Document:

2010 Incentive Compensation Plan

 Exhibit 10.20 
 Hexion Specialty Chemicals, Inc. 
 2010 INCENTIVE
COMPENSATION PLAN 
 Purpose of the Plan 
 The purpose of the Plan is to reward associates for 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

 1 January 2010 – 31 December 2010 
 Eligibility 
 Participation is based on each individual associate’s scope of
responsibility and contribution within the organization, as well as the market prevalence for incentive in 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 2011.

 Eligible compensation for incentive calculation is based on the participant’s base rate of pay as of 31 December, 2010. The
participant’s incentive calculation will be prorated if a change in salary or incentive target occurs after 1 April of 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 2010. 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, each Division and specified Business Units. 
 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 for Global Hexion, each Division and specified Business Units. 
  

					
	3/5/2010	  	1	  	

 Payment of the EHS measure is contingent upon the EBITDA results of the participant’s primary area of
responsibility (Global Hexion, Division or Business Unit) meeting the minimum financial payout threshold. 
 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 the 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 the Divisions at the end of the plan
year. 
 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, the scope of their role and contributions within
the organization. 
 If the maximum EBITDA and Cash Flow performance targets are attained and the EHS performance is at 100% or better, the Plan
will pay 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
(Funds through
EBITDA
achievement)	 	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%
 Business Unit
Measure
	 	40%
 Division Measure

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

																
	 2010 Plan
	  	Minimum	 	 	Lower
Midpoint	 	 	Target	 	 	Upper
Midpoint	 	 	Maximum	 
	 Financial performance as % of Target
	  	89.3	% 	 	94.7	% 	 	100	% 	 	105.5	% 	 	110.9	% 
	 Incentive Payout %
	  	50	% 	 	75	% 	 	100	% 	 	138	% 	 	175	% 
	 Sr. LeadershipTeam Incentive Payout %
	  	50	% 	 	75	% 	 	100	% 	 	150	% 	 	200	% 

  

					
	3/5/2010	  	2	  	

 For actual performance between the Minimum, Target and Maximum 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 2010 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, 2011 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 plan, 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 31 December of the Plan year. 

 

					
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	 	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, 2010 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 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 financial 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. 
  

					
	3/5/2010	  	4Summary of Terms of Employment

 Exhibit 10.23 
 HEXION SPECIALTY CHEMICALS, INC. 
 SUMMARY OF TERMS
OF EMPLOYMENT 
 FOR JOSEPH BEVILAQUA 
  

					
	Position:	  	EVP and President, Epoxy and Phenolics Division
		
	Base Salary:	  	$ 500,000 per year, paid bi-weekly
		  	You will be paid on a bi-weekly basis, with your checks being electronically deposited to your bank checking or savings account(s).
		
	Effective Date:	  	August 10, 2008
		
	Incentive:	  	You will continue to be eligible to participate in the Hexion 2008 Incentive Compensation Plan. Your target incentive award remains at 70% of your base salary. Your
2008 incentive will be prorated using your base salary and target incentive prior to your promotion and your base salary and target incentive after your promotion is effective. (Promotional changes that occur on or before the 15th of any month will be considered as a full month for calculation
purposes.) The Incentive Compensation Plan is contingent upon the achievement of specific company economic goals as well as individual incentive goals. The terms of this plan and eligibility for participation are reviewed annually
		
	Severance:	  	This agreement confirms that in the event that you were to lose your job through no fault of your own you are eligible to receive the following severance package:

			
		  	•	  	18 months of your then base salary
			
		  	•	  	18 months of company contributions towards the cost of continued medical and dental coverage (COBRA)
			
		  	•	  	12 months of Executive Outplacement services
			
		  	•	  	Payment for accrued, but unused vacation
			
		  	•	  	Repatriation back to Columbus, Ohio based on the terms of your International Assignment.
		
	Relocation:	  	You will receive detailed terms on your International Assignment to The Netherlands. However if you choose, you be covered under the Hexion Homeowner Buyout Program.
Before initiating any action with your move, please contact Madeline Frank at SIRVA Relocation, phone 630-570-8965. She has been retained by Hexion to assist you with all phases of your move and can help you with any questions you may
have.
		
	Terms of Plans:	  	Some of the above are highlights of various plans or programs, and all are subject to the terms of the actual plans and programs.

			
	“AT WILL” Statement:	  	The legal nature of this employment contract is one “AT WILL”, which means that either you or the Company can end this relationship at any time.
		
		  	Other than as changed herein, the terms of your Amended and Restated Employment Agreement dated as of August 12, 2004 will remain in place.

  

							
	OFFER ACCEPTED:	 		  		 	
				
	  
	 		  	  
	 	
	Signature	 		  	Date

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