SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 23, 2005
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CELANESE CORPORATION
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(Exact Name of Registrant as specified in its charter)
DELAWARE 001-32410 98-0420726
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1601 West LBJ Freeway, Dallas, Texas 75234-6034
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (972) 901-4500
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Not Applicable
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(Former name or former address, if changed since last report):
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
Celanese Corporation (the "Company") has entered into an employment agreement
with each of the current executive officers of the Company listed below (the
"Executives"), the terms of which are summarized below (collectively, the
"Employment Agreements").
Name of Executive Title Base Salary Date of Agreement
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David N. Weidman President and Chief $900,000 February 23, 2005
Executive Officer
Lyndon Cole Executive Vice President $700,000 February 24, 2005
Corliss Nelson Executive Vice President, $675,000 February 23, 2005
Chief Financial Officer
Andreas Pohlmann Executive Vice President, $650,000 February 23, 2005
Chief Administrative Officer
and Secretary
In addition, the Company has entered into a cash bonus award letter agreement
with each of Mr. Weidman on February 23, 2005, Mr. Pohlmann on February 23,
2005, and Mr. Cole on February 24, 2005 (collectively, the "Bonus Agreements"),
the material terms of which are also summarized below. Concurrent with the
execution of his Employment Agreement and Bonus Agreement, Mr. Weidman entered
into an agreement with Celanese AG, a majority of the shares of which are
indirectly owned by the Company, whereby he terminated his service agreement
with Celanese AG, effective as of December 31, 2004. Further, each of Mr. Cole
and Mr. Pohlmann, concurrently with the execution of his respective Employment
Agreement and Bonus Agreement, entered into an amended and restated Service
Agreement with Celanese AG (together, the "Service Agreements"), the terms of
which are described below.
Each of the Employment Agreements has an initial term commencing on the dates
listed above and continuing through December 31, 2007, unless such Employment
Agreement is terminated earlier pursuant to the terms of such Employment
Agreement. Pursuant to the terms of the respective Employment Agreements, each
of the Executives shall receive the annual base salary set forth above, subject
to future upward adjustment by the Company's board of directors, and shall
report to the board of directors of the Company. In addition, each of Mr.
Pohlmann, Mr. Nelson and Mr. Cole shall report to the Chief Executive Officer.
Each of the Employment Agreements also contemplates that each of Mr. Weidman,
Mr. Pohlmann and Mr. Cole will serve as a member on the board of directors upon
request, without additional compensation. Unless otherwise agreed by the Company
and the respective Executive, continuation of such Executive's employment beyond
the initial term shall be deemed employment-at-will and shall not automatically
extend the terms of his Employment Agreement, except for certain protective
provisions for the benefit of the Company and, in the case of Mr. Pohlmann, the
continued effectiveness of the Celanese AG deferred compensation plan and the
defined benefit pension as described in his respective Service Agreement.
Each of the Executives is entitled to receive an annual bonus award based on
actual achievement of performance targets established by the board of directors.
At target performance levels, each Executive will be entitled to receive an
annual cash bonus ranging from 0-200% of an amount equal to 80% of such
Executive's annual base salary. Each of the Executives is entitled to
reimbursement of reasonable business expenses in accordance with Company policy,
and further, each of Mr. Weidman, Pohlmann and Cole will be entitled to payment
of his car lease through the current term of that lease and payment for the
preparation of his individual 2004 tax return by the Company's outside
accountants. Each of the Executives will be entitled to participate in
compensation and employee benefits plans customarily made available to senior
executives of the Company from time to time. In addition, Mr. Weidman will be
entitled to participate in defined pension benefits provided by the Company,
which are on the same terms as the defined pension benefits provided by Celanese
AG to the members of its board of management. Each of Mr. Pohlmann and Mr. Cole
will also be entitled to participate in the deferred compensation plan and
defined benefit pension of Celanese AG.
During the term of his employment and for one year afterward, each Executive has
agreed, subject to certain customary exceptions, that he will not compete with
the business of the Company, solicit employees or interfere with client,
employee, consultant or other business relationships. Each Executive has also
agreed to keep the Company's non-public information confidential and return
materials containing such information to the Company upon his termination. Each
Executive has further agreed to assign to the Company any inventions and
intellectual property he develops, during his employment, within the scope of
his employment and/or with the use of Company resources and to grant a license
to the Company for all intellectual property rights in works he created prior to
his employment with the Company that are relevant or implicated by such
employment.
Each of the Executives may be entitled to receive severance benefits after
termination of his employment depending on the circumstances under which his
employment terminates. If the Executive's employment is terminated by the
Company for cause or due to his death or disability, or by the Executive without
good reason, the Executive will be entitled to accrued and unpaid salary,
accrued and unpaid bonus and other accrued rights under compensation and
employee benefit plans in which he participates (the "Accrued Rights"), but will
not be entitled to severance benefits. If the Executive's employment is
terminated by the Company without cause or by the Executive for good reason, he
will be entitled to, in addition to the Accrued Rights, severance benefits equal
to (i) a pro rata portion of any annual bonus that he would have been entitled
to receive based on the percentage of the then current year already elapsed
through the date of termination, payable when such bonus would have been payable
had he not been terminated and (ii) subject to the Executive's compliance with
non-competition, non-solicitation and confidentiality restrictions and subject
to reduction by other severance or termination benefits that may be available
under other plans of the Company or its affiliates, continued salary payments
for twelve months after the termination date and payment of his annual bonus at
target performance levels for the year of termination payable over the twelve
month period after the termination date. In addition, if Mr. Cole resigns
because of a sale or change of control of the Company's Technical Polymers
Ticona business, and Mr. Cole has not accepted or will not continue employment
with the Company or any of its affiliates or with the purchaser of Ticona or any
of its affiliates, Mr. Cole will be entitled to, in addition to the Accrued
Rights, severance benefits equal to (i) a pro rata portion of any annual bonus
that he would have been entitled to receive based on the percentage of the then
current year already elapsed through the date of
termination payable when such bonus would have been payable had he not been
terminated and (ii) subject to reduction by other severance or termination
benefits that may be available under other plans of the Company or its
affiliates, a lump sum payment equal to three times the sum of (A) his average
base salary over the three calendar years prior to the termination date (or over
all prior whole calendar years if his service was for less than three years),
and (B) his average annual bonus earned during the three calendar years prior to
termination (or over all prior whole calendar years if his service was for less
than three years), in each case including his previous service with Celanese AG.
Under the respective Services Agreements, each of which retroactively becomes
effective as of November 1, 2004, Mr. Pohlmann and Mr. Cole were appointed
Chairman of the Board of Management and Vice Chairman of the Board of
Management, respectively, of Celanese AG and each of them will perform other
such duties without remuneration other than the compensation received under each
Service Agreement. In addition to the terms of the Services Agreements described
above, each of Mr. Pohlmann and Mr. Cole has also agreed, subject to certain
customary exceptions, that he will not compete with the business of Celanese AG,
keep Celanese AG's non-public information confidential and return materials
containing such information to Celanese AG upon his termination. Each has
further agreed to assign to Celanese AG any inventions he develops during his
engagement. In the event of termination of either Service Agreement, neither of
Mr. Pohlmann nor Mr. Cole will receive any severance or other payments or
benefits, other than benefits accrued under Celanese AG's defined pension
arrangement. Celanese AG pays the cost to maintain (i) directors & officers
insurance, except for a deductible to be paid by the Executive, and (ii)
accident insurance, in each case covering Mr. Pohlmann and Mr. Cole.
Pursuant to the terms of the respective Bonus Agreement, Mr. Weidman will be
eligible to receive a cash bonus award equal to $5,135,000, Mr. Cole will be
eligible to receive a cash bonus award equal to $3,960,000, and Mr. Pohlmann
will be eligible to receive a cash bonus award equal to $3,710,000. Each of Mr.
Weidman, Mr. Cole and Mr. Pohlmann received fifty percent of his respective
bonus award in January 2005. Each of them will receive twenty-five percent of
his respective bonus award if the Company achieves certain cost-reduction
targets for 2005, with the remaining twenty-five percent of the respective bonus
award payable if the Company achieves certain cost-reduction targets for 2006.
If Mr. Weidman's, Mr. Cole's or Mr. Pohlmann's employment is terminated by the
Company for cause, or by such Executive without good reason, such Executive will
forfeit any unpaid portion of the potential bonus award under his respective
Bonus Agreement. If Mr. Weidman's, Mr. Cole's or Mr. Pohlmann's employment is
terminated by the Company without cause or due to his death or disability or by
such Executive for good reason, such Executive will be entitled to receive the
remaining scheduled payments under the Bonus Agreement without regard to whether
the cost reduction targets are achieved.
The foregoing description is qualified in its entirety by reference to the
Employment Agreements, Services Agreements and the Bonus Agreements, all of
which will be attached as exhibits to the Company's Annual Report on Form 10-K
which the Company intends to file in March 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CELANESE CORPORATION
By: /s/ Corliss J. Nelson
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Name: Corliss J. Nelson
Title: Executive Vice President and
Chief Financial Officer
Date: March 1, 2005