Document:

10.34 - 2015 Cash LTI Plan

Exhibit 10.34

	
	
	MPM Holdings Inc.                                                                                                                                  Long-Term Cash Incentive Plan (the “Plan”)

		
	I.
	Purpose of the Plan

To provide key employees of subsidiaries of MPM Holdings Inc. (the ”Company”) with a performance- based incentive program to drive the achievement of long-term business success.

		
	II.
	Definition of Terms

Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Company’s Management Equity Plan.

		
	III.
	Eligibility to Participate

Awards under the Plan may be granted only to employees of the Company’s subsidiaries. Each person to whom an award is granted under the Plan is referred to as a “Participant”.  Participants are selected based on the scope of their responsibility and contribution in building value for the total enterprise.  Participants are nominated by their employer and approved by the employer’s Board of Directors (the “Board”).

		
	IV.
	Individual Awards

Awards may be granted under the Plan at any time and from time to time on or prior to the termination of the Plan.   The award agreement for each participant will set forth the Participant’s target award and the conditions for payment of such award.

V.    No Right to Award or Grant

The Plan is strictly a voluntary undertaking on the part of the Company, and no Person shall have any claim to receive any award under the Plan.  The Plan is subject to modification and termination by the Board at any time, with or without notification to participants.    All determinations made by the Company in respect of the Plan will be conclusive and binding on all participants, and shall be given the maximum deference permitted by law.

There is no obligation for uniformity of treatment of participants regarding the awards made, including with respect to the vesting or payment of any awards.  The terms and conditions of awards made under the Plan need not be the same with respect to each participant.

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All payments are subject to applicable restrictions contained in the Company’s and its subsidiaries’ debt and equity financing agreements.  If any such restrictions prohibit or otherwise delay payments due to participants in the Plan, then the employer shall have the option to make such payments within thirty (30) days of the date that it is first permitted to make such payments.  

Participants and their beneficiaries or heirs shall have no legal or equitable rights, claims or interest in any specific property or assets of the Company.  The payment obligations under the Plan shall constitute merely an unfunded and unsecured promise of the Company’s subsidiaries to pay compensation in the future to those Participants to whom there is an obligation under the Plan in accordance with its terms.  The rights of the Participants and any beneficiaries or heirs shall be no greater than those of the Company’s and its subsidiaries’ unsecured general creditors.

The Company values its reputation for integrity and honesty.  Achieving business results at the expense of violation of the law, regulations, or business ethics or allowing individuals under one’s supervision to behave in this manner is never in the best interest of the Company or its subsidiaries. Accordingly, if ethical or honesty standards of behavior are violated or if any such behavior of personnel under a Participant’s supervision is knowingly condoned, any award to a Participant under the Plan is subject to forfeiture.

VI.    No Evidence or Right of Employment or Service

Nothing contained in the Plan or any other document related to the Plan constitutes an employment or service commitment by the Company or its subsidiaries; affects the employment status of the Participant who is subject to termination without cause; confers upon the Participant any right to remain employed by or in the service of the Company or its subsidiaries; interferes in any way with the right of the Company or its subsidiaries to terminate the Participant’s employment; or to change the Participant’s compensation or other terms of employment at any time.

VII.    Termination

The Plan will terminate on December 31, 2020, unless earlier terminated (the “Termination Date”).  No awards may be granted after the Termination Date.  Any awards outstanding on the Termination Date shall remain in effect until such award terminates as provided in the applicable award agreement.

VIII.    Code Section 409A Compliance

If any payment of an award pursuant to this Plan or an award agreement would subject the Participant to tax under Section 409A of the Code, the  Plan or award agreement shall be modified in the least restrictive manner necessary in order to comply with the provisions of Section 409A, other applicable provisions(s) of the Code and/or any rules, regulations or other regulatory guidance issued under such
statutory provisions and, in each case, without any material diminution in the value of the payments to an affected Participant.

*            *            *

    
Adopted:10.35 - 2015 Modification to 2012 Cash LTI

Exhibit 10.35

March [__], 2015

[Name]
[Position]
MPM Holdings Inc.
260 Hudson River Road
Waterford, NY 12188

Dear [Name]:  

Reference is made to the Momentive Performance Materials Holdings LLC 2012 Long-Term Cash Incentive Plan (the “2012 Cash LTIP”), of which you are a participant.  Annex A to this letter sets forth the details of your award under the 2012 Cash LTIP as of the date hereof, including the total dollar amount of your target award and the components of such award subject to service-based and performance-based vesting.  

As you know, 50% of your target award under the 2012 Cash LTIP (the “Service-Based Award”) is scheduled to be paid in April 2015, subject to your continued employment in active service with Momentive Performance Materials Holdings LLC’s subsidiaries through the payment date.  Although your current employment is with a subsidiary of MPM Holdings Inc. (“MPM”) and not a subsidiary of Momentive Performance Materials Holdings LLC, MPM or one of its subsidiaries shall pay your Service-Based Award subject to (i) your continued employment in active service with MPM and its subsidiaries through the payment date and (ii) the other terms and conditions set forth in the 2012 Cash LTIP.  

As you further know, the remaining 50% of your target award under the 2012 Cash LTIP (the “Performance-Based Award”) is subject to the EBITDA goals of Momentive Performance Materials Holdings LLC as set forth in the 2012 Cash LTIP.  The Compensation Committee of MPM’s Board of Directors (the “Committee”) has approved modified performance targets and other terms for your Performance-Based Award to give you an opportunity to earn your Performance-Based Award based on fiscal year 2015 performance, as follows:

		
	▪
	In lieu of the EBITDA goals set forth in the 2012 Cash LTIP, you will be eligible to receive: 

		
	◦
	50% of your Performance-Based Award (i.e., 25% of your target award under the 2012 Cash LTIP) if and only if MPM’s annual EBITDA for fiscal year 2015 is $[_____] or greater.  If such annual EBITDA target is not achieved in respect of fiscal year 2015 performance, then that portion of your Performance-Based Award shall be entirely forfeited and cancelled without consideration therefor. 

Doc#: US1:9905857v3                    

		
	◦
	50% of your Performance-Based Award (i.e., 25% of your target award under the 2012 Cash LTIP) if and only if MPM’s annual Free Cash Flow for fiscal year 2015 is $[_____] or greater.  If such annual Free Cash Flow target is not achieved in respect of fiscal year 2015 performance, then that portion of your Performance-Based Award shall be entirely forfeited and cancelled without consideration therefor.

		
	▪
	All determinations of achievement of “EBITDA” and “Free Cash Flow” shall be made by the Committee, and shall be conclusive and binding.  Any and all payments under this letter must be approved in advance by the Committee.  

		
	▪
	If any portion of your Performance-Based Award is earned based on the EBITDA and/or Free Cash Flow goals achieved for fiscal year 2015, then MPM shall pay such portion to you in cash in April 2016 subject to your continued employment in active service with MPM or its subsidiaries through the payment date.  Any and all payments made under this letter will be subject to any and all applicable income, employment and other tax withholding requirements.

		
	▪
	If your employment with MPM and its subsidiaries is terminated for any reason or by any party before the payment date, then your entire Performance-Based Award shall be forfeited and cancelled without consideration therefor.

		
	▪
	For the avoidance of doubt, by signing below, you agree to the modified performance targets and other terms with respect to your Performance-Based Award as set forth above, and you acknowledge and agree you shall not be entitled to any additional payment in respect of the Performance-Based Award if the EBITDA goals of Momentive Performance Materials Holdings LLC as set forth in the 2012 Cash LTIP are actually achieved.  

This opportunity applies only to you and selected key employees.  We hope this opportunity will encourage your alignment with MPM’s performance goals, especially for this upcoming year. Please note that the terms of this letter (including the performance goals) are strictly confidential and, except as required by law, shall not be disclosed by you to any person other than your spouse and legal, financial and other advisors (if any).  

This letter is intended to modify the applicable provisions of the 2012 Cash LTIP with respect to the subject matter hereof, and this letter and the 2012 Cash LTIP shall be construed in accordance with such intent.  Except as expressly modified by this letter, the provisions of the 2012 Cash LTIP are and shall remain in full force and effect.  To the extent that a provision of this letter conflicts with or differs from a provision of the 2012 Cash LTIP, such provision of this letter shall prevail and govern for all purposes and in all respects.  Without limiting the generality of the foregoing, the 2012 Cash LTIP and this letter, including the performance goals set forth herein, are subject to modification and termination by the Committee at any time, with or without notification.  

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This letter and the 2012 Cash LTIP represent the entire understanding between MPM, Momentive Performance Materials Holdings LLC, and each of their respective affiliates and you regarding the subject matter hereof and thereof, and any previous or current discussions, negotiations, or understandings that are not set forth in this letter or the 2012 Cash LTIP are superseded.  This letter does not constitute a contract of employment.

[Name], thank you for your contributions to date and for the contributions that we can count on you delivering in the time ahead.     

Very truly yours,

MPM HOLDINGS INC.

                            
By:_________________________
     [Name]
     [Position] 

Acknowledged and agreed: 

________________________
[Name]

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ANNEX A
Summary of Award under 
2012 Cash LTIP

	
			
	 
	Percentage of Award
	Potential Dollar Amount          of Award

	Service-Based Award
	50% 
	$[_____]

	Performance-Based Award
	50% 
	$[_____]

	Total Target Award
	100% 
	$[_____]

The vesting conditions of the Performance-Based Award, as modified by the letter to which this Annex A is attached, are further detailed below: 
	
					
	Performance Measure
	FY 2015 Target
	Percentage of Performance-Based Award
	Percentage of Total Award
	Potential Dollar Amount of Award

	EBITDA
	$[_____]
	50% 
	25% 
	$[_____]

	Service-Based Award
	$[_____]
	50% 
	25% 
	$[_____]

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