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Item 5.02(e)
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Adoption of Garrett Motion Inc. 2021 Long-Term Incentive Plan
On May 25, 2021, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) recommended that the Board approve, and the Board approved and adopted, the Garrett Motion Inc. 2021 Long-Term Incentive Plan (the “Equity Plan”) in order to permit grants of equity-based compensation to eligible employees, directors and consultants of the Company, substantially on the terms approved by the Bankruptcy Court in the Confirmation Order. As the issuance of the Company’s Common Stock pursuant to the Equity Plan was part of the Plan approved by the Bankruptcy Court under the Bankruptcy Code, shareholder approval of such issuance is not required under the Nasdaq corporate governance requirements.
The Equity Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, shares of restricted stock, restricted stock units, performance awards, dividend equivalent rights and other stock-based awards. The Equity Plan provides for grants of up to 31,280,476 shares of the Company’s Common Stock in respect of awards, and limits the aggregate compensation that may be paid to the Company’s non-employee directors in respect of any single fiscal year (including awards under the Equity Plan) to a total of $750,000, excluding any amounts awarded shortly following the Company’s emergence from chapter 11 bankruptcy and any special committee fees. The Committee will administer the Equity Plan, including designating the eligible participants, which will include all of the Company’s named executive officers, as well as which participants will receive awards, the type and amounts of awards granted and the terms of such awards, including the vesting schedule, expiration date and other material features of the awards.
The Equity Plan provides for an adjustment in the number of shares of Common Stock available to be delivered under the Equity Plan, the number of shares subject to awards, and the exercise price of certain awards in the event of a change in the capitalization of the Company, a stock dividend or stock split, a merger or combination of shares or other similar events, as well as for the adjustment or termination of awards upon the occurrence of certain corporate events. Upon a change in control (as defined in the Equity Plan), if awards under the Equity Plan are continued, assumed, replaced, converted or have new rights substituted therefor by the surviving entity, time-based vesting awards shall continue to remain outstanding subject to the same terms and conditions as in effect immediately prior to the change in control, and performance-based vesting awards may be deemed achieved at target levels as of the change in control and remain outstanding subject to time-based service requirements, if any. In addition, if a participant’s employment is terminated as a result of death or disability, by the Company without cause or by the participant for good reason (as defined in the Equity Plan) during the two year period immediately following a change in control, then all outstanding unvested awards held by the participant shall become fully vested and exercisable. If awards under the Equity Plan are not continued, assumed, replaced, converted or substituted upon a change in control, then the Committee has discretion to, among other actions, accelerate the vesting of outstanding awards or cancel such awards and pay the holders cash, shares of Common Stock or other securities or other property.