Document:

2009 Incentive Compensation Plan

 Exhibit 10.25 
 Hexion Specialty Chemicals, Inc. 
 2009 INCENTIVE COMPENSATION PLAN 
 Purpose of the Plan 
 The purpose of the Plan is to reward
associates for profitably growing the business and controlling cost. 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 
 1 January 2009 – 31 December 2009 
 Eligibility 
 Participation is based on each individual associate’s scope of responsibility and contribution within the organization, as well as the market median targets for the country where they are employed. 
 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
Specialty Chemicals, Inc. or a subsidiary company on 1 January 2010. 
 Eligible compensation for incentive calculation is based on the
participant’s base rate of pay as of 1 January 2009. The participant’s incentive calculation will be prorated if a change in salary or incentive target occurs during the plan year. 
 Plan Performance Measures 
 EBITDA: Earnings Before
Interest, Taxes, Depreciation and Amortization and excluding restructuring (as approved by the Board), gains/losses from the sale of businesses and integration expenses (same as ‘Segment’ EBITDA) 
 The achievement of EBITDA growth is the critical measure on which the investment community and future shareholders will evaluate Hexion’s performance in 2009. As a
result, the participants should be focused and incentivized to manage the business to achieve growth in EBITDA. 
 50% of the participant’s incentive
target will be based on the achievement of the EBITDA targets. 
 EBITDA will be measured for Global Hexion and also at each Division and specified Business
Unit. 
 EHS: Measures the Occupational Incidents Injury Rate (OIIR) 
 10% of the participant’s incentive target will be based on the achievement of the EHS Goals. 
 The applicable EHS goals
must be achieved at 100% or better in order to be eligible for an incentive award. EHS will be measured only at Global Hexion, Divisional and Business Unit levels. 
 Payment of the EHS measure is contingent upon the EBITDA results of the participant’s primary area of responsibility (Global Hexion, Divisional or Business Unit) meeting the minimum financial payout threshold. 
  

 1 

 Cash Flow: Represents the amount of cash generated by business operations. 
 40% of the participant’s incentive target will be based on the achievement of Cash Flow targets. 
 Cash Flow will be separately calculated from EBITDA for payout. Even if EBITDA target is not achieved, it is still possible to meet or exceed Cash Flow targets for partial payout. 
 Cash Flow will be measured for Global Hexion and also at the Divisional level at the plan year end. 
 Target Incentive 
 Each eligible participant will have a target incentive opportunity expressed as a percent of
their base salary. Targets are determined by the associate’s pay Band, country of employment and by the scope and contributions within the organization. 
 If the maximum EBITDA and Cash Flow performance targets are attained and the EHS performance is at 100%, this Plan can generate a maximum of 175% of the Target Incentive Award. 
 Plan Structure 
 The structure of each participant’s incentive is determined by the individual’s role
in the organization and whether they report at a business unit level, a divisional level or at the corporate level. 
  

											
	 	  	Global
Hexion
EBITDA	 	Division
EBITDA	 	Business Unit
EBITDA	 	EHS Goals	 	Cash Flow
(Funds
Independently)
	 Hexion Corporate Level
	  	50%
 (Funds EHS
Goals)
	 		 		 	10%
 Global Measure
	 	40%
 Global Measure

	 Division Level
	  	10%	 	40%
 (Funds EHS
Goals)
	 		 	10%
 Division Measure
	 	40%
 Division Measure

	 Business Unit Level
	  		 	10%	 	40%
 (Funds EHS
Goals)
	 	10%
 Division Measure
	 	40%
 Division Measure

 Calculation of Incentive Payments 
 The EBITDA and Cash Flow measures will have the following relationship towards incentive award payout at Global Hexion level: 
  

																
	 2009 Plan
	  	Minimum	 	 	Lower
Midpoint	 	 	Target	 	 	Upper
Midpoint	 	 	Maximum	 
	 Financial performance as % of Target
	  	94.7	%	 	97.4	%	 	100	%	 	105.3	%	 	110.5	%
	 Incentive Payout %
	  	50	%	 	75	%	 	100	%	 	138	%	 	175	%

  

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 For actual performance between the points above, a straight line
calculation will be made, rounded to the nearest 1/10th percent. There is no additional payment made for performance above the maximum. The final
financial award will be determined when the 2009 audited financial performance results are available. 
 Basis for Award Payouts 
 Financial Results: Bonus payments will be based on audited and approved financial results. No bonus payment will be made until formal results have been approved by
Hexion’s corporate officers. 
 Payment against the achievement of the financial measures will be as follows: 
  

	 	a.	Payment of any financial element is contingent on its own merit. 

  

	 	b.	If there is more than one financial measure, payment against each of the measures will be independent of each other. 

 For example, if measure 1: “Business Unit” is met it will pay out regardless of whether measure 2: “Division” is met. 
  

	 	c.	Payment on achievement of EHS measure is contingent upon meeting the EBITDA financial measure for the participant’s direct reporting relationship. 

 Limitations: All incentive payments must be self-funded from profits generated at the corporate, divisional, or business unit level. The Compensation Committee of
the Board of Directors may elect to modify the annual EBITDA targets based on acquisitions or divestitures that may occur during the calendar year. Hexion Specialty Chemicals has the right to amend or terminate this plan at any time. 
 Employment: Participants must be actively employed by Hexion Specialty Chemicals, Inc. or a subsidiary company on 1 January, 2010 and must have been in an
incentive eligible position for at least three full consecutive months during the financial year. 
 Performance Related Issues: Awards to
participants who are subject to a disciplinary review of performance, or are on a performance improvement plan, need to be reviewed with the HR Divisional/Functional Leader to determine if the associate is eligible for a partial award. 

Incentive Payments: Payments are subject to applicable taxes and garnishment/wage orders, and if the associate participates in the Hexion Specialty Chemical US
retirement plans, all incentive payments are subject to deferral and to plan provisions. 
 Pro-ration: A participant’s incentive payment will be
prorated for any of the following conditions: 
  

	 	a.	Base Salary and Incentive Group: Awards are normally calculated on the participant’s base salary as of 1 January of the Plan year. 

  

	 	b.	New Hires: Awards to participants who commenced employment during the Plan year will be pro-rated on the basis of full month’s service during the Plan year. Employees who
commence employment on or before the 15th of any month will be considered to have a full month’s service for that month but must be employed on or before October 1, 2009 to be eligible to receive any payout 

  

	 	c.	 Re-hires: Awards to participants who terminated during the Plan year and are subsequently rehired during the Plan year will be eligible to receive incentive
provided they have worked at least three full consecutive months in the Plan year in an incentive eligible role. Any incentive payments will be prorated based on: 1 – their rate of pay during the full months they 

  

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were employed prior to termination, and 2 – their rate of pay at the end of the Plan year for each full month of active employment after their date of
rehire. If the participant was not in an incentive eligible role at termination, no credit will be given for incentive payout for that period. 

  

	 	 d.
	 Salary/Incentive Target Changes: Awards to participants whose base rate of pay and/or incentive group changes after
January 1st of the Plan year will be pro-rated on the basis of full month’s service at each job level during the year. (Job changes on or
before the 15th of any month will be considered as in respect of the full month. Changes that take effect after the 15th of the month will be counted as effective the 1st of the next month for incentive calculation purposes.)

  

	 	e.	Transfers: Awards to participants transferring between Divisions/Business Units/Sites during the Plan year will be pro-rated on the basis of full month’s service in each
Division/Business Unit/Site during the year. Business performance against each applicable measure will be based on the full year performance. The award will be funded based on the direct reporting relationship of the associate. (Transfers on or
before the 15th of any month will be considered as in respect of the full month. Transfers that take effect after the 15th of the month will be counted as effective the 1st of the next month for incentive calculation purposes.)

  

	 	f.	Leaves of Absence/Disability: Approved leaves of absence for 12 weeks or less in the Plan year will not be excluded from the incentive payment, i.e. the associate will be eligible
to receive the full incentive payment. If an associate is absent or on a leave that exceeds 12 cumulative weeks, then any time not worked beyond the 12 weeks will be excluded for the Plan year and the associate will receive a prorated incentive.

 Timing of Payments: Typically, financial results are announced in March following the end of the Plan year and any earned incentive
payments are made in April. In no event shall payments be made prior to the final audited year end financials results of Hexion Specialty Chemicals, Inc. being formally announced and the subsequent Incentive Compensation Plan payout approval by the
Compensation Committee of the Board of Directors. No leader within the organization is to make prospective statements regarding the payment of Incentive Compensation until the Compensation Committee has given approval. 
 The Hexion Incentive Compensation Plan remains at the total discretion of the Company. Hexion retains the right to amend or adapt the design and rules of the plan.
Local legislation will prevail where necessary. 
  

 4International assignment agreement

 Exhibit 10.28 
  

			
	

	  	Hexion Specialty Chemicals, Inc.
	  	 180 East Broad Street
 Columbus, OH 43215

hexion.com

 November 13, 2008 
 Joseph Bevilaqua 
 3859 Fairlington Drive 
 Columbus, OH
43220 
 USA 
 Dear Jody, 
 Further to recent discussions, I am pleased to confirm, on behalf of Hexion Specialty Chemicals, Inc. the terms of your assignment as follows: 
 Appointment 
 You will be appointed to the position of EVP and
President of Epoxy and Phenolic Resins Division reporting to me. Your office location will be Hexion Specialty Chemicals; Seattelweg, Netherlands. 
 Commencement 
 The assignment will commence on November 1, 2008 subject to prior receipt of: 
  

	 	•	 	 any required work permit, 

  

	 	•	 	 visas for you and your spouse and any other authorizations which may be necessary, and 

  

	 	•	 	 satisfactory medical reports for yourself and your spouse – this will be your responsibility to obtain and will be reimbursed by the company for the expense.

 The company will assist in helping you obtain the appropriate visas. In the event that there is a delay to these formalities it may be
necessary to re-arrange the proposed commencement date. 
 Duration 
 The assignment is expected to be for a period of 36 months from the date of actual commencement. This period may be varied subject to mutual agreement between yourself and the Company. The assignment and future
opportunities will be reviewed 12 to 18 months prior to your return to the U.S. 
 Compensation 
 Effective October 1, 2008, your notional base salary will be $500,000 per annum. Your notional salary will be next reviewed on April 1, 2010. Each April your
assignment salary will be recalculated to reflect any merited increase based on your Home Country merit guidelines. 
 Your salary will be paid to your US
bank account. The Company will pay your actual U.S. and host country taxes attributable to your Hexion income annually. In exchange for these payments, hypothetical taxes will be withheld from your pay to represent the Federal, State and local (if
applicable) taxes you would have had to pay had you remained at your U.S. home location. 

 Your final year-end tax obligation will be calculated in accordance with appropriate Tax Equalization methodologies in
your Home and Host Country. 
 You must obtain tax advice from Deloitte with respect to Home Country and Host Country tax obligations, at the beginning and
end of your assignment. During your assignment through the year of your repatriation, the Company will pay for Home Country tax preparation assistance, Host Country tax preparation assistance, and any appropriate tax reconciliation. 
 You will continue to participate in the annual Hexion Incentive Compensation Program which provides an individual target of 70%. Your individual incentive goals will be
measured against predetermined objectives as you undertake your assignment. You should discuss and agree to these objectives with your manager. Any payment due to you will be calculated on your Home Country Notional Salary. 
 Holiday and Travel Arrangements 
 Your annual holiday (vacation)
entitlement will be 20 days. In addition you will be entitled to public holidays as observed by your Host Company. 
 The Company will reimburse you up to
$25,000 annually to cover personal travel for you and your family members. 
 Illness, Injury and Medical Coverage 
 For the duration of your assignment you and your spouse will be enrolled in the Aetna Global Medical and Dental Plan unless you choose to remain in the U.S. health
benefits program. Any medical or dental costs not covered under these schemes will be to your own account. 
 In the event of a serious illness of a member
of your immediate family the Company will provide you with compassionate leave, including return airfare to the home location, in accordance with the Company business travel policy. 
 In the unfortunate event of a death of a member of your immediate family your the Company will provide you and your spouse with compassionate leave including return airfare to the home location, in accordance with the
Company business travel policy. 
 Relocation and Repatriation 
 The Company will provide airfare for you and your spouse, from the United States to your Host Country on taking up the assignment and back to the United States on its completion. The class of travel will be incompliance with the corporate
Hexion Travel Policy. 
 The cost of shipping your personal effects from the United States and their return to the United States will also be covered up to
350kg by air and 30 cubic meters by surface/sea. 
 You will receive a relocation (disturbance) allowance at both the beginning and the end of your
assignment equivalent to 10% of your notional base salary, [Currently estimated at $50,000 USD net.] The first beginning relocation allowance is to be paid the later of 30 days of assignment commencement or Hexion receiving your signed assignment
agreement. This allowance is being paid to cover incidental expenses that you are likely to incur in leaving and later returning to your home, e.g., special maintenance needs, mail diversion, movement of personal effects into and out of storage,
storage, vet’s bills, tips, sale of vehicle, additional insurance or leasing expense etc.] 

 Upon repatriation to your Home Country, the Company will provide up to 60 days temporary housing for you and your spouse.
In addition, the Company will provide a $2500/USD one time net amount to cover expenses for you and your spouse during this time. 
 Housing

 Your total housing allowance will be up to $5000 USD/Mo, this considers the cost of furnished housing and utilities. You are responsible for the
provision of soft furnishings including linen, kitchenware, crockery, glassware and minor electrical equipment. 
 The Company will also provide temporary
housing of up to 45 days upon your arrival in your Host Country. 
 Cost of Goods 
 You will be provided with a monthly cost of goods allowance of $4800 USD. 
 Transportation 
 You will be provided with a company vehicle under the terms of the Hexion European Automobile Policy. 
 The Company will compensate for the loss of one automobile resulting from the forced sale in your Home Country. If the actual sale price is less than the published valuation market price, the Company will reimburse
the difference between sale price and the market price for the make, model, and year of the car, and other considerations (including mileage, wear and tear, etc.). Maximum reimbursement is $1500. No further expenses relating to maintaining,
insuring, purchasing, or selling one or more cars will be covered. 
 Language and Cultural Lessons 
 Your Host Company will pay for 6 months of specialized cultural and language training for you and your spouse upon your arrival. 
 Specific Terms and Conditions 
 You will continue to be eligible for
the Hexion retirement program in the United States. Your contributions for these plans will be based on your notional base salary, and deductions will be made accordingly from your salary paid in your Home Country. 
 Completion of Assignment 
 Upon successful completion of this
assignment, the Company will make a good-faith effort to move you on to a position which will enable you to continue to develop your career and where Hexion can benefit from the skills and experience you acquire while on assignment. 
 The Company will seek to offer you a suitable alternative position in the US upon successful completion of the assignment. However, the Company cannot provide any
guarantee that a suitable comparable position will be available upon completion of your assignment. If no position is available to you in the US, the Company will be responsible for relocating you back to the US. 
 On return following successful completion of the assignment, you will continue under the normal Country terms and conditions of employment and the additional benefits
associated with your International assignment will cease to apply. 

 Early Termination of Assignment 
 Your assignment may be terminated early if: 
  

	 	•	 	 you give not less than 3 months’ written notice to the Company, or 

  

	 	•	 	 the Company gives written notice to you to take effect at any time stated in the notice if in the absolute discretion of the Company, for any reason. It is
impracticable or undesirable for the assignment to continue. The Company will make every effort to give you as much notice as possible but at least a minimum of 3 months. 

 On early termination of the assignment by the Company: 
  

	 	•	 	 repatriation arrangements will apply as if the assignment had been completed, and 

  

	 	•	 	 you will be reimbursed for unavoidable expense incurred as a result of termination for a maximum period of 3 months from repatriation. 

In the event you have given notice in order to terminate your employment, you will be responsible for all arrangements and costs associated with your repatriation.
You must be actively employed to receive any of the assignment allowances that are described in this agreement. 
 Obligations of the Assignment

 You must devote the whole of your working time and attention to the assignment and in consequence you are not permitted to engage in any other business
activity in your Host Country or any other occupation undertaken for profit or gain. 
 You are expected to comply with local conditions of employment and
administrative procedures including safety regulations, local working hours, works rules, and business expense claims. 
 As a representative of Hexion you
are expected to comply with the local laws, customs and regulations in your Host Country. 
 Modifications to Existing Terms and Conditions

 Throughout the assignment you will remain an employee of your Home Country but once you leave your current job to take up this assignment, your terms
and conditions of employment are supplemented by the terms of this letter and attachments. 
 Law 
 US law is the proper law of this Agreement. 
 Please confirm your acceptance
of this assignment offer by signing and returning the duplicate copy of this letter. 
 On behalf of Hexion may I take this opportunity of congratulating you
on this appointment and wishing you and your family every success. 
  

	
	Yours sincerely,
	
	 /s/ Craig O. Morrison

	Craig O. Morrison
	President and Chief Executive Officer
	Hexion Specialty Chemicals, Inc.

 I am pleased to accept the assignment under the terms referred to above and the attached addendums. 
  

							
	 /s/ Joseph P. Bevilaqua
	 		 		 	11/17/08
	 Joseph Bevilaqua
	 		 		 	Date

  

			
	cc	  	Judy Sonnett
		  	US file

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