Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Compensatory Arrangements
On February 16, 2017, the Supervisory Board (the Board) of LyondellBasell Industries N.V. (the Company), acting upon the
recommendation of the Compensation Committee, approved changes to the compensation programs for the executive officers named in the Companys proxy statement (the NEOs) and certain other executive officers.
Changes to Short-Term Incentive Awards for 2017
The
Companys Short-Term Incentive (STI) awards provide executive officers the opportunity to earn an annual cash bonus based on Company and individual performance. The changes to the STI awards for 2017 simplify the determination of
how much of the target award the executive officers may earn.
As described in the Compensation Discussion and Analysis section of the Companys 2016
proxy statement, executives STI awards were previously determined based on Company performance and the performance of award units that represent the business unit(s) or function(s) for which the executive officers are responsible. Executive
officers could earn from 0 to 200% of their target awards based on the Companys and award unit(s) performance. The awards also had an individual performance component in the form of a personal modifier. The modifier ranges from 0 to 1.5
and is multiplied against the earned percentage, resulting in a total payout ranging from 0 to 300% of target.
Beginning with the 2017 STI awards, the
earned percentage of the target award for the NEOs and other executive officers will be determined solely on Company performance and the individual modifier. Award unit performance will no longer be used in the determination of the executive
officers awards.
Under the new awards, Company performance will be based on the same measures as in prior years. However, the weighting of those
measures will now be as follows: Business results (weighted 60%); Costs (weighted 20%); and HSE performance (weighted 20%). As in prior years, payouts for each of these measures can range from 0 to 200% and will be based on the Compensation
Committees determination of the Company performance under each measure. The individual performance component is unchanged.
Changes to Long-Term
Incentive Awards
The components of the Companys Long-Term Incentive (LTI) awards for 2017 are unchanged from prior years and
continue to consist of restricted stock units (RSUs) representing 25% of the total grant value; performance share units (PSUs) representing 50% of the total grant value; and
non-qualified
stock-options representing 25% of the total grant value.
Beginning in 2017, the performance measure for the PSUs, which are earned over a three-year performance period,
will be total shareholder return (TSR) relative to the S&P 500 Chemicals Index. The PSU payouts will increase or decrease from the target award based on the Companys relative TSR performance in the index group over the
three-year period. Depending on the Companys relative performance, the payout can range from 0 to 200% of the target.
Amendment of Long-Term
Incentive Plan (LTIP) and Form of LTI Award Agreements
Effective as of February 16, 2017, the 2010 Long-Term Incentive Plan was
amended and restated and renamed the 2017 Long-Term Incentive Plan. The LTIP allows for grants of share and cash-based awards to employees and directors of the Company. Share-based awards that may be granted under the LTIP include stock
options, stock appreciation rights, restricted stock, restricted stock units, performance share units and shares of stock. The LTIP provides that all grants under the LTIP will be on the terms and conditions as determined by the Compensation
Committee and included in award agreements approved by the Compensation Committee.
The amendments to the LTIP include the deletion of outdated and
obsolete provisions relating to grants made in connection with the Companys emergence from bankruptcy proceedings in April 2010 and clarification that tax withholdings by the Company upon exercise or vesting of awards are no longer restricted
to minimum statutory withholding amounts. No changes to the persons eligible to receive awards, the types of awards, the number of awards, the method for determining the exercise prices for options, the expiration date of the LTIP or any
other changes that could be deemed to be material revisions were made. As such, shareholder approval was not required.
Certain ministerial changes to the
form of award agreements for the LTI awards also were approved. The changes include amending the award agreements to provide that the Company will automatically withhold shares in settlement of withholding tax requirements upon vesting unless it not
able to do so, in which case no shares will be delivered unless such tax obligations have been paid by the participant.
Supervisory Director Terms
Information about Supervisory Directors terms is included below under Item 8.01 and incorporated by reference into this Item 5.02.