus Plan (the "2013 Bonus Plan"), pursuant to which the named executive officers may receive a cash bonus after the end of the 2013 fiscal year based on total Company performance. The 2013 target bonus levels are shown as a percentage of 2013 base salary: Named Executive Officer1 2013 Target Bonus Level Mark C. Rohr 130 % Steven M. Sterin 80 % Gjon N. Nivica, Jr. 70 % Jay C. Townsend 80 % _________________________________________________ |
The 2013 Bonus Plan is a performance-based plan created under the Company's 2009 Global Incentive Plan, as amended and restated April 19, 2012 (the "2009 Plan"). Actual bonuses earned under the 2013 Bonus Plan will depend on the Committee's assessment of performance based on certain financial and non-financial metrics, including Adjusted EBIT Growth, working capital and stewardship, and individual performance.
Long-Term Incentive Equity Awards
The Committee approved annual long-term incentive equity awards under the 2009
Plan to the Company's named executive officers in the form of performance-based
restricted stock units ("PRSUs") granted on February 6, 2013 in the following
amounts:
Named Executive Officer1 Performance RSUs (#) at Target
Mark C. Rohr 106,067
Steven M. Sterin 21,213
Gjon N. Nivica, Jr. 14,849
Jay C. Townsend 21,213
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These awards will be evidenced by a Performance-Based Restricted Stock Unit
Award Agreement (in the form filed herewith, the "PRSU Agreement"). The
percentage of the target number of PRSUs awarded that may vest is subject to the
achievement of specified levels of Adjusted EBIT Growth during the 2013-2014
fiscal years compared to a target and is set forth in the following schedule:
Adjusted EBIT Growth Achieved Performance Adjustment Percentage
Below Threshold 0 % Threshold 34 % Target 100 % Stretch 200 % |
There is an alternative performance adjustment provision that could apply if Adjusted EBIT Growth performance is below threshold. In this case, if Operating EBITDA exceeds a specified percentage of Net Sales for the performance period, the performance adjustment percentage will equal 34%.
The award, as adjusted for performance, vests 50% on each of February 1, 2015 and January 1, 2016, to be settled in shares promptly following the performance determination after the performance period and the deemed vesting date.
The PRSU Agreement specifies treatment of the award in case of termination of employment before the award becomes fully vested. In general, in case of death or disability, a pro rated portion of the award will be earned and vest immediately assuming target performance (although if death or disability occurs after performance has been determined, the performance-adjusted number of PRSUs will be pro rated). In case of termination of employment without cause or for a qualifying retirement, a pro rated portion of the award will be adjusted for performance results and vest per the original vesting schedule. The award can also become vested in case of a termination of employment without cause within two years after a change in control. In all other cases, unvested PRSUs will be forfeited and canceled without consideration upon termination of employment. A retirement qualifies for pro rated vesting if the executive voluntarily retires from the Company after age 55 with 10 years of service (age 60 and 5 years of service for our current CEO).
PRSUs do not receive any dividend equivalents.
The description of the PRSU Agreement contained herein is qualified in its entirety by reference to the form of the PRSU Agreement that is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Executive Severance Plan
The Committee approved amendments to the Company's 2010 Executive Severance Benefits Plan (the "Severance Plan"), effective February 6, 2013. As amended, the Severance Plan applies to all executive officers of the Company, including the named executive officers.
The Severance Plan provides, upon the involuntary termination not for cause of
an executive, for the payment of (i) one year's (1.5 for the CEO) base salary,
(ii) one year's (1.5 for the CEO) annual performance bonus award (based upon
target Company performance and a 1.0 individual modifier), and (iii) a pro rata
portion of the annual performance bonus award for the year in which the
termination occurs (based upon actual Company performance and an 1.0 individual
modifier). In addition, the Severance Plan provides that the vesting of
long-term incentive grants of restricted stock units, stock options and
incentive cash upon termination will be governed by the terms of the award
agreements for such grants. The Severance Plan also provides for the payment of
COBRA premiums and executive outplacement services for a period of one year from
the date of termination (18 months COBRA premium for the CEO). As a condition to
the receipt of any benefits under the Severance Plan, an executive must agree to
standard release, non-compete, non-solicitation, and confidentiality provisions.
During 2012, the Committee amended the Severance Plan to eliminate the
resignation for good reason provision in order to provide the Company with more
flexibility in transferring employees without triggering severance benefits.
The foregoing summary of the Severance Plan is qualified in its entirety by reference to the full text of the Severance Plan that is filed herewith as Exhibit 10.2 and incorporated herein by reference.
Departure of Named Executive Officer
On November 19, 2012, the Company announced that Douglas M. Madden, Chief
Operating Officer, has elected to retire effective March 31, 2013 (the
"Retirement Date").
In connection with Mr. Madden's retirement from the Company, Mr. Madden and the
Company will enter into an Agreement and Amendment (the "Agreement") on the
Retirement Date, pursuant to which Mr. Madden will agree to voluntarily resign
from all positions he holds with the Company and any of its subsidiaries on the
Retirement Date. A summary of the anticipated material terms of the Agreement,
which were approved by the Committee on February 6, 2013, is set forth below:
• Restrictive Covenant: Mr. Madden will agree (1) for a period of two years
after the Retirement Date not to compete with the Company, or solicit or
hire former employees of the Company, and (2) to keep information concerning
the Company confidential.
• Cooperation Covenant: Mr. Madden will agree to cooperate with the Company as necessary after the Retirement Date, including being available for conference calls and assisting with pending litigation and claims.
• Vesting and Settlement of Equity Awards: Under our retirement policy, by virtue of Mr. Madden's retirement after age 55 with at least 10 years of service, Mr. Madden will vest in a pro rata portion of his 2010 and 2011 performance- and time-vesting RSUs outstanding on the Retirement Date, to be settled in accordance with the settlement provisions contained in the respective award agreements, including performance conditions with respect to performance-vesting RSUs and holding period requirements with respect to 2010 and 2011 awards. Notwithstanding the foregoing, Mr. Madden's December 2011 time-vesting RSU award will continue to vest in accordance with the remaining vesting schedule rather than on a pro rata basis, and the award agreement for this award is being amended by the Agreement. Also under our retirement policy, Mr. Madden will also be entitled to pro rata vesting of his outstanding 2010 and 2011 stock option awards, and will be entitled to exercise the vested portion of such stock option awards from the Retirement Date through the original expiration date subject to any applicable holding period requirements. The terms of all remaining, vested stock option agreements are unaffected by the Agreement. The portion of all remaining unvested RSUs and unvested stock option awards will be forfeited and canceled as of the Retirement Date.
• 2013 Bonus Payments and Equity Awards: Mr. Madden will not be entitled to receive a cash incentive bonus for 2013 or any 2013 annual long-term incentive equity award.
The Agreement also provides for a general release by Mr. Madden of any and all
claims that he may have against the Company. Mr. Madden will continue to be
entitled to his accrued benefits under the Company's employee benefit and
pension plans and policies in which he participates, independent of the
Agreement.
The foregoing summary is qualified in its entirety by reference to the
Agreement, the final form of which will be filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ending March 31, 2013.
(d) Exhibits
Exhibit Number Description
10.1 Form of 2013 Performance-Based Restricted Stock Unit Award
Agreement
10.2 Executive Severance Benefits Plan, amended effective
February 6, 2013
99.1 Press Release dated February 11, 2013
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