SEC Info - Hexion Inc. - ‘10-Q’ for 3/31/15

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Hexion Inc. – ‘10-Q’ for 3/31/15 – ‘EX-10.1’

On: Wednesday, 5/13/15, at 4:36pm ET · For: 3/31/15 · Accession #: 13239-15-32 · File #: 1-00071

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

 5/13/15  Hexion Inc.                       10-Q        3/31/15   67:13M

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    622K 
 2: EX-10.1     2015 Incentive Compensation Plan                    HTML     40K 
 3: EX-18.1     Pwc Letter                                          HTML     23K 
 4: EX-31.1(A)  Section 302 CEO Certification                       HTML     28K 
 5: EX-31.1(B)  Section 302 CFO Certification                       HTML     28K 
 6: EX-32.1     Section 906 CEO and CFO Certification               HTML     24K 
45: R1          Document and Entity Information Document            HTML     41K 
35: R2          Condensed Consolidated Balance Sheets               HTML    171K 
43: R3          Condensed Consolidated Balance Sheets               HTML     41K 
                (Parentheticals)                                                 
47: R4          Condensed Consolidated Statements of Operations     HTML     64K 
62: R5          Condensed Consolidated Statements of Comprehensive  HTML     37K 
                Income                                                           
37: R6          Condensed Consolidated Statements of Cash Flows     HTML    113K 
42: R7          Condensed Consolidated Statement of Equity          HTML     44K 
                (Deficit)                                                        
32: R8          Background and Basis of Presentation                HTML     31K 
24: R9          Significant Accounting Policies                     HTML     89K 
63: R10         Restructuring (Notes)                               HTML     56K 
49: R11         Related Party Transactions                          HTML     58K 
48: R12         Fair Value                                          HTML     52K 
53: R13         Debt Obligations                                    HTML     74K 
54: R14         Commitments and Contingencies                       HTML     84K 
52: R15         Pension and Postretirement Expense                  HTML     58K 
55: R16         Segment Information                                 HTML     77K 
44: R17         Summarized Financial Information of Unconsolidated  HTML     39K 
                Affiliate                                                        
46: R18         Changes in Accumulated Other Comprehensive Income   HTML     51K 
                Level 1 (Notes)                                                  
51: R19         Income Taxes (Notes)                                HTML     26K 
67: R20         Guarantor Non-Guarantor Subsidiary Financial        HTML    563K 
                Information                                                      
58: R21         Significant Accounting Policies Level 2 (Policies)  HTML     94K 
39: R22         Significant Accounting Policies Level 3 (Tables)    HTML     75K 
50: R23         Restructuring (Tables)                              HTML     53K 
41: R24         Fair Value Level 3 (Tables)                         HTML     43K 
19: R25         Debt Obligations Level 3 (Tables)                   HTML     68K 
59: R26         Commitments and Contingencies Level 3 (Tables)      HTML     62K 
64: R27         Pension and Postretirement Expense Level 3          HTML     58K 
                (Tables)                                                         
28: R28         Segment Information Level 3 (Tables)                HTML     72K 
27: R29         Summarized Financial Information of Unconsolidated  HTML     43K 
                Affiliate Level 3 (Tables)                                       
30: R30         Guarantor Non-Guarantor Subsidiary Financial        HTML    554K 
                Information Level 3 (Tables)                                     
31: R31         Background and Basis of Presentation Level 4        HTML     23K 
                (Details) - Number of Reportable Segments                        
33: R32         Significant Accounting Policies Level 4 (Details)   HTML     89K 
17: R33         Restructuring (Details)                             HTML     53K 
56: R34         Related Party Transactions Level 4 (Details)        HTML    105K 
38: R35         Fair Value Level 4 (Details) - Fair Value           HTML     26K 
                Hierarchy                                                        
40: R36         Fair Value Level 4 (Details) - Fair Value of Debt   HTML     35K 
22: R37         Debt Obligations Level 4 (Details)                  HTML     90K 
66: R38         Commitments and Contingencies Level 4 (Details) -   HTML     80K 
                Environmental Liabilities                                        
13: R39         Commitments and Contingencies Level 4 (Details) -   HTML     27K 
                Non-Environmental Liabilities                                    
34: R40         Pension and Postretirement Expense Level 4          HTML     62K 
                (Details) - Components of net pension and                        
                postretirement expense benefit                                   
61: R41         Segment Information Level 4 (Details) - Revenues    HTML     30K 
                by Segment                                                       
21: R42         Segment Information Level 4 (Details) - EBITDA by   HTML     30K 
                Segment                                                          
26: R43         Segment Information Level 4 (Details) -             HTML     53K 
                Reconciliation of Segment EBITDA to Net Income                   
29: R44         Summarized Financial Information of Unconsolidated  HTML     30K 
                Affiliate Level 4 (Details) - HAI Balance Sheets                 
36: R45         Summarized Financial Information of Unconsolidated  HTML     30K 
                Affiliate Level 4 (Details) - HAI Results of                     
                Operation                                                        
16: R46         Changes in Accumulated Other Comprehensive Income   HTML     51K 
                Level 4 (Details) - Summary of Changes in                        
                Accumulated Other Comprehensive Income                           
23: R47         Income Taxes (Details)                              HTML     23K 
14: R48         Guarantor Non-Guarantor Subsidiary Financial        HTML     29K 
                Information Level 4 (Details) - Additional                       
                Information                                                      
60: R49         Guarantor Non-Guarantor Subsidiary Financial        HTML    291K 
                Information Level 4 (Details) - Consolidating                    
                Balance Sheets                                                   
20: R50         Guarantor Non-Guarantor Subsidiary Financial        HTML    141K 
                Information Level 4 (Details) - Consolidating                    
                Statement of Operations                                          
57: R51         Guarantor Non-Guarantor Subsidiary Financial        HTML    146K 
                Information Level 4 (Details) - Consolidating                    
                Statement of Cash Flows                                          
65: XML         IDEA XML File -- Filing Summary                      XML     97K 
15: EXCEL       IDEA Workbook of Financial Reports                  XLSX    261K 
25: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS   2.24M 
 7: EX-101.INS  XBRL Instance -- msc-20150331                        XML   3.14M 
 9: EX-101.CAL  XBRL Calculations -- msc-20150331_cal                XML    293K 
10: EX-101.DEF  XBRL Definitions -- msc-20150331_def                 XML    886K 
11: EX-101.LAB  XBRL Labels -- msc-20150331_lab                      XML   1.64M 
12: EX-101.PRE  XBRL Presentations -- msc-20150331_pre               XML    998K 
 8: EX-101.SCH  XBRL Schema -- msc-20150331                          XSD    202K 
18: ZIP         XBRL Zipped Folder -- 0000013239-15-000032-xbrl      Zip    255K

‘EX-10.1’ — 2015 Incentive Compensation Plan

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

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EX 10.1 Hexion Holdings LLC 2015 Incentive Compensation Plan

Exhibit 10.1

HEXION HOLDINGS LLC

2015 INCENTIVE COMPENSATION PLAN (the “Plan”)

Purpose of the Plan

The Plan is sponsored by Hexion Holdings LLC (“Parent” or “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 purposes of promoting actions which are the most beneficial to the company's short-term and long-term value creation.

Plan Year

January 1, 2015 - December 31, 2015

Eligibility for Participation

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

Plan Performance Measures

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

EBITDA (sometimes also referred to as Segment EBITDA) - Refers to Earnings before Interest, Taxes, Depreciation and Amortization, adjusted to exclude certain non-cash, certain other income and expenses and 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 2015. As a result, the participants should be focused and incented to manage the business to achieve EBITDA targets.

Segment EBITDA will be measured for the Parent (“Hexion EBITDA”), 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. Associates participating at the commercial plan level have 10 percent of their incentive target based on the achievement of EBITDA targets.

EH&S - Measures environmental, health and safety results utilizing: 1) Severe Incident Factors (“SIF”), and 2) Environmental Reportable Incidents (“ERI”).

SIF and ERI will be measured for the Parent, for each Division, and for specified Business Units.

Associates participating at the Corporate, Division, Business unit or Commercial plan level have a total of five percent of their incentive target based on the achievement of the applicable SIF goal and 5 percent of their incentive target based on the achievement of the applicable ERI goal.

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 the Parent and for each Division, and may exclude certain unusual, non-recurring items at the discretion of the Compensation Committee of the Hexion Holdings Board of Managers (the “Board”).

Associates participating at the Corporate, Division, or Business Unit plan level have a total of 35 percent of their incentive target based on the achievement of the applicable Parent or Division Cash Flow target. Associates participating at the Commercial plan level have 30 percent of their incentive target based on the achievement of the applicable Division Cash Flow target.

Supplemental Commercial Plan Measure

Margin over Material (“MOM”) - Associates participating at the Commercial plan level have 50 percent of their incentive target based on the achievement of applicable MOM targets. MOM refers to sales less raw materials & distribution costs.

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 50 percent on the Hexion Corporate plan design and 50 percent on the MPM Corporate plan design as reflected in the MPM Holdings Inc. 2015 Incentive Compensation Plan.

Plan Structure

The following tables depict the structure described above.



Plan Level	Segment EBITDA	EH&S	Cash Flow
Corporate	27.5% Global Hexion 27.5% Divisions	10% Global Hexion	25% Global Hexion 10% Divisions
Shared Services	50% Hexion Corporate Design 50% MPM Corporate Design
Division	10% Global Hexion 45% Division	10% Division	10% Global Hexion 25% Division
Business Unit	10% Division 45% Business Unit	10% Division or Business Unit	10% Global Hexion 25% Division



Plan Level	Segment EBITDA	Annual MOM	EH&S	Cash Flow
EPCD-Commercial	10% Business Unit	50% Regional BU	10% Division	30% Division
FPD Brazil-Commercial	10% Business Unit			30% Division

Calculation of Incentive Payments

Payment based on the EBITDA measure will range from a minimum of 50 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 50 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 50 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.

Minimum Award Guaranty - If the actual performance of the company would result in a payment of less than 30 percent of an individual associate’s target incentive (including all pro-rations), then, regardless of actual performance, payment equaling 30 percent of such target incentive (including all prorations) will be awarded.

Limitations -The Compensation Committee of the Board 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. Hexion has the right to amend or terminate this Plan at any time.

Employment Requirement - Associates must be employed in an incentive-eligible position for at least three consecutive full months during the Plan Year and must be actively employed by Hexion on the final day of the Plan Year and on the incentive payment date in order to receive an incentive payment. Plan participants are also eligible to receive an incentive payment if they are employed on the final day of the Plan Year, but prior to the incentive payment date their employment is: (i) involuntarily terminated without cause, (ii) terminated due to the participant’s death or disability, or (iii) terminated due to retirement with the participant having reached age 65 and completed at least ten years of service prior to retirement.

Plan Assignment Levels - Any change in a participant’s plan assignment level that is not related to a job transfer must be approved by an appropriate division or functional Vice President.

Payments - 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. Employment must commence on or before October 1, 2015 to be eligible to participate in the Plan. Rehires will be treated as new hires.


b.	Salary: Awards will be calculated on the participant's base salary as of July 1, 2015. Awards to participants whose base rate of pay changes after July 1, 2015 will be prorated.


c.	Job Changes or Transfers: Awards to participants changing jobs or transferring between Divisions, Business Units, or Regions which result in a change to a different ICP target or plan incentive assignment during the Plan Year 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 Parent. Parent 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

	12/31/15	10-K
	10/1/15
	7/1/15
Filed on:	5/13/15	8-K
For Period end:	3/31/15	8-K
	1/1/15
		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 0000013239-15-000032 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)