SEC Info - Hexion Inc. - ‘10-Q’ for 3/31/18

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Hexion Inc. – ‘10-Q’ for 3/31/18 – ‘EX-10.1’

On: Monday, 5/14/18, at 4:55pm ET · For: 3/31/18 · Accession #: 13239-18-15 · File #: 1-00071

  As Of               Filer                 Filing    For·On·As Docs:Size

 5/14/18  Hexion Inc.                       10-Q        3/31/18   73:11M

Quarterly Report — Form 10-Q — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    758K 
 2: EX-10.1     2018 Incentive Compensation Plan                    HTML     40K 
 3: EX-10.2     Deer Park Site Servces, Utilities, Materials and    HTML    244K 
                Facilities Agreement                                             
 4: EX-10.3     Moerdijk Vad Site Services, Utilities, Materials    HTML    258K 
                and Facilities Agreement                                         
 5: EX-10.4     Pernis Vad Site Services, Utilities, Materials and  HTML    269K 
                Facilities Agreement                                             
 6: EX-10.5     Pernis Beri Site Services, Utilities, Materials     HTML    271K 
                and Facilities Agreement                                         
 7: EX-10.6     Assignment and Assumption of Deer Park Ground       HTML     35K 
                Lease and Extension                                              
 8: EX-10.7     Assignment and Extension of Amended and Restated    HTML     37K 
                Agreement of Pernis Sublease                                     
 9: EX-10.8     First Amended and Restated Moerdijk Agreement of    HTML     71K 
                Lease                                                            
10: EX-10.9     Extension of Amended and Restated Agreement of      HTML     31K 
                Moerdijk Lease                                                   
11: EX-31.1(A)  Section 302 CEO Certification                       HTML     29K 
12: EX-31.1(B)  Section 302 CFO Certification                       HTML     29K 
13: EX-32.1     Section 906 CEO & CFO Certification                 HTML     25K 
20: R1          Document and Entity Information Document            HTML     41K 
21: R2          Condensed Consolidated Balance Sheets               HTML    146K 
22: R3          Condensed Consolidated Balance Sheets               HTML     42K 
                (Parentheticals)                                                 
23: R4          Condensed Consolidated Statements of Operations     HTML     61K 
24: R5          Condensed Consolidated Statements of Comprehensive  HTML     34K 
                Income                                                           
25: R6          Condensed Consolidated Statements of Cash Flows     HTML    110K 
26: R7          Condensed Consolidated Statement of Equity          HTML     35K 
                (Deficit)                                                        
27: R8          Background and Basis of Presentation                HTML     28K 
28: R9          Significant Accounting Policies                     HTML    124K 
29: R10         Restructuring (Notes)                               HTML     51K 
30: R11         Related Party Transactions                          HTML     77K 
31: R12         Fair Value                                          HTML     52K 
32: R13         Debt Obligations                                    HTML     78K 
33: R14         Commitments and Contingencies                       HTML     72K 
34: R15         Pension and Postretirement Expense                  HTML     59K 
35: R16         Disposition (Notes)                                 HTML     26K 
36: R17         Segment Information                                 HTML     91K 
37: R18         Changes in Accumulated Other Comprehensive Income   HTML     44K 
                Level 1 (Notes)                                                  
38: R19         Income Taxes (Notes)                                HTML     30K 
39: R20         Guarantor Non-Guarantor Subsidiary Financial        HTML    577K 
                Information                                                      
40: R21         Significant Accounting Policies Level 2 (Policies)  HTML    177K 
41: R22         Significant Accounting Policies Level 3 (Tables)    HTML    114K 
42: R23         Restructuring (Tables)                              HTML     48K 
43: R24         Related Party Transactions Level 3 (Tables)         HTML     70K 
44: R25         Fair Value Level 3 (Tables)                         HTML     45K 
45: R26         Debt Obligations Level 3 (Tables)                   HTML     75K 
46: R27         Commitments and Contingencies Level 3 (Tables)      HTML     53K 
47: R28         Pension and Postretirement Expense Level 3          HTML     59K 
                (Tables)                                                         
48: R29         Segment Information Level 3 (Tables)                HTML     85K 
49: R30         Changes in Accumulated Other Comprehensive Income   HTML     44K 
                Level 3 (Tables)                                                 
50: R31         Guarantor Non-Guarantor Subsidiary Financial        HTML    575K 
                Information Level 3 (Tables)                                     
51: R32         Background and Basis of Presentation Level 4        HTML     23K 
                (Details) - Number of Reportable Segments                        
52: R33         Significant Accounting Policies Level 4 (Details)   HTML     94K 
53: R34         Restructuring Restructuring and Cost Reduction      HTML     44K 
                Programs (Details)                                               
54: R35         Restructuring Changes in liabilities recorded       HTML     30K 
                related to contract termination costs and ARO                    
                (Details)                                                        
55: R36         Related Party Transactions Level 4 (Details)        HTML     69K 
56: R37         Fair Value Level 4 (Details) - Fair Value of Debt   HTML     35K 
57: R38         Debt Obligations Level 4 (Details)                  HTML     77K 
58: R39         Commitments and Contingencies Level 4 (Details) -   HTML     68K 
                Environmental Liabilities                                        
59: R40         Commitments and Contingencies Level 4 (Details) -   HTML     27K 
                Non-Environmental Liabilities                                    
60: R41         Pension and Postretirement Expense Level 4          HTML     44K 
                (Details) - Components of net pension and                        
                postretirement expense benefit                                   
61: R42         Disposition (Details)                               HTML     26K 
62: R43         Segment Information Level 4 (Details) - Revenues    HTML     45K 
                by Segment                                                       
63: R44         Segment Information Level 4 (Details) - EBITDA by   HTML     30K 
                Segment                                                          
64: R45         Segment Information Level 4 (Details) -             HTML     58K 
                Reconciliation of Segment EBITDA to Net Income                   
65: R46         Changes in Accumulated Other Comprehensive Income   HTML     42K 
                Level 4 (Details) - Summary of Changes in                        
                Accumulated Other Comprehensive Income                           
66: R47         Income Taxes (Details)                              HTML     28K 
67: R48         Guarantor Non-Guarantor Subsidiary Financial        HTML     34K 
                Information Level 4 (Details) - Additional                       
                Information                                                      
68: R49         Guarantor Non-Guarantor Subsidiary Financial        HTML    208K 
                Information Level 4 (Details) - Consolidating                    
                Balance Sheets                                                   
69: R50         Guarantor Non-Guarantor Subsidiary Financial        HTML     97K 
                Information Level 4 (Details) - Consolidating                    
                Statement of Operations                                          
70: R51         Guarantor Non-Guarantor Subsidiary Financial        HTML     94K 
                Information Level 4 (Details) - Consolidating                    
                Statement of Cash Flows                                          
72: XML         IDEA XML File -- Filing Summary                      XML    118K 
71: EXCEL       IDEA Workbook of Financial Reports                  XLSX     77K 
14: EX-101.INS  XBRL Instance -- msc-20180331                        XML   3.42M 
16: EX-101.CAL  XBRL Calculations -- msc-20180331_cal                XML    188K 
17: EX-101.DEF  XBRL Definitions -- msc-20180331_def                 XML    820K 
18: EX-101.LAB  XBRL Labels -- msc-20180331_lab                      XML   1.37M 
19: EX-101.PRE  XBRL Presentations -- msc-20180331_pre               XML    947K 
15: EX-101.SCH  XBRL Schema -- msc-20180331                          XSD    171K 
73: ZIP         XBRL Zipped Folder -- 0000013239-18-000015-xbrl      Zip    245K

‘EX-10.1’ — 2018 Incentive Compensation Plan

This Exhibit is an HTML Document rendered as filed. [ Alternative Formats ]

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Exhibit

EXHIBIT 10.1

Hexion Holdings LLC

2018 INCENTIVE COMPENSATION PLAN (the “Plan”)

Purpose of the Plan

The Plan is sponsored by Hexion Holdings LLC (“Hexion Holdings”) to reward associates of Hexion Inc. (“Hexion”) and its subsidiaries for delivering increased value by profitably growing the business and controlling costs. The Plan is designed to link rewards with critical financial metrics for the purpose of promoting actions which are the most beneficial to Hexion’s short-term and long-term value creation.

Administration

The Plan shall be administered by and awards under the Plan shall be authorized by the Compensation Committee (the “Committee”) of Hexion Holdings’ Board of Managers (the “Board”). The Committee may delegate some of its authority under the Plan to management or as is otherwise stated in the Plan. The Committee has the right to amend or terminate this Plan at any time.

Plan Year

January 1, 2018 - December 31, 2018

Eligibility for Participation

Participation is based on each associate's scope of responsibility and contribution to the organization. Each participant is assigned to participate at the Corporate, Division, Business Unit, or Shared Services plan level. Associates who participate at the Shared Services plan level are those associates who provide services to both Hexion and Momentive Performance Materials Inc. and its subsidiaries (“MPM”).

Plan Performance Measures

The Plan performance measures are based on three performance criteria: EBITDA, EH&S and Cash Flow.

EBITDA (sometimes also referred to as Segment EBITDA)

EBITDA refers to Earnings before Interest, Taxes, Depreciation and Amortization, adjusted to exclude (i) certain non-cash items, (ii) certain other income and expenses and (iii) discontinued operations. The achievement of EBITDA targets is a critical measure on which the investment community and future shareholders will evaluate Hexion's performance in 2018. As a result, the participants should be focused and incented to manage the business to achieve EBITDA targets.

Segment EBITDA will be measured for Global Hexion, for each of the Epoxy, Phenolic and Coating Resins and Forest Products Divisions of Hexion (each a “Division”) and for specified Hexion Business Units. Associates participating at the Corporate, Division, or Business Unit plan level have a total of 55 percent of their incentive target based on the achievement of EBITDA targets. EBITDA achievement measured for Global Hexion, each Division, and Business Unit may exclude certain unusual, non-recurring items at the discretion of the Committee.

Environmental Health and Safety (EH&S)

EH&S measures environmental and safety results utilizing both leading and lagging indicators including (i) SIFs - severe incident factors (a lagging indicator), (ii) OIIR - occupational illness and injury rate (a lagging indicator,) and(iii) total environmental incidents (ERI).

EH&S will be measured for Global Hexion, for each Division, and for specified Business Units.

Associates participating at the Corporate, Division and Business Unit plan level will have a total of ten (10) percent of their incentive target based on the achievement of EH&S goals - two and a half (2.5) percent each based on the achievement of established goals for OIIR and ERI, and five (5) percent based upon SIF performance.

Cash Flow

Cash Flow represents the amount of cash generated by business operations. Cash flow is defined as Segment EBITDA, net trading capital improvement and/or usage, capital spending and interest paid along with other operating cash flow items such as income taxes paid and pension

contributions. The purpose of this component is to focus on cost control and cost reduction actions to preserve an adequate amount of liquidity to fund operations and capital expenditures, service debt, and ultimately sustain the business through difficult economic cycles.

Cash Flow will be measured for Global Hexion and for each Business Unit, and may exclude certain unusual, non-recurring items at the discretion of the Committee.

Associates participating at the Corporate and Business Unit plan level have a total of 35 percent of their incentive target based on the achievement of the applicable Global Hexion and Business Unit Cash Flow targets.

Target Incentive

Each participant will have a target incentive opportunity expressed as a percent of his or her base salary. Plan assignment levels and targets are determined by the associate's business responsibilities and scope of his or her role and contributions within the organization. Associates who participate at the Shared Services plan level have targets based (i) fifty (50) percent on the Hexion Corporate plan design and (ii) fifty (50) percent on the MPM Corporate plan design as reflected in the MPM Holdings Inc. 2018 Incentive Compensation Plan.

Plan Structure

The following tables depict the structure described above.



Plan Level	Segment EBITDA	EH&S	Cash Flow
Corporate	55% Global Hexion	10% Global Hexion	35% Global Hexion
Shared Services	50% Hexion Corporate 50% MPM Corporate
Business Unit	27.5% Global Hexion 27.5% Business Unit	10% Global Hexion	17.5% Global Hexion 17.5% Business Unit

Calculation of Incentive Payments

Payment based on the EBITDA measure will range from a minimum of 1 percent of the EBITDA incentive opportunity to a maximum of 200 percent of the EBITDA incentive opportunity based on applicable EBITDA achievement. Payment based on the Cash Flow measure will range from a minimum of 1 percent of the Cash Flow incentive opportunity to a maximum of 200 percent of the Cash Flow incentive opportunity based on applicable Cash Flow achievement. Payment based on the EH&S measures will range from 100 percent of the applicable EH&S incentive opportunity to a maximum of 200 percent of the applicable EH&S incentive opportunity based on the applicable EH&S achievement. For the SIF component of the EH&S measure, there will be no payout if, during the calendar year, any incident at a Hexion site results in a fatality.

Calculation of EBITDA performance between the minimum and target performance levels, the target and upper-middle performance levels, and the upper middle and maximum performance levels will be linear, rounded to the nearest 1/10^th of one percent. There is no additional payment made for performance above the maximum level of performance.

Each of the performance measures is evaluated independently such that a payout for achieving one performance measure is not dependent upon the achievement of any other performance measure.

Basis for Award Payouts

Financial Results

Any Plan payouts require the prior approval of the Chairs of the Audit and Compensation Committees of the Board if they are to be made before audited financial results have been formally approved and publicly announced.

Plan Assignments

Any change in a participant’s plan assignment that is not related to a job transfer must be approved by an appropriate Vice President.

Shared Services Plan Assignment Calculation

Following the final determination of payouts, participants with the Shared Services plan assignment will receive a payout equal to the greater of (i) the payout earned under the Shared Services plan assignment and (ii) the payout earned under the Hexion Corporate plan assignment.

Limitations

The Committee may elect to modify the calculation of the annual targets based on acquisitions, divestitures or other unusual, non-recurring events or transactions that occur during the calendar year.

Eligibility Requirement

In order to receive an incentive payment, an associate must meet all of the following criteria:


1.	Employed in an incentive-eligible position for at least three consecutive, full months during the Plan Year.


2.	The first day of work must begin on or before October 1 of the Plan Year.


3.	Must be actively employed by Hexion on the incentive payment date unless, following the final day of the Plan Year, one of the following situations arises:


i.	Participant is involuntarily terminated without cause;


ii.	Participant dies or is terminated due to disability; or


iii.	Participant retires having reached age 55 with at least ten years of service.

Payments

Payouts under the Plan are generally made no later than the last payroll period in the second quarter, following the end of the Plan Year. Incentive payments are subject to applicable taxes, garnishment, and wage orders.

Proration of Payments

Proration of payments will be made on a whole-month basis. Associate changes on or before the 15^th of any month will be applied starting on the 1^st of that month. Associate changes after the 15^th of any month will be applied starting on the 1^st of the following month. A participant's incentive payment will be prorated for any of the following conditions:


a.	New Hires: Awards to participants who commenced employment during the Plan Year will be prorated.


b.	Salary: Awards will be calculated based on the participant's base salary as of July 1st. Awards to participants whose base salary changes after July 1 will be prorated.


c.	Job Changes or Transfers: Awards to participants who experience a job change or transfer during the Plan Year-which results in a different ICP target or plan assignment-will be prorated.


d.	Leaves of Absence: For approved leaves of absence that exceed 12 cumulative weeks, the amount of time not worked beyond the 12 weeks will be excluded from the Plan Year and the associate will receive a prorated incentive.

The Plan remains at the total discretion of the Committee. Hexion Holdings retains the right to amend or adapt the design and rules of the Plan. Local laws will prevail where necessary.

Dates Referenced Herein and Documents Incorporated by Reference

This ‘10-Q’ Filing	Date	Other Filings

	12/31/18	10-K, NT 10-K
Filed on:	5/14/18	8-K
For Period end:	3/31/18
	1/1/18
		List all Filings

1 Subsequent Filing that References this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/10/21  Hexion Inc.                       10-K       12/31/20  132:30M

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Filing Submission 0000013239-18-000015 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)