Exhibit 10.5


CELANESE
CORPORATION

2004 STOCK INCENTIVE PLAN


NONQUALIFIED
STOCK OPTION AGREEMENT


THIS AGREEMENT, is made
effective as of January 20, 2005 (the “Date
of Grant”), between Celanese Corporation (the “Company”) and the individual named as a
participant on the signature page hereto (the “Participant”).


R  E  C  I  T  A  L
S:


WHEREAS, the Company has
adopted the Plan (as defined below), the terms of which are hereby incorporated
by reference and made a part of this Agreement; and


WHEREAS, the Committee has
determined that it would be in the best interests of the Company and its
stockholders to grant the Options provided for herein to the Participant
pursuant to the Plan and the terms set forth herein;


NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth, the parties agree
as follows:


1.             Definitions.  Whenever the following terms are used in this
Agreement, they shall have the meanings set forth below.  Capitalized terms not otherwise defined
herein shall have the same meanings as in the Plan.


(a)   Cause:  “Cause” as defined in an employment agreement
or change in control agreement between the Company or its subsidiaries and the
Participant or, if not defined therein or if there is no such agreement,
“Cause” means (i) the Participant’s willful failure to perform
Participant’s duties to the Company (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 to the Participant of such failure, (ii) commission
of (x) a felony (other than traffic-related) 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) Participant’s
willful malfeasance or willful misconduct which is demonstrably injurious to
the Company, (iv) any act of fraud by the Participant or (v) the
Participant’s breach of the provisions of any confidentiality, noncompetition
or nonsolicitation to which the Participant is subject.


(b)   Disability:  The Participant becomes physically or
mentally incapacitated and is therefore unable for a period of six consecutive
months or for an aggregate of nine months in any 24 consecutive month
period to perform Participant’s duties.


(c)   EBITDA:   The same meaning as “Adjusted EBITDA” in the
Company’s Credit Agreement dated as of January 26, 2005, except there shall be
no inclusion of any favorable reserve reversals or any extraordinary or
non-recurring gains unless the reserve or gain is adjusting an expense that
occurred and impacted Adjusted EBITDA during 2004-2008.


(d)   Expiration Date:  The tenth anniversary of the Date of Grant.


 





















 


(e)   Free Cash Flow:  EBITDA less “Capital Expenditures” (as
defined under GAAP), plus or minus Changes in Trade Working
Capital, minus cash outflows from Special Charges and restructuring
costs (not included in Special Charges or included in purchase accounting) plus
cash recoveries associated with expenses recognized after January 1, 2005,
in each case without duplication.


(f)    Good Reason:  “Good Reason” as defined in an employment
agreement or change in control agreement between the Company or its
subsidiaries and the Participant or, if not defined therein or if there is no
such agreement, “Good Reason” means (i) a substantial diminution in
Participant’s position or duties; adverse change in reporting lines, or
assignment of duties materially inconsistent with his position (other than in
connection with an increase in responsibility or a promotion), (ii) any
reduction in Participant’s base salary or annual bonus opportunity or
(iii) failure of the Company to pay compensation or benefits when due, in
each case which is not cured within 30 days following the Company’s
receipt of written notice from Participant describing the event constituting
Good Reason.


(g)   Options:  Collectively, the Time Option and the
Performance Options to purchase Shares granted under this Agreement.


(h)   Performance Options:  Collectively, the Tier I EBITDA Performance
Option, the Tier I FCF Performance Option, the Tier II EBITDA Performance
Option and the Tier II FCF Performance Option.


(i)    Performance Targets:  Collectively, the Tier I EBITDA Target, the
Tier I FCF Target, the Tier II EBITDA Target and the Tier II FCF Target.


(j)    Plan:  The Celanese Corporation 2004 Stock Incentive
Plan, as from time to time amended.


(k)   Retirement:  Voluntary resignation on or after Participant
has attained age 65.


(l)    Stockholders Agreement: The
Stockholders Agreement, dated as of January 18, 2005 (as amended from time to
time), among the Company and the other parties thereto.


(m)  Tier I EBITDA Performance Option:  An Option to purchase the number of Shares
set forth on Schedule A attached hereto.


(n)   Tier I EBITDA Target:  The Tier I EBITDA Target set forth on
Schedule B attached hereto.


(o)   Tier I FCF Performance Option:  An Option to purchase the number of Shares
set forth on Schedule A attached hereto.


(p)   Tier I FCF Target:  The Tier I FCF Target set forth on Schedule B
attached hereto.


 


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(q)   Tier II EBITDA Performance Option:  An Option to purchase the number of Shares
set forth on Schedule A attached hereto.


(r)    Tier II EBITDA Target:  The Tier II EBITDA Target set forth on
Schedule B attached hereto.


(s)   Tier II FCF Performance Option:  An Option to purchase the number of Shares
set forth on Schedule A attached hereto.


(t)    Tier II FCF Target:  The Tier II FCF Target set forth on Schedule
B attached hereto.


(u)   Time Option:  An Option with respect to which the terms and
conditions are set forth in Section 3(a) of this Agreement.


(v)   Vested Portion:  At any time, the portion of an Option which
has become vested, as described in Section 3 of this Agreement.


2.             Grant
of Options.  The Company hereby
grants to the Participant the right and option to purchase, on the terms and
conditions hereinafter set forth, the number of Shares subject to the Time
Option, the Tier I EBITDA Performance Option, the Tier I FCF Performance
Option, the Tier II EBITDA Performance Option and the Tier II FCF Performance
Option set forth on Schedule A attached hereto, subject to adjustment as
set forth in the Plan.  The exercise
price of the Shares subject to the Options shall be $16 per Share, subject to
adjustment as set forth in the Plan (the “Option Price”).  The Options are intended to be nonqualified
stock options, and are not intended to be treated as ISOs that comply with
Section 422 of the Code.


3.                                       Vesting
of the Options.


(a)   Vesting of the Time
Option.


(i)            In General.  Subject to the Participant’s continued
Employment with the Company and its Affiliates, the Time Option shall vest and
become exercisable (A) with respect to fifteen percent (15%) of the Shares
subject to such Time Option on the Date of Grant, (B) with respect to an
additional twenty percent (20%) of the Shares subject to such Time Option
on December 31, 2005, December 31, 2006, December 31, 2007 and December
31, 2008 and (C) with respect to the remaining five percent (5%) of the
Shares subject to the Time Option on March 31, 2009.


(ii)           Change in Control.  Notwithstanding the foregoing, upon a Change
in Control, the Time Option shall, to the extent not previously cancelled or
expired, immediately become one hundred percent (100%) vested and
exercisable.


(b)   Vesting of the
Performance Options.


(i)            In General.  Each Performance Option shall vest and become
exercisable with respect to fifteen percent (15%) of the Shares subject to
each such


 


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Performance Option on the
Date of Grant.  Subject to the
Participant’s continued Employment with the Company and its Affiliates, each
Performance Option, to the extent not previously canceled or expired, shall
become fully vested and exercisable with respect to one hundred
percent (100%) of the Shares subject to such Performance Option on the
eighth anniversary of the Date of Grant.


(ii)           Acceleration.  Notwithstanding the last sentence of Section
3(b)(i) above and subject to the Participant’s continued Employment with the
Company and its Affiliates, each Performance Option shall vest and become
exercisable (A) with respect to thirty percent (30%) of the Shares subject
to each such Performance Option on December 31, 2005 and December 31, 2006, (B)
with respect to fifteen percent (15%) of the Shares subject to each such
Performance Option on December 31, 2007 and (C) with respect to ten percent
(10%) of the Shares subject to each such Performance Option on December 31,
2008 (each of December 31, 2005, December 31, 2006, December 31, 2007 and
December 31, 2008, an “Accelerated Vesting Date”) to the
extent that the Performance Target for such Performance Option is achieved for
the fiscal year ending on an Accelerated Vesting Date.


(iii)          Catch-Up. 
Notwithstanding the foregoing and subject to the Participant’s continued
Employment with the Company and its Affiliates, if, on December 31, 2008, the
cumulative Performance Target for a Performance Option has been achieved for
the period commencing with the year ending on December 31, 2005 through the
year ending on December 31, 2008, then such Performance Option shall immediately
become one hundred percent (100%) vested and exercisable.  In addition, (x) if Blackstone sells ninety
percent (90%) of its equity interest in the Company prior to
December 31, 2008 or (y) upon the occurrence of a Change of Control, the
portion of a Performance Option that was eligible to, but did not, vest on an
Accelerated Vesting Date that occurred prior to such event shall vest to the
extent that the cumulative Performance Target for such Performance Option was
achieved for the period commencing
with the year ending on December 31, 2005 through the year ending on the Accelerated
Vesting Date immediately prior to such event.


(iv)          Change in Control.  Notwithstanding the foregoing, upon a Change
in Control, the Performance Option shall, to the extent not previously
cancelled or expired, become vested and exercisable with respect to the Shares
that were eligible to vest and become exercisable on each Accelerated Vesting
Date through the Accelerated Vesting Date of the year of the Change in Control
if either (x) the cumulative Performance Target applicable to such
Performance Option was achieved for
the period commencing with the year ending on December 31, 2005 through the Change in
Control (the Performance Target for the year of the Change in Control shall be
appropriately adjusted by the Committee to reflect the period from the
beginning of the year of the Change in Control through the Change in Control)
or (x) Blackstone receives in connection with such Change in Control an
amount equal to at least $54.45 per Share on its initial equity investment
(appropriately adjusted, as determined in the sole discretion of the Committee,
to reflect any changes in the capitalization of the Company).


 


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(c)   Termination of Employment.


(i)            General.  Other than as described in
Sections 3(c)(ii) and (iii), if the Participant’s Employment with the
Company and its Affiliates terminates for any reason, the Option, to the extent
not then vested and exercisable, shall expire and be immediately canceled by
the Company without consideration.


(ii)           Time Option.  Notwithstanding Section 3(a) and
3(c)(i), in the event that the Participant’s Employment is terminated
(A) by the Company without Cause, (B) by the Participant with Good Reason
or (C) due to the Participant’s death, Disability or Retirement, to the
extent not previously cancelled or expired, the Time Option shall immediately
become vested and exercisable as to the Shares subject to the Time Option that
would have otherwise vested and become exercisable in the calendar year in
which such termination of Employment occurs.


(iii)          Performance Option.  Notwithstanding Section 3(b) and 3(c)(i),
in the event that (x) the Participant’s Employment is terminated (A) by the
Company without Cause, (B) by the Participant with Good Reason or (C) due to
the Participant’s death, Disability or Retirement and (y) a Performance Target
is achieved with respect to a Performance Option for the year of such
termination of Employment, to the extent not previously cancelled or expired,
such Performance Option shall become vested and exercisable with respect to the
Shares subject to the Performance Option that would have vested and become
exercisable upon the achievement of such Performance Target as if the
Participant’s Employment continued through the end of such year.


4.                                       Exercise
of Options.


(a)   Period of Exercise.  Subject to the provisions of the Plan and
this Agreement, the Participant may exercise all or any part of the Vested
Portion of an Option at any time prior to the Expiration Date.  Notwithstanding the foregoing, if the
Participant’s Employment terminates prior to the Expiration Date, the Vested
Portion of an Option shall remain exercisable only for the period set forth
below (and shall expire upon termination of such period):


(i)            Termination by the Company
Without Cause, Termination by the Participant with Good Reason or Termination
Due to Death, Disability or Retirement. 
If the Participant’s Employment with the Company and its Affiliates is
terminated (A) by the Company without Cause, (B) by the Participant with Good
Reason or (C) due to the Participant’s death, Disability or Retirement, the
Participant may exercise (x) the Vested Portion of the Time Option for a period
ending on the earlier of (A) one year following the date of such
termination and (B) the Expiration Date and (y) the Vested Portion of a
Performance Option for a period ending on the earlier of (A) the later of (1)
one year following the date of such termination and (2) 90 days following the
date the total Vested Portion of such Performance Option is determined and (B)
the Expiration Date; and


(ii)           Termination by the Participant
without Good Reason.  If the
Participant’s Employment with the Company and its Affiliates is
terminated by the Participant without Good Reason, the Participant may
exercise the Vested Portion of an


 


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Option for a period ending
on the earlier of (A) 90 days following the date of such termination and
(B) the Expiration Date; and


(iii)          Termination by the Company for
Cause.  If the Participant’s
Employment with the Company and its Affiliates is terminated by the Company for
Cause, the Vested Portion of an Option shall immediately terminate in full and
cease to be exercisable; and


(b)   Method of Exercise.


(i)            Subject to Section 4(a) of this
Agreement, the Vested Portion of an Option may be exercised by delivering to
the Company at its principal office written notice of intent to so exercise; provided
that the Option may be exercised with respect to whole Shares only.  Such notice shall specify the number of
Shares for which the Option is being exercised and, other than as described in
clause (C) of the following sentence, shall be accompanied by payment in
full of the aggregate Option Price in respect of such Shares.  Payment of the aggregate Option Price may be
made (A) in cash, or its equivalent (e.g., a check), (B) by transferring
to the Company Shares having a Fair Market Value equal to the aggregate Option
Price for the Shares being purchased and satisfying such other requirements as
may be imposed by the Committee; provided that such Shares have been
held by the Participant for no less than six months (or such other period as
established from time to time by the Committee or generally accepted accounting
principles), (C) if there is a public market for the Shares at the time of
payment, subject to such rules as may be established by the Committee, through
delivery of irrevocable instructions to a broker to sell the Shares otherwise
deliverable upon the exercise of the Option and deliver promptly to the Company
an amount equal to the aggregate Option Price or (D) by a combination of
(A) and (B) above or such other method as approved by the Committee.  No Participant shall have any rights to
dividends or other rights of a stockholder with respect to the Shares subject
to an Option until the Participant has given written notice of exercise of the
Option, paid in full for such Shares or otherwise completed the exercise
transaction as described in the preceding sentence and, if applicable, has
satisfied any other conditions imposed pursuant to this Agreement.


(ii)           Notwithstanding any other provision
of the Plan or this Agreement to the contrary, absent an available exemption to
registration or qualification, an Option may not be exercised prior to the
completion of any registration or qualification of the Option or the Shares under
applicable state and federal securities or other laws, or under any ruling or
regulation of any governmental body or national securities exchange that the
Committee shall in its sole reasonable discretion determine to be required by
such laws, rulings or regulations.


(iii)          Upon the Company’s determination that
an Option has been validly exercised as to any of the Shares, the Company shall
issue certificates in the Participant’s name for such Shares.  However, the Company shall not be liable to
the Participant for damages relating to any reasonable delays in issuing the
certificates to the Participant or any loss by the Participant of the
certificates.


 


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(iv)          In the event of the Participant’s
death, the Vested Portion of an Option shall remain vested and exercisable by
the Participant’s executor or administrator, or the person or persons to whom
the Participant’s rights under this Agreement shall pass by will or by the laws
of descent and distribution as the case may be, to the extent set forth in
Section 4(a) of this Agreement.  Any
heir or legatee of the Participant shall take rights herein granted subject to
the terms and conditions hereof.


(v)           As a condition to the exercise of any
Option evidenced by this Agreement, the Participant shall execute the
Stockholders Agreement, if then in effect.


5.             Adjustments.  In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination
or transaction or exchange of Shares or other corporate exchange, or in the
event of any distribution to shareholders of Shares (other than regular cash
dividends or any synthetic secondary offering following an initial public
offering of the Shares) or any transaction similar to the foregoing or the
issuance of equity (or rights to acquire equity) for consideration less than
Fair Market Value (other than equity-based compensation or the conversion of
preferred shares of the Company to Shares), the Committee in its sole
discretion and without liability to any person may make such substitution or
adjustment, if any, as it deems to be equitable, to the Option; provided, that
in the event of an extraordinary dividend or similar extraordinary distribution
(excluding an initial public offering of the Shares and any synthetic secondary
offerings), in lieu of any other adjustment or substitution, the Participant
shall be entitled to receive, with respect to each Share subject to the Vested
Portion of the Option as of such distribution, an amount equal to such
extraordinary dividend or distribution paid with respect to a Share (whether
paid in cash or otherwise), such amount to be paid when such distribution is
paid to shareholders of the Company.


6.             No
Right to Continued Employment.  Neither the Plan nor this Agreement shall be
construed as giving the Participant the right to be retained in the employ of,
or in any consulting relationship to, the Company or any Affiliate.  Further, the Company or its Affiliate may at
any time terminate the Participant or discontinue any consulting relationship,
free from any liability or any claim under the Plan or this Agreement, except
as otherwise expressly provided herein.


7.             Legend on
Certificates.  The
certificates representing the Shares purchased by exercise of an Option shall
be subject to such stop transfer orders and other restrictions as the Committee
may determine is required by the rules, regulations, and other requirements of
the Securities and Exchange Commission, any stock exchange upon which such
Shares are listed, any applicable federal or state laws and the Company’s
Certificate of Incorporation and Bylaws, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.


8.             Transferability.  Unless otherwise determined by the Committee,
an Option may not be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant otherwise than by will or by the
laws of descent and distribution, and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that the


 


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designation
of a beneficiary shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance. 
During the Participant’s lifetime, an Option is exercisable only by the Participant.


9.             Withholding.  The Participant may be required to pay to the
Company or its Affiliate and the Company or its Affiliate shall have the right
and is hereby authorized to withhold from any payment due or transfer made
under the Option or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Shares, other securities, other
Awards or other property) of any applicable withholding taxes in respect of the
Option, its exercise, or any payment or transfer under the Option or under the
Plan and to take such action as may be necessary in the option of the Company
to satisfy all obligations for the payment of such taxes.


10.           Securities
Laws.  Upon the acquisition of any
Shares pursuant to the exercise of an Option, the Participant will make or
enter into such written representations, warranties and agreements as the
Committee may reasonably request in order to comply with applicable securities
laws or with this Agreement.


11.           Notices.  Any notice under this Agreement shall be
addressed to the Company in care of its General Counsel, addressed to the
principal executive office of the Company and to the Participant at the address
last appearing in the personnel records of the Company for the Participant or
to either party at such other address as either party hereto may hereafter
designate in writing to the other.  Any
such notice shall be deemed effective upon receipt thereof by the addressee.


12.           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflicts of laws provisions thereof.


13.           Options
Subject to Plan and Stockholders Agreement.  By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received and read
a copy of the Plan and the Stockholders Agreement.  The Options and the Shares received upon
exercise of the Options are subject to the Plan and the Stockholders Agreement.  The terms and provisions of the Plan and the
Stockholders Agreement as each may be amended from time to time are hereby
incorporated by reference.  In the event
of a conflict between any term or provision contained herein and a term or
provision of the Plan or the Stockholders Agreement, the applicable terms and
provisions of the Plan or the Stockholders Agreement will govern and
prevail.  In the event of a conflict
between any term or provision of the Plan and any term or provision of the
Stockholders Agreement, the applicable terms and provisions of the Stockholders
Agreement will govern and prevail.


14.           Signature
in Counterparts.  This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.


 


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IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto.


	
   

  	
  CELANESE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Participant

  



 


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Schedule A


 


 


 


The number of Shares subject
to each Option is set forth below:


 


Time Option:


Tier I EBITDA Performance
Option:


Tier I FCF Performance
Option:


Tier II EBITDA Performance
Option:


Tier II FCF Performance
Option:


 





















 


Schedule B


 


 


Performance Targets


 


 


 


 


	
  Year-End

  	
  Tier I EBITDA

  Target

  	
  Tier I
  FCF

  Target*

  	
  Tier II
  EBITDA

  Target

  	
  Tier II
  FCF

  Target*

  
	
  December 31, 2005

  	
  $865 million

  	
   

  	
  $900 million

  	
   

  
	
  December 31, 2006

  	
  $975 million

  	
   

  	
  $1.075 million

  	
   

  
	
  December 31, 2007

  	
  $975 million

  	
   

  	
  $1.075 million

  	
   

  
	
  December 31, 2008

  	
  $825 million

  	
   

  	
  $925 million

  	
   

  



 


*  To
be established annually by the Board, no later than 90 days following the
beginning of such year.


 


The Performance Targets
shall be adjusted by the Committee, to the extent that the Committee deems
equitable in its sole discretion, upon acquisitions, divestitures, to reflect
changes in the business and in other appropriate circumstances.