def14a
CELANESE CORPORATION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to
§240.14a-12
CELANESE CORPORATION
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ
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No fee required
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Fee computed on table below per Exchange Act Rules
14a-6(i)(1)
and 0-11
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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[This page
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CELANESE
CORPORATION
1601 West Lyndon B. Johnson Freeway
Dallas, Texas 75234
March 10,
2011
Dear Fellow Stockholders:
On behalf of your board of directors, I am pleased to invite you
to attend the 2011 Annual Meeting of Stockholders of Celanese
Corporation. The meeting will be held at 7:30 a.m. (Dallas
time) on Thursday, April 21, 2011, at The Crescent Club,
200 Crescent Court 17th Floor, Dallas, Texas
75201.
The accompanying Proxy Statement describes the items to be
considered and acted upon by the stockholders at the Annual
Meeting.
To ensure that your shares are represented at the meeting, we
urge you to cast your vote as promptly as possible. You may vote
by proxy via the Internet or telephone, or, if you received
paper copies of the proxy materials by mail, you can also vote
via mail by following the instructions on the proxy card or
voting instruction card. We encourage you to vote via the
Internet. It is convenient and saves us significant postage and
processing costs.
Sincerely,
David N. Weidman
Chairman and
Chief Executive Officer
TABLE
OF CONTENTS
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i
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 21,
2011
Celanese Corporations Notice of Annual Meeting and Proxy Statement, 2010 Annual Report to
Stockholders and other proxy materials are available at www.proxyvote.com.
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Date:
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April 21, 2011
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Time:
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7:30 a.m., Central Daylight Time
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Place:
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The Crescent Club,
200 Crescent Court 17th Floor,
Dallas, Texas 75201
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Items of Business:
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(1) To elect Martin G. McGuinn, Daniel S. Sanders and John K.
Wulff to serve on our board of directors until the 2014 Annual
Meeting of Stockholders or until their successors are elected
and qualified;
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(2) To approve an advisory vote on executive compensation;
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(3) To designate the frequency of periodic advisory votes on
executive compensation;
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(4) To ratify the selection of KPMG LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2011; and
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(5) To transact such other business as may properly be brought
before the meeting in accordance with the provisions of the
Companys Third Amended and Restated By-laws (the
By-laws).
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Record Date:
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You are entitled to attend the Annual Meeting and can vote if
you were a stockholder of record as of the close of business on
February 23, 2011.
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Our Proxy Statement follows. Financial and other information
about Celanese Corporation is contained in our Annual Report to
Stockholders for the fiscal year ended December 31, 2010
(the 2010 Annual Report to Stockholders).
To ensure that your shares are represented at the meeting, we
urge you to cast your vote as promptly as possible. You may vote
by proxy via the Internet or telephone, or, if you received
paper copies of the proxy materials by mail, you can also vote
via mail by following the instructions on the proxy card or
voting instruction card. We encourage you to vote via the
Internet. It is convenient and saves us significant postage and
processing costs.
By Order of the Board of Directors of
Celanese Corporation
Gjon N. Nivica, Jr.
Senior Vice President, General Counsel
and Corporate Secretary
Dallas, Texas
March 10, 2011
1
For the Annual Meeting of Stockholders To Be Held on
April 21, 2011
The board of directors (the board of directors or
the board) of Celanese Corporation, a Delaware
corporation (Celanese, us,
Company, we or our),
solicits the enclosed proxy for use at our 2011 Annual Meeting
of Stockholders (the Annual Meeting) to be held at
7:30 a.m. (Central Daylight Time) on Thursday,
April 21, 2011, at The Crescent Club, 200 Crescent
Court 17th Floor, Dallas, Texas 75201. This
Proxy Statement contains information about the matters to be
voted on at the meeting and the voting process, as well as
information about our directors (each, a director or
collectively, the directors) and executive officers.
We will bear the expense of soliciting the proxies for the
Annual Meeting.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 21,
2011
Celanese Corporations Notice of Annual Meeting and Proxy
Statement, 2010 Annual Report to
Stockholders and other proxy materials are available at www.proxyvote.com.
Pursuant to U.S. Securities and Exchange Commission
(SEC) rules, we have elected to furnish proxy
materials to our stockholders over the Internet instead of
mailing printed copies of those materials to each stockholder.
If you received a Notice of Internet Availability of Proxy
Materials (Notice of Internet Availability) by mail,
you will not receive a printed copy of the proxy materials
unless you request one. Instead, the Notice of Internet
Availability will instruct you as to how you may access and
review the proxy materials and cast your vote on the Internet.
If you received a Notice of Internet Availability by mail and
would like to receive a printed copy of our proxy materials,
please follow the instructions included in the Notice of
Internet Availability. Stockholders who requested paper copies
of proxy materials or previously elected to receive proxy
materials electronically did not receive the Notice of Internet
Availability and will receive the proxy materials in the format
requested. This Proxy Statement and our 2010 Annual Report to
Stockholders also are available in the investor section of our
website, www.celanese.com.
The Notice of Internet Availability and, for stockholders who
previously requested electronic or paper delivery, the proxy
materials are first being made available on or about
March 10, 2011, to stockholders of record and beneficial
owners who owned shares of the Companys Series A
Common Stock (the Common Stock) at the close of
business on February 23, 2011.
Our principal executive offices are located at 1601 West
Lyndon B. Johnson Freeway, Dallas, Texas 75234.
What is
the purpose of the Annual Meeting?
At our Annual Meeting, stockholders will vote upon several
important Company matters. In addition, our management will
report on the Companys performance over the last fiscal
year and, following the meeting, respond to questions from
stockholders.
2
What is
included in the proxy materials?
The proxy materials include:
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Our Proxy Statement for the 2011 Annual Meeting of Stockholders
(this Proxy Statement); and
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Our 2010 Annual Report to Stockholders.
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If you requested a paper copy of these materials by mail, the
proxy materials also include a proxy card or a voting
instruction card for the Annual Meeting.
What
information is contained in this Proxy Statement?
The information in this Proxy Statement relates to the proposals
to be voted on at the Annual Meeting, the voting process, the
Companys board of directors and board committees, the
compensation of the Companys directors and certain
executive officers for fiscal year 2010 and other required
information.
How can I
access the proxy materials over the Internet?
Your Notice of Internet Availability, proxy card or voting
instruction card (as applicable) contains instructions on how to:
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View our proxy materials for the Annual Meeting on the
Internet; and
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Instruct us to send our future proxy materials to you
electronically by
e-mail.
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Our proxy materials are also available in the investor section
of our website at www.celanese.com or
at www.proxyvote.com.
Your Notice of Internet Availability, proxy card or voting
instruction card contains instructions on how you may request to
access proxy materials electronically on an ongoing basis.
Choosing to access your future proxy materials electronically
will help us conserve natural resources and reduce the costs of
printing and distributing our proxy materials. If you choose to
access future proxy materials electronically, you will receive
an e-mail
with instructions containing a link to the website where those
materials are available and a link to the proxy voting website.
Your election to access proxy materials by
e-mail will
remain in effect until you terminate it.
Who may
attend the Annual Meeting?
The board of directors set February 23, 2011 as the record
date for the Annual Meeting. All stockholders of record and
beneficial owners of shares of Common Stock at the close of
business on February 23, 2011, or their duly appointed
proxies, may attend and vote at the Annual Meeting and any
adjournments or postponements thereof. For verification of
beneficial ownership at the Annual Meeting, you will need to
bring personal identification and a copy of your brokerage
statement reflecting your share ownership as of
February 23, 2011 and check in at the registration desk.
Who may
vote at the Annual Meeting?
Each stockholder who owned Common Stock at the close of business
on February 23, 2011 is entitled to one vote for each share
of Common Stock held on all matters to be voted on. At the close
of business on the record date, there were
156,037,896 shares of our Common Stock outstanding.
What
constitutes a quorum to conduct business at the Annual
Meeting?
The required quorum for the transaction of business at the
Annual Meeting is the presence of, in person or represented by
proxy, the holders of a majority of the voting power of the
outstanding shares of Common Stock entitled to vote at the
Annual Meeting.
3
How many
votes are required to approve each item?
Election of Directors. The Companys
By-laws prescribe the voting standard for the election of
directors as a majority of the votes cast in an uncontested
election, such as this one, where the number of nominees does
not exceed the number of directors to be elected. Under this
standard, in order to be elected the number of shares voted
FOR a director nominee must exceed the number of
votes cast AGAINST that nominee. In the event of a
contested election of directors, where the number of nominees
exceeds the number of directors to be elected, directors shall
be elected by a plurality of the shares represented in person or
by proxy at the meeting and entitled to vote. You may not
cumulate your votes in the election of directors.
All Other Proposals. The affirmative vote of a
majority of the voting power of the shares of Common Stock
present in person or represented by proxy and entitled to vote
at the Annual Meeting is required for all proposals other than
the election of directors. For the proposals that are advisory,
such as the proposal regarding an advisory vote on executive
compensation and the proposal regarding an advisory vote on the
frequency of
say-on-pay,
please refer to the text of these proposals for more information
on the advisory nature of these proposals.
How are
abstentions and broker non-votes treated?
Abstentions and broker non-votes (defined below under the
heading, Will my shares be voted if I do not provide my
proxy?) will be counted toward calculating a quorum.
Shares not present at the meeting will have no effect on the
outcome of the voting on any matter because they are not
considered to be present and are not a vote cast. Shares voting
ABSTAIN and broker non-votes will have no effect on
the outcome of the voting in the election of directors because
they are not considered votes cast, but they each will have the
same effect as a vote against the other proposals as to which
the abstention is made or broker-non vote is subject because
they each are considered to be present.
How does
the Board recommend I vote on the proposals?
The board recommends votes:
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FOR the election of each of the nominees for Class I
director named in this Proxy Statement Martin G.
McGuinn, Daniel S. Sanders and John K. Wulff;
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FOR the approval of an advisory vote on executive
compensation;
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FOR the approval of an annual advisory vote on say on
pay; and
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FOR the ratification of KPMG LLP as our independent
registered public accounting firm for fiscal year 2011.
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What does
it mean to vote by proxy?
By giving your proxy, you give someone else the right to vote
your shares in accordance with your instructions. In this way,
you assure that your vote will be counted even if you are unable
to attend the Annual Meeting. If you give your proxy but do not
include specific instructions on how to vote, the Proxyholders
(defined below) will vote your shares FOR the election of each
of the boards nominees for Class I director, FOR the
approval of an advisory vote on executive compensation, FOR the
approval of an annual advisory vote on say on pay, and FOR the
ratification of the selection of KPMG LLP as our independent
registered public accounting firm.
What is
the difference between holding and voting shares as a
stockholder of record and as a beneficial owner?
Most Celanese stockholders hold their shares through a
stockbroker, bank or other nominee rather than directly in their
own name. As summarized below, there are some distinctions
between shares held of record and those owned beneficially.
Stockholder of Record. If your shares are
registered directly in your name with our transfer agent,
Computershare Trust Company, N.A.
(Computershare), you are considered, with respect to
those shares, the
4
stockholder of record. As the stockholder of record, you have
the right to grant your voting proxy directly to Steven M.
Sterin, our Senior Vice President and Chief Financial Officer,
and James R. Peacock III, our Vice President, Deputy General
Counsel and Assistant Corporate Secretary (collectively, the
Proxyholders) or to vote in person at the Annual
Meeting.
Beneficial Owner. If your shares are held in a
stock brokerage account or by a bank or other nominee (the
Record Holder), you are considered the beneficial
owner of shares held in street name, and these proxy
materials are being forwarded to you by your Record Holder,
which is considered, with respect to those shares, the
stockholder of record. As the beneficial owner, you have the
right to direct your broker or nominee how to vote and are also
invited to attend the Annual Meeting. HOWEVER, SINCE YOU ARE NOT
THE STOCKHOLDER OF RECORD, YOU MAY NOT VOTE THESE SHARES IN
PERSON AT THE ANNUAL MEETING UNLESS YOU OBTAIN A SIGNED LEGAL
PROXY FROM THE RECORD HOLDER GIVING YOU THE RIGHT TO VOTE THE
SHARES. A beneficial owner can obtain a legal proxy by making a
request to the broker, bank, or trustee that is the Record
Holder. Under a legal proxy, the bank, broker, or trustee that
is the Record Holder confers all of its rights as a record
holder (which may in turn have been passed on to it by the
ultimate record holder) to grant proxies or to vote at the
meeting. Your Record Holder has provided you with instructions
on how to vote your shares.
What should I do if I receive more than one notice or
e-mail about
the Internet availability of the proxy materials or more than
one copy of the printed proxy materials?
You may receive more than one notice or more than one
e-mail about
the Internet availability of the proxy materials or more than
one copy of the printed proxy materials. For example, if you
hold your shares in more than one brokerage account, you may
receive a separate notice, a separate
e-mail or a
separate mailing for each brokerage account in which you hold
shares. If you are a stockholder of record and your shares are
registered in more than one name, you may receive more than one
notice,
e-mail or
mailing. Please vote all of your shares.
How do I
cast my vote?
Each stockholder is entitled to one vote for each share of
Common Stock on all matters presented at the Annual Meeting.
Celanese is offering the following methods of voting:
Voting
In-Person.
Stockholders of Record. Shares held directly
in your name as the stockholder of record may be voted in person
at the Annual Meeting. If you choose to vote in person at the
Annual Meeting, please bring the Notice of Internet Availability
and proof of personal identification.
Beneficial Owners. Shares held in street name
may be voted in person by you only if you obtain a legal proxy
from the Record Holder giving you the right to vote the shares.
You may request a legal proxy from your Record Holder by
indicating on your voting instruction form that you plan to
attend and vote your shares at the Annual Meeting, or at the
internet voting site to which your voting materials direct you.
Please allow sufficient time to receive a legal proxy through
the mail after your Record Holder receives your request.
Voting
via the Internet.
Shares may be voted via the Internet at
www.proxyvote.com. Your voting instructions will be
accepted up until 11:59 P.M. Eastern Time on April 20,
2011, the day before the Annual Meeting. Have your Notice of
Internet Availability, proxy card or voting instruction card in
hand when you access the website and follow the instructions to
obtain your records and to create an electronic voting
instruction form.
Voting
via Telephone.
Shares may be voted via any touch-tone telephone at
1-800-690-6903.
Your voting instructions will be accepted up until
11:59 P.M. Eastern Time on April 20, 2011. Have your
Notice of Internet Availability, proxy card or voting
instruction card in hand when you call and then follow the
instructions given.
5
Voting
via Mail.
If you received a paper proxy card, your shares may be voted via
mail by marking, signing and dating your proxy card and
returning it to Vote Processing,
c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717.
EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING, WE
RECOMMEND THAT YOU ALSO SUBMIT YOUR PROXY AS DESCRIBED ABOVE SO
THAT YOUR VOTE WILL BE COUNTED IF YOU LATER DECIDE NOT TO ATTEND
THE MEETING. SUBMITTING YOUR PROXY VIA INTERNET, TELEPHONE OR
MAIL DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON AT THE ANNUAL
MEETING.
What
happens if additional proposals are presented at the Annual
Meeting?
Other than the election of directors, the advisory vote on
executive compensation, the advisory vote on say on pay vote
frequency and the ratification of the selection of KPMG LLP as
the independent registered public accounting firm, we do not
expect any matters to be presented for a vote at the Annual
Meeting. If you grant a proxy, the persons named as Proxyholders
will have the discretion to vote your shares on any additional
matters properly presented for a vote at the Annual Meeting in
accordance with the recommendation of the board of directors or,
in the absence of such a recommendation, in accordance with the
judgment of the Proxyholders. Under our By-laws, the deadline
for notifying us of any additional proposals to be presented at
the Annual Meeting has passed and, accordingly, stockholders may
not present proposals at the Annual Meeting.
Can I
change my vote or revoke my proxy?
If your shares are held in street name through a broker, bank or
other nominee, you should contact the holder of your shares
regarding how to revoke your proxy.
If you are a stockholder of record, you may change your vote at
any time before the polls close at the Annual Meeting. You may
do this by:
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voting again by telephone or through the Internet prior to
11:59 P.M. Eastern Time, on April 20, 2011;
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requesting, completing and mailing in a paper proxy card, as
outlined in the Notice of Internet Availability;
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giving written notice to the Corporate Secretary of the Company
by April 20, 2011; or
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voting again at the Annual Meeting.
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Your attendance at the Annual Meeting will not have the effect
of revoking a proxy unless you notify our Corporate Secretary in
writing before the polls close that you wish to revoke a
previous proxy. You may revoke your proxy at any time before the
proxy has been voted at the Annual Meeting by taking one of the
actions described above.
Who will
count the votes?
Representatives of Carl Hagberg & Associates will
count the votes and will serve as the independent inspector of
the election.
What if I
execute my proxy but do not provide voting
instructions?
If you provide specific voting instructions, your shares will be
voted as you instruct. If you execute a proxy but do not specify
how your shares are to be voted, the Proxyholders will vote your
shares in accordance with the recommendations of the board
provided above.
Will my
shares be voted if I do not provide my proxy?
Your shares may be voted if they are held in the name of a
brokerage firm, even if you do not provide the brokerage firm
with voting instructions. Brokerage firms have the authority
under the New York Stock Exchange (NYSE) rules to
cast votes on certain routine matters if they do not
receive instructions from their customers.
6
The ratification of the independent registered accounting firm
is considered a routine matter for which brokerage firms may
vote unvoted shares. The election of directors and the two
advisory votes are not considered routine matters under current
NYSE rules. When a proposal is not a routine matter and the
brokerage firm has not received voting instructions from the
beneficial owner of the shares with respect to that proposal,
the brokerage firm cannot vote the shares on that proposal. This
is called a broker non-vote. It should be noted that
NYSE rules previously considered the election of directors to be
a routine matter for which brokerage firms could
vote in the election of directors if the record holder had not
received instructions on how to vote from the beneficial owner.
Accordingly, given this recent change, it is particularly
important that beneficial owners instruct their brokers how they
wish to vote their shares.
What are
the costs of soliciting these proxies?
We will bear the costs of solicitation of proxies. We have
engaged D.F. King & Co., Inc. to assist us with the
solicitation of proxies and expect to pay D.F. King &
Co. an estimated fee of $7,500 plus out of pocket expenses. In
addition to solicitations by mail, D.F. King & Co. and
our directors, officers and regular employees may solicit
proxies by telephone, e-mail and personal interviews without
additional remuneration. We will request brokers, custodians and
fiduciaries to forward proxy soliciting material to the owners
of shares of our Common Stock that they hold in their names. We
will reimburse banks and brokers for their reasonable
out-of-pocket
expenses incurred in connection with the distribution of our
proxy materials.
How can I
request free copies of the proxy materials or additional
information?
You may contact Broadridge:
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By Internet at: www.proxyvote.com.
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By calling Broadridge at:
1-800-579-1639.
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By sending an e-mail to: sendmaterial@proxyvote.com.
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What is
householding?
We may send a single Notice of Internet Availability or set of
proxy materials and other stockholder communications to any
address shared by two or more stockholders. This process is
called householding. This reduces duplicate
mailings, saves printing and postage costs and conserves natural
resources. We will deliver promptly upon written or oral request
a separate copy of the Notice of Internet Availability, 2010
Annual Report to Stockholders or this Proxy Statement to a
stockholder at a shared address to which a single copy of the
documents was delivered.
To receive a separate copy or to stop receiving multiple copies
sent to stockholders of record sharing an address:
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Stockholder of Record. If you are a
stockholder of record, please use the same contact information
provided above under How can I request free copies of
the proxy materials or additional information?
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Beneficial Owner. If you are a beneficial
owner, please submit your request to your stockbroker.
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What is
the deadline to propose actions for consideration at next
years annual meeting of stockholders?
You may submit proposals for consideration at future stockholder
meetings. For a stockholder proposal to be considered for
inclusion in the Companys proxy statement for the 2012
Annual Meeting of Stockholders, the Companys Corporate
Secretary must receive the written proposal at our principal
executive offices no later than the close of business on
November 12, 2011. Such proposals also must comply with SEC
regulations under
Rule 14a-8
7
regarding the inclusion of stockholder proposals in
company-sponsored proxy materials. Proposals should be addressed
to:
Corporate
Secretary
Celanese Corporation
1601 West Lyndon B. Johnson Freeway
Dallas, Texas 75234
For a stockholder proposal that is not intended to be
included in the Companys proxy statement under
Rule 14a-8,
the stockholder must provide the information required by the
Companys By-laws and give timely notice to the Company in
accordance with the Companys By-laws, which, in general,
require that the notice be received by the Companys
Secretary:
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Not earlier than the close of business on December 23,
2011; and
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Not later than the close of business on January 22, 2012.
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If the date of the stockholder meeting is moved more than
30 days before the anniversary of the Companys Annual
Meeting for the prior year, then notice of a stockholder
proposal that is not intended to be included in the
Companys proxy statement under
Rule 14a-8
must be received no earlier than the close of business
120 days prior to the meeting and not later than the close
of business on the later of the following two dates:
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90 days prior to the meeting; and
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10 days after public announcement of the meeting date.
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How may I
recommend or nominate individuals to serve as
directors?
You may recommend director candidates for consideration by the
boards nominating and corporate governance committee as
described later in this Proxy Statement under Corporate
Governance Candidates for the Board.
Generally, recommended candidates are considered at the first or
second board meeting prior to the annual meeting.
In addition, the Companys By-laws permit stockholders to
nominate directors for election at an annual stockholder
meeting. To nominate a director, the stockholder must deliver
the information required by the Companys By-laws. To
nominate an individual for election at an annual stockholder
meeting, the stockholder must give timely notice to the
Companys Corporate Secretary in accordance with the
Companys By-laws, which, in general, require that the
notice be received by the Companys Secretary between the
close of business on December 23, 2011 and the close of
business on January 22, 2012, unless the annual meeting is
moved by more than 30 days before the anniversary of the
prior years annual meeting, in which case the deadline
will be as described in the question above.
How may I
obtain a copy of the Companys By-law provisions regarding
stockholder proposals and director nominations?
You may contact the Companys Secretary at our principal
executive offices for a copy of the relevant By-law provisions
regarding the requirements for making stockholder proposals and
nominating director candidates. The Companys By-laws also
are available in the investor section of the Companys
website at www.celanese.com under Corporate Governance.
Date of
our fiscal year end
This Proxy Statement provides information about the matters to
be voted on at the Annual Meeting and also additional
information about the Company, and certain of our officers and
directors. Please note that some of the information is stated as
of the end of our fiscal year, December 31, 2010, and some
information is provided as of a more current date.
8
Director
Nominees
Under the Companys By-laws, in uncontested elections, such
as this one, where the number of nominees does not exceed the
number of nominees to be elected, a director nominee must
receive the affirmative vote of a majority of the votes cast at
the annual meeting of stockholders in order to be elected. The
board believes this majority vote standard appropriately gives
stockholders a greater voice in the election of directors than
plurality voting does. Under the General Corporation Law of the
State of Delaware, an incumbent director who fails to receive
the required vote holds over, or continues to serve
as a director, until his or her successor is elected and
qualified. In order to address this hold over issue,
board policy requires an incumbent nominee who fails to receive
the required vote to tender his or her resignation. Following
receipt of such a resignation, the board will act on it within
90 days of the certification of the vote. In considering
whether to accept or reject the resignation, the board will
consider all factors it deems relevant, including the underlying
reason for the votes result, the directors
contributions to the Company during his or her tenure, and the
directors qualifications. The board may accept or reject
the resignation. Only independent directors will participate in
the deliberations regarding a tendered resignation.
Our board of directors is divided into three classes serving
staggered three-year terms. At the Annual Meeting you will have
the opportunity to elect three directors to serve for three
years. Our board of directors has nominated Martin G. McGuinn,
Daniel S. Sanders and John K. Wulff to be elected as
Class I directors at the Annual Meeting. The director
nominees, Messrs. McGuinn, Sanders and Wulff, have
consented to be elected to serve as directors for the term of
the Class I directors. Unless otherwise instructed, the
Proxyholders will vote the proxies received by them for these
three nominees. If any nominee of Celanese is unable or declines
to serve as a director as of the time of the Annual Meeting, the
board may designate a substitute nominee or reduce the size of
the board. Proxies will be voted for any nominee who shall be
designated by the present board of directors to fill the
vacancy. If elected, Messrs. McGuinn, Sanders and Wulff
will serve until the 2014 Annual Meeting of Stockholders or
until their successors are elected and qualified.
The name of each of our directors and certain information about
them, as of the date of this Proxy Statement (except ages, which
are as of the date of the Annual Meeting), is set forth below.
Included in the information below is a description of the
particular experience, qualifications, attributes and skills
that led the board to conclude that each person below should
serve as a director for the Company.
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Martin G. McGuinn, 68, has been a member of our
board of directors since August 2006. He currently serves as a
member of the board of directors (since 2007) and the audit
committee as well as the chairman of the organization &
compensation committee of The Chubb Corporation. He also serves
as a member of the board of directors (since 2009), a member of
the audit committee and the chairman of the compensation
committee of iGATE Corporation. Mr. McGuinn serves as a member
of the Advisory Board of CapGen Financial Group. From January
1999 until February 2006, he was Chairman and Chief Executive
Officer of Mellon Financial Corporation, where he spent
25 years in a number of positions. Mr. McGuinn served a
one-year term as Chairman of the Financial Services Roundtable
from April 2003 to April 2004. He served as the 2005 President
of the Federal Reserve Boards Advisory Council. Mr.
McGuinn also serves on several non-profit boards including the
Carnegie Museums of Pittsburgh and the University of Pittsburgh
Medical Center.
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Mr. McGuinn has more than 25 years of experience in the
financial services industry, where he gained substantial
management experience and leadership capabilities from his
position as the chief executive officer of a large public
banking institution. Additionally, his strong financial skills
and expertise, including on the topics of capital markets and
macroeconomics, and significant experience as a public company
director, led the board to conclude that he should serve as a
director.
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9
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Daniel S. Sanders, 71, has been a member of our
board of directors since December 2004. He was President of
ExxonMobil Chemical Company and Vice President of ExxonMobil
Corporation from December 1999 until his retirement in August
2004. Prior to the merger of Exxon and Mobil, Mr. Sanders served
as President of Exxon Chemical Company beginning in January 1999
and as its Executive Vice President beginning in 1998. Mr.
Sanders is a member of the Board of Trustees of Furman
University. He is the past Chairman of the Board of the
American Chemistry Council and past Chairman of the Society of
Chemical Industry (American Section). He currently serves as a
member of the board of directors (since 2004), a member of the
governance committee, and chairman of the compensation committee
of Arch Chemicals, Inc.; and a member of the board of directors
(since 2005) and a member of the compensation committee and
chairman of the nominating and corporate governance committee of
Nalco Holding Company. He also serves as the non-executive
chairman of Milliken and Co. Mr. Sanders is the recipient of the
2005 Chemical Industry Medal awarded by the Society of Chemical
Industry (American Section).
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With over 43 years of experience in the chemical industry,
Mr. Sanders brings broad management, operational and industry
experience to the board. In particular, he gained extensive
management and leadership knowledge from his previous executive
positions at a leading public energy and chemical company.
Additionally, his global experience and knowledge of
compensation and governance gained from his career service on
other public company boards led the board to conclude that Mr.
Sanders should serve as a director for the Company.
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John K. Wulff, 62, has been a member of our board
of directors since August 2006. He is the former Chairman of
the board of directors of Hercules Incorporated, a position held
from July 2003 until Ashland, Inc.s acquisition of
Hercules in November 2008. Prior to that time, he served as a
member of the Financial Accounting Standards Board from July
2001 until June 2003. Mr. Wulff was previously Chief Financial
Officer of Union Carbide Corporation from 1996 to 2001. During
his fourteen years at Union Carbide, he also served as Vice
President and Principal Accounting Officer from January 1989 to
December 1995, and Controller from July 1987 to January 1989.
Mr. Wulff was also a partner of KPMG LLP and predecessor
firms from 1977 to 1987. He currently serves as a member of the
board of directors (since 2004), the chairman of the audit
committee and a member of the governance and compensation
committee of Moodys Corporation. He is also the chairman
of the audit committee and a member of the board of directors of
Sunoco Incorporated (since March 2004) and chairman of the audit
committee and a member of the board of directors of Chemtura
Corporation (since October 2009). Mr. Wulff served as a director
of Fannie Mae from December 2004 to September 2008 and chairman
of the nominating and governance committee.
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By virtue of his 14 years of experience in the chemical
industry, including management and financial knowledge as the
former chief financial officer of a publicly traded chemical
company, Mr. Wulff brings significant knowledge and broad
industry experience to the board. He has a strong financial
background gained through various auditing, executive and
finance positions, and substantial experience in leadership
positions as a director of several public companies. In
particular, the board was impressed with the leadership Mr.
Wulff demonstrated while serving on the board of directors of
Fannie Mae, which he joined after the Office of Federal Housing
Enterprise Oversight and the U.S. Securities and Exchange
Commission had already begun investigations into Fannie
Maes accounting practices, internal controls, governance,
compensation and related activities. This experience and
background led the board to conclude that Mr. Wulff should serve
as a director for the Company.
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Vote
Required
Each director must receive a majority of the votes cast in favor
of his or her election.
Recommendation
of the Board
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE NOMINEES LISTED ABOVE
10
Directors
Continuing in Office
Class II
Directors Term Expires in 2012
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James E. Barlett, 67, has been a member of our
board of directors since December 2004. He has been Vice
Chairman of TeleTech Holdings, Inc. since October 2001. Mr.
Barlett has been a member of the board of directors of TeleTech
Holdings, Inc. since February 2000. He previously served as the
Chairman (since 1997), President and Chief Executive Officer
(since 1994) of Galileo International, Inc. until October 2001.
Prior to joining Galileo, Mr. Barlett served as Executive Vice
President for MasterCard International Corporation and was
Executive Vice President for NBD Bancorp. Mr. Barlett also
served as a member of the board of directors and the chairman of
the audit committee of Korn/Ferry International from 1999 until
September 2009.
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Mr. Barletts management and leadership experience as a
former chief executive officer of a public company, knowledge
from leading a company through an initial public offering, and
experience in previous executive positions at other public
companies, led the board to conclude that Mr. Barlett should
serve as a director for the Company. Additional factors
supporting this conclusion include his strong finance and
accounting background and knowledge in the human resources area.
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David F. Hoffmeister, 56, has been a member of our
board of directors since May 2006. Mr. Hoffmeister serves
as the Senior Vice President and Chief Financial Officer of Life
Technologies Corporation. From October 2004 to November 2008, he
served as Chief Financial Officer and Leader of Global Finance
of Invitrogen Corporation, which merged with Applied Biosystems
in November 2008 to form Life Technologies Corporation. Before
joining Invitrogen, Mr. Hoffmeister spent 20 years with
McKinsey & Company as a senior partner serving clients in
the healthcare, private equity and chemical industries on issues
of strategy and organization. From 1998 to 2003, Mr. Hoffmeister
was the leader of McKinseys North American chemical
practice.
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Mr. Hoffmeister has extensive experience in the chemical
industry, having worked as a consultant to chemical clients for
20 years at a global management consulting firm. He has a
strong finance background and currently serves as the chief
financial officer of a global biotechnology company. These
experiences coupled with his background with a leading business
consulting firm led the board to conclude that Mr. Hoffmeister
should serve as a director for the Company.
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Paul H. ONeill, 75, has been a member of our
board of directors since December 2004. Mr. ONeill
has been a Special Advisor at The Blackstone Group L.P. since
March 2003. Prior to that time, he served as U.S. Secretary of
the Treasury from 2001 to 2002 and was Chief Executive Officer
of Alcoa, Inc. from 1987 to 1999 and chairman of the board of
directors from 1987 to 2000. Mr. ONeill also served as a
member of the board of directors from February 2003 to April
2006, a member of the audit committee from 2004 to 2006, a
member of the executive compensation and development committee
from 2003 to 2005 and a member of the governance committee from
2003 to 2004 of Eastman Kodak. He served as a member of the
board of directors of Nalco Holding Company from November 2003
to December 2007. Mr. ONeill has served as a member of the
board of directors of TRW Automotive Holdings Corp. since August
2003 and is a member of its corporate governance committee.
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Mr. ONeill has strong leadership skills, financial
expertise and valuable macroeconomic insights gained as the U.S.
Secretary of the Treasury and as the chief executive officer of
a global public manufacturing company. Additionally, Mr.
ONeill brings broad knowledge of corporate and political
governance gained through experience while in government and on
boards of other public companies. As a result, the board
concluded Mr. ONeill should serve as a director for the
Company.
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11
Class III
Directors Term Expires in 2013
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Mark C. Rohr, 59, has been a member of our board
of directors since April 2007. He has been the Chairman,
President and Chief Executive Officer of Albemarle Corporation
since October 2002. Mr. Rohr served as Albemarles
President and Chief Operating Officer from January 2000 through
September 2002. Previously, Mr. Rohr served as Executive Vice
President Operations of Albemarle. Before joining
Albemarle, Mr. Rohr served as Senior Vice President, Specialty
Chemicals of Occidental Chemical Corporation. Mr. Rohr has
served as a member of the board of directors, the audit
committee and the environmental, health & safety committee
of Ashland Inc. since 2008. He also serves on the executive
committee of the American Chemical Council.
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By virtue of his ten years as the chief executive of a leading
chemical company, Mr. Rohr brings significant insight and broad
industry experience to the board. In addition, his operations
and global business experience, combined with a broad
understanding of complex financial issues and governance, led
the board to conclude that Mr. Rohr should serve as a director
for the Company.
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Farah M. Walters, 66, has been a member of our
board of directors since May 2007. Since 2005, she has served as
President and Chief Executive Officer of QualHealth, LLC, a
healthcare consulting firm. From 1992 until her retirement in
June 2002, Ms. Walters was the President and Chief Executive
Officer of University Hospitals Health System and University
Hospitals of Cleveland. She also serves as a member of the board
of directors of PolyOne Corporation (since 1998), including as a
member of the compensation committee, the nominating and
governance committee and the financial policy committee. She
previously served as the lead director
(2006-2007),
chairperson of both the compensation and nominating and
governance committee and the 2005 CEO search committee, and a
member of the environmental, health and safety committee of
PolyOne. She was a member of the board of directors of Kerr
McGee Corp. from 1993 until 2006. While a director at Kerr
McGee, she served as a member of the executive committee, the
chairman of the compensation committee, the chairman of the
audit committee and a member of the governance committee. From
2003 to 2006, Ms. Walters was also a director, and a member of
the compensation committee and the audit committee, of Alpharma,
Inc.
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Ms. Walters has substantial experience on public boards,
including the board of another public chemical company, and
management experience and leadership capabilities gained from
her position as the chief executive officer of a hospital
system. She also has experience in the medical field, which is a
growing business for the Company, and knowledge in the human
resources area, particularly executive succession planning.
Additionally, Ms. Walters has significant knowledge and
experience in the area of corporate governance, gained in part
through her service in several leadership positions on public
company boards. As a result of this experience, the board
concluded that Ms. Walters should serve as a director for the
Company.
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David N. Weidman, 55, has been our Chief Executive
Officer and a member of our board of directors since December
2004. He became Chairman of the board of directors in February
2007. Mr. Weidman joined Celanese AG (the Companys
predecessor) in September 2000 where he held a number of
executive positions, most recently Vice Chairman and a member of
its board of management. Before joining Celanese AG, Mr. Weidman
held various leadership positions with AlliedSignal, most
recently as the President of its performance polymers business.
Mr. Weidman began his career in the chemical industry with
American Cyanamid in 1980. He is a member of the board of the
American Chemistry Council, the National Advisory Council of the
Marriott School of Management and the Society of Chemical
Industry. He is also a member of the Advancement Counsel for
Engineering and Technology for the Ira A. Fulton College of
Engineering and Technology and a member of the board and
Chairman of the finance committee of The Conservation Fund.
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Mr. Weidman has extensive knowledge and understanding of the
chemical industry gained from decades working in the industry in
various positions of increasing responsibility. He also has
extensive knowledge of the Company, its operation and strategy,
holding executive positions in the Company and its predecessor
for nearly 10 years. He remains actively involved in issues
affecting the industry, including as a director of the American
Chemistry Council. As a result, the board concluded Mr. Weidman
should serve as a director for the Company.
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12
Director
Compensation in 2010
The Company uses both cash and equity-based compensation to
attract and retain qualified directors to serve on our board of
directors. In setting the compensation levels, the nominating
and corporate governance committee considered the extent of time
and the expertise required to serve on our board. Each
non-management director is entitled to an annual cash retainer
of $85,000, which is paid in quarterly installments, and an
annual equity retainer of $85,000 in restricted stock units that
vest in one year. In addition, the chair of the nominating and
corporate governance committee, compensation committee and
environmental, health & safety committee receives an
annual fee of $10,000 and the chair of the audit committee
receives an annual fee of $20,000. The Presiding Director
receives no additional compensation for his services as such.
Non-management directors are also able to participate in the
Companys 2008 Deferred Compensation Plan, which is an
unfunded, nonqualified deferred compensation plan that allows
directors the opportunity to defer a portion of their cash
compensation and restricted stock units in exchange for a future
payment amount equal to their deferments plus or minus certain
amounts based upon the market performance of specified
measurement funds selected by the participant.
2010 Director
Compensation Table
The table below is a summary of compensation earned and
restricted stock units granted by the Company to non-management
directors for the fiscal year ended December 31, 2010.
Mr. Weidman is not included in this table since he is an
employee of the Company and receives no compensation for his
services as director.
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Change in
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Pension
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Value and
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Nonqualified
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Fees Earned or
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Non-Equity
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Deferred
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Paid in
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Cash
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Awards
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Awards
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Compensation
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Earnings
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Compensation
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Total
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Name
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($)(1)
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($)(2)
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($)(2)
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($)
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($)(3)
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($)(4)
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($)
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James E. Barlett
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85,000
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84,978
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169,978
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Paul H. ONeill
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95,000
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84,978
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155,953
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2,936
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338,867
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Daniel S. Sanders
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85,000
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84,978
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44,422
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18,477
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232,877
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David F. Hoffmeister
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105,000
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84,978
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2,203
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192,181
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John K. Wulff
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95,000
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84,978
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64,433
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10,645
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255,056
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Martin G. McGuinn
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85,000
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84,978
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1,218
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171,196
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Mark C. Rohr
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95,000
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84,978
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6,135
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186,113
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Farah M. Walters
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85,000
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84,978
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62,534
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9,553
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242,065
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(1) |
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Includes payment of an annual
retainer and committee chair fees.
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(2) |
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Represents the grant date fair
value of long-term equity incentive awards under the
Companys 2009 Global Incentive Plan computed in accordance
with Financial Accounting Standards Board (FASB)
Accounting Standards Codification (ASC) Topic 718,
Compensation Stock Compensation (FASB
ASC Topic 718). For a discussion of the method and
assumptions used to calculate such expense, see Note 19 to
our Consolidated Financial Statements contained in our Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2010. As of
December 31, 2010, each director owned the following number
of stock options: James E. Barlett, 24,622, all of which are
vested; Paul H. ONeill, 24,622, all of which are vested;
Daniel S. Sanders, 24,622, all of which are vested; David F.
Hoffmeister, 25,000, all of which are vested; John K. Wulff,
25,000, all of which are vested; Martin G. McGuinn, 25,000, all
of which are vested; Mark C. Rohr, 25,000, of which 12,500 are
vested; Farah M. Walters, 25,000, of which 12,500 are vested.
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(3) |
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Includes above-market earnings on
amounts deferred under the 2008 Deferred Compensation Plan.
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(4) |
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Includes dividends paid under the
2008 Deferred Compensation Plan, and certain expenses paid for
or reimbursed by the Company in connection with spousal or guest
attendance at certain board meetings and other Company events,
as well as certain non-business related expenses incurred by the
director at these events in 2010. Such expenses could include
meals, airfare, lodging and other entertainment, and other
similar items.
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13
Celaneses compensation program for named executive
officers is intended to (1) support the execution of our
business strategy and long-term financial objectives,
(2) attract, incentivize and retain a talented team of
executives who will provide leadership for our success in
dynamic, competitive markets and products, (3) foster
performance in the creation of long-term stockholder value, and
(4) reward executives for contributions at a level
reflecting our performance as well as their individual
performance. Our compensation committee has designed our
executive compensation program based on principles that reflect
these objectives. These principles have contributed to our
strong performance and rewarded executives appropriately. See
Executive Compensation Compensation
Discussion and Analysis for additional discussion.
We are presenting this proposal, commonly known as a
Say-on-Pay
proposal, which gives you, as a stockholder, the opportunity to
endorse or not endorse our executive compensation programs
through an advisory vote on the following resolution:
Resolved, that the stockholders approve, on an advisory
basis, the compensation of our named executive officers, as
disclosed pursuant to Item 402 of
Regulation S-K,
including the Compensation Discussion and Analysis, compensation
tables and narrative disclosure, contained in this Proxy
Statement.
The board of directors recommends that stockholders endorse the
compensation program for our named executive officers by voting
FOR the above resolution. We believe that executive compensation
for 2010 is reasonable and appropriate and, as discussed in the
Compensation Discussion and Analysis (the CD&A)
contained in this Proxy Statement, is justified by our
performance. Our compensation programs are the result of a
carefully considered approach and reflect advice received from
the compensation committees independent compensation
consultant.
In deciding how to vote on this proposal, the board of directors
asks you to consider the following factors, many of which are
more fully discussed in the CD&A:
Performance
We believe the compensation programs for the named executive
officers were instrumental in helping us achieve strong
financial performance in the challenging macroeconomic
environment of 2010.
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Our cumulative total stockholder return over the prior one-,
three- and five-year periods was 29.0%, -1.5% and 122.9%,
respectively.
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In 2010, our stock outperformed the S&P 500 by over 16%.
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Our net sales grew to $5.9 billion in 2010, representing an
increase of $836 million or 16% over the prior year.
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Our Operating EBITDA* increased to $1.1 billion in 2010,
representing an increase of $265 million or 31% over the
prior year. We delivered record annual performance in Operating
EBITDA for Advanced Engineered Materials, Consumer Specialties
and Industrial Specialties as volumes, pricing and margins
improved.
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Our net earnings were $377 million in 2010 compared to
$498 million in 2009. The 2009 results included a net
release of tax valuation allowances of $314 million.
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Our return on invested capital (ROIC) was 14.0% in
2010, exceeding our weighted average cost of capital of 9.5%.
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* Operating EBITDA is a non-GAAP financial measure that we
define as net earnings plus loss (earnings) from discontinued
operations, interest income and expense, taxes, and depreciation
and amortization, and further adjusted for other charges and
other adjustments (Operating EBITDA). See
Exhibit A to this Proxy Statement for additional
information concerning this measure and a reconciliation of this
measure to net earnings, the most comparable U.S. GAAP
financial measure.
14
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We increased our quarterly dividend 25% in 2010. Celanese has
paid cash dividends for 23 consecutive quarters.
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During 2010, we returned an additional $48 million to
stockholders by repurchasing 1,667,592 shares of our Common
Stock under our previously-announced stock repurchase plan.
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Compensation
We believe our executive compensation programs, which emphasize
long-term equity awards, satisfy the objectives described above
and are strongly aligned with the long-term interests of our
stockholders.
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We emphasize pay for performance and structure our compensation
programs to provide appropriate incentives to executives to
drive business and financial results. Our named executive
officers received annual performance bonus awards based, in
part, on our performance relative to three metrics (Operating
EBITDA, working capital, and safety). The amount of these cash
bonus awards reflected our actual performance on these metrics.
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At least 50% of each of our named executive officers, and
more than 80% of our chief executive officers, 2010
targeted compensation was performance-based, with the majority
of performance-based compensation coming in the form of
long-term incentives subject to hold requirements.
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Our three-year average share usage is below the median of our
peer group and our fully diluted overhang is below the
competitive norms for this group.
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Corporate
Governance
We believe our executive compensation program is aligned with
good corporate governance.
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We continue to have stock ownership guidelines with consequences
if guidelines are not adhered to or are not met within the
initial five-year time-frame and an executive compensation
recoupment policy for all cash and stock-based awards if
non-compete, non-solicitation or other covenants are breached.
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We recently adopted hold requirements on stock-based awards that
focus executives on the longer-term effect of decisions made and
approved a policy that prohibits the hedging of Company stock by
directors and employees (See Compensation
Discussion & Analysis Additional
Information Regarding Executive Compensation).
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In order to encourage our named executive officers to focus on
the best interests of our stockholders, we have change in
control agreements that provide severance benefits (subject to a
cutback to avoid excise taxes) following a termination of
employment by the Company without cause or by the officer for
good reason within two years after a change in control. These
agreements are intended to alleviate personal concerns under a
potential change in control and not to provide compensation
advantages for executing a particular transaction. See
Compensation Discussion and Analysis
Compensation Philosophy and Elements of Pay Other
Compensation Elements Change in Control
Agreements for further information.
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Our senior executives (other than our chief executive officer)
are entitled to severance benefits in connection with a
termination without cause (or termination with good reason)
under our executive severance plan, which eliminates the need
for negotiating arrangements at the time of a dismissal (See
Compensation Discussion &
Analysis Compensation Philosophy and Elements of
Pay Other Compensation Elements).
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Mitigation
Against Excessive Risk
We believe our executive compensation programs do not encourage
excessive and unnecessary risks that would threaten the value of
our Company.
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Our long-term incentive plan uses multiple performance metrics
to help ensure a balance of absolute and relative performance
metrics.
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No annual performance bonuses are paid unless the Company meets
or exceeds a threshold level of Company operating performance.
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15
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The compensation committee has the ability to use its discretion
to reduce the amount of payments under the compensation program.
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Payment opportunities for our executive officers under both the
annual performance bonus and long-term incentive programs are
capped.
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The compensation committee has plan oversight and approves both
the design and payout of all annual performance bonus awards, as
well as each grant of long-term incentive compensation.
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The compensation programs are subject to periodic assessment by
the compensation committee and its independent compensation
consultant. For additional information, please see
Compensation Discussion & Analysis
Risk Assessment of Compensation Practices.
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This vote is mandated by Section 951 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act and SEC regulations.
As an advisory vote, this proposal is not binding upon the
Company. However, the compensation committee, which is
responsible for designing and administering our executive
compensation program, values the feedback received from
stockholders in their vote on this proposal, and will consider
the outcome of the vote when making future compensation
decisions for named executive officers. In addition, the
non-binding advisory votes described in this Proposal 2 and
below in Proposal 3 will not be construed as
(1) overruling any decision by the Company, the board of
directors, or the compensation committee relating to the
compensation of the named executive officers, or
(2) creating or changing any fiduciary duties or other
duties on the part of the board of directors, or any committee
of the board of directors, or the Company.
Recommendation
of the Board
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE APPROVAL OF OUR EXECUTIVE COMPENSATION
PROGRAM
16
In addition to providing an advisory vote on our executive
compensation program, we are requesting stockholders to indicate
their preference for the frequency in which these advisory votes
on executive compensation should take place every
one, two or three years. This vote is mandated by
Section 951 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act and SEC regulations. Stockholders may
indicate their preference on this advisory vote by choosing an
annual, biennial or triennial vote frequency, or abstaining on
this vote when stockholders vote in response to the resolution
set forth below. We will ask stockholders not less than every
six years whether they desire a different vote frequency on the
advisory vote on executive compensation.
Resolved, that a non-binding advisory vote of the
Companys stockholders to approve, on an advisory basis,
the compensation of the named executive officers, as disclosed
pursuant to the compensation disclosure rules of the SEC be held
at an Annual Meeting of Stockholders, beginning with the 2011
Annual Meeting of the Stockholders, every one year, two years or
three years.
The board of directors has recommended that the stockholders
approve that we conduct an advisory vote on executive
compensation annually. We believe that an annual review of our
executive compensation practices will be better aligned with
stockholder interests as it allows us to obtain information on
stockholders views of the compensation of our named
executive officers on a more consistent basis. It also allows us
to engage in regular dialogue with our stockholders on corporate
governance matters, including our executive compensation
philosophy, policies and programs. For these reasons, we believe
that stockholders should support an annual advisory vote
on executive compensation.
The option of one year, two years or three years that receives
the highest number of votes cast by the stockholders will be the
frequency for the advisory vote on named executive officer
compensation that has been selected by stockholders. However,
because this is an advisory vote, this proposal is not binding
upon the Company in any way and the compensation committee and
the board of directors may decide that it is in the best
interests of stockholders and the Company to hold an advisory
vote on executive compensation more or less frequently than the
option approved by the stockholders. The compensation committee,
which is responsible for designing and administering our
executive compensation program, and the board of directors value
the opinions expressed by stockholders in their vote on this
proposal, and will consider the outcome of the vote when making
a decision about the frequency of future advisory votes on
executive compensation.
Recommendation
of the Board
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THE SELECTION OF ONE YEAR
AS
THE STOCKHOLDERS PREFERENCE FOR THE FREQUENCY WITH WHICH
STOCKHOLDERS ARE PROVIDED AN ADVISORY VOTE ON EXECUTIVE
COMPENSATION
17
The audit committee of the board of directors has selected KPMG
LLP to audit the Companys consolidated financial
statements for fiscal year 2011. Since 2005 KPMG LLP served as
our independent registered public accounting firm and also
provided other audit-related and non-audit services that were
approved by the audit committee.
Representatives of KPMG LLP will be present at the Annual
Meeting and will have the opportunity to make a statement if
they desire and will be available to respond to appropriate
questions from stockholders.
We are asking our stockholders to ratify the selection of KPMG
LLP as our independent registered public accounting firm.
Although ratification is not required by our By-laws or
otherwise, the board is submitting the audit committees
selection of KPMG LLP to our stockholders for ratification as a
matter of good corporate practice. Even if the selection is
ratified, the audit committee in its discretion may select a
different registered public accounting firm at any time during
the year if it determines that such a change would be in the
best interests of the Company and our stockholders. If the
appointment of KPMG LLP is not ratified, the audit committee
will evaluate the basis for the stockholders vote when
determining whether to continue the firms engagement.
Audit
and Related Fees
Aggregate fees billed to the Company during the years ended
December 31, 2010 and 2009 by its independent registered
public accounting firm, KPMG LLP, and KPMG LLP affiliates were
as follows:
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Year Ended December 31,
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2010
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2009
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Audit
Fees(1)
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$
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6,570,475
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$
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6,310,500
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Audit-related
Fees(2)
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184,173
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181,000
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Tax
Fees(3)
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1,365,954
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1,403,500
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All Other Fees
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Total Fees
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$
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8,120,602
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$
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7,895,000
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(1) |
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For professional services rendered
for the audits of annual consolidated financial statements of
the Company (including the audit of internal controls over
financial reporting), statutory audits and the review of the
Companys quarterly consolidated financial statements.
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(2) |
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Primarily for professional services
rendered in connection with consultation on financial accounting
and reporting standards and employee benefit plan audits.
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(3) |
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Primarily for professional fees
related to technical assistance, the preparation of tax returns
in non-U.S. jurisdictions and assistance with tax audits and
appeals.
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Audit
Committee Pre-Approval Policy
The audit committee is responsible for appointing, retaining and
pre-approving the fees of the Companys independent
registered public accounting firm. The audit committee has
adopted a Policy for Pre-Approval of Independent Auditor
Services (Pre-Approval Policy) pursuant to which
proposed services may be pre-approved through the application of
detailed policies and procedures (general
pre-approval) or by specific review of each service
(specific pre-approval). The audit committee has
provided general pre-approval for certain specific types of
non-prohibited audit, audit-related and tax services that do not
exceed $100,000 per project and $1,000,000 per year in the
aggregate and gives detailed guidance to management as to the
specific services that are eligible for general pre-approval.
The audit committee is to be informed on a timely basis of any
services performed by the independent auditor pursuant to
general pre-approval. Unless a type of service is included in
this general pre-approval, it will require specific
pre-approval. The annual audit services engagement terms and
fees must be specifically pre-approved by the audit committee.
Requests to provide services that require specific pre-approval
must be submitted to the audit committee by both the independent
registered public accounting firm and the chief
18
financial officer or controller, and must include detailed
back-up
documentation and a joint statement as to whether the request or
application is consistent with the SECs rule on auditor
independence.
The audit committee may delegate its pre-approval authority to
one or more of its members. The member or members to whom such
authority is delegated must report any pre-approval decisions to
the audit committee at its next scheduled meeting.
All services performed by our independent registered public
accounting firm in 2010 were pre-approved by the audit committee.
Recommendation
of the Board
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE RATIFICATION OF OUR INDEPENDENT
REGISTERED PUBLIC
ACCOUNTING FIRM FOR FISCAL YEAR 2011
19
The business and affairs of the Company are managed under the
direction of the board of directors. The board believes that
good corporate governance is a critical factor in achieving
business success and in fulfilling the boards
responsibilities to stockholders. The board believes that its
practices align management and stockholder interests. Highlights
of our corporate governance practices are described below.
Strong corporate governance is an integral part of
Celaneses core values. Our Companys corporate
governance policies and procedures are available on the
corporate governance portal of the Companys investor
relations website at www.celanese.com. The corporate
governance portal includes the Companys Corporate
Governance Guidelines, Board Committee Charters, Global Business
Conduct Policy, Financial Code of Ethics, and Stockholders
Communications with the Board Policy. Any future modification or
amendments to our Financial Code of Ethics, and any waiver of
our Financial Code of Ethics, which applies to our Chief
Executive Officer (CEO) (Principal Executive
Officer), Chief Financial Officer (CFO) (Principal
Financial Officer) or Senior Vice President, Finance and
Treasurer (Principal Accounting Officer) will be posted on the
same website. We provide below specific information regarding
certain corporate governance practices.
Composition
of the Board of Directors
Our charter provides that the number of members of the board of
directors shall be fixed by the board of directors, but shall be
no less than seven and no more than fifteen. Currently we have
nine directors. Our board of directors is divided into three
classes. The members of each class serve for a staggered
three-year term, expiring at the annual meeting of stockholders
in the year shown below.
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Class I 2011
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Class II 2012
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Class III 2013
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Martin G. McGuinn
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James E. Barlett
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David N. Weidman
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Daniel S. Sanders
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David F. Hoffmeister
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Mark C. Rohr
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John K. Wulff
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Paul H. ONeill
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Farah M. Walters
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Our board of directors is to be comprised of a majority of
independent directors. Please see more information about
independence in Corporate Governance Director
Independence.
In February 2011, the board of directors approved a director
retirement guideline, the full text of which is set forth in our
Corporate Governance Guidelines. The guideline states that a
director should retire from the board of directors no later than
the annual meeting of stockholders following such
directors 72nd birthday; provided, however, the
retirement guideline may be waived by a majority of uninterested
directors upon the recommendation of the nominating and
corporate governance committee. This guideline will be phased in
and will first apply to our Class II directors beginning
immediately following the 2012 Annual Meeting of Stockholders,
our Class III directors beginning immediately following the
2013 Annual Meeting of Stockholders and our Class I
directors beginning immediately following the 2014 Annual
Meeting of Stockholders.
Board
Leadership Structure
Meetings of our board of directors are presided over by the
Chairman of the Board. Our By-laws do not require that the
Chairman be independent of the Company and currently
Mr. Weidman, our CEO, serves as Chairman. While the board
regularly considers the separation of the Chairman/CEO roles, we
believe that in order for the Company to succeed in executing
its strategy it is important that these two roles be aligned as
closely as possible. Having a combined Chairman/CEO allows the
CEO to better understand and meet the needs of the board and
allows the Chairman to better understand the Companys
day-to-day
situation.
Each member of our board of directors has significant business
experience. We believe that their independence is not adversely
affected by having a combined Chairman/CEO.
20
Additionally, in order to eliminate any potential conflict of
interest, the board has designated an independent Presiding
Director. The Presiding Director presides over executive
sessions of the board, which are conducted at least quarterly.
In addition, the Presiding Director has the following
responsibilities:
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Approving board meeting agendas.
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Approving board meeting schedules.
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Calling meetings of the independent directors, as necessary.
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The Presiding Director during the period from the 2010 Annual
Meeting of Stockholders through the 2011 Annual Meeting of
Stockholders is Mr. Rohr. Under the Companys current
procedure, the role of Presiding Director rotates biennially
among the chairs of the standing board committees at the first
meeting of the board of directors following the Annual Meeting
of Stockholders. Following the 2011 Annual Meeting of
Stockholders, the Presiding Director will be the chairperson of
the environmental, health & safety committee.
Director
Independence
The board of directors has adopted a standard of independence
for directors. This standard incorporates all of the
requirements for director independence contained in the NYSE
listing standards. The listing standards of the NYSE require
companies listed on the NYSE to have a majority of
independent directors. The NYSE listing standards
generally provide that a director is independent if the board
affirmatively determines that the director has no material
relationship with the Company directly or as a partner,
stockholder or officer of an organization that has a
relationship with the Company. In addition, a director is not
independent if (1) the director is, or has been within the
last three years, an employee of the Company, or an immediate
family member is, or has been within the last three years, an
executive officer of the Company; (2) the director or a
member of the directors immediate family has received,
during any twelve-month period within the last three years, more
than $120,000 in direct compensation from the Company other than
for service as a director and committee member, and pension or
other forms of deferred compensation for prior service to the
Company; (3) (a) the director is a current partner or
employee of the Companys independent auditor, (b) the
director has an immediate family member who is a current partner
of such firm, (c) the director has an immediate family
member who is a current employee of the Companys
independent auditor and who personally works on the
Companys audit, or (d) the director or an immediate
family member was within the last three years a partner or
employee of the Companys independent auditor and
personally worked on the Companys audit within that time;
(4) the director or a member of the directors
immediate family is, or has been within the last three years,
employed as an executive officer of another company where an
executive officer of the Company serves or served on that
companys compensation committee; or (5) the director
is a current employee, or an immediate family member is a
current executive officer, of a company that has made payments
to, or received payments from, the Company for property or
services in an amount which, in any of the last three fiscal
years, exceeds the greater of $1,000,000, or 2% of such other
Companys consolidated gross revenues.
In addition, in compliance with NYSE listing standards, we have
a compensation committee and a nominating and corporate
governance committee that are each composed of entirely
independent directors, and each of these committees have written
charters addressing the committees purpose and
responsibilities and that we evaluate annually the performance
of these committees.
The Company reviews and determines the independence of each of
the directors in accordance with the Director Independence
Standards set forth in Exhibit A to the Companys
Corporate Governance Guidelines, adopted by the board. The
Director Independence Standards are intended to comply with the
NYSE corporate governance rules and other applicable laws, rules
and regulations regarding independence. The full text of the
Corporate Governance Guidelines can be found in the investor
section of the Companys website, www.celanese.com,
under Corporate Governance. The board considers transactions
and relationships between each director or any member of his or
her immediate family and the Company and its subsidiaries and
affiliates. As more fully described in Certain
Relationships and Related Person Transactions, the Company
in the normal course of business has been a party to
transactions with other corporations where certain of our
directors are themselves either directors or officers. The board
was made aware of these transactions and the amounts involved
and none of them were deemed to be material or were considered
to impact a directors independence. One such
21
series of transactions between the Company and Albemarle
Corporation, where one of our directors, Mark C. Rohr, is the
Chairman of the Board, President and Chief Executive Officer,
was considered to be an interested transaction in the aggregate
that was pre-approved under the terms of our Related Party
Transaction Policy.
The board, based upon the recommendation of the nominating and
corporate governance committee, has affirmatively determined
that eight of our directors, Messrs. Barlett, Hoffmeister,
McGuinn, ONeill, Rohr, Sanders and Wulff and
Ms. Walters, are independent of the Company and its
management under the NYSE listing standards and the
Companys director independence standards.
Mr. Weidman, our Chairman and Chief Executive Officer, is
the only director who is not independent.
Board
Oversight of Risk Management
The board has delegated to the audit committee the
responsibility for overseeing the Companys risk management
process. Management reviews and discusses annually with the
audit committee and the full board the process by which
management and the board assess and manage the Companys
most significant business risks. Additionally, on an ongoing
basis, senior management, including the CFO, provides updates to
the audit committee on risk management policies and process
compliance. This process for overseeing risk has been used to
manage the significant categories of risks to which the Company
is exposed. The boards role in risk oversight has not had
any effect on the boards leadership structure.
While the board has delegated to the audit committee the
responsibility for overseeing the Companys risk management
process, the board has also recently assigned oversight for each
principal category of risk to either the full board, the audit
committee or one of the boards other standing committees.
The following table shows the assignments by major category.
Risk
Management Assignments
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Risk Category
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Board Oversight Body
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Business and Corporate Development & Strategy
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Full Board
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Capital Structure, Operating Performance, Country Risk
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Full Board
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Risk Assessment and Management Policies and Guidelines
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Audit
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Litigation Exposure, IT Strategy & Business
Continuity, Insurance Coverage
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Audit
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Business Conduct Policy Compliance
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Audit
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Treasury and Tax Strategy
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Audit
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Executive Succession, Talent, Pension and Other Retirement
Obligations
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Compensation
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Environmental Exposure and Regulatory Changes,
Production/Reliability
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EHS
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Changes in Corporate Laws, Corporate Governance Strategy
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Corporate
Governance
|
22
Board
Meetings in 2010
Each of our directors is expected to devote sufficient time and
attention to his or her duties and to attend all board,
committee and stockholders meetings. The board of
directors held 7 meetings during 2010. All directors attended at
least 75% of the aggregate of (i) meetings of the board and
(ii) meetings of the committees on which they served during
the fiscal year ended December 31, 2010. In addition, we
have a policy requiring our directors to attend the annual
meeting of stockholders. All of our directors attended the
annual meeting of stockholders in 2010.
Committees
of the Board
The board of directors has 4 standing board committees: audit,
compensation, nominating and corporate governance, and
environmental, health & safety committees. The
following table sets forth the composition of our committees.
Audit
Committee
The Companys audit committee is comprised of
Mr. Hoffmeister (Chairman), Mr. Barlett and
Mr. McGuinn, each of whom the board has affirmatively
determined are independent of the Company and its management
under the rules of the NYSE and the SEC. The board has also
determined that all members of the audit committee are
independent and audit committee financial experts as
the term is defined in Item 407(d)(5) of
Regulation S-K.
Each member of the audit committee is also financially
literate as that term is defined by the rules of the NYSE.
The audit committee held 10 meetings during 2010. The complete
text of the Audit Committee Charter, adopted by the board of
directors on October 21, 2010, is available from the
Companys investor relations website at www.celanese.com
under Corporate Governance.
The audit committee is directly responsible for the appointment,
compensation and oversight of the work of the Companys
independent auditor. The independent auditors report directly to
the audit committee. The principal purposes of the audit
committee are to oversee:
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accounting and reporting practices of the Company and compliance
with legal and regulatory requirements regarding such accounting
and reporting practices;
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the quality and integrity of the financial statements of the
Company;
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internal control and compliance programs;
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the independent auditors qualifications and
independence; and
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the performance of the independent auditor and the
Companys internal audit function.
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23
Compensation
Committee
The Companys compensation committee is comprised of
Mr. Wulff (Chairman), Mr. Sanders, and
Ms. Walters. The board has determined that all members of
the nominating and corporate governance committee are
independent. In addition, the board has determined that all
members of the compensation committee are independent under
Rule 16b-3
under the Securities Exchange Act of 1934 and qualify as
non-employee directors for purposes of
Section 162(m) of the Internal Revenue Code. The
compensation committee held 9 meetings during 2010. The complete
text of the Compensation Committee Charter, adopted by the board
of directors on October 21, 2010, is available on the
Companys investor relations website at www.celanese.com
under Corporate Governance. A description of the
compensation committees processes and procedures for
determining executive compensation is more fully described in
Compensation Discussion and Analysis below.
The principal purposes of the compensation committee are to:
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review and approve the compensation of the Companys
executive officers;
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review and approve the corporate goals and objectives relevant
to the compensation of the CEO and the other executive officers,
and to evaluate the CEOs and the other executive
officers performance and compensation in light of such
established goals and objectives; and
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oversee the development and implementation of succession plans
for the CEO and the other key executives.
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Nominating
and Corporate Governance Committee
The Companys nominating and corporate governance committee
is comprised of Mr. Rohr (Chairman), Mr. ONeill
and Ms. Walters. The board has determined that all members
of the nominating and corporate governance committee are
independent. The nominating and corporate governance committee
held 5 meetings during 2010. The completed text of the
Nominating and Corporate Governance Charter, adopted by the
board of directors on October 21, 2010, is available on the
Companys investor relations website at www.celanese.com
under Corporate Governance. The Nominating and Corporate
Governance Committee Charter provides that the nominating and
corporate governance committee may, from time to time, retain
legal, accounting or other consultants or experts the nominating
and corporate governance committee deems necessary in the
performance of its duties, including, in its process of
identifying director candidates.
The principal purposes of the nominating and corporate
governance committee are to:
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identify, screen and review individuals qualified to serve as
directors and recommend candidates for nomination for election
at the annual meeting of stockholders or to fill board vacancies;
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develop and recommend to the board and oversee implementation of
the Companys Corporate Governance Guidelines;
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oversee evaluations of the board; and
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recommend to the board nominees for the committees of the board.
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Environmental,
Health & Safety Committee
The Companys environmental, health & safety
committee is comprised of Mr. ONeill (Chairman),
Mr. Rohr, Mr. Sanders and Mr. Weidman. The
environmental, health & safety committee assists the
board in fulfilling its oversight duties, while Company
management retains responsibility for assuring compliance with
applicable environmental, health and safety laws and
regulations. The environmental, health & safety
committee held 2 meetings during 2010. The complete text of the
Environmental, Health & Safety Committee Charter,
adopted by the board of directors on November 30, 2010, is
available on the Companys investor relations website at
www.celanese.com under Corporate Governance.
24
The principal purposes of the environmental, health &
safety committee are to:
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oversee the Companys policies and practices concerning
environmental, health and safety issues;
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review the impact of such policies and practices of the
Companys corporate social responsibilities, public
relations and sustainability; and
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make recommendations to the board regarding these matters.
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The board of directors and the nominating and corporate
governance committee consider candidates for board membership
suggested by the board or nominating and corporate governance
committee members, as well as by management and stockholders.
The Nominating and Corporate Governance Committee Charter
provides that the nominating and corporate governance committee
may, from time to time, retain legal, accounting or other
consultants or experts the nominating and corporate governance
committee deems necessary in the performance of its duties,
including, in its process of identifying director candidates.
Nominee
Assessment and Diversity
The nominating and corporate governance committees
assessment of a proposed director candidate will include a
review of the persons judgment, experience, independence,
understanding of the Companys business or other related
industries, and such other factors as the nominating and
corporate governance committee considers important, which are
expected to contribute to an effective board, including the
following qualities:
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leadership experience in business or administrative activities
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specialized expertise in the chemical industry
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breadth of knowledge about issues affecting the Company
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ability to contribute special competencies to board activities
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personal integrity
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loyalty to the company and concern for its success and welfare
and willingness to apply sound independent business judgment
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awareness of a directors vital part in the Companys
good corporate citizenship and corporate image
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time available for meetings and consultation on Company matters
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willingness to assume fiduciary responsibilities
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be intelligent, thoughtful and analytical
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possess knowledge about compensation and human resources
practices
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be free of actual or potential conflicts of interest
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have experience serving on boards of public companies
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be familiar with regulatory and governance matters
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Although the Company does not have a formal policy on board
diversity, when considering board candidates, the nominating and
corporate governance committee strives to achieve a balance of
knowledge, experience and perspective such that the
Companys board reflects a diversity of backgrounds and
experiences.
25
Nominee
Recommendations
The nominating and corporate governance committee will consider
recommendations for director nominees made by stockholders.
Stockholder recommendations should be sent to:
Celanese Corporation
Board of Directors
1601 West Lyndon B. Johnson Freeway
Dallas, Texas 75234
Attn: Corporate Secretary
Generally, recommended candidates are considered at the first or
second board meeting prior to the annual meeting. No candidates
were recommended by stockholders during 2010.
The nominating and corporate governance committee considers
individuals recommended by stockholders in the same manner and
to the same extent as it considers director nominees identified
by other means. The Chairman of the nominating and corporate
governance committee will make exploratory contacts with those
nominees whose skills, experiences, qualifications and personal
attributes satisfy those that the nominating and corporate
governance committee has identified as essential for a nominee
to possess, as described above. Then, an opportunity will be
arranged for the members of the nominating and corporate
governance committee or as many members as can do so to meet the
potential nominees. The nominating and corporate governance
committee will then select a nominee to recommend to the board
of directors for consideration and appointment. Board members
appointed in this manner will serve, absent unusual
circumstances, until their election by our stockholders at the
next annual meeting of stockholders. The board and the
nominating and corporate governance committee have not received
director nominations from any stockholders outside the board or
the nominating and corporate governance committee.
The board of directors has adopted the following procedure in
accordance with the requirements of the SEC for stockholders to
communicate with the board and its members. Stockholders and
other parties interested in communicating directly with the
non-management directors as a group or the board may do so by
sending their communications to:
Celanese Corporation
Board of Directors
1601 West Lyndon B. Johnson Freeway
Dallas, Texas 75234
Attn: Corporate Secretary
All stockholder communications received by the Corporate
Secretary will be delivered to one or more members of the board
as appropriate, as determined by the Corporate Secretary.
Notwithstanding the foregoing, the Corporate Secretary will
maintain for the benefit of the board for a period of two years
following the receipt of any communication, a record of all
stockholder communications received in compliance with this
policy.
Members of the board may review this record of stockholder
communications upon their request to the Corporate Secretary. In
addition, the receipt of any accounting, internal controls or
audit-related complaints or concerns will be directed to the
Chairman of the audit committee.
26
The audit committee of the board of directors assists the board
in fulfilling its oversight responsibilities with respect to the
external reporting process and the adequacy of the
Companys internal controls. Specific responsibilities of
the audit committee are set forth in the Audit Committee Charter.
Company management is responsible for the Companys
internal controls and the financial reporting process. The
independent registered public accounting firm KPMG LLP is
responsible for performing an independent audit of the
Companys consolidated financial statements and issuing an
opinion on the conformity of those audited financial statements
with generally accepted accounting principles in the United
States of America. The audit committee monitors the
Companys financial reporting process and reports to the
board of directors on its findings.
The audit committee reviewed and discussed with Company
management and KPMG LLP the audited financial statements
contained in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2010. The audit committee
also discussed with KPMG LLP the matters required to be
discussed by the Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended (AICPA,
Professional Standards, Vol. 1, AU Section 380), as adopted
by the Public Company Accounting Oversight Board in
Rule 3200T. The audit committee has received from KPMG LLP
the written disclosures and the letter required by the
applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountants
communications with the audit committee concerning independence,
and has discussed with KPMG LLP its independence.
The audit committee has also considered whether the provision to
the Company by KPMG LLP of limited non-audit services is
compatible with maintaining the independence of KPMG LLP. The
audit committee has satisfied itself as to the independence of
KPMG LLP.
Based on the audit committees review and discussions
described above, the audit committee recommended to the board of
directors that the audited consolidated financial statements be
included in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2010. This report was
submitted by the audit committee,
David F. Hoffmeister, Chairman
Martin G. McGuinn
James E. Barlett
The audit committee report does not constitute soliciting
material, and shall not be deemed to be filed or incorporated by
reference into any other filing under the Securities Act of
1933, or the Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates the audit
committee report by reference therein.
The compensation committee has reviewed and discussed the
Compensation Discussion and Analysis contained in this Proxy
Statement with management and the compensation committees
independent compensation consultant and, based upon its review
and discussion, the compensation committee recommended to the
board of directors that the Compensation Discussion and Analysis
be included in the Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010 and this Proxy
Statement. This report was submitted by the compensation
committee,
John K. Wulff, Chairman
Daniel S. Sanders
Farah M. Walters
The compensation committee report does not constitute
soliciting material, and shall not be deemed to be filed or
incorporated by reference into any other filing under the
Securities Act of 1933, or the Securities Exchange Act of 1934,
except to the extent that the Company specifically incorporates
the compensation committee report by reference therein.
27
Compensation
Discussion and Analysis
Executive
Summary
During 2010, we continued to progress towards becoming a premier
chemical company. Our progress was driven by our relentless
focus on our value creation levers of geographic growth,
innovation, productivity, and portfolio enhancements. Our
effective execution of these levers resulted in strong results
in net sales and Operating EBITDA.* Specifically, in 2010 our
net sales increased 16.5% to $5.9 billion and our Operating
EBITDA increased 31% to $1.1 billion. Earnings from
continuing operations before taxes increased 114% to
$538 million, and net earnings were $377 million in
2010 compared to $498 million in 2009. Our 2009 net
earnings included a net release of tax valuation allowances of
$314 million. In addition, we improved our safety
performance over 2009. Our strong operational and financial
performance resulted in a 29% total return for stockholders in
2010, based on a closing price as of December 31, 2010 of
$41.17 per share.
We closely monitor our performance in relation to the
performance of those companies included in our peer groups, as
described later in this Compensation Discussion and Analysis
(CD&A). Although we target compensation to be
at the median of our executive benchmarking peer group, whether
we pay out at, above or below the targeted amount depends on
internal performance metrics and overall company performance
relative to our peers. This compensation structure is consistent
with our philosophy of performance-based pay that also enables
us to attract and retain the top talent in the industry.
2010
Pay Decisions and Plan Design Changes
In light of new roles and responsibilities, three of our named
executive officers received base pay increases
and / or adjustments to their annual performance bonus
award targets or long-term equity incentive award targets in
2010. Base pay and target pay for all other named executive
officers remained consistent with previous years.
The annual performance bonus plan design remained unchanged from
last year and continues to measure performance relative to
Operating EBITDA, working capital and environmental, health and
safety (EHS) metrics and the individual performance
of the executive officer. As a result of our strong 2010
performance described above, our annual performance bonus plan
paid at 108.8% of target for corporate-level participants,
including the named executive officers.
Our long-term incentive program was redesigned to further align
our executives with long-term stockholders interests and
the business strategy of our Company. Although we continued to
grant time- and performance-vesting restricted stock units
(RSUs), except for our chief executive officer who
did not receive time-vesting RSUs in 2010, stock options were
added to our named executive officers equity mix. A
mandatory hold requirement of a portion of vested restricted
stock units and net shares received from the exercise of stock
options was introduced in 2010 (discussed further on
page 45). The hold requirement for RSUs is seven years from
the date of grant of the award (four years after the last
vesting date). The hold requirement for shares acquired upon
exercise of stock options after covering the exercise price,
taxes and any transaction costs is one year from the date of
exercise.
A thorough review of compensation related risks was completed in
2010. As described later in Executive
Compensation Risk Assessment of Compensation
Practices, no material adverse risk was found in any of
our executive or broad-based compensation programs. This
assessment did lead to the amendment of our Insider Trading
Policy to prohibit the hedging of Company stock by directors and
employees.
* Operating EBITDA is a non-GAAP financial measure.
See Exhibit A to this Proxy Statement for additional
information concerning this measure and a reconciliation of this
measure to net earnings, the most comparable U.S. GAAP
financial measure.
28
Highlights
of Pay Programs
We continue to maintain pay programs that are aligned with good
corporate governance. In fact, governance is embedded in our
processes and policies and includes the following:
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stock ownership guidelines to ensure executives maintain a
meaningful ownership level in our stock;
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hold requirements on stock-based awards that focus executives on
the longer-term effect of decision-making;
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an executive compensation recoupment policy (or
clawback) for all long-term cash and stock-based
awards if non-compete, non-solicitation or other covenants are
breached;
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equity granting guidelines that ensure no improper timing of
granting stock awards in connection with the release of material
non-public information;
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no employment agreements; and
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an insider trading policy that prohibits the hedging of risk on
our stock by directors and employees.
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In addition to maintaining good corporate governance, we have
designed our annual performance bonus plan and long-term
incentive program to be aligned with best practices that
mitigate against excessive risk. This includes the following:
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multiple performance metrics are used in our long-term incentive
program to help ensure a balance of absolute and relative
performance metrics;
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a funding threshold of Company operating performance must be met
or exceeded before any incentives, both annual performance bonus
and long-term, will be paid;
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negative discretion by our compensation committee can be applied
to all plans;
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payment opportunities for both the annual performance bonus plan
and the long-term incentive program are capped;
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the plan oversight and approval of both the design and payout of
all annual performance bonus awards, as well as each grant of
long-term incentive compensation, by the compensation committee;
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periodic assessment of the annual performance bonus and
long-term incentive plans by management and the compensation
committees independent compensation consultant; and
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incentive targets that are analyzed and benchmarked.
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We strongly believe that our executive officers
compensation should be driven by performance. To the extent that
we do not achieve our annual or long-term performance targets or
an executive officers individual performance does not meet
expectations, our compensation program is designed to reduce the
amount of total compensation received by such executive officer.
The CD&A provides an overview of our compensation programs
and explains how pay is determined for our CEO and the other
executive officers named in the Summary Compensation Table on
page 48 (collectively, our named executive
officers). Our named executive officers for 2010 were:
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David N. Weidman
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Chairman and Chief Executive Officer
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Steven M. Sterin
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Senior Vice President and Chief Financial Officer
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Douglas M. Madden
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Chief Operating Officer
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James S. Alder
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Senior Vice President, Operations and Technical
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Jacquelyn H. Wolf
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Senior Vice President, Human Resources
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29
Oversight
of the Executive Compensation Process
The compensation committee is responsible for establishing
compensation policies and programs that are consistent with our
business strategy and aligned with our stockholders
interests. Specifically, the compensation committee is
responsible for:
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reviewing and approving the corporate goals and objectives
relevant to the compensation of the CEO and other executive
officers;
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evaluating the performance and compensation of the CEO and other
executive officers in light of their established goals and
objectives;
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reviewing and approving both target and actual pay levels of our
executive officers;
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reviewing and approving incentive and equity-based compensation
plans and all grants of awards under such plans; and
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overseeing the development and implementation of succession
plans for the CEO and the other key executives.
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Our compensation committee is comprised entirely of independent
directors (as defined under NYSE listing standards).
The
Role of the Compensation Consultant in Making
Decisions
The compensation committee has retained Frederic W. Cook Co.,
Inc. (FW Cook) as its independent outside
compensation consultant to advise it in connection with
executive compensation matters. Beginning in mid-2010,
representatives of FW Cook regularly attended compensation
committee meetings as requested by its chair, Mr. Wulff,
and reported directly and exclusively to the compensation
committee on matters relating to compensation for the named
executive officers. During 2010, the compensation committee
requested that FW Cook:
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analyze and benchmark incentive targets;
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review and provide guidance on compensation plan design;
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review the composition of our peer group and recommend
modifications;
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conduct an analysis of compensation for our named executive
officers and certain other senior executives, and assess how
target and actual compensation aligned with our philosophy and
objectives; and
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provide market data, historical compensation information,
internal equity comparisons, competitive practice information
and recommendations regarding appropriate peer groups,
compensation trends and compensation strategy.
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During fiscal year 2010, FW Cook provided to the Company only
services approved by the compensation committee.
Prior to April 2010, the compensation committee used Mercer LLC
in the same capacity as described above. Mercer LLC also did not
provide any material services to the Company or our senior
management other than those provided in connection with its
engagement by the compensation committee.
The
Role of Management in Making Decisions
The compensation committee regularly meets with the CEO and the
senior vice president, human resources to receive reports and
recommendations regarding the compensation of our executive
officers other than the CEO. In particular, the CEO submits
recommendations, as appropriate, to the compensation committee
on the base salary, target annual performance bonus award
levels, and target levels of incentive and equity-based
compensation to be offered to each executive officer.
Recommendations are developed in consultation with the senior
vice president, human resources and the compensation consultant
and accompanied by market data prepared by the compensation
committees consultant. In addition, the CEO makes
recommendations to the compensation committee on the individual
performance modifiers used to determine each executive
officers actual payout under the annual
30
performance bonus award, as further described in
Compensation Discussion and Analysis
Performance Assessments and Individual Compensation
Decisions. Although the compensation committee considers
the CEOs recommendations, the final decisions regarding
base salary, bonus and equity targets and individual performance
modifiers are made by the compensation committee. The CEO does
not make any recommendations to the compensation committee
regarding his own compensation.
Compensation
Philosophy and Elements of Pay
Compensation Philosophy. Our focus as a
company is to deliver continued earnings growth and superior
value creation for our stockholders. To that end, we have
adopted a
pay-for-performance
compensation program that is designed to reward executives for
superior company and individual performance through awards of
variable and long-term incentives. At the same time, these
programs are intended to be sufficiently competitive with our
peer companies so as to also attract and retain highly qualified
personnel. We believe that our current compensation program is
both attractive to our executives and aligned with the best
interests of our stockholders.
Compensation Objectives. The objectives of our
compensation programs are to provide pay that is competitive,
performance-based, aligned with the interest of our
stockholders, and focused on attracting, rewarding and retaining
talent as described below:
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Competitive pay should be set at a level that
is competitive to our peers for which we compete for talent, is
equitable among our executive officers, and recognizes the
knowledge, skills and attributes of our executive officers;
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Performance-based pay should reward
individual, business unit and Company performance when
pre-established short- and long-term goals are met or exceeded
and provide for consequences when such targets are not met;
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Aligned with Stockholders incentives should
encourage long-term increases in stockholder value; and
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Focused on Talent pay should be designed to
attract, motivate and retain key executives.
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31
Elements of Compensation. The table below
summarizes the current elements of our compensation programs and
how each element supports the Companys compensation
objectives:
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Compensation
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Performance-
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Stockholder
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Element
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Description
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Competitive
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Based
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Alignment
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Talent Focus
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Base Salary
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Fixed level of compensation
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X
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X
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Determined within a competitive range established through
independent analysis
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Annual
Performance
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Performance-based cash incentive opportunity
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X
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X
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X
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X
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Bonus Award
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Plan measures include Operating EBITDA, working capital, and EHS
metrics and individual performance
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Stock Options
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Variable pay based on increases in our stock price over time
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X
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X
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X
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X
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Performance-
vesting
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Long-term performance plan (three-year performance period)
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X
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X
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X
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X
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Restricted Stock
Units (PRSUs)
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Plan measures include Operating EBITDA and Total Stockholder
Return relative to the Companys Long-term performance plan
peer group
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Time-vesting
Restricted Stock
Units (RSUs)
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Awards of RSUs that vest over time (minimum three-year vesting)
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X
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X
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X
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Retirement Plans
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Celanese Americas Retirement Savings Plan
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X
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X
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Celanese Americas Retirement Pension Plan
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Severance
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Change in Control Agreement
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X
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X
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X
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Arrangements
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Executive Severance Benefits Plan
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Setting
Total Compensation
Our compensation-setting process consists of establishing
overall target total compensation for each executive officer and
then allocating that compensation among base salary, annual
performance bonus awards, and long-term incentive awards. While
no specific formula is used to determine the allocation between
cash and equity-based compensation, when allocating these
compensation elements, we utilize a compensation mix more
heavily weighted towards variable and long-term incentive
compensation. The compensation committee believes that the
CEOs compensation should be the most heavily weighted
towards variable and long-term incentive awards and,
accordingly, 100% of his 2010 equity award (which accounted for
67% of his 2010 total targeted compensation) was allocated to
performance-vesting RSUs (75%) and stock options (25%).
To establish the appropriate target level of compensation for
the CEO and each executive officer, each compensation element is
reviewed by the compensation committee against market data for
our peer group provided by the compensation committees
independent compensation consultant. Since a majority of the
total compensation of our executive officers is
performance-based and, therefore, at risk, actual
compensation is determined by
32
Company and individual performance against pre-established
objectives. If we achieve our annual performance targets, as
approved by the board, and an executive officer meets individual
performance objectives, the compensation committees
philosophy is to target his or her compensation at or near the
50th percentile of the peer group for total annual cash
compensation (base salary plus annual performance bonus award)
and total annual compensation (total cash plus long-term
incentive awards). To the extent that we exceed our annual
performance targets and an executive officer significantly
exceeds individual performance objectives, our compensation
program is designed to reward such executive officer by paying
total compensation in the top quartile of the peer group. To the
extent that we do not achieve our annual performance targets or
an executive officers individual performance does not meet
expectations, our compensation program is designed to reduce the
amount of total compensation received by such executive officer.
Setting compensation targets based on comparative market data is
intended to ensure that our compensation practices are
competitive in terms of attracting, rewarding and retaining
executives. In addition, because a named executive
officers target compensation is set by reference to
persons with similar duties at companies in our peer group, the
compensation committee does not establish any fixed relationship
between the compensation of the CEO and that of any other named
executive officer. Internal pay equity among the other named
executive officers is also considered when setting compensation
targets. The level of responsibility, scope of role and impact
to the organization are all taken into consideration.
Our
Compensation Peer Group
As noted above, the compensation committees independent
compensation consultant provided an analysis of compensation
data and practices from a select group of peer companies in the
chemical industry. The compensation committee, with the
assistance of the consultant, identified the companies to be
included in our peer group based primarily on industry, market
capitalization and annual revenue. In some cases the
compensation committee also considered other criteria such as
the number of employees at a potential peer company, the
complexity of a potential peer companys business, and
whether the role and responsibilities of a potential peer
companys executive officers were comparable to those of
our executive officers.
The peer group that was used in 2010 varied slightly from the
one used in 2009 as a result of the acquisition or bankruptcy of
companies in the peer group and the addition of other companies
to take the place of those acquired or insolvent companies.
In determining total compensation for 2010, the compensation
committee and its independent compensation consultant noted that
our market capitalization and annual revenue were significantly
larger than the majority of the companies in our peer group and
adjusted both the overall compensation level and each element of
compensation to reflect the complexity and sophistication of our
business. In some cases this resulted in compensation that was
above the median of the peer group.
As a result of the independent compensation consultants
recommendations, in late 2010, the compensation committee
reviewed and adjusted the composition of the peer group for 2011
in order to include companies that were more closely similar in
market capitalization, revenue and complexities (i.e.
companies with at least 30% of revenue from
foreign sources).
33
The 2010 and 2011 peer groups are as follows:
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2010 Peer Companies
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2011 Peer Companies
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1.
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Airgas
Inc.(1)
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1.
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Air Products & Chemicals,
Inc.(2)
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2.
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Albemarle Corp.
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2.
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Albemarle Inc.
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3.
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Ashland Inc.
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3.
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Ashland Inc.
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4.
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Cabot
Corp.(1)
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4.
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Cytec Industries Inc.
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5.
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Cytec Industries Inc.
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5.
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Eastman Chemical Co.
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6.
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Eastman Chemical Co.
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6.
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Ecolab
Inc.(2)
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7.
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FMC Corp.
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7.
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FMC Corp.
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8.
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Huntsman Corp.
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8.
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Huntsman Corp.
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9.
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Lubrizol Corp.
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9.
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Lubrizol Corp.
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10.
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NALCO Holding Co.
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10.
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Monsanto
Company(2)
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11.
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PPG Industries Inc.
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11.
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NALCO Holding Co.
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12.
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Rockwood Holdings Inc.
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12.
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PPG Industries Inc.
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13.
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RPM International Inc.
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13.
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Praxair
Inc.(2)
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14.
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Westlake Chemical
Corp.(1)
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14.
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Rockwood Holdings Inc.
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15.
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W.R. Grace &
Co.(1)
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15.
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RPM International Inc.
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16.
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Valspar
Corporation(2)
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(1) |
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Removed for 2011.
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(2) |
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Added for 2011.
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Although the compensation committee strives to set executive
compensation at levels that are competitive with the companies
in the peer group, it does not rigidly adhere to a particular
target in determining executive compensation. Any executive
officers total compensation may vary from the targets due
to various other factors, including exceptionally strong or weak
Company or business unit performance over the prior year and
particularly strong or weak individual performance over the
prior year. The compensation committee also takes into account
additional individual factors when establishing total executive
compensation levels, including an executives position
within the Company, level of experience, tenure and need for
retention.
Base
Salary
Our CEO and the other executive officers are considered
at-will employees. As such, the compensation
committee annually reviews and approves the base salaries for
the CEO and each of the other executive officers. In making a
determination of the appropriate level of an executive
officers base salary, the compensation committee considers
a number of factors, including (i) the scope, complexity,
and financial or business impact of the executives
position, (ii) the executives level of expertise,
experience and individual performance, (iii) how the
executives base salary compares to that of the
Companys other executives, and (iv) how the
executives base salary compares to the base salary of
similarly-situated executives at companies in our peer group. As
further discussed above in Setting Total
Compensation, for any given executive, we generally target
the median of base salaries paid to similarly-situated
executives at companies in our peer group. However, as a result
of the factors mentioned above, base salaries may actually be
set higher or lower than the median when appropriate.
Annual
Performance Bonus Awards
Plan Summary. A target annual
performance bonus award, expressed as a percentage of annual
base salary, is set for each executive officer based upon the
market data for his or her position and his or her level within
the organization. Target bonus percentages for each named
executive officer are shown in the chart below. The actual
annual performance bonus award that an executive officer
receives can range from 0% 400% of his or her target
annual performance bonus award based upon: (i) our
achievement of certain business, financial and safety
performance targets and (ii) the achievement by the
executive officer of personal objectives established for him or
her at the beginning of the year. An individual performance
modifier for each executive officer (other than the CEO)
34
is recommended to the compensation committee by our CEO after
the end of the fiscal year, based on his assessment of the
satisfactory completion of the various individual objectives.
The formula for determining the actual payout for each executive
officer is as follows:
Eligible earnings is defined as base pay that is earned for the
year. This amount is reflective of any pay adjustments that
might have been made throughout the year.
Company Goals and Objectives. The
annual performance bonus awards for 2010 are based upon our
achievement of incremental levels of Operating EBITDA, two
working capital components (Accounts Receivable
(A/R) + Inventory; and Accounts Payable
(A/P)), and environmental, health and safety goals.
The compensation committee adopted these performance metrics
because it believes that they are the key indicators of our
financial and operational success and key drivers of long-term
stockholder value. Within each of these performance metric
areas, there are three incremental performance levels, which are
referred to internally as threshold, target and stretch. No
annual performance bonus will be paid unless we meet or exceed
the threshold level of Operating EBITDA. The target level for
all metrics is set at amounts that reflect our internal,
confidential business plan at the time the awards are
established. These goals are generally within the ranges we have
publicly disclosed for the performance period and, accordingly,
require a high level of performance over the period to be
achieved. Threshold and stretch levels are set as a percentage
of target and designed to keep executives motivated throughout
the year (threshold) as well as reward for exceptional
performance (stretch).
For 2010, the target annual performance bonus awards and the
measurement level for each of the named executive officers were
as follows:
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Target Annual
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Performance Bonus
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2010 Performance Metrics
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Mix of Business
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(% of Base Salary)
|
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|
and Relative Weight
|
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|
Unit and Total Company
Metrics
|
David N. Weidman
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100
|
%
|
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|
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Steven M. Sterin
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80
|
%
|
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|
65% Operating EBITDA
|
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Douglas M. Madden
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90
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%
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25% Working Capital
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100% Total Company
|
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James S. Alder
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80
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%
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10% EHS
|
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|
Jacquelyn H. Wolf
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70
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%
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35
The 2010 threshold, target and stretch performance levels, as
well as the actual performance levels, for our performance
measures were:
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2010
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Actual
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Threshold
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Target
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Stretch
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Operating
EBITDA(1)
($Millions)
|
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$
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1,122
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$
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883
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$
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1,104
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$
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1,325
|
|
Working Capital (A/R +
Inventory)(2)
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23.3
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%
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24.1
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%
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23.1
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%
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22.1
|
%
|
Working Capital
(A/P)(2)
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10.8
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%
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10.2
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%
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11.2
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%
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12.2
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%
|
EHS
(OIR)(3)
|
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0.15
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0.26
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0.22
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0.18
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|
EHS
(LTIR)(3)
|
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0.05
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0.08
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0.06
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0.04
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|
EHS (Contractor
OIR)(3)
|
|
|
0.48
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|
|
0.58
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|
|
|
0.54
|
|
|
|
0.50
|
|
|
|
|
(1) |
|
For purposes of calculating annual
performance bonus awards, Operating EBITDA is defined as net
earnings plus loss (earnings) from discontinued operations,
interest expense, taxes and depreciation and amortization, and
further adjusted for other charges and other adjustments.
|
|
(2) |
|
For purposes of calculating annual
performance bonus awards, the working capital components are
defined as (a) (1) third-party accounts receivable plus
(2) inventory divided by (3) net sales, and
(b) third-party accounts payable divided by net sales. The
table reflects the full year average of the quarterly targets of
these components. Inventory effects associated with the
Kelsterbach, Germany relocation have been excluded from the
working capital performance targets and actual results.
|
|
(3) |
|
For purposes of calculating annual
performance bonus awards, EHS includes our Occupation Safety
& Health Administration (OSHA) Incident Rate
(OIR, which is defined as the ratio of OSHA
recordable injuries per 200,000 employee work hours) and
our Lost Time Injuries Rate (LTIR, which is defined
as the ratio of lost time injuries per 200,000 employee
work hours) and Contractor Incident Rate (Contractor
OIR, which is defined as the ratio of OSHA recordable
injuries per 200,000 contractor work hours).
|
The targets are based on the operating budget approved by the
compensation committee, as adjusted from time to time for
acquisitions and divestitures. In 2010, the compensation
committee approved adjustments for acquisitions and a change in
method of accounting for one of the Companys investments.
For 2010, the business performance modifier for each of the
named executive officers was 108.8%.
Individual Goals and Objectives. The
compensation committee believes that individual performance
goals are appropriate instruments for measuring individual
contributions to strategic corporate initiatives. Each named
executive officer eligible for an annual performance bonus award
had individual performance goals within the following framework.
|
|
|
|
|
|
|
Attract, Retain and Develop
|
|
|
Execute Strategic Plan/
|
|
|
Leadership with Innovation/
|
Top Talent
|
|
|
Control the Controllables
|
|
|
Leading Senior Level Teams
|
Turnover rates
Success rates of newly hired,
promoted or transferred executives
|
|
|
Productivity
Growth
Innovation
|
|
|
Innovation and marketing
Leadership engagement
Leading the strategic, operational and
people agendas of the organization
|
|
An executives behaviors and results in relation to his or
her individual goals are measured through an extensive appraisal
process using a 9-box methodology which reflects behaviors and
effectiveness in nine possible combinations. Each executive is
assigned an individual performance modifier based on the
CEOs assessment of the executives achievement of
those goals. The compensation committee reviews and approves the
modifiers recommended by the CEO. The compensation committee
determines the individual performance modifier assigned to the
CEO in executive session. The bonus award is paid in March of
the year following the performance period.
The rationale for each named executive officers individual
performance modifier (including the achievement of such
executive officers personal goals) is described in greater
detail below in Performance Assessment and Individual
Compensation Decisions.
36
Long-Term
Incentive Compensation
In furtherance of our long-term compensation strategy, we seek
to offer a compensation mix that provides appropriate incentives
to meet our objectives of providing competitive pay packages for
talented executives, delivering compensation that is
performance-based, and aligning managements interests with
those of stockholders. In 2009, stockholders approved the 2009
Global Incentive Plan (the 2009 GIP) pursuant to
which the Company may grant stock options, stock appreciation
rights, restricted stock, time-vesting and performance-vesting
restricted stock units and incentive cash bonuses.
As described above in the Elements of Compensation
table, long-term incentives in the form of equity awards support
our compensation objectives and are consistent with our overall
strategy to attract, motivate, reward and retain top performers.
For 2010, the compensation committee approved a Long-term
Incentive Plan (the 2010 LTIP) under the 2009 GIP,
pursuant to which awards of stock options and time-vesting and
performance-vesting RSUs were made to our executive officers.
The allocation of these awards was designed to be heavily
weighted towards performance with 100% of the CEOs and 75%
of the other named executive officers equity awarded as
performance-vesting RSUs and stock options. The compensation
committee believes that this allocation provides an appropriate
balance of risk / reward and retention of the
executive officer and also appropriately considers the relative
dilutive effect of each type of award to our stockholders. Based
on our long-term approach to stock ownership, we also
implemented a mandatory hold requirement on these long-term
incentives that better aligns with business strategy and
long-term stockholders as described in further detail below in
Hold Requirement for Equity Awards. The long-term
incentive mix and information regarding hold percentages are
shown below:
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Hold
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
|
|
|
|
Requirement
|
|
|
|
|
Stock Options
|
|
|
|
Time RSUs
|
|
|
|
RSUs
|
|
|
|
for RSUs
|
|
CEO
|
|
|
|
25
|
%
|
|
|
|
0
|
%
|
|
|
|
75
|
%
|
|
|
|
75
|
%
|
|
|
Other NEOs
|
|
|
|
25
|
%
|
|
|
|
25
|
%
|
|
|
|
50
|
%
|
|
|
|
45
|
%
|
|
Stock Options. Stock options have a
seven-year term and are granted with an exercise price equal to
the average of the high and low stock price on the date of grant
on October 1, 2010. They will only have value to employees
to the extent that the price of our stock is higher than the
exercise price of the options. The vesting schedule for our
stock options related to the 2010 annual grant is 25% of the
award each year for four years. Shares acquired on the exercise
of stock options after covering the exercise price, taxes and
any transaction costs must be held for one year following
exercise.
Time-vesting RSUs. Time-vesting RSUs
facilitate stock ownership and will vest 30%, 30%, and 40% over
three years from our 2010 annual grant date of October 1st.
On each vesting date, a percentage of the vested shares must be
held for an aggregate of seven years from the date of grant.
Performance-vesting
RSUs. Performance-vesting RSUs granted on
December 1, 2010 also facilitate stock ownership and will
vest on October 1, 2013 based upon the Companys
achievement of target levels of Operating EBITDA during the 2011
and 2012 fiscal years and the change in the price of the Common
Stock, including dividends (as if reinvested) (Total
Stockholder Return or TSR) as compared to peer
companies during the period from October 1, 2010 through
September 28, 2013, according to the schedule below. A
portion of the shares that are earned and vested at the end of
the performance period will be required to be held for four
additional years, or seven years from the date of grant.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relative TSR
|
|
|
|
|
|
Below Threshold
|
|
|
Target
|
|
|
Stretch
|
|
|
Operating EBITDA
|
|
Below Threshold
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
Target
|
|
|
50
|
%
|
|
|
100
|
%
|
|
|
150
|
%
|
|
|
Stretch
|
|
|
75
|
%
|
|
|
150
|
%
|
|
|
225
|
%
|
For purposes of measuring relative Total Stockholder Return for
the 2010 performance-vesting RSUs, the compensation committee
determined that a broader peer group (the Dow Jones U.S.
Chemicals Index) than the one used for comparison of overall
compensation was appropriate. The compensation committees
key considerations
37
in making this decision included (i) the potential higher
volatility of results produced by a smaller peer group in a plan
of this type, (ii) the desire to establish a peer group
that is more accessible to investors, and (iii) the
benefits of selecting a peer group that will be
self-adjusting and updated by an independent third
party from year to year. The following 32 companies
currently constitute this peer group:
|
|
|
A. Schulman Inc.
|
|
Huntsman Corp.
|
Air Products & Chemicals Inc.
|
|
International Flavors & Fragrances Inc.
|
Airgas Inc.
|
|
Lubrizol Corp.
|
Albemarle Corp.
|
|
Minerals Technologies Inc.
|
Ashland Inc.
|
|
Mosaic Co.
|
Avery Dennison Corp.
|
|
NewMarket Corporation
|
Cabot Corp.
|
|
Olin Corp.
|
Calgon Carbon Corp.
|
|
OM Group Inc.
|
CF Industries Holdings Inc.
|
|
PPG Industries Inc.
|
Cytec Industries Inc.
|
|
Praxair Inc.
|
Dow Chemical Co.
|
|
Rockwood Holdings Inc.
|
E. I. DuPont de Nemours & Co.
|
|
RPM International Inc.
|
Eastman Chemical Co.
|
|
Sensient Technologies Corp.
|
Ecolab Inc.
|
|
Sigma-Aldrich Corp.
|
FMC Corp.
|
|
Solutia, Inc.
|
H. B. Fuller Co.
|
|
W. R. Grace & Co.
|
Other
Compensation Elements
Consistent with providing a total pay program that is
sufficiently competitive with our peer companies so as to
attract and retain highly qualified personnel, our executive
officers receive or have access to the following benefits. We
believe all of these plans have proven useful and, in many
cases, necessary for recruiting and retention purposes.
Health and Welfare. The health, dental
and insurance benefits for executives are comparable with those
provided by our peer companies and are generally the same
benefits available to our other employees. In addition, we
maintain an executive annual physical program that allows our
executive officers to monitor and assess their overall health on
a regular basis. We believe that this program further mitigates
risk to the Company by providing information necessary for
successful succession planning.
Celanese Americas Retirement Pension
Plan. All of our named executive officers
participate in the same tax-qualified retirement plan, the
Celanese Americas Retirement Pension Plan, or CARPP, but because
of different hire dates, their participation formulas differ.
This plan covers substantially all of our U.S. employees.
See 2010 Pension Benefits Table for details.
Celanese Americas Retirement Savings
Plan. All of our named executive officers are
eligible to participate in the Celanese Americas Retirement
Savings Plan, or CARSP, a tax-qualified, defined contribution
plan (401(k)) sponsored by Celanese Americas LLC, one of our
wholly owned subsidiaries. This plan covers substantially all of
our U.S. employees. See Supplemental
Perquisites and All Other Compensation Table for details.
2008 Deferred Compensation Plan. In
December 2007, we adopted a deferred compensation plan which
provides certain of our senior employees the opportunity to
defer a portion of their compensation in exchange for a future
payment amount equal to their deferrals as adjusted based upon
the market-performance of specified measurement funds selected
by the participant. See 2010 Non-Qualified Deferred
Compensation Table for details.
Severance Policy. In order to have a
competitive benefit that allows for consistent administration
without negotiations of special payments, we implemented an
Executive Severance Benefits Plan that applies to our named
executive officers (excluding the CEO) as well as other company
executives. After a thorough market review and
38
internal analysis, the compensation committee approved a
severance plan in 2010 that provides, upon the involuntary
termination without cause of an executive, for the payment of
(i) one years base salary, (ii) one years
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). See
Potential Payments Upon Termination or Change In
Control for details. This benefit is not available to our
CEO. Any separation pay or benefit for the CEO must be approved
by the compensation committee after a thorough review and
analysis of the CEOs term of employment, past
accomplishments, reasons for separation and competitive market
practice.
Change in Control Agreements. We have
change in control agreements with all of our executive officers.
The change in control agreements provide for a payment to be
made to the named executive officers following a termination of
employment by the Company without cause or by the
officer with good reason within 2 years
following a change in control (as each term is
defined in the change in control agreements) or following the
first public announcement of a potential change in control
transaction, provided certain conditions are satisfied. Each
change in control agreement has a two-year term that is
automatically renewed for successive two-year terms unless
90 days notice of non-renewal is given by either
party to the agreement. In certain circumstances, certain
executives are eligible for a tax reimbursement payment. See
Potential Payments Upon Termination or Change in
Control for details.
In approving the change in control agreements, the compensation
committee considered the prevalence of such agreements among
similarly-situated executives at our peer companies based on
data collected by us. The compensation committee also determined
that the uniform non-compete and non-solicit clauses contained
in such agreements provide a significant benefit to us.
Specifically, the change in control agreements prohibit the
executive officer from soliciting customers of, or competing
against, the Company for a period of 1 year following the
date of termination if such termination occurs following the
announcement of a change in control event and 2 years
following the date of termination if such termination occurs
after a change in control event.
Perquisites. We review our perquisites
program periodically to ensure it remains market competitive for
our executives and supportable to our stockholders. We offer a
minimal cash perquisite allowance that allows our executive
officers to use at their discretion and for the benefits that
are most valued by them. This payment is not grossed up for
taxes and not available to our CEO, Mr. Madden and
Mr. Alder, as discussed below in the footnotes to the 2010
Summary Compensation Table.
Performance
Assessment and Individual Compensation Decisions
For 2010, the principal elements of compensation for each of our
named executive officers were base salary, annual performance
bonus awards, stock options, and time-vesting and
performance-vesting restricted stock unit awards. Each of these
elements of our compensation program was reviewed by the
compensation committee and the compensation committee assessed
each element in relation to the other elements paid to each
executive when making compensation decisions. The compensation
committee also assessed each named executive officers
performance relative to the goals described above when making
individual modifier decisions for the annual performance bonus
award. The compensation elements described in the tables below
are shown as a percent of our 2010 peer group median developed
by FW Cook. The percentage of the median reflected by the
long-term incentive awards shown below is based on the planning
value at the time of approval and not the grant date fair value
reflected in the 2010 Summary Compensation Table. Timing
differences between the approval date and grant date along with
the accounting methodology for performance-vesting RSUs will
cause variances between the committee approved value and the
grant date fair value.
In addition to the compensation discussed below, each named
executive officer received certain other benefits and
compensation described in the 2010 Summary Compensation Table.
39
David
N. Weidman
For fiscal year 2010, David N. Weidman received the following
compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized
|
|
|
|
|
|
|
|
|
Base
|
|
Annual Performance
|
|
Stock Options
|
|
Time-Vesting RSUs
|
|
Performance-Vesting RSUs
|
Salary
|
|
Bonus Award
|
|
(#)
|
|
(#)
|
|
(#)
|
|
$
|
900,000
|
|
|
$
|
1,371,888
|
|
|
|
68,495
|
|
|
|
0
|
|
|
|
96,600
|
|
The following table summarizes the deviation from the peer
median of each element of Mr. Weidmans compensation,
the reasons for such deviation, and the reasons supporting
Mr. Weidmans individual performance modifier.
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
% of Median
|
|
|
|
Element
|
|
|
(Target)
|
|
|
Commentary
|
Base Salary
|
|
|
|
86
|
%
|
|
|
The compensation committee believes it is appropriate for
Mr. Weidmans base salary to be below the market
median because his total compensation should be most heavily
weighted towards variable and long-term incentive awards. Mr.
Weidman did not receive an increase to his base salary in 2010.
|
|
Annual Performance
Bonus Award
|
|
|
|
118
|
%
|
|
|
The compensation committee considered the following
accomplishments when determining the individual performance
modifier for Mr. Weidman:
Achieving $1.1 billion of Operating
EBITDA and total working capital of 12.6%
Exceeding total productivity and growth
and innovation targets
Executing against sustainability
objectives in the areas of safety, environmental release, energy
rates and social responsibility
Continuing the successful development of
the executive officers and extended leadership team
Leading the development of premier
processes for product commercialization, marketing and innovation
|
|
Long-term Incentive
Awards
|
|
|
|
133
|
%
|
|
|
As noted in the base salary section, Mr. Weidmans total
compensation package is more heavily weighted towards variable
and long-term incentive awards.
|
|
Total Direct Compensation
|
|
|
|
120
|
%
|
|
|
|
|
|
|
|
40
Steven
M. Sterin
For fiscal year 2010, Steven M. Sterin received the following
compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized
|
|
|
|
|
|
|
|
|
Base
|
|
Annual Performance
|
|
Stock Options
|
|
Time-Vesting RSUs
|
|
Performance-Vesting RSUs
|
Salary
|
|
Bonus Award
|
|
(#)
|
|
(#)
|
|
(#)
|
|
$494,000
|
|
$
|
522,791
|
|
|
|
13,320
|
|
|
|
6,260
|
|
|
|
12,520
|
|
The following table summarizes the deviation from the peer
median of each element of Mr. Sterins compensation,
the reasons for such deviation, and the reasons supporting
Mr. Sterins individual performance modifier.
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
% of Median
|
|
|
|
Element
|
|
|
(Target)
|
|
|
Commentary
|
Base Salary
|
|
|
|
106%
|
|
|
|
Mr. Sterins base salary was increased from $475,000 to
$494,000 during the year in recognition of his increased
contributions to the Company and for market competitiveness
reasons. Mr. Sterin is paid above the median of our peer group
but remains below the median of market surveys used to validate
our peer group data.
|
|
Annual Performance
Bonus Award
|
|
|
|
150%
|
|
|
|
The compensation committee considered the following
accomplishments when determining the individual performance
modifier for Mr. Sterin:
|
|
|
|
|
|
|
|
|
Developing a capital strategy that reduced refinancing risks, future costs and maintained covenant light structure
|
|
|
|
|
|
|
|
|
Executing against significant strategic improvements for tax, accounting and enterprise risk management
|
|
|
|
|
|
|
|
|
Achieving retention rates for high-potential employees and ensuring the success of the finance leadership team.
|
|
Long-term Incentive
Awards
|
|
|
|
97%
|
|
|
|
Mr. Sterins targeted 2010 long-term incentive award was
increased to $700,000 to be competitive at the median level for
the peer group.
|
|
Total Direct
Compensation
|
|
|
|
112%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As discussed in the prior years proxy statement,
Mr. Sterin received an off-cycle grant of 13,436
time-vesting RSUs valued at $400,000 on February 10, 2010
that will vest June 30, 2014. This award was made in
recognition of Mr. Sterins performance as Chief
Financial Officer and his increasing level of responsibility
within the Company.
41
Douglas
M. Madden
For fiscal year 2010, Douglas M. Madden received the following
compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized
|
|
|
|
|
|
|
|
|
Base
|
|
Annual Performance
|
|
Stock Options
|
|
Time-Vesting RSUs
|
|
Performance-Vesting RSUs
|
Salary
|
|
Bonus Award
|
|
(#)
|
|
(#)
|
|
(#)
|
|
$650,000
|
|
$
|
929,982
|
|
|
|
22,835
|
|
|
|
10,735
|
|
|
|
21,465
|
|
The following table summarizes the deviation from the peer
median of each element of Mr. Maddens compensation,
the reasons for such deviation, and the reasons supporting
Mr. Maddens individual performance modifier.
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
% of Median
|
|
|
|
Element
|
|
|
(Target)
|
|
|
Commentary
|
Base Salary
|
|
|
|
112
|
%
|
|
|
Mr. Maddens base salary is above the median of our peer
group but remains below the median of market surveys used to
validate our peer group data.
|
|
Annual Performance Bonus Award
|
|
|
|
186
|
%
|
|
|
The compensation committee considered the following
accomplishments when determining the individual performance
modifier for Mr. Madden:
|
|
|
|
|
|
|
|
|
Achieving $1.1 billion of Operating EBITDA
|
|
|
|
|
|
|
|
|
Exceeding productivity and growth and innovation targets
|
|
|
|
|
|
|
|
|
Executing against business level strategic actions as determined by the compensation committee
|
|
|
|
|
|
|
|
|
Achieving retention rates for high-potential employees and ensuring the success of the business leadership teams
|
|
|
|
|
|
|
|
|
Operationalizing premier processes for product commercialization, marketing and innovation
|
|
Long-term Incentive Awards
|
|
|
|
157
|
%
|
|
|
In order to remain competitive and ensure long-term retention,
Mr. Maddens long-term incentive target is above the
median of our peer group but remains below the median of market
surveys used to validate our peer group data.
|
|
Total Direct
Compensation
|
|
|
|
151
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
As discussed in the prior years proxy statement,
Mr. Madden received an off-cycle grant of 16,795
time-vesting RSUs valued at $500,000 on February 10, 2010
that will vest December 31, 2013. This award was made in
recognition of Mr. Maddens promotion to chief
operating officer and his increased level of responsibility
within the Company.
42
James
S. Alder
For fiscal year 2010, James S. Alder received the following
compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized
|
|
|
|
|
|
|
|
|
Base
|
|
Annual Performance
|
|
Stock Options
|
|
Time-Vesting RSUs
|
|
Performance-Vesting RSUs
|
Salary
|
|
Bonus Award
|
|
(#)
|
|
(#)
|
|
(#)
|
|
$465,850
|
|
$
|
357,152
|
|
|
|
19,030
|
|
|
|
8,945
|
|
|
|
17,890
|
|
The following table summarizes the deviation from the peer
median of each element of Mr. Alders compensation,
the reasons for such deviation, and the reasons supporting
Mr. Alders individual performance modifier.
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
% of Median
|
|
|
|
Element
|
|
|
(Target)
|
|
|
Commentary
|
Base Salary
|
|
|
|
107
|
%
|
|
|
Mr. Alders base salary was increased from $423,500 to
$465,850 per the planned increase set in 2007. Mr. Alder is paid
appropriately based on his level of expertise and contributions
to the Company.
|
|
Annual Performance
Bonus Award
|
|
|
|
117
|
%
|
|
|
The compensation committee considered the following
accomplishments when determining the individual performance
modifier for Mr. Alder:
|
|
|
|
|
|
|
|
|
Exceeding productivity targets
|
|
|
|
|
|
|
|
|
Executing against innovation-based growth plans
|
|
|
|
|
|
|
|
|
Maintaining the Kelsterbach project on schedule while adding incremental capacity and other enhancements
|
|
|
|
|
|
|
|
|
Achieving retention rates for high-potential employees and ensuring the success of the Operations and Technical leadership teams
|
|
Long-term Incentive
Awards
|
|
|
|
148
|
%
|
|
|
In order to ensure long-term retention, Mr. Alders
long-term incentive target is above the median of our peer group.
|
|
Total Direct
Compensation
|
|
|
|
127
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
43
Jacquelyn
H. Wolf
Jacquelyn H. Wolf joined the Company in December 2009 as our
Senior Vice President, Human Resources. For fiscal year 2010,
Ms. Wolf received the following compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized
|
|
|
|
|
|
|
|
|
Base
|
|
Annual Performance
|
|
Stock Options
|
|
Time-Vesting RSUs
|
|
Performance-Vesting RSUs
|
Salary
|
|
Bonus Award
|
|
(#)
|
|
(#)
|
|
(#)
|
|
$400,000
|
|
$
|
304,864
|
|
|
|
8,565
|
|
|
|
4,025
|
|
|
|
8,050
|
|
The following table summarizes the deviation from the peer
median of each element of Ms. Wolfs compensation, the
reasons for such deviation, and the reasons supporting
Ms. Wolfs individual performance modifier.
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
% of Median
|
|
|
|
Element
|
|
|
(Target)
|
|
|
Commentary
|
Base Salary
|
|
|
|
117
|
%
|
|
|
Based on a competitive market positioning for base salary, Ms.
Wolf did not receive an increase in 2010.
|
|
Annual Performance
Bonus Award
|
|
|
|
162
|
%
|
|
|
The compensation committee considered the following
accomplishments when determining the individual performance
modifier for Ms. Wolf:
|
|
|
|
|
|
|
|
|
Leading organizational actions to facilitate the successful development of the executive officers and senior leadership team and to ensure successful succession planning
|
|
|
|
|
|
|
|
|
Developing successful strategies for cost savings
|
|
|
|
|
|
|
|
|
Implementing changes to the overall compensation strategy of the Company for better stockholder alignment
|
|
|
|
|
|
|
|
|
Achieving retention rates for high-potential employees
|
|
Long-term Incentive
Awards
|
|
|
|
126
|
%
|
|
|
In order to reward superior performance and ensure long-term
retention, Ms. Wolfs long-term incentive award was above
the median of our peer group.
|
|
Total Direct
Compensation
|
|
|
|
130
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition, in connection with the hiring of Ms. Wolf in
December 2009, she received the following additional
compensation during fiscal year 2010:
|
|
|
|
|
$200,000 cash sign-on bonus
|
|
|
|
17,500 time-vesting RSUs (valued at grant date at $569,450)
|
|
|
|
7,500 performance-vesting RSUs (valued at grant date at $292,200)
|
|
|
|
30,000 non-qualified stock options (valued at grant date at
$469,800)
|
|
|
|
relocation benefits and certain other compensation as described
in the Summary Compensation Table
|
Each of these equity awards was granted under the 2009 GIP. The
terms of these awards are set forth above in Compensation
Philosophy and Elements of Compensation Long-Term
Incentive Compensation and below in the 2010 Grants of
Plan-Based Awards Table.
Additional
Information Regarding Executive Compensation
Following are descriptions of other policies that we believe are
integral to a stockholders understanding of the
Companys overall executive compensation program structure.
44
Executive
Stock Ownership Requirements
In 2007 the compensation committee adopted a stock ownership
policy for senior management. Ownership includes (i) shares
of our stock held outright, whether individually or through
beneficial ownership in a trust, (ii) time-vesting and
performance-vesting RSUs that have not vested (at target), and
(iii) shares of our stock or share equivalents held in a
Company-sponsored deferred compensation or retirement plan.
Stock options do not count towards the executive officers
ownership requirements. Failure to meet stock ownership
requirements by the end of year 5, or failure to make a
meaningful effort to do so, may result in the executive officer
not receiving future base salary increases or equity awards, and
may also make the executive officer ineligible for promotion.
The following table sets forth, as of December 31, 2010,
the ownership requirement (expressed as a percentage of base
salary) for each of our named executive officers, the actual
number of shares owned and resulting ownership percentage, and
the deadline for compliance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Level of Celanese Stock Ownership
|
|
|
Ownership
|
|
|
|
|
|
Deadline for
|
|
|
Requirement as a
|
|
Total
|
|
|
|
Compliance with
|
|
|
Multiple of Base
|
|
Number of
|
|
As
|
|
Stock Ownership
|
|
|
Salary
|
|
Shares
|
|
% of Base
Salary(1)
|
|
Guidelines
|
|
Mr. Weidman
|
|
|
600
|
%
|
|
|
728,223(2
|
)(3)
|
|
|
3,377
|
%
|
|
|
December 2012
|
|
Mr. Sterin
|
|
|
300
|
%
|
|
|
60,275
|
|
|
|
509
|
%
|
|
|
December 2012
|
|
Mr. Madden
|
|
|
400
|
%
|
|
|
192,823
|
(2)
|
|
|
1,238
|
%
|
|
|
December 2012
|
|
Mr. Alder
|
|
|
400
|
%
|
|
|
160,248
|
(2)
|
|
|
1,435
|
%
|
|
|
December 2012
|
|
Ms. Wolf
|
|
|
300
|
%
|
|
|
35,799
|
|
|
|
374
|
%
|
|
|
December 2014
|
|
|
|
|
(1) |
|
Calculated using the average of the
2010 high and low closing share prices of $32.61.
|
|
(2) |
|
After giving effect to the
settlement of performance RSUs issued in April 2007 whose
performance period ended on December 31, 2010. See
2010 Option Exercises and Stock Vested table.
|
|
(3) |
|
Includes 200,000 Performance Units
granted December 11, 2008.
|
As of February 23, 2011, all of the named executive
officers had already achieved the required level of stock
ownership.
Hold
Requirement for Equity Awards
Based on our long-term approach to stock ownership, our
compensation committee added a hold feature to the long-term
equity awards provided to our executive officers in our 2010
annual grants. A hold feature better aligns with our long-term
business strategy and the interest of our long-term
stockholders. As noted above, this year we awarded stock
options, time-vesting RSUs (except to the CEO) and
performance-vesting RSUs. When each stock option is exercised,
the executive officer must hold for an additional one year the
net shares received after covering the exercise price, taxes and
any transaction costs. For any time-vesting RSUs that become
vested on a vesting date, a portion (55%) shall be immediately
deliverable to the executive officer and the remaining portion
(i.e., 45%) shall be subject to a hold requirement extending
until the seventh anniversary of the grant date. For any
performance-vesting RSUs that become vested, after adjustment
for the achievement of the performance goals, a portion (25% for
the CEO and 55% for the other named executive officers) shall be
immediately deliverable to the executive officer and the
remaining portion (i.e., 75% for the CEO and 45% for the other
named executive officers) shall be subject to a hold requirement
extending until the seventh anniversary of the grant date. The
shares held after the exercise of options and the time- and
performance-vesting RSUs subject to a hold requirement shall be
deliverable to the executive officers earlier upon the executive
officers death or disability or a change in control. If
during the hold period the executive officers employment
is terminated by the Company for cause (as defined in the award
agreement) or the executive officer breaches the applicable
clawback agreement with the Company, the shares and RSUs subject
to the hold requirement shall be forfeited and cancelled without
consideration.
Executive
Compensation Recoupment Policy
In order to further align managements interests with the
interests of stockholders and support good governance practices,
our compensation committee adopted a recoupment (also known as a
clawback) policy
45
applicable to long-term incentive cash awards, restricted stock
units, stock options or any other form of equity awarded to an
employee. The policy prohibits the awardee from
(i) disclosing confidential or proprietary information,
(ii) competing with us, and (iii) soliciting or hiring
employees, former employees or consultants of ours for a period
of one year following the termination of the employees
employment with us for any reason. In the event that the awardee
violates the provisions of the recoupment policy, the awardee
will cease vesting and forfeit any rights to the covered awards
and will be required to deliver to us any amount received from
the long-term incentive cash award or gain realized on any stock
option exercises or any other transaction relating to an equity
grant by us.
In addition, pursuant to Section 304 of the Sarbanes-Oxley
Act of 2002, if we are required to restate our financials due to
material noncompliance with any financial reporting requirements
as a result of misconduct, the CEO and CFO will be required to
reimburse us for any bonus or other incentive-based or
equity-based compensation received during the 12 months
following the first public issuance of the non-complying
document, and any profits realized from the sale of securities
of the Company during those 12 months.
Prohibition
on Hedging
Our board has recently amended our Insider Trading Policy to
prohibit directors and employees from (i) entering into
transactions that have the effect of hedging risk associated
with owning shares of our Common Stock, including engaging in
short sales, engaging in transactions in put or call options or
other derivative securities, or engaging in any other forms of
hedging transactions relative to our Common Stock, such as
collars or forward sale contracts, and (ii) purchasing our
shares on margin.
Tally
Sheets
From
time-to-time,
the compensation committee reviews a summary report, or
tally sheet, prepared by FW Cook or management for
each named executive officer. The purpose of a tally sheet is to
show the total dollar value of the executives annual
compensation. This includes the executives base salary,
annual performance bonus award, equity-based compensation,
perquisites, pension benefit accruals, and other compensation.
The tally sheet also shows holdings of our stock and
equivalents, and accumulated value and unrealized gains under
prior equity-based compensation awards. In addition, the tally
sheet shows amounts payable to the named executive officer upon
termination of the executives employment under various
circumstances, including retirement or a change in control. The
compensation committee uses tally sheets to estimate the total
annual compensation of the named executive officers, and to
provide perspective on the value accumulated by the named
executive officers from our compensation programs and the
potential payouts to them under a range of termination scenarios.
Employment
Agreements
The compensation committee has determined that it is not in our
best interest to enter into employment agreements with the CEO
or any other executive officer of the Company. However, we have
entered into offer letters with certain of the executive
officers from time to time, including Ms. Wolf, at the time
of her hiring. These offer letters generally contain provisions
outlining the executives base salary, bonus, sign-on
equity grants and, in some cases, severance provisions. These
offer letters do not create an expectation of employment and all
of our executive officers remain employed at will.
Tax
and Accounting Considerations
Tax Deductibility of Compensation
Expense. Section 162(m) of the Internal
Revenue Code (the Code) places a limit of $1,000,000
on the amount of compensation to our CEO and the three other
most highly compensated officers employed at the end of the year
(other than our Chief Financial Officer) that may be deducted by
us as a business expense in any tax year unless, among other
things, the compensation is performance-based and has been
approved by the stockholders. Salaries for the named executive
officers do not qualify as performance-based compensation.
Time-vesting RSUs granted by us do not qualify for an exemption
under Section 162(m); however, stock options and
performance-vesting RSUs granted by us in 2010 do qualify for an
exemption under Section 162(m). Additionally, annual
performance bonus awards for 2010, which were awarded under the
2009 GIP,
46
qualify as performance-based compensation and, therefore, for an
exemption under Section 162(m). As permitted by such
program, the compensation committee used its discretion to
reduce a maximum award (200% of target for business performance
and 200% of target for individual performance) to the amount
actually awarded to each named executive officer.
The compensation committee believes that in establishing
incentive compensation programs for our named executive
officers, the potential deductibility of the compensation
payable should be only one of several factors taken into
consideration and not the sole governing factor. For that
reason, the compensation committee may deem it appropriate to
continue to provide one or more executive officers with the
opportunity to earn incentive compensation that may be in excess
of the amount deductible by reason of Section 162(m) or
other provisions of the Code.
Tax Implications for
Officers. Section 409A of the Code
imposes additional income taxes on executive officers for
certain types of deferred compensation that do not comply with
Section 409A. We do not believe this has had an impact on
our compensation program for the executive officers because our
deferred compensation plans have been designed to comply with
Section 409A. Section 280G of the Code imposes an
excise tax on payments to executives of severance or change in
control compensation paid in connection with a change of control
that exceed the levels specified in Section 280G. The named
executive officers could receive the amounts shown on the table
in the section entitled Potential Payments Upon
Termination or Change in Control below as severance or
change in control payments, but the compensation committee does
not consider their potential impact in setting total annual
compensation.
Accounting Considerations. The
compensation committee also considers the accounting and cash
flow implications of various forms of executive compensation. In
our financial statements, we record salaries and non-equity
performance-based compensation incentives as expenses in the
amount paid, or to be paid, to the named executive officers.
Accounting rules also require us to record an expense in our
financial statements for equity awards, even though equity
awards are not paid as cash to employees. The accounting expense
of equity awards to employees is calculated in accordance with
FASB ASC Topic 718. The compensation committee believes,
however, that the many advantages of equity compensation, as
discussed above, more than compensate for the non-cash
accounting expense associated with them.
Risk
Assessment of Compensation Practices
It is our policy to regularly monitor our compensation policies
and practices to determine whether our risk management
objectives are being met and to adjust those policies and
practices to address any incentives that are determined to
encourage risks that are reasonably likely to have a material
adverse effect on us and any changes in our risk profile. With
respect to the compensation of our executives, the compensation
committee, with the input of the independent compensation
consultant and management, takes into consideration whether any
such programs may incentivize excessive risk behavior. As part
of these considerations and consistent with its compensation
philosophy, our compensation programs, particularly our annual
and long-term incentive programs, are designed to provide
incentives for the executives to achieve our objectives without
encouraging excessive risk taking because:
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our incentive plans utilize a mix of short-term and long-term
performance measures, which provide executives with short-term
incentive to improve our results while also providing a
significant incentive to maintain those results for the
long-term;
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a significant portion of our most senior executives
incentive compensation consists of stock-based compensation,
which when coupled with our stock ownership policy, encourages
long-term equity ownership by the executives, aligning their
interests with our stockholders;
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the financial metrics utilized under each of the plans are
designed to reflect measures of stockholder value over multiple
years or annual operational performance that the compensation
committee believes will tend to create long-term stockholder
value;
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various non-financial metrics (such as achievement of
environmental, health and safety goals) are used as part of the
process of determining compensation;
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47
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in determining the exact mix of compensation from year to year,
the compensation committee intends to provide awards that
provide an appropriate level of market risk that
does not encourage excessive risk taking; and
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compensation payment opportunities that may be excessive are
avoided due to the limits placed on the amount of incentive
payments that may be earned.
|
With respect to compensation of employees other than executives,
under the direction of the compensation committee, management
has reviewed our compensation policies and practices to
determine whether those policies and practices encourage
excessive risk-taking. Our compensation programs for employees
other than executives are designed to incentivize employees to
demonstrate the courage to make decisions that benefit the
Company as a whole, while accepting personal accountability and
avoiding unnecessary risk.
Compensation
Committee Interlocks and Insider Participation
No member of the compensation committee was at any time during
2010 employed as an employee or officer of the Company or had
any relationship with us requiring disclosure as a related-party
transaction.
In addition, no executive officer of the Company has served on
the board of directors or compensation committee of any other
entity that has one or more executive officers who served as a
member of our board of directors or compensation committee
during 2010.
Compensation
Tables
2010
Summary Compensation Table
The following table summarizes all compensation for the fiscal
years ended December 31, 2010, 2009 and 2008 awarded to,
earned by, or paid to each of the named executive officers:
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Change in
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Pension Value
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and
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Nonqualified
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Non-Equity
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Deferred
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All
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Stock
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Option
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Incentive Plan
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Compensation
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Other
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Name and Principal
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Salary
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Bonus
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Awards
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Awards
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Compensation
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Earnings
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Compensation
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Total
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Position
|
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Year
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($)(1)
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($)
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($)(2)
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($)(3)
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($)(4)
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($)(5)
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($)(6)
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($)
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David N. Weidman
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2010
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900,000
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3,437,994
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(7)
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991,808
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2,325,607
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835,383
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74,857
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8,565,649
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Chairman and Chief
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2009
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934,615
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|
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5,134,899
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|
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598,324
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|
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1,891,931
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450,834
|
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50,719
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9,061,322
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Executive Officer
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2008
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900,000
|
|
|
|
|
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2,566,913
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|
|
|
|
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1,699,799
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867,875
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64,435
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6,099,022
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Steven M. Sterin
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2010
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480,154
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1,069,497
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(8)
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192,874
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522,791
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12,040
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28,392
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2,305,748
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Senior Vice President and
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2009
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447,115
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700,040
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315,716
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16,105
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18,814
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1,497,790
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Chief Financial Officer
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2008
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355,962
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169,510
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257,506
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3,161
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37,154
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820,132
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Douglas M. Madden
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2010
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632,692
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1,647,897
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(8)
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330,651
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1,021,475
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877,260
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43,054
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4,553,029
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Chief Operating Officer
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2009
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505,769
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1,531,076
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29,788
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537,772
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677,555
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25,658
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3,307,618
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James S. Alder
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2010
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455,588
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956,668
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(8)
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275,554
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473,401
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4,160,773
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27,364
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6,349,348
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Senior Vice President, Operations and Technical
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Jacquelyn H. Wolf
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2010
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400,000
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200,000
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(9)
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1,292,124
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(10)
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593,821
|
(11)
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304,864
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9,831
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|
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240,545
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|
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3,041,185
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Senior Vice President, Human Resources
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(1) |
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Salary paid in 2009 reflects 27 pay
periods as compared to Salary paid in 2010 and 2008 which
reflects 26 pay periods.
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(2) |
|
Represents the grant date fair
value of long-term equity incentive awards granted in 2010 under
our 2009 GIP computed in accordance with FASB ASC Topic 718. For
a detailed discussion of the method and assumptions used to
calculate such value, see Note 19 to our Consolidated
Financial Statements contained in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010. Further
information regarding the performance-vesting RSUs granted to
the named executive officers during 2010 is set forth in
footnotes 7, 8 and 10 to this 2010 Summary Compensation Table
and in the 2010 Grants of Plan-Based Awards Table on a
grant-by-grant
basis.
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(3) |
|
Represents the grant date fair
value of stock options granted in 2010 under our 2009 GIP
computed in accordance with FASB ASC Topic 718. The value of
stock options granted under the 2010 LTIP was calculated using a
price per share of $14.48, the estimated fair value per share
using the Black-Scholes pricing method, on October 1, 2010,
the date of grant. For a detailed discussion of the method and
assumptions used to calculate such value, see Note 19 to
our Consolidated Financial Statements contained in our Annual
Report on
Form 10-K
for the fiscal
|
48
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|
year ended December 31, 2010.
Further information regarding the stock options granted to the
named executive officers during 2010 is set forth in the 2010
Grants of Plan-Based Awards Table on a
grant-by-grant
basis.
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(4) |
|
Includes annual performance bonus
award cash payouts with respect to 2010 performance and the
value of gains and losses on the cash balance account pursuant
to the 2007 Revised Deferred Compensation Plan for each named
executive officer as follows:
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|
2007 Revised Deferred
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Annual Performance
|
|
Compensation Plan
|
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|
Bonus
|
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Gains and
|
Name
|
|
Award ($)
|
|
Losses ($)
|
|
Mr. Weidman
|
|
|
1,371,888
|
|
|
|
953,719
|
|
Mr. Sterin
|
|
|
522,791
|
|
|
|
|
|
Mr. Madden
|
|
|
929,982
|
|
|
|
91,493
|
|
Mr. Alder
|
|
|
357,152
|
|
|
|
116,249
|
|
Ms. Wolf
|
|
|
304,864
|
|
|
|
|
|
|
|
|
|
|
In 2007, certain executives were
given the opportunity to exchange their potential deferred
compensation account payouts, which were established and earned
under a previous plan, and replace that amount into a new
deferred compensation account credited with an earnings factor.
If the executive chose to replace these amounts into the 2007
Revised Deferred Compensation Plan, the amounts would generally
only be payable if the executive was employed through
December 31, 2010. The amounts shown in the chart above
reflect the compensation gains or losses in the related deferred
compensation account during 2010.
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|
Further information about the
Annual Performance Bonus Plan is set forth in Compensation
Discussion and Analysis Annual Performance Bonus
Awards, and in the 2010 Grants of Plan-Based Awards Table.
Further information about the 2007 Revised Deferred Compensation
Plan is set forth under the caption 2004 Deferred
Compensation Plan and 2007 Revised Deferred Compensation
Plan below the 2010 Option Exercises and Stock Vested
Table and in the 2010 Nonqualified Deferred Compensation Table.
|
|
(5) |
|
Consists entirely of the aggregate
respective change in the actuarial present value of each
individuals pension benefits based on a discount rate of
5.3%. The discount rate in 2009 was 5.9%. The change in discount
rate contributed to a $298,777 increase from 2009 for
Mr. Weidman.
|
|
(6) |
|
See
Supplemental Perquisites
and All Other Compensation Table below for further information.
|
|
(7) |
|
The value of performance-vesting
RSUs granted under the 2010 LTIP was calculated using a price
per share of $35.59, the estimated fair value per share as
determined using a Monte Carlo simulation, on December 1,
2010, the date of grant, discounted for lack of dividend
participation and hold restrictions.
|
|
|
|
With respect to performance-vesting
RSUs granted under the 2010 LTIP, payout of such
performance-vesting RSUs can range from a minimum of 0% to a
maximum of 225% of target. The target and maximum potential
values of the award of performance-vesting RSUs for
Mr. Weidman using the estimated fair value discussed above,
assuming performance at the target and highest levels of
performance conditions, is set forth below. The target value is
considered to be the value at the grant date based upon the
probable outcome of the performance conditions.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Number of
|
|
Value at Target
|
|
Maximum Number of
|
|
Value at Highest
|
PRSUs
|
|
Performance ($)
|
|
PRSUs
|
|
Performance ($)
|
|
|
96,600
|
|
|
|
3,437,994
|
|
|
|
217,350
|
|
|
|
7,735,487
|
|
|
|
|
(8) |
|
The value of time-vesting RSUs
granted under the 2010 LTIP was calculated using a price per
share of $27.39, the average of the high and low market price of
our Common Stock as reported by the NYSE on October 1,
2010, the date of grant, discounted for lack of dividend
participation and hold restrictions. The value of
performance-vesting RSUs granted under the 2010 LTIP was
calculated using a price per share of $39.78, the estimated fair
value of per share as determined using a Monte Carlo simulation,
on December 1, 2010, the date of grant, discounted for lack
of dividend participation and hold restrictions.
|
|
|
|
With respect to performance-vesting
RSUs granted under the 2010 LTIP, payout of such
performance-vesting RSUs can range from a minimum of 0% to a
maximum of 225% of target. The target and maximum potential
values of the award of performance-vesting RSUs for each named
executive officer using the estimated fair value discussed
above, assuming performance at the target and highest levels of
performance conditions, is set forth below. The target value is
considered to be the value at the grant date based upon the
probable outcome of the performance conditions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Number of
|
|
Value at Target
|
|
Maximum Number of
|
|
Value at Highest
|
Name
|
|
PRSUs
|
|
Performance ($)
|
|
PRSUs
|
|
Performance ($)
|
|
Mr. Sterin
|
|
|
12,520
|
|
|
|
498,046
|
|
|
|
28,170
|
|
|
|
1,120,603
|
|
Mr. Madden
|
|
|
21,465
|
|
|
|
853,878
|
|
|
|
48,296
|
|
|
|
1,921,215
|
|
Mr. Alder
|
|
|
17,890
|
|
|
|
711,664
|
|
|
|
40,253
|
|
|
|
1,601,264
|
|
|
|
|
(9) |
|
Sign-on bonus paid pursuant to
Ms. Wolfs offer letter dated November 18, 2009.
|
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(10) |
|
Includes (i) 17,500
time-vesting RSUs ($569,450) granted in connection with the
hiring of Ms. Wolf, (ii) 4,025 time-vesting RSUs
($110,245) granted under the 2010 LTIP and (iii) the
performance-vesting RSUs discussed below. The value of
time-vesting RSUs in connection with the hiring of Ms. Wolf
was calculated using a price per share of $32.54, the average of
the high and low market price of our Common Stock as reported by
the NYSE on January 21, 2010, the date of grant. The value
of performance-vesting RSUs granted in connection with the
hiring of Ms. Wolf was calculated using a price per share
of $38.96, the estimated fair value per share as determined
|
49
|
|
|
|
|
using a Monte Carlo simulation, on
January 21, 2010, the date of grant. The value of
performance-vesting RSUs granted under the 2010 LTIP was
calculated using a price per share of $39.78, the estimated fair
value per share as determined using a Monte Carlo simulation, on
December 1, 2010, the date of grant, discounted for lack of
dividend participation and hold restrictions. Payout for the
performance-vesting RSUs can range from a minimum of 0% to a
maximum of 225% of target. The target and maximum potential
values of the award of performance-vesting RSUs granted in
connection with the hiring of Ms. Wolf and pursuant to the
2010 LTIP for Ms. Wolf using the estimated fair market
values discussed above, assuming performance at the target and
highest levels of performance conditions, is set forth below.
The target value is considered to be the value at the grant date
based upon the probable outcome of the performance conditions.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target
|
|
Value at
|
|
Maximum
|
|
Value at
|
|
|
Number of
|
|
Target
|
|
Number of
|
|
Highest
|
Award
|
|
PRSUs
|
|
Performance ($)
|
|
PRSUs
|
|
Performance ($)
|
|
Sign-on
|
|
|
7,500
|
|
|
|
292,200
|
|
|
|
16,875
|
|
|
|
657,450
|
|
2010 LTIP
|
|
|
8,050
|
|
|
|
320,229
|
|
|
|
18,113
|
|
|
|
720,535
|
|
|
|
|
(11) |
|
Includes 30,000 non-qualified stock
options granted in connection with the hiring of Ms. Wolf.
|
Supplemental
Perquisites and All Other Compensation Table
The following supplemental table summarizes perquisites and
other compensation paid to each of the named executive officers
for the fiscal year ended December 31, 2010, which are
included in the All Other Compensation column of the
2010 Summary Compensation Table:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess
|
|
|
Personal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
|
|
|
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
|
|
|
Matching
|
|
|
Liability
|
|
|
Related to
|
|
|
Executive
|
|
|
|
|
|
Relocation
|
|
|
|
|
|
|
Savings Plan
|
|
|
401k
|
|
|
Insurance
|
|
|
Company
|
|
|
Health
|
|
|
Perquisite
|
|
|
Tax Gross-
|
|
|
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Premiums
|
|
|
Events
|
|
|
Services
|
|
|
Allowance
|
|
|
Ups
|
|
|
Other
|
|
Name
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)(6)
|
|
|
($)
|
|
|
($)
|
|
|
David N. Weidman
|
|
|
34,480
|
|
|
|
12,250
|
|
|
|
2,200
|
|
|
|
24,127
|
|
|
|
1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Sterin
|
|
|
|
|
|
|
8,788
|
|
|
|
2,200
|
|
|
|
2,404
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
Douglas M. Madden
|
|
|
13,038
|
|
|
|
12,250
|
|
|
|
1,125
|
|
|
|
16,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James S. Alder
|
|
|
9,221
|
|
|
|
12,250
|
|
|
|
1,125
|
|
|
|
2,968
|
|
|
|
1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jacquelyn H. Wolf
|
|
|
|
|
|
|
10,712
|
|
|
|
575
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
22,223
|
(7)
|
|
|
192,035
|
(8)
|
|
|
|
(1) |
|
The Celanese Americas Supplemental
Retirement Savings Plan, or CASRSP, is an unfunded, nonqualified
defined contribution plan that is available only to persons
employed by Celanese prior to January 1, 2001. If a person
meets this eligibility requirement, he or she is entitled to an
allocation under this plan equal to 5% of his or her salary in
excess of the compensation limits under the CARSP. The amount
contributed to the plan on behalf of a participant is credited
with earnings based on the earnings rate of the Stable Value
Fund (a fund invested in debt instruments), which is a fund
maintained for investments under the CARSP. The annualized rate
of return for 2010 was 1.0%. Distributions under this plan are
in the form of a lump sum payment which is paid as soon as
administratively practicable after termination of employment.
Further information about the CASRSP is set forth in the 2010
Pension Benefits Table.
|
|
(2) |
|
We make a matching contribution
based on the employees pre-tax and after-tax contributions
to the CARSP. We match 100% up to the first 5% that is
contributed. Contributions that are in excess of 5% will not be
matched. This benefit is provided to all
U.S.-based
eligible employees.
|
|
(3) |
|
The Group Excess Personal Liability
insurance policy provides excess limit of liability coverage to
executives of Celanese Americas LLC.
|
|
(4) |
|
During 2010, each of our executive
officers, including our named executive officers, were
encouraged to bring his or her spouse or a guest to certain
board meetings and other Company events. This column includes
expenses paid for or reimbursed by the Company in connection
with spousal or guest attendance, as well as certain
non-business related expenses incurred by the named executive
officer at these events. Such expenses could include meals,
airfare, lodging and other entertainment, and other similar
items.
|
|
(5) |
|
Represents the cost of an annual
comprehensive physical exam and expert consultation.
|
|
(6) |
|
We offer a cash perquisite
allowance to our executive officers, other than our chief
executive officer, chief operating officer and Mr. Alder,
which we allow them to use at their discretion. This payment is
not grossed up for taxes.
|
|
(7) |
|
Paid to reimburse Ms. Wolf for
taxes paid in connection with $37,035 of relocation expenses
paid for by us in accordance with our relocation policy
available to all employees. No other tax
gross-ups of
any type were paid to any other named executive officer during
2010.
|
|
(8) |
|
Includes $150,000 in reimbursement
for capital loss on sale of home, a $5,000 sales bonus and
$37,035 in relocation expenses, each paid in accordance with our
relocation policy. As part of our executive relocation policy,
Ms. Wolf was only eligible to receive a maximum amount of
$150,000 for a loss on a sale of her home. Ms. Wolfs
actual loss was $254,900. All employees that receive relocation
benefits are eligible for the loss on sale benefit but at
different capped amounts.
|
50
2010
Grants of Plan-Based Awards Table
The following table summarizes incentive awards and other
plan-based awards granted to each of the named executive
officers during the fiscal year ended December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentives
|
|
Equity Incentive Plans
|
|
|
|
|
Estimated Possible Payouts Under
|
|
|
|
|
|
|
|
All Other Stock Awards
|
|
Grant
|
|
|
|
|
Non-
|
|
Estimated Possible Payouts Under
|
|
Number of
|
|
Securities
|
|
|
|
Date
|
|
|
|
|
Equity Incentive Plans
|
|
Equity Incentives
|
|
Shares of
|
|
Underlying
|
|
Exercise
|
|
Fair
|
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Stocks or Units
|
|
Options
|
|
Price
|
|
Value
|
Name
|
|
Grant Date
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($)
|
|
($)
|
|
David N. Weidman
APBP(1)
|
|
|
N/A
|
|
|
|
225,000
|
|
|
|
900,000
|
|
|
|
1,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-vesting RSUs
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,150
|
|
|
|
96,600
|
|
|
|
217,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,437,994
|
|
Stock Options
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,495
|
|
|
|
32.35
|
|
|
|
991,808
|
|
Steven M. Sterin
APBP(1)
|
|
|
N/A
|
|
|
|
96,031
|
|
|
|
384,123
|
|
|
|
768,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-vesting RSUs
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,130
|
|
|
|
12,520
|
|
|
|
28,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
498,046
|
|
Time-vesting RSUs
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,260
|
|
|
|
|
|
|
|
|
|
|
|
171,461
|
|
Time-vesting RSUs
|
|
|
2/10/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,436
|
|
|
|
|
|
|
|
|
|
|
|
399,990
|
|
Stock Options
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,320
|
|
|
|
32.35
|
|
|
|
192,874
|
|
Douglas M. Madden
APBP(1)
|
|
|
N/A
|
|
|
|
142,356
|
|
|
|
569,423
|
|
|
|
1,138,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-vesting RSUs
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,366
|
|
|
|
21,465
|
|
|
|
48,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
853,878
|
|
Time-vesting RSUs
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,735
|
|
|
|
|
|
|
|
|
|
|
|
294,032
|
|
Time-vesting RSUs
|
|
|
2/10/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,795
|
|
|
|
|
|
|
|
|
|
|
|
499,987
|
|
Stock Options
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,835
|
|
|
|
32.35
|
|
|
|
330,651
|
|
James S. Alder
APBP(1)
|
|
|
N/A
|
|
|
|
79,728
|
|
|
|
318,912
|
|
|
|
637,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-vesting RSUs
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,473
|
|
|
|
17,890
|
|
|
|
40,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
711,664
|
|
Time-vesting RSUs
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,945
|
|
|
|
|
|
|
|
|
|
|
|
245,004
|
|
Stock Options
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,030
|
|
|
|
32.35
|
|
|
|
275,554
|
|
Jacquelyn H. Wolf
APBP(1)
|
|
|
N/A
|
|
|
|
70,000
|
|
|
|
280,000
|
|
|
|
560,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance-vesting RSUs
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,013
|
|
|
|
8,050
|
|
|
|
18,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
320,229
|
|
Performance-vesting
RSUs(2)
|
|
|
1/21/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,875
|
|
|
|
7,500
|
|
|
|
16,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
292,200
|
|
Time-vesting RSUs
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,025
|
|
|
|
|
|
|
|
|
|
|
|
110,245
|
|
Time-vesting
RSUs(2)
|
|
|
1/21/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,500
|
|
|
|
|
|
|
|
|
|
|
|
569,450
|
|
Stock Options
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,565
|
|
|
|
32.35
|
|
|
|
124,021
|
|
Stock
Options(2)
|
|
|
1/21/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
32.54
|
|
|
|
469,800
|
|
|
|
|
(1) |
|
Annual Performance Bonus Plan.
Further information about the Annual Performance Bonus Plan is
set forth in Compensation Discussion and
Analysis Annual Performance Bonus Awards.
Regardless of threshold, target or stretch achievement, these
awards are also subject to an individual modifier ranging from
0-200%. For purposes of this table, (i) the
threshold bonus amount is calculated based upon all
plan performance measures being achieved at the plan threshold
levels (25% of target bonus); (ii) the target
bonus amount is calculated based upon all performance measures
being achieved at the plan target levels (100% of target bonus);
(iii) the maximum bonus amount is calculated
based upon all performance measures being achieved at the plan
stretch levels (200% of target bonus); and (iv) the
individual performance modifier for each executive officer being
equal to 100% in all the scenarios.
|
|
(2) |
|
Awarded in connection with
Ms. Wolf joining the Company in December 2009.
|
Each award of performance-vesting RSUs under the 2010 LTIP vests
on October 1, 2013 based upon the achievement of target
levels of Operating EBITDA during the 2011 and 2012 fiscal
years, and Total Stockholder Return as compared to peer
companies during the period from October 1, 2010 through
September 28, 2013. Each award of time-vesting RSUs under
the 2010 LTIP program vests 30% on October 1, 2011, 30% on
October 1, 2012 and 40% on October 1, 2013. Each award
of stock options under the 2010 LTIP vests 25% on each of
October 1, 2011, October 1, 2012, October 1,
2013, and October 1, 2014. Further information about the
2010 LTIP is set forth in Compensation Discussion and
Analysis Long-Term Incentive Compensation.
Ms. Wolfs award of performance-vesting RSUs in
January 2010 vests on October 1, 2012 based upon the
achievement of target levels of Operating EBITDA during the 2010
and 2011 fiscal years and Total Stockholder Return as compared
to peer companies during the period from October 1, 2010
through September 28, 2012. Ms. Wolfs award of
time-vesting RSUs in January 2010 vests 20% on October 1,
2010, 30% on October 1, 2011, 30% on October 1, 2012,
and 20% on October 1, 2013. Ms. Wolfs award of
stock options in January 2010 vests 20% on October 1, 2010,
30% on October 1, 2011, 30% on October 1, 2012, and
20% on October 1, 2013. Mr. Sterins and
Mr. Maddens awards of time-vesting RSUs in February
2010 vest on June 20, 2014 and December 31, 2013,
respectively.
51
Outstanding
Equity Awards at Fiscal 2010 Year-End Table
The following table summarizes outstanding equity awards held by
each of the named executive officers as of December 31,
2010, including the vesting dates for the portions of these
awards that have not yet vested:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
Market
|
|
|
|
|
Number
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
Market
|
|
Number
|
|
or Payout
|
|
|
|
|
of
|
|
Number of
|
|
Plan Awards:
|
|
|
|
|
|
Number of
|
|
Value of
|
|
of Unearned
|
|
Value of
|
|
|
|
|
Securities
|
|
Securities
|
|
Number
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Shares,
|
|
Unearned
|
|
|
|
|
Underlying
|
|
Underlying
|
|
of Securities
|
|
|
|
|
|
Units of
|
|
Units of
|
|
Units or
|
|
Shares,
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Underlying
|
|
Option
|
|
|
|
Stock That
|
|
Stock That
|
|
Other Rights
|
|
Units or Other
|
|
|
|
|
Options
|
|
Options
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
Have Not
|
|
Have Not
|
|
That Have
|
|
Rights That Have
|
|
|
|
|
(#)
|
|
(#)
|
|
Unearned Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Not Vested
|
|
Not Vested
|
Name
|
|
|
|
Exercisable
|
|
Unexercisable
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
David N. Weidman
|
|
|
1/21/2005
|
|
|
|
3,149,074
|
|
|
|
0
|
|
|
|
|
|
|
|
16.00
|
|
|
|
1/21/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
0
|
|
|
|
68,495
|
(2)
|
|
|
|
|
|
|
32.35
|
|
|
|
10/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,200
|
|
|
|
1,037,484
|
|
|
|
|
|
|
|
|
|
|
|
|
12/11/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
(1)
|
|
|
8,234,000
|
|
|
|
|
12/2/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,000
|
(6)(7)
|
|
|
4,446,360
|
|
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,600
|
(6)(8)
|
|
|
3,977,022
|
|
Steven M. Sterin
|
|
|
7/25/2007
|
|
|
|
25,000
|
|
|
|
25,000
|
(3)
|
|
|
|
|
|
|
40.13
|
|
|
|
7/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/2006
|
|
|
|
30,000
|
|
|
|
15,000
|
(4)
|
|
|
|
|
|
|
20.37
|
|
|
|
6/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/2006
|
|
|
|
20,000
|
|
|
|
10,000
|
(4)
|
|
|
|
|
|
|
21.02
|
|
|
|
5/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
0
|
|
|
|
13,320
|
(2)
|
|
|
|
|
|
|
32.35
|
|
|
|
10/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,700
|
(11)
|
|
|
317,009
|
|
|
|
|
|
|
|
|
|
|
|
|
2/10/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,436
|
(12)
|
|
|
553,160
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,260
|
(13)
|
|
|
257,724
|
|
|
|
|
|
|
|
|
|
|
|
|
4/2/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,125
|
(9)
|
|
|
128,656
|
|
|
|
|
12/11/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,400
|
(10)(6)
|
|
|
551,678
|
|
|
|
|
12/2/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,000
|
(6)(7)
|
|
|
452,870
|
|
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,520
|
(7)(8)
|
|
|
515,448
|
|
Douglas M. Madden
|
|
|
1/21/2005
|
|
|
|
156,775
|
|
|
|
0
|
|
|
|
|
|
|
|
16.00
|
|
|
|
1/21/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
0
|
|
|
|
22,835
|
(2)
|
|
|
|
|
|
|
32.35
|
|
|
|
10/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,800
|
(11)
|
|
|
691,656
|
|
|
|
|
|
|
|
|
|
|
|
|
2/10/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,795
|
(14)
|
|
|
691,450
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,735
|
(13)
|
|
|
441,960
|
|
|
|
|
|
|
|
|
|
|
|
|
4/2/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,631
|
(9)
|
|
|
149,488
|
|
|
|
|
12/11/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,700
|
(6)(10)
|
|
|
893,389
|
|
|
|
|
12/2/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
(6)(7)
|
|
|
988,080
|
|
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,465
|
(6)(8)
|
|
|
883,714
|
|
James S. Alder
|
|
|
1/21/2005
|
|
|
|
174,055
|
|
|
|
0
|
|
|
|
|
|
|
|
16.00
|
|
|
|
1/21/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
0
|
|
|
|
19,030
|
(2)
|
|
|
|
|
|
|
32.35
|
|
|
|
10/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
(11)
|
|
|
461,104
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,945
|
(13)
|
|
|
368,266
|
|
|
|
|
|
|
|
|
|
|
|
|
12/11/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,700
|
(10)
|
|
|
687,539
|
|
|
|
|
12/2/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,000
|
(6)(7)
|
|
|
658,720
|
|
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,890
|
(6)(8)
|
|
|
736,531
|
|
Jacquelyn H. Wolf
|
|
|
1/21/2010
|
|
|
|
6,000
|
|
|
|
24,000
|
(5)
|
|
|
|
|
|
|
32.54
|
|
|
|
1/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
0
|
|
|
|
8,565
|
(2)
|
|
|
|
|
|
|
32.35
|
|
|
|
10/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
(16)
|
|
|
576,380
|
|
|
|
|
|
|
|
|
|
|
|
|
10/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,025
|
(13)
|
|
|
165,709
|
|
|
|
|
|
|
|
|
|
|
|
|
1/21/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
(15)
|
|
|
308,775
|
|
|
|
|
12/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,050
|
(8)
|
|
|
331,419
|
|
|
|
|
(1) |
|
Represents 200,000 Performance
Units granted to Mr. Weidman on December 11, 2008.
Each Performance Unit is worth one share of our Common Stock,
subject to adjustment (0-225% of targeted amount shown) based on
Company performance against pre-established metrics, but is
settled in cash upon vesting.
|
|
(2) |
|
25% of these options vest, subject
to a hold requirement upon exercise, on each of October 1,
2011, October 1, 2012, October 1, 2013 and
October 1, 2014.
|
|
(3) |
|
12,500 of these options vest on
each of January 1, 2011 and January 1, 2012.
|
|
(4) |
|
The remainder of these options vest
on January 1, 2011.
|
|
(5) |
|
9,000 of these options vest on each
of October 1, 2011 and October 1, 2012. 6,000 of these
options vest on October 1, 2013.
|
For all stock options listed above, the named executive officers
may exercise all or any part of the vested portion of their
options prior to the expiration date of the grant. However, if
the executives employment is terminated by us without
cause, by the executive with good reason, or due to death or
disability or retirement, the executive may exercise the vested
portion of the options for a period ending on the earlier of one
year following the date of such termination and the expiration
date. If the executive terminates without good reason, the
executive may exercise the vested portion of the option for a
period ending on the earlier of 90 days following the date
of such termination and the expiration date. If the termination
is by us for cause, then all options to the extent not vested
and exercisable immediately terminate and cease to be
exercisable.
52
|
|
|
(6) |
|
Each of the performance-vesting
RSUs vest based upon the Companys achievement of the
following performance metrics. Further information about the
performance-vesting RSUs is set forth in Compensation
Discussion and Analysis Long-Term Incentive
Compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relative TSR
|
|
|
|
|
Below Threshold
|
|
Target
|
|
Stretch
|
|
Operating EBITDA
|
|
Below Threshold
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
Target
|
|
|
50
|
%
|
|
|
100
|
%
|
|
|
150
|
%
|
|
|
Stretch
|
|
|
75
|
%
|
|
|
150
|
%
|
|
|
225
|
%
|
|
|
|
(7) |
|
These shares will vest on
October 1, 2012, subject to adjustment (0-225% of targeted
amount shown) based on Company performance against
pre-established metrics.
|
|
(8) |
|
These shares will vest, subject to
a hold feature, on October 1, 2013, subject to adjustment
(0-225% of targeted amount shown) based on Company performance
against pre-established metrics.
|
|
(9) |
|
Amounts reflect performance shares
that remain outstanding and eligible to vest on
September 30, 2011. The award was designed to vest based
upon the achievement of Total Stockholder Return as compared to
peer companies during four performance periods. Each performance
period begins on April 1, 2007 and ends on
September 30th in each of the years 2008 through 2011.
Awards that do not vest in the first four performance periods
are eligible to vest, based on relative Total Stockholder Return
performance at the 75th percentile and subject to limitations as
to the maximum number of RSUs that may vest, on
September 30, 2012. The following schedule applies to
vesting at the end of each performance period:
|
|
|
|
Company TSR Compared to Peer TSR
|
|
% of RSUs Vesting
|
|
Below 25th Percentile
|
|
0.00%
|
At 25th Percentile
|
|
50.00%
|
Between 25th and 50th Percentile
|
|
Interpolate
|
At 50th Percentile
|
|
100.00%
|
Between 50th and 75th Percentile
|
|
Interpolate
|
At or Above 75th Percentile
|
|
150.00%
|
|
|
|
(10) |
|
These shares will vest on
October 14, 2011, subject to adjustment (0-225% of targeted
amount shown) based on Company performance against
pre-established metrics.
|
|
(11) |
|
Reflects the remaining shares that
will vest 30% of the original award on October 1, 2011 and
40% of the original award on October 1, 2012.
|
|
(12) |
|
100% of these RSUs vest on
June 30, 2014.
|
|
(13) |
|
Each award vests, subject to a hold
feature, 30% on October 1, 2011, 30% on October 1,
2012 and 40% on October 1, 2013.
|
|
(14) |
|
100% of these RSUs vest on
December 31, 2013.
|
|
(15) |
|
These shares will vest on
October 1, 2012, subject to adjustment (0-225% of targeted
amount shown) based on Company performance against
pre-established metrics.
|
|
(16) |
|
5,250 of these RSUs vest on each of
October 1, 2011 and October 1, 2012. 3,500 of these
RSUs vest on October 1, 2013.
|
2010
Option Exercises and Stock Vested Table
The following table summarizes the exercise of stock options and
the vesting of stock awards by each of the named executive
officers during the fiscal year ended December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
Acquired on
|
|
Value Realized
|
|
Number of Shares
|
|
Value Realized
|
|
|
Exercise
|
|
on Exercise
|
|
Acquired on Vesting
|
|
on Vesting
|
Name
|
|
(#)
|
|
($)
|
|
(#)(1)
|
|
($)
|
|
David N. Weidman
|
|
|
|
|
|
|
|
|
|
|
118,051
|
(2)
|
|
$
|
4,890,387
|
|
Steven M. Sterin
|
|
|
|
|
|
|
|
|
|
|
3,300
|
|
|
$
|
106,755
|
|
Douglas M. Madden
|
|
|
|
|
|
|
|
|
|
|
17,484
|
(2)
|
|
$
|
668,345
|
|
James S. Alder
|
|
|
|
|
|
|
|
|
|
|
17,868
|
(2)
|
|
$
|
708,579
|
|
Jacquelyn H. Wolf
|
|
|
|
|
|
|
|
|
|
|
3,500
|
|
|
$
|
113,225
|
|
|
|
|
(1) |
|
Gross shares (not net of shares
used for tax withholding).
|
|
(2) |
|
Reflects the vesting of
performance-vesting awards granted in 2007 and described below
in the Compensation Discussion and Analysis
2004 Deferred Compensation Plan and 2007 Revised Deferred
Compensation Plan. Includes 107,251 shares issued to
Mr. Weidman upon settlement of the award (of which
36,805 shares were used to pay taxes). Includes
10,284 shares issued to Mr. Madden upon settlement of
the award (of which 2,802 shares were used to pay taxes).
Includes 13,068 shares issued to Mr. Alder upon
settlement of the award (of which 3,546 shares were used to
pay taxes).
|
53
2004
Deferred Compensation Plan and 2007 Revised Deferred
Compensation Plan
In December 2004 we adopted a deferred compensation plan for
certain executive officers, including the named executive
officers who were employed by the Company at such time. The plan
was a non-equity based long-term incentive plan, providing
time-vesting and performance-vesting compensation for certain
executive officers and key employees. It was implemented during
the period of time between the Blackstone acquisition of
Celanese AG and our initial public offering. This plan was
designed to reward our senior management for our successful
pre-initial public offering organizational restructuring of the
Company, to retain and compensate senior management for the loss
of compensation programs previously provided by Celanese AG and
to incentivize management to increase profitability and
stockholder value in the future.
In March 2007, to ensure the retention of key employees
following the end of the 2004 Deferred Compensation Plan, our
compensation committee and board of directors approved a Revised
Deferred Compensation Plan. Under this revised program,
participants in the 2004 Deferred Compensation Plan were
provided with an election to exchange their
2007-2009
potential payouts for a deferred cash compensation award in an
amount equal to 90% of the maximum potential payout that would
vest and become payable at the end of 2011 based solely on
continued employment, rather than performance targets. The award
is subject to periodic adjustments to reflect gains and losses,
as applicable, on certain notional investment options available
to each participant.
Each electing participant also received an award of
performance-vesting RSUs, with an initial target value equal to
25 percent of the revised deferred cash compensation award.
These performance-vesting RSUs vest based upon the
Companys Total Stockholder Return performance for the
period April 1, 2007 through December 31, 2010. The
performance period ended on December 31, 2010 and paid out
at 86.64% of target according to the following schedule:
|
|
|
Company TSR Compared to Peer TSR
|
|
% of RSUs Vesting
|
|
Below 25th Percentile
|
|
0.00%
|
At 25th Percentile
|
|
66.67%
|
Between 25th and 50th Percentile
|
|
Interpolate
|
At 50th Percentile
|
|
83.33%
|
Between 50th and 75th Percentile
|
|
Interpolate
|
At or Above 75th Percentile
|
|
100.00%
|
Of our named executive officers, Messrs. Weidman, Madden
and Alder were granted awards under the 2004 Deferred
Compensation Plan. Mr. Sterin and Ms. Wolf joined the
Company after our initial public offering and as a result did
not receive an award under this plan. In March 2007, Messrs.
Weidman, Madden and Alder elected to participate in the 2007
Revised Deferred Compensation Plan and forfeit their awards
under the 2004 Deferred Compensation Plan.
54
2010
Pension Benefits Table
The following table summarizes the present value of the
accumulated retirement benefits by each of the named executive
officers as of the end of fiscal year ended December 31,
2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Present
|
|
Payments
|
|
|
|
|
Years
|
|
Value of
|
|
During
|
|
|
|
|
Credited
|
|
Accumulated
|
|
Last Fiscal
|
|
|
|
|
Service
|
|
Benefit
|
|
Year
|
Name
|
|
Plan Name
|
|
(#)
|
|
($)
|
|
($)
|
|
David N. Weidman
|
|
Celanese Americas Retirement Pension Plan
|
|
|
10.333
|
|
|
|
410,975
|
|
|
|
|
|
|
|
Celanese Americas Management Supplemental Pension Plan
|
|
|
10.000
|
|
|
|
3,406,935
|
|
|
|
|
|
Steven M. Sterin
|
|
Celanese Americas Retirement Pension Plan
|
|
|
7.6667
|
|
|
|
67,494
|
|
|
|
|
|
Douglas M. Madden
|
|
Celanese Americas Retirement Pension Plan
|
|
|
26.8333
|
|
|
|
855,224
|
|
|
|
|
|
|
|
Celanese Americas Supplemental Retirement Pension Plan
|
|
|
26.8333
|
|
|
|
2,983,298
|
|
|
|
|
|
James S. Alder
|
|
Celanese Americas Retirement Pension Plan
|
|
|
36.9167
|
|
|
|
1,447,264
|
|
|
|
|
|
|
|
Celanese Americas Supplemental Retirement Pension Plan
|
|
|
36.9167
|
|
|
|
7,624,938
|
|
|
|
|
|
Jacquelyn H. Wolf
|
|
Celanese Americas Retirement Pension Plan
|
|
|
1.0000
|
|
|
|
9,831
|
|
|
|
|
|
The present value amounts shown in the table above are the
amount needed today that, with interest, would provide the named
executive officers future retirement benefit. Assumptions
used to determine the present value of benefits under the CAMSPP
(defined below) and for benefits earned for employees hired
prior to January 1, 2001 in the CARPP (defined below) are
based on a 5.3% discount rate and mortality from the RP-2000
Mortality Table. Benefits earned for employees hired on or after
January 1, 2001 in the CARPP are based on an assumed future
interest crediting rate of 3.8% to age 65 and an interest
only discount rate of 5.3%. Retirement in the CAMSPP is assumed
to occur at age 60 and at age 65 in the CARPP.
Each of our retirement benefit plans identified in the table
above is more fully described below.
Celanese Americas Retirement Pension
Plan. The Celanese Americas Retirement
Pension Plan, or CARPP, is a tax-qualified defined benefit
pension plan sponsored by Celanese Americas LLC, one of our
wholly owned subsidiaries. This plan covers substantially all of
our U.S. employees. The plan is subject to the provisions
of ERISA. All of our named executive officers participated in
this plan in 2010.
Non-union employees hired before January 1, 2001, with five
or more years of service, as defined in the plan, are entitled
to annual pension benefits beginning at normal retirement age
(65) equal to the greater of (a) 1.33% of the
employees final average earnings (salary and bonus)
multiplied by the employees years of credited service, or
(b) 1.67% of the employees final average earnings
(salary and bonus) multiplied by the employees years of
credited service minus 50% of the employees Social
Security benefit multiplied by a fraction, the numerator of
which is the employees years of credited service (to a
maximum of 35 years) and the denominator of which is 35.
The plan permits early retirement at
ages 55-64.
Employees may elect to receive their pension benefits in the
form of a joint and survivor annuity, a life annuity, or a
certain and life annuity. Employees vest in their benefit after
completing five years of service with the Company, as defined in
the plan. Employees who terminate before becoming vested forfeit
their benefits. If a married employee dies after being fully
vested in the plan, a death benefit will be payable to the
surviving spouse. This plan formula applies to
Messrs. Weidman, Madden and Alder.
Effective January 1, 2001, the plan began providing
benefits for new employees, as defined by the plan, hired after
December 31, 2000, based upon a different benefit formula
(Cash Balance Plan). The Cash Balance Plan provides
that for each plan year that employees work as defined, we
credit 5% of the employees annual pensionable earnings (up
to Internal Revenue Code limits) to a hypothetical plan account
that has been established for each employee, and credit that
account with interest. For a given year, the plans
interest rate is the annual rate of interest on
30-year
United States Treasury Securities for the August before the
first day of that year. Effective January 1, 2008,
employees vest in their accrued benefit after completing three
years of service with us, as defined in the plan. If employees
are vested when they leave the Company, they have the option to
take their account balance with them, either in a lump-sum
payment or as an annuity. Employees also have the choice to
leave their account balance in the
55
plan until the normal retirement age of 65. The amount of
benefit depends on the employees pay, plan years worked
and any interest earned on the Company contributions. Once
vested, survivor benefits are applicable to married
participants. Mr. Sterin and Ms. Wolf are covered
under the Cash Balance Plan benefit formula.
Under the CARPP, if an employees employment with us is
terminated as a result of a corporate reorganization, layoff or
corporate restructuring including divestiture, that employee
will receive an additional year of vesting service under the
CARPP.
Celanese Americas Supplemental Retirement Pension
Plan. The Celanese Americas Supplemental
Retirement Pension Plan, or CASRPP, is an unfunded,
non-qualified excess benefit plan sponsored by
Celanese Americas LLC, one of our wholly owned subsidiaries. The
purpose of the plan, which is also subject to the provisions of
ERISA, is to supplement the benefits payable to certain
employees who are also participants in the Companys
qualified defined benefit plan (the CARPP). Similar to the
CARPP, the CASRPP applies to non-union employees hired before
January 1, 2001, with five or more years of service, as
defined in the plan. The annual pension benefit formula and
other plan rules are also the same as in the CARPP, as described
above, except that the benefit amount under the CASRPP is not
limited with respect to annual pensionable earnings.
Mr. Madden and Mr. Alder are the only named executive
officers that participated in this plan in 2010.
Celanese Americas Management Supplemental Pension
Plan. The Celanese Americas Management
Supplemental Pension Plan, or CAMSPP, is an unfunded,
nonqualified defined benefit plan. Mr. Weidman is the only
named executive officer that participated in this plan in 2010.
The promised pension benefit becomes fully vested once the
participant attains five years of Company service and is paid at
age 60 or when the participant leaves the Company,
whichever is later. The amount of the pension is calculated as
the product of 1.8% times 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 spent in Celanese Corporation and its subsidiaries. The
pension benefit is adjusted annually, based on the
U.S. cost-of-living
index.
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 are earned
during qualifying years of service. The following are generally
offset against this pension: (i) payments under all other
qualified and non-qualified plans paid by us and our affiliates
(excluding payments attributable to employee contributions) and
(ii) social security pension benefits acquired during
qualifying years of service at a rate of 50%.
In the event of an early disability, the pension benefit is paid
for the duration of the disability. In determining the amount of
the disability pension, qualifying years of service until
age 60 are added to the qualifying years of service earned
to date. The pension is not reduced on account of the early
commencement of benefits. From the age of 60 onwards, the
payment is continued at the same level as an old-age pension in
case the disability persists. All other Celanese-financed
benefits, if any, are offset against the disability pension.
In the event of death, the pension is to be paid to the spouse
and unmarried dependents. The spouses benefit is 60% of
the pension otherwise payable to the participant and continues
until remarriage. An additional benefit of up to 20% of the
pension otherwise payable is also payable with respect to
children of the participant, which additional pension terminates
when the children attain age 21 (or up until age 27 if
they are still in school). These pension benefits are not
reduced on account of early commencement of the pension. All
other Celanese-financed benefits, if any, are offset against the
survivors pension.
56
2010
Nonqualified Deferred Compensation Table
The following table contains certain information concerning
benefits under nonqualified deferred compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings
|
|
|
Withdrawals/
|
|
|
Balance
|
|
|
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
Distributions
|
|
|
at Last FYE
|
|
Name
|
|
Plan Name
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
David N. Weidman
|
|
Celanese Americas Supplemental Retirement Savings Plan
|
|
|
|
|
|
|
34,480
|
|
|
|
2,783
|
|
|
|
|
|
|
|
287,831
|
|
|
|
2007 Revised Deferred Compensation Plan
|
|
|
|
|
|
|
|
|
|
|
953,719
|
|
|
|
18,497,466
|
(2)
|
|
|
|
|
Steven M. Sterin
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas M. Madden
|
|
Celanese Americas Supplemental Retirement Savings Plan
|
|
|
|
|
|
|
13,038
|
|
|
|
621
|
|
|
|
|
|
|
|
65,449
|
|
|
|
2007 Revised Deferred Compensation Plan
|
|
|
|
|
|
|
|
|
|
|
91,493
|
|
|
|
1,774,507
|
(3)
|
|
|
|
|
James S. Alder
|
|
Celanese Americas Supplemental Retirement Savings Plan
|
|
|
|
|
|
|
9,221
|
|
|
|
335
|
|
|
|
|
|
|
|
35,746
|
|
|
|
2007 Revised Deferred Compensation Plan
|
|
|
|
|
|
|
|
|
|
|
116,249
|
|
|
|
2,254,668
|
(4)
|
|
|
|
|
Jacquelyn H. Wolf
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This amount is reported in the 2010
Summary Compensation Table.
|
|
(2) |
|
$17,543,747 of this amount has been
reported in the 2010 or prior years Summary Compensation
Table.
|
|
(3) |
|
$1,592,446 of this amount has been
reported in the 2010 or prior years Summary Compensation
Table.
|
|
(4) |
|
$1,925,118 of this amount has been
reported in the 2010 or prior years Summary Compensation
Table.
|
The Celanese Americas Supplemental Retirement Savings Plan, or
the CASRSP, is an unfunded, nonqualified defined contribution
plan that is available only to persons employed by Celanese
prior to January 1, 2001. If a participant has received a
maximum Company contribution to the CARSP, he or she is entitled
to an allocation under this plan equal to 5% of his or her
salary in excess of the compensation limits under the CARSP. The
amount contributed to the plan on behalf of a participant is
credited with earnings based on the earnings rate of the Stable
Value Fund (a fund primarily invested in debt instruments),
which is a fund maintained for investments under the CARSP. The
annualized rate of return for 2010 was 1.0%. Distributions under
this plan are in the form of a lump sum payment which is paid as
soon as administratively practicable after termination of
employment. Messrs. Weidman, Madden and Alder are the only
named executive officers that participated in this plan in 2010.
The 2007 Revised Deferred Compensation Plan is an unfunded,
nonqualified deferred compensation plan under which certain of
our senior employees were provided an election to relinquish
their
2007-2009
payments under the 2004 Deferred Compensation Plan in exchange
for a future payment equal to 90% of the maximum potential
payout under the 2004 Deferred Compensation Plan plus or minus
certain amounts based upon the performance of certain notional
investment options selected by the participant. The annualized
rate of return for 2010 was 5.4%. Messrs. Weidman, Madden
and Alder were the only named executive officers that
participated in this plan in 2010. On December 31, 2010,
the cash balance of each participants 2007 Revised
Deferred Compensation Plan vested and was paid to such
participants as indicated in the table above.
The 2008 Deferred Compensation Plan is an unfunded, nonqualified
deferred compensation plan that allows certain of our senior
employees and directors the opportunity to defer a portion of
their compensation in exchange for a future payment amount equal
to their deferments plus or minus certain amounts based upon the
market performance of specified measurement funds selected by
the participant. No named executive officer participated in this
plan in 2010.
57
Potential
Payments Upon Termination or Change In Control
The particular events that trigger payments to our named
executive officers are generally defined in our severance policy
and the individual executives
change-in-control
agreements, deferred compensation agreements, stock option
agreements or RSU agreements. The compensation committee
believes that the primary benefits to the Company of employment
agreements are the non-competition and non-solicitation
provisions found therein. In order to achieve the benefit of
these provisions without incurring the generally negative
obligations associated with employment agreements, the
compensation committee decided to offer a more limited
change-in-control
agreement to each executive officer. However, the deferred
compensation agreements and stock option agreements are still
effective and provide for some potential payments upon
termination and change in control as described in the tables
below.
Severance
Policy
Our Executive Severance Benefits Plan (Severance
Plan) applies to employees that are at certain salary
levels, including all of our executive officers but excluding
the chief executive officer, and provides, upon the involuntary
termination without cause of an executive or upon the
resignation of an executive with good reason, for the payment of
(i) one years base salary; (ii) one years
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 a 1.0 individual modifier). The Severance Plan
also provides for the payment of premiums for post-termination
health insurance coverage (COBRA premiums) for a
period of one year from the date of termination. 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. In addition,
the Severance Plan provides that the vesting of long-term
incentive grants of stock options, restricted stock units, and
cash upon termination without cause will be governed by the
terms of the applicable award agreements. Executives who are
involuntarily terminated for any other reason (e.g., death,
disability, retirement, termination for cause), or who
voluntarily terminate or retire without good reason, are not
eligible to receive severance benefits under the Severance Plan.
Change
in Control Agreements
We have entered into change in control agreements with each of
our named executive officers. The change in control agreements
provide for a payment to be made to these officers following a
termination of employment by the Company without
cause or by the executive officer with good
reason within two years following a change in
control or following the first public announcement of a
potential change in control transaction, provided certain
conditions are satisfied. Generally, the change in control
agreements provide for each executive officer to receive:
|
|
|
|
|
a lump sum payment equal to two times the sum of:
|
(i) the executive officers then current annualized
base salary, and
(ii) the higher of (a) the executive officers
target bonus in effect on the last day of the fiscal year that
ended immediately prior to the year in which the date of
termination occurs, or (b) the average of the cash bonuses
paid by the Company to the executive officer for the three
fiscal years preceding the date of termination; and
|
|
|
|
|
group health and dental coverage for the executive officer and
his or her dependents for a period of two years following the
date of termination.
|
In addition, all of the named executive officers change in
control agreements, other than Ms. Wolfs, provide
that under certain circumstances such executive officer may
receive a tax reimbursement payment not to exceed
$4 million, in the case of Mr. Weidman, or
$2 million, in the case of Messrs. Sterin, Madden and
Alder. The Companys current form of change in control
agreement, which was executed by Ms. Wolf, does not contain
provisions for a tax reimbursement payment. Each change in
control agreement has a two-year term that is automatically
renewed for successive two-year terms unless 90 days
notice of non-renewal is given by either party to the agreement.
58
For purposes of the change in control agreements:
cause generally means (i) a willful failure to
perform ones duties (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
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) willful malfeasance or
willful misconduct which is demonstrably injurious to the
Company or its Affiliates; (iv) any act of fraud;
(v) any material violation of the Companys code of
conduct; (vi) any material violation of the Companys
policies concerning harassment or discrimination;
(vii) conduct that causes material harm to the business
reputation of the Company or its Affiliates; or
(viii) breach of the confidentiality, non-competition, or
non-solicitation provisions of the change in control agreement.
good reason generally means (i) a material
diminution in base salary or annual bonus opportunity;
(ii) a material diminution in authority, duties, or
responsibilities (including status, offices, titles and
reporting requirements); (iii) a material change in the
geographic location; (iv) the 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
the change in control agreement.
change in control generally means any one of the
following events: (a) any person becoming the beneficial
owner of thirty percent (30%) or more of Companys voting
securities (other than as a result of certain issuances or open
market purchases approved by incumbent directors); (b) the
Companys incumbent directors ceasing to constitute at
least a majority of the board of directors; (c) the
stockholders of the Company approving 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 Companys assets, unless
immediately following such transaction, (i) all or
substantially all of the beneficial owners of the Companys
voting securities prior to such transaction are the beneficial
owners of more than 50% of the combined voting power of the
securities of the surviving entity in the transaction,
(ii) no person is the beneficial owner of 30% or more of
the combined voting power of the surviving entity in the
transaction 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 Companys
stockholders of a complete liquidation and dissolution of the
Company. The preceding was a summary of the definition of a
change in control, so please refer to actual text of the
definition as set forth in the change in control agreements.
Please also note that, 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).
Equity
Awards
The award agreements under which the long-term cash, stock
option and RSU equity awards were issued describe the
circumstances under which the awards will vest, if earlier than
the stated date. Upon the death or disability of an executive, a
pro rata portion of the award will generally vest. Upon a
termination of an executive without cause a similar pro rata
portion of the award will vest. Unvested awards are forfeited
upon a termination with cause or voluntary resignation. In the
case of a change in control, all awards granted since 2008 are
double trigger if a change in control
occurs, the award is continued or replaced with an award of
comparable value, and the executive is subsequently terminated,
then the portion of the award that was unvested at the time of
termination will be accelerated. If in connection with the
change in control the executives rights in the award are
adversely affected (i.e., such as by the award not being
continued) and the award is not replaced with an award of
comparable value, then the unvested portion of the award would
be accelerated upon the change in control. Performance awards
would vest at target level if otherwise payable upon a change in
control.
Post-Termination
Table
The table below shows an estimate of the amount of additional
compensation that each of our named executive officers would
receive in the event of a termination or change in control,
taking into consideration the circumstances of
59
the termination and payments that the named executive officer
would be entitled to under the various agreements described
above. The amounts shown are generally categorized as follows:
voluntary termination or termination for cause; involuntary
termination without cause or by the executive for good reason;
termination due to death or disability; and change in control
(with and without termination). The amounts shown assume that
such termination was effective as of December 31, 2010. As
of such date, the closing price of our Common Stock was $41.17
per share.
The table below includes additional benefits triggered by a
termination and change of control only. Please see the following
tables for details of the named executives vested payments
and benefits that they would be entitled to receive regardless
of the occurrence of a termination or change of control:
|
|
|
|
|
For Stock Options See Outstanding Equity
Awards at Fiscal Year 2010 End Table
|
|
|
|
For Pension Benefits See 2010 Pension
Benefits Table
|
|
|
|
For Nonqualified Deferred Compensation See
2010 Nonqualified Deferred Compensation Table
|
The actual amounts that will be paid upon termination can only
be determined at the time of the executives termination
from the Company. The following table shows the potential
payments to our named executive officers, upon termination or
change in control.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination of Employment
|
|
|
Change in Control
|
|
|
|
|
|
|
|
|
|
Involuntarily
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntarily or
|
|
|
Good
|
|
|
without
|
|
|
|
|
|
|
|
|
Without
|
|
|
With
|
|
|
|
for Cause
|
|
|
Reason
|
|
|
Cause
|
|
|
Death
|
|
|
Disability
|
|
|
Termination
|
|
|
Termination
|
|
David N. Weidman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
Payment(1)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
4,366,432
|
|
Long-Term Cash Incentive
Awards(2)
|
|
|
|
|
|
|
|
|
|
|
105,882
|
|
|
|
105,882
|
|
|
|
105,882
|
|
|
|
400,000
|
|
|
|
400,000
|
|
Equity Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options(2)
|
|
|
|
|
|
|
|
|
|
|
78,674
|
|
|
|
78,674
|
|
|
|
78,674
|
|
|
|
604,126
|
|
|
|
604,126
|
|
Time-vesting
RSUs(2)
|
|
|
|
|
|
|
|
|
|
|
489,923
|
|
|
|
489,923
|
|
|
|
489,923
|
|
|
|
1,037,484
|
|
|
|
1,037,484
|
|
Performance-vesting
RSUs(3)
|
|
|
|
|
|
|
|
|
|
|
7,404,877
|
|
|
|
7,404,877
|
|
|
|
7,404,877
|
|
|
|
16,657,382
|
|
|
|
16,657,382
|
|
Benefits & Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise Tax
Gross-Up(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Celanese Americas Management Supplemental Pension Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
47,407
|
(5)
|
|
$
|
158,022
|
(6)
|
|
|
|
|
|
|
|
|
Welfare Benefits
Continuation(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,415
|
|
Outplacement
Services(8)
|
|
|
|
|
|
|
16,200
|
|
|
|
16,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
16,200
|
|
|
$
|
8,095,556
|
|
|
$
|
8,126,763
|
|
|
$
|
8,237,378
|
|
|
$
|
18,698,992
|
|
|
$
|
23,090,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven M. Sterin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
Payment(1)
|
|
$
|
|
|
|
$
|
1,319,494
|
|
|
$
|
1,319,494
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,622,772
|
|
Long-Term Cash Incentive
Awards(2)
|
|
|
|
|
|
|
|
|
|
|
190,588
|
|
|
|
190,588
|
|
|
|
190,588
|
|
|
|
720,000
|
|
|
|
720,000
|
|
Equity Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options(2)
|
|
|
|
|
|
|
526,500
|
|
|
|
541,820
|
|
|
|
541,820
|
|
|
|
541,820
|
|
|
|
656,982
|
|
|
|
656,982
|
|
Time-vesting
RSUs(2)
|
|
|
|
|
|
|
|
|
|
|
293,748
|
|
|
|
293,748
|
|
|
|
293,748
|
|
|
|
1,127,893
|
|
|
|
1,127,893
|
|
Performance-vesting
RSUs(3)
|
|
|
|
|
|
|
107,207
|
|
|
|
661,931
|
|
|
|
661,931
|
|
|
|
661,931
|
|
|
|
1,648,653
|
|
|
|
1,648,653
|
|
Benefits & Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise Tax
Gross-Up(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,329,149
|
|
Welfare Benefits
Continuation(7)
|
|
|
|
|
|
|
18,434
|
|
|
|
18,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,869
|
|
Outplacement
Services(8)
|
|
|
|
|
|
|
16,200
|
|
|
|
16,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
1,987,835
|
|
|
$
|
3,042,215
|
|
|
$
|
1,688,087
|
|
|
$
|
1,688,087
|
|
|
$
|
4,153,528
|
|
|
$
|
7,142,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination of Employment
|
|
|
Change in Control
|
|
|
|
|
|
|
|
|
|
Involuntarily
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntarily or
|
|
|
Good
|
|
|
without
|
|
|
|
|
|
|
|
|
Without
|
|
|
With
|
|
|
|
for Cause
|
|
|
Reason
|
|
|
Cause
|
|
|
Death
|
|
|
Disability
|
|
|
Termination
|
|
|
Termination
|
|
Douglas M. Madden
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
Payment(1)
|
|
$
|
|
|
|
$
|
1,871,948
|
|
|
$
|
1,871,948
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,271,853
|
|
Long-Term Cash Incentive
Awards(2)
|
|
|
|
|
|
|
|
|
|
|
103,235
|
|
|
|
103,235
|
|
|
|
103,235
|
|
|
|
390,000
|
|
|
|
390,000
|
|
Equity Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options(2)
|
|
|
|
|
|
|
|
|
|
|
26,231
|
|
|
|
26,231
|
|
|
|
26,231
|
|
|
|
201,405
|
|
|
|
201,405
|
|
Time-vesting
RSUs(2)
|
|
|
|
|
|
|
|
|
|
|
541,468
|
|
|
|
541,468
|
|
|
|
541,468
|
|
|
|
1,825,066
|
|
|
|
1,825,066
|
|
Performance-vesting
RSUs(3)
|
|
|
|
|
|
|
124,539
|
|
|
|
1,109,120
|
|
|
|
1,109,120
|
|
|
|
1,109,120
|
|
|
|
2,914,671
|
|
|
|
2,914,671
|
|
Benefits & Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise Tax
Gross-Up(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Welfare Benefits
Continuation(7)
|
|
|
|
|
|
|
7,942
|
|
|
|
7,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,884
|
|
Outplacement
Services(8)
|
|
|
|
|
|
|
16,200
|
|
|
|
16,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
2,020,629
|
|
|
$
|
3,676,144
|
|
|
$
|
1,780,054
|
|
|
$
|
1,780,054
|
|
|
$
|
5,331,142
|
|
|
$
|
7,618,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James S. Alder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
Payment(1)
|
|
$
|
|
|
|
$
|
1,244,304
|
|
|
$
|
1,244,304
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,842,840
|
|
Long-T |