Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Chief Executive Officer & Director
Appointment
On December 13, 2021,
LyondellBasell Industries N.V. (the “Company”) announced that the Board of Directors of the Company (the “Board”)
has appointed Peter E.V. Vanacker as Chief Executive Officer, effective no later than June 2022, on such date as may be agreed with the
Board following Mr. Vanacker’s completion of his obligations under his existing employment agreement. The Board has also appointed
Mr. Vanacker to serve on the Board of Directors to fill the vacancy created by Mr. Bob Patel’s retirement, effective at the time
he assumes the role of Chief Executive Officer. A copy of the press release announcing the appointment is attached as Exhibit 99.1 to
this Current Report on Form 8-K.
Mr. Vanacker, age
55, currently serves as the President, CEO and Chair of the Executive Committee of Neste Corporation, which he joined in 2018. Prior to
his role at Neste, he served as CEO and Managing Director, CABB Group GmbH (2015–2018) and as CEO and Managing Director of Treofan
Group (2012–2015). He also served as Executive Vice President and Member of the Executive Board of Bayer Material Science (now,
Covestro AG) (2004–2012) with responsibility for the global polyurethanes business and as Chief Marketing and Innovation Officer.
He is currently the Chair of the Advisory Board for the European Institute for Industrial Leadership and a member of the Supervisory Board
of Symrise AG. He holds a Master of Science in Chemical Engineering and Polymers Engineering from the University IHR-CTL Gent, Belgium.
There are no arrangements
or understandings between Mr. Vanacker and any other persons pursuant to which he was selected as Chief Executive Officer. There are also
no family relationships between Mr. Vanacker and any director or executive officer of the Company and he has no direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
In connection with Mr. Vanacker’s
appointment as Chief Executive Officer, the Company and Mr. Vanacker have entered into an offer letter (the “Offer Letter”)
setting forth the material terms of Mr. Vanacker’s employment with the Company, which are summarized below.
|
|
·
|
Base Salary and Incentive Compensation. Mr. Vanacker
will receive a base salary of $1,400,000 and will be eligible to participate in all of the Company’s compensation and benefit plans
and programs for senior executives, including the Company’s incentive plans. The incentive plans include the Company’s Short
Term Incentive Plan (“STI”) and Long Term Incentive Plan (“LTI”). Mr. Vanacker will have a target bonus
of 150% of his base salary under the STI and a target award of $10,000,000 under the LTI, allocated among performance share units (50%),
restricted share units (25%) and stock options (25%).
|
|
|
·
|
One-Time
New Hire Awards. In consideration of certain amounts forfeited at his current employer,
Mr. Vanacker will receive new-hire, one-time awards as follows: (i) a cash award in
the amount of $1,900,000, which is subject to certain repayment provisions, and (ii) a restricted
share unit award with a value of $2,300,000, which will vest in equal installments on the
first two anniversaries of the date of grant.
|
|
|
·
|
Indemnification. In connection with his appointment,
the Company will also enter into an Indemnification Agreement with Mr. Vanacker which sets forth the terms of the Company’ contractual
obligation to provide indemnification, advance expenses, provide insurance, and related provisions.
|
The description above
is a summary of the material terms of the Offer Letter and Form of Officer and Director Indemnification Agreement and is qualified in
its entirety by reference to such documents attached as Exhibits 10.1 and 10.2, respectively, to this Form 8-K and incorporated herein
by reference.
Amendment to the Executive Severance Plan
In connection with the appointment of Mr.
Vanacker, the Company will enter into an amendment and restatement of the Company’s Executive Severance Plan (the “Severance
Plan”), effective as of December 13, 2021, which will extend eligibility under the Severance Plan to the chief executive officer
of the Company.
Under the terms of the Severance Plan, if
a participant’s employment is terminated (a) by a participant for “good reason” or (b) by the employer for reasons other
than (i) “cause” or (ii) the participant’s death or “disability” (as such terms are defined in the Severance
Plan, each a “Termination”), then, subject to the participant’s delivery of a release and waiver in favor of the Company,
the participant will be entitled to the following benefits and rights:
|
|
·
|
Payment of a lump sum amount equal to the sum of (A) the participant’s base salary, (B) the participant’s target annual
bonus amount for the preceding year or, if the participant did not have a target annual bonus opportunity in the preceding year, the year
of the participant’s termination, and (C) an amount equal to the cost of 18 months of COBRA premiums for the participant and his
or her eligible dependents; and
|
|
|
·
|
The continued provision for 18 months following the date of termination of subsidized coverage under the Company’s life insurance
plan and the provision, for a maximum of two years from the date of termination, of outplacement assistance, not to exceed $20,000 (collectively,
the “Other Benefits”).
|
CEO Executive Severance Plan Participation
Agreement
Upon joining the Company, Mr. Vanacker will
execute an Executive Severance Plan Participation Agreement with Lyondell Chemical Company (the “CEO Participation Agreement”),
which provides the following benefits in the event of a Termination:
|
|
·
|
Payment of a lump sum amount equal to 1.5 times the sum of the Mr. Vanacker’s base salary and target annual bonus amount for
the preceding year or, if he did not have a target annual bonus opportunity in the preceding year, the year of his termination;
|
|
|
·
|
In the event a change of control (as defined in the Severance Plan) and Termination during a change of control period (as defined
in the Severance Plan), a one-time payment equal to 2.5 times the sum of Mr. Vanacker’s base salary plus target annual bonus;
|
|
|
·
|
Payment of an amount equal to the cost of 18 months of COBRA premiums for Mr. Vanacker and his eligible dependents; and
|
|
|
·
|
The Other Benefits (defined above).
|
The description above
is a summary of the material terms of the Severance Plan and CEO Participation Agreement and is qualified in its entirety by reference
to such documents attached as Exhibits 10.3 and 10.4, respectively, to this Form 8-K and incorporated herein by reference.
Interim Chief Executive Officer
Until Mr. Vanacker’s
start date, Mr. Kenneth Lane has been appointed to serve as interim Chief Executive Officer. Mr. Lane will also continue to serve as
the Executive Vice President, Global Olefins & Polyolefins during the interim period. In connection his appointment, Mr. Lane’s
base salary will be increased to $1,200,000 and his STI target bonus will be increased to 150%, in each case for the time period that
he serves as interim CEO.