Document:

EX-10.2

 Exhibit 10.2 

LSB INDUSTRIES, INC. 
 (2008
Stock Incentive Plan) 
 RESTRICTED STOCK AGREEMENT 

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is effective as of December 31, 2015 (the “Grant
Date”), by and between LSB INDUSTRIES, INC., a Delaware corporation (the “Company”), and Daniel D. Greenwell (the “Participant”). For valuable consideration, the Company and Participant agree as follows.

 1. Background. The Participant is an employee, officer or director of the Company or an Affiliate, whom the Compensation Committee of the Board of
Directors of the Company (“Committee”) has selected to receive an award under the Company’s 2008 Stock Incentive Plan (as may be amended from time to time, the “Plan”). The purpose of the award is to retain and
motivate the Participant by providing the Participant the opportunity to acquire a proprietary interest in the Company and to link the Participant’s interests and efforts to the long-term interests of the Company’s shareholders. 

2. Restricted Stock Grant. Subject to the terms of the Plan and of this Agreement, the Company hereby grants to the Participant 376,045 shares of the
Company’s Common Stock, subject to certain restrictions thereon (the “Restricted Stock”). 
 3. Restrictions; Forfeiture. The
Restricted Stock is restricted in that it may not be sold, transferred or otherwise alienated or hypothecated until the restrictions enumerated in this Agreement and the Plan are removed or expire as contemplated in Section 4 of this Agreement.
The Restricted Stock is also restricted in the sense that it may be forfeited to the Company (the “Forfeiture Restrictions”). Except as otherwise provided in Section 4, if the Participant’s service relationship with the
Company or any of its subsidiaries is terminated for any reason, then those shares of Restricted Stock for which the restrictions have not lapsed as of the date of termination shall become null and void and those shares of Restricted Stock shall be
forfeited to the Company. The Restricted Stock for which the restrictions have lapsed as of the date of such termination shall not be forfeited to the Company. The Participant hereby agrees that if the Restricted Stock is forfeited, the Company
shall have the right to deliver the Restricted Stock to the Company’s transfer agent for, at the Company’s election, cancellation or transfer to the Company. 

4. Vesting. 
 4.1 The restrictions on the
Restricted Stock granted pursuant to this Agreement will expire and the Restricted Stock will become transferable, and nonforfeitable as to 15% of the Restricted Stock as of the Grant Date and one-third of the remaining Restricted Stock on the first
anniversary, and each subsequent anniversary, of the Grant Date, such that 100% of the shares of Restricted Stock shall be vested on the three-year anniversary of the Grant Date; provided, however, that, except as otherwise provided in
Section 4.2 of this Agreement or in the Employment Agreement between the parties dated as of December 31, 2015 (the “Employment Agreement”), the Restricted Stock will vest on

 Exhibit 10.2 

 

 
such dates only if the Participant remains in the employ of or a service provider to the Company or its subsidiaries continuously from the Grant Date through the applicable vesting date. 

4.2 Notwithstanding Section 4.1 of this Agreement, provided that (i) the Participant remains in the employ of or a service provider
to the Company or its subsidiaries continuously from the Grant Date until immediately prior to the occurrence of any of the events listed below and (ii) the Participant holds Restricted Stock granted pursuant to this Agreement at such time,
then: 
  

	 	4.2.1	all shares of Restricted Stock shall automatically vest in full upon a Change in Control of the Company (as defined in the Employment Agreement); 

 

	 	4.2.2	all shares of Restricted Stock shall automatically vest in full upon a termination of the Participant’s employment by the Company without Cause (as defined in the Employment Agreement) or by the Participant for
Good Reason (as defined in the Employment Agreement); or 

  

	 	4.2.3	a pro-rata portion of the Restricted Stock shall automatically vest upon the Participant’s termination of employment by reason of death or Disability (as defined in the Employment Agreement) with such pro-rata
portion calculated by multiplying the number of shares of Restricted Stock scheduled to vest on the anniversary of the Grant Date immediately succeeding such termination of employment by a fraction, the numerator of which is the number of days that
have elapsed from the last anniversary of the Grant Date (or if such termination of employment occurs prior to the first anniversary of the Grant Date, then the number of days that have elapsed from the Grant Date) through the date of such
termination of employment and the denominator of which shall be 365. 

 5. Escrow of Restricted Stock. The Company shall evidence the
Restricted Stock in the manner that it deems appropriate, including, without limitation, certificating the Restricted Stock or evidencing the Restricted Stock in book entry form, electronic or otherwise. The Company may issue in the
Participant’s name a certificate or certificates representing the Restricted Stock and retain that certificate or those certificates until the restrictions on such Restricted Stock expire, as contemplated in Section 4 of this Agreement, or
the Restricted Stock is forfeited, as described in Section 3 of this Agreement. If the Company certificates the Restricted Stock, the Participant shall execute one or more stock powers in blank for those certificates and deliver those stock
powers to the Company. The Company shall hold the Restricted Stock and the related stock powers pursuant to the terms of this Agreement, if applicable, until such time as (a) a certificate or certificates for the Restricted Stock are delivered
to the Participant, (b) the Restricted Stock is otherwise transferred to the Participant free of restrictions, or (c) the Restricted Stock is canceled and forfeited pursuant to this Agreement. 

6. Ownership of Restricted Stock. From and after the Grant Date, the Participant will be entitled to all the rights of absolute ownership of the
Restricted Stock granted under this Agreement, including the right to vote those shares; provided, however, that any dividends paid by the Company with respect to the Restricted Stock prior to the expiration of the Forfeiture

 Exhibit 10.2 

 

 
Restrictions shall be held in escrow by the Company and paid to the Participant, if at all, at the time the Forfeiture Restrictions expire on the Restricted Stock for which the dividend accrued;
provided, further, that in no event shall dividends be settled later than 45 days following the date on which the Forfeiture Restrictions expire with respect to the Restricted Stock for which the dividends were accrued. For purposes of clarity, if
the Restricted Stock is forfeited by the Participant pursuant to the terms of this Agreement then the Participant shall also forfeit the dividends, if any, accrued with respect to such forfeited Restricted Stock. No interest will accrue on the
dividends between the declaration and settlement of the dividends. 
 7. Delivery of Stock. Promptly following the expiration of the restrictions on
the Restricted Stock as contemplated in Section 4 of this Agreement, the Company shall cause to be issued and delivered to the Participant or the Participant’s designee a certificate or other evidence of the number of whole shares of
Restricted Stock as to which restrictions have lapsed, free of any restrictive legend relating to the lapsed restrictions, upon receipt by the Company of any tax withholding as may be requested pursuant to Section 8 of this Agreement. The value
of such Restricted Stock shall not bear any interest, and the Company shall not have any liability to the Participant other than to deliver the Restricted Stock and associated dividends, if any, because of to the passage of time or any delay in
delivery. 
 8. Payment of Taxes. The Company may require the Participant to pay to the Company (or the Company’s subsidiary if the Participant
is an employee of a subsidiary of the Company), an amount the Company deems necessary to satisfy its (or its subsidiary’s) current or future obligation to withhold federal, state, and local income or other taxes that the Participant incurs as a
result of the vesting of the Restricted Stock. With respect to any required tax withholding, the Participant may (a) direct the Company to withhold from the shares of Common Stock to be issued to the Participant under this Agreement the number
of shares necessary to satisfy the Company’s obligation to withhold taxes, which determination will be based on the shares’ Fair Market Value at the time such determination is made; (b) deliver to the Company shares of Common Stock
sufficient to satisfy the Company’s tax withholding obligations, based on the shares’ Fair Market Value at the time such determination is made; (c) deliver cash to the Company sufficient to satisfy its tax withholding obligations; or
(d) satisfy such tax withholding through any combination of (a), (b) and (c). If the Participant desires to elect to use the stock withholding option described in subparagraph (a), the Participant must make the election at the time and in
the manner the Company prescribes. If such tax obligations are satisfied under subparagraph (a) or (b), the maximum number of shares of Common Stock that may be so withheld or surrendered shall be the number of shares of Common Stock that have
an aggregate Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such tax liabilities determined based on the greatest withholding rates for federal, state, and local, tax purposes, including payroll taxes,
that may be utilized without creating adverse accounting treatment with respect to such Award. The Company, in its discretion, may deny the Participant’s request to satisfy its tax withholding obligations using a method described under
subparagraph (a), (b), or (d). In the event the Company determines that the aggregate Fair Market Value of the shares of Common Stock withheld as payment of any tax withholding obligation is insufficient to discharge that tax withholding obligation,
then the Participant must pay to the Company, in cash, the amount of that deficiency immediately upon the Company’s request. 

 Exhibit 10.2 

 

 9. Leave of Absence. With respect to the Restricted Stock, the Company may, in its sole discretion,
determine that if the Participant is on leave of absence for any reason, the Participant will be considered to still be in the employ of, or providing services to, the Company, provided that rights to the Restricted Stock during a leave of absence
will be limited to the extent to which those rights were earned or vested when the leave of absence began. 
 10. Compliance with Securities Law.
Notwithstanding any provision of this Agreement to the contrary except for Section 16, the issuance of Common Stock (including Restricted Stock) will be subject to compliance with all applicable requirements of federal, state, or foreign law
with respect to such securities and with the requirements of any stock exchange or market system upon which the Common Stock may then be listed. No Common Stock will be issued hereunder if such issuance would constitute a violation of any applicable
federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Common Stock may then be listed. In addition, Common Stock will not be issued hereunder unless
(i) a registration statement under the Securities Act, is at the time of issuance in effect with respect to the shares issued or (ii) in the opinion of legal counsel to the Company, the shares issued may be issued in accordance with the
terms of an applicable exemption from the registration requirements of the Securities Act. THE PARTICIPANT IS CAUTIONED THAT ISSUANCE OF UNRESTRICTED STOCK UPON THE VESTING OF RESTRICTED STOCK GRANTED PURSUANT TO THIS AGREEMENT MAY NOT OCCUR UNLESS
THE FOREGOING CONDITIONS ARE SATISFIED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of the
Restricted Stock, or unrestricted Common Stock (upon vesting), will relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority has not been obtained. As a condition to any issuance
hereunder, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such
compliance as may be requested by the Company. From time to time, the Committee and appropriate officers of the Company are authorized to take the Securities Actions necessary and appropriate to file required documents with governmental authorities,
stock exchanges, and other appropriate Persons to make shares of Common Stock available for issuance. 
 11. Certain Defined Terms. Capitalized terms
used but not defined herein shall have the meanings set forth in the Plan. 
 12. Anti-dilution. In the event of a stock dividend, stock split,
spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to shareholders other than a normal cash dividend or other change in the Company’s corporate or capital structure, then the Committee shall make
proportional adjustments to the Restricted Stock and/or the Plan as described in Section 13 of the Plan. 
 13. The Plan. Participant
acknowledges receipt of a copy of the Plan, which is attached hereto as Exhibit A, and represents that Participant is familiar with the terms and provisions of the Plan and hereby accepts the Restricted Stock subject to all such terms and
provisions. 

 Exhibit 10.2 

 

 14. Employment. Nothing in the Plan or in this Agreement shall confer upon Participant any right to
continued employment as an employee of the Company or its Affiliates or interfere in any way with the right of the Company and its Affiliates to terminate Participant’s employment at any time. 

15. Binding Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors,
administrators, trustees, successors and assigns. 
 16. Company Representations and Warranties. The Company represents and warrants that there are
sufficient shares under the Plan (and will reserve same) for this award and also that it will take all reasonable steps necessary to file an S-8 or other registration statement to enable it to issue shares of Restricted Stock to Participant upon the
Grant Date and for Participant to sell them once vested. 
 17. No Liability for Good Faith Determinations. The Company and the members of the
Committee and the Board shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Restricted Stock granted hereunder. 

18. Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of Common Shares or property to the Participant or the
Participant’s legal representative, heir, legatee, or distribute, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such Persons hereunder. The Company may require the Participant
or the Participant’s legal representative, heir, legatee or distribute, as a condition precedent to such payment or issuance, to execute a release solely with respect to the delivered Restricted Stock and receipt therefor in such form as it
shall reasonably determine. 
 19. Governing Law and Consent to Jurisdiction and Venue. All questions arising with respect to the provisions of this
Agreement shall be determined by application of the laws of Oklahoma, without giving any effect to any conflict of law provisions thereof, except to the extent Oklahoma state law is preempted by federal law. Further, the Participant hereby consents
and agrees that state courts located in Oklahoma City, Oklahoma and the United States District Court for the Western District of Oklahoma each shall have personal jurisdiction and proper venue with respect to any dispute between the Participant and
the Company arising in connection with the Restricted Shares or this Agreement. In any dispute with the Company, the Participant will not raise, and the Participant hereby expressly waives, any objection or defense to such jurisdiction as an
inconvenient forum. 
 20. Clawback. This Agreement and the Restricted Stock granted hereunder is subject to any written clawback policies of the
Company, whether in effect on the Grant Date or adopted, with the approval of the Board, following the Grant Date and either (i) applicable to all senior executives of the Company and their restricted stock awards or (ii) adopted to
conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by the Securities and Exchange Commission. Any such policy may subject the Restricted Stock and amounts paid or realized with respect
to the Restricted Stock to reduction, 

 Exhibit 10.2 

 

 
cancelation, forfeiture or recoupment if certain specified events or wrongful conduct occur as specified in such policy, including but not limited to an accounting restatement due to the
Company’s material noncompliance with financial reporting regulations or other events or wrongful conduct specified in any such clawback policy and which the Company determines should apply to the Restricted Stock in accordance with this
Section 20. 
 21. Electronic Delivery. The Participant consents to receive documents from the Company and any plan administrator by means of
electronic delivery, provided that such delivery complies with applicable law. This consent shall be effective for the entire time that the Participant holds awards granted under the Plan. 

22. Entire Agreement. This Agreement and the Employment Agreement constitute the entire agreement between the Company and the Participant relating to
the Restricted Stock. Any previous agreement with respect to this matter is superseded by this Agreement. Unless otherwise provided in the Plan, no term, provision or condition of this Agreement may be modified in any respect except by a writing
executed by both of the parties hereto. No person has any authority to make any representation or promise not set forth in this Agreement. This Agreement has not been executed in reliance upon any representation or promise except those contained
herein and in the Employment Agreement. 
 EXECUTED effective as of the Grant Date. 

 

					
	LSB INDUSTRIES, INC., a Delaware corporation
		
	By:	 	 /s/ Mark T. Behrman

		 	[Name]	 	Mark T. Behrman
		 	[Title]	 	CFO
		
		 	 /s/ Daniel D. Greenwell

		 	Daniel D. Greenwell
		 	Participant

 Exhibit 10.2 

 

 Exhibit A 

LSB Industries, Inc. 2008 Incentive Stock Plan 

(as amended and restated effective April 3, 2014)Exhibit

EXHIBIT 10.1
January 1, 2016
William H. Carter  
c/o Hexion Inc. 
180 East Broad Street
Columbus, Ohio 43215-3799
 

Dear Bill:
This letter agreement (this “Agreement”) sets forth certain terms and conditions relating to your retirement from Hexion Inc., a New Jersey corporation (the “Company”).  Capitalized terms used in this Agreement that are not otherwise defined shall have the meaning attributed to them in the Amended and Restated Employment Agreement between the Company and you, dated as of August 12, 2004 (the “Employment Agreement”).
For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Company and you hereby agree as follows:
1.Retirement.  

(a)You shall remain continuously employed in active service through and including January 1, 2016 (the “Retirement Date”).  Effective as of the Retirement Date and without further action by any person, your employment with the Company shall end and you shall be deemed to have relinquished any and all titles, positions and appointments with the Company, Hexion Holdings LLC (“Parent”) or any of their respective subsidiaries or affiliates (collectively, the “Company Group”), whether as an officer, director, employee, consultant, agent, trustee or otherwise, except for those positions set forth on Schedule A hereto.  You agree to execute such documents promptly as may be requested by the Company to evidence your separation from employment and cessation of service on the Retirement Date.  The parties agree that the cessation of your employment is due to your voluntary resignation upon retirement.  

(b)You shall be entitled to receive the following, provided that your receipt of the payments and benefits referenced in Sections 1(b)(iii) and (iv) below are subject to your satisfaction of the conditions in Section 1(d) hereof: 

		
	(i)
	continued payments of your Annual Base Salary through the Retirement Date; 

		
	(ii)
	prompt reimbursement of expenses incurred in the course of and for the purposes of your employment that have been submitted prior to, and are unpaid as of, the Retirement Date, or have been properly submitted within 30 days following the Retirement Date; 

		
	(iii)
	payment of your incentive bonus under Parent’s 2015 Incentive Compensation Plan, as if you had remained employed through the payment date and subject to achievement of the applicable performance targets and other terms and conditions of the plan, such incentive bonus to be payable in 2016 in a lump sum at the same time bonuses are generally paid to other incentive plan participants; 

		
	(iv)
	payment of the portion of your “Target Award” payable in April 2016 under Section 3(b) of the 2014 Cash-Based Long-Term Incentive Award Agreement between the Company and you, granted under Parent’s Long-Term Cash Incentive Plan, as if you had remained employed through the payment date and subject to the other terms and conditions of the plan and your award agreement; 

		
	(v)
	the Health & Welfare Benefits and Retirement Benefits as set forth in the Total Rewards Information document prepared for and provided to you;

		
	(vi)
	 payment of your vested benefits under the Momentive Specialty Chemicals Inc. Supplemental Executive Retirement Plan, in accordance with the terms thereof (including, for the avoidance of doubt, employer contributions made thereunder in respect of fiscal 2015; and

		
	(vii)
	distribution of your “Deferred Compensation Account” under the BHI Acquisition Corp. 2004 Deferred Compensation Plan, in accordance with the terms thereof, in a single lump sum payment in the form of 192,969 Common Units in Parent.

(c)You have received equity awards under the BHI Acquisition Corp. 2004 Stock Incentive Plan (the “2004 Plan”) and the Momentive Performance Materials Holdings LLC 2011 Equity Incentive Plan (the “2011 Plan”), which are set forth on Schedule B hereto.  With respect to those awards, we agree, subject to your satisfaction of the conditions in Section 1(d) hereof, that:  

		
	(i)
	notwithstanding anything to the contrary in your August 12, 2004 award agreement granted under the 2004 Plan, your vested option to acquire 482,422 Common Units in Parent granted pursuant thereto shall remain exercisable and expire on December 31, 2017 (i.e., the existing expiration date of the option, as previously modified), subject to earlier cancellation under the 2004 Plan; 

		
	(ii)
	with respect to your option granted pursuant to your February 23, 2011 award agreement under the 2011 Plan, notwithstanding anything in such award agreement to the contrary: 

(A)     the unvested Tranche B and Tranche C portions of your option with respect to 232,400 Common Units in Parent granted pursuant thereto shall continue to be eligible to vest on the terms and conditions set forth in such award agreement, as if you had remained employed through the earlier of (i) the applicable vesting date and (ii) December 31. 2020; and 
(B)     the vested Tranche A portion of your option with respect to 232,401 Common Units in Parent granted pursuant thereto, as well as any unvested Tranche B and Tranche C portions of your option which may become vested, shall remain exercisable and shall expire on December 31, 2020, subject to earlier cancellation under the 2011 Equity Plan;
		
	(iii)
	with respect to your option granted pursuant to your March 8, 2013 award agreement under the 2011 Plan, notwithstanding anything in such award agreement to the contrary: 

(A)     the unvested portion of your option with respect to 178,856 Common Units in Parent granted pursuant thereto shall continue to be eligible to vest on December 31, 2016 in accordance with the terms and conditions set forth in such award agreement, as if you had remained employed through such date; and 
(B)    the vested portion of your option with respect to 536,559 Common Units in Parent granted pursuant thereto, as well as the unvested portion of your option which becomes vested on December 31, 2016, shall remain exercisable and shall expire on December 31, 2020, subject to earlier cancellation under the 2011 Equity Plan; and  
		
	(iv)
	your 77,466 unvested restricted deferred units granted pursuant to your February 23, 2011 award agreement under the 2011 Plan, as well as your 564,913 unvested restricted deferred units granted pursuant to your March 8, 2013 award agreement under the 2011 Plan, shall continue to be eligible to vest on the terms and conditions set forth in the respective award agreements, as if you had remained employed, through the earlier of (i) the applicable vesting date and (ii) December 31, 2020. 

You currently hold 77,468 Common Units in Parent acquired from previously settled restricted deferred units, which shall remain unaffected by your separation from employment.  
For the avoidance of doubt, the parties intend that the extended term of your options as described above shall be compliant with Section 409A of the U.S. Internal Revenue Code, as amended, and in no event shall such term be extended beyond the original expiration date of such option.
(d)Notwithstanding anything to the contrary herein, in order to receive the payments and benefits referenced in Sections 1(b)(iii), 1(b)(iv) and 1(c), you must: 

		
	(i)
	enter into this Agreement on January 1, 2016 and not revoke the Release (as defined in Section 4(a) hereof) prior to the expiration of the applicable Revocation Period (as defined in Section 4(f) hereof), such that the Release shall be effective and irrevocable no later than January 9, 2016; and

		
	(ii)
	continue compliance with the terms and conditions set forth herein (including, without limitation, Section 2 hereof). 

(e)You acknowledge and agree that, except as otherwise set forth in this Agreement, no member of the Company Group owes you any additional payments, compensation, remuneration, bonuses, incentive payments, benefits, profits interests, stock options, warrants, restricted stock units, other equity or equity-based awards, severance, reimbursement of expenses or commissions of any kind whatsoever, whether under contract or arising under applicable law or regulations.  

(f)You acknowledge and agree that the continued payment of any and all payments and benefits to which you are entitled under this Agreement are conditional upon and subject to your compliance with the restrictive covenants set forth in Sections 5, 6 and 7 of the Employment Agreement the “Restrictive Covenants”).  In the event of your breach of any of the Restrictive Covenants, in addition to any other remedy which may be available at law or in equity, unless otherwise expressly provided by applicable law, the Company’s obligation to make further payments under this Agreement shall cease 

upon the date of such breach. 

(g)The Employment Agreement shall terminate upon the Retirement Date, without any further force or effect, except that Sections 5, 6, 7 and 10 of the Employment Agreement shall survive.

2.Agreements and Acknowledgements.  As an inducement to the willingness of the Company to enter into this Agreement, and as a condition to the Company’s agreements under Section 1 above, you hereby agree as follows:

(a)Communications.  The Company and you shall cooperate with respect to communications you may have with employees, clients, trade associations, the press, media, analysts, or current or potential debt or equity investors in any member of the Company Group with respect to the confidential business of the Company Group, and your employment with (and separation from) the Company, including, without limitation, communications with respect to the terms, conditions and circumstances of this Agreement.

(b)Authority.  Effective as of the date hereof, you shall have no authority to act on behalf of any member of the Company Group, and shall not hold yourself out as having such authority, enter into any agreement or incur any obligations on behalf of any member of the Company Group, commit any member of the Company Group in any manner or otherwise act in an executive or other decision-making capacity with respect to any member of the Company Group.

(c)Return of Property.  As of the Retirement Date, you shall have delivered to the Company and retained no copies of any notes, memoranda, specifications, devices, formulas, records, files, lists, drawings, documents, models, equipment, property, computer, software or intellectual property relating to the businesses of the Company Group, in whatever form (including electronic), and all copies thereof, that were received or created by you while an employee of the Company Group (including, without limitation, Confidential Information and Inventions).  You agree that all such material is and shall remain the property of the Company Group.  You may nonetheless retain copies of documents relating to your compensation or your personal entitlements and obligations.  

(d)Confidentiality.  You agree that the terms of this Agreement are confidential and you agree not to disclose any information contained in this Agreement to anyone, other than to your lawyer, financial advisor or immediate family members (all of whom shall agree to keep the terms of this Agreement confidential), to enforce this Agreement, to respond to a valid subpoena or other legal process or as required by law; provided, that, to the extent permitted by law, you will notify the Company prior to any such disclosure.

3.No Effect on Other Rights and Obligations.  

Except as otherwise specifically provided in this Agreement, nothing in this Agreement is intended to modify any rights to which you may be entitled under the by-laws and other constituent documents of any member of the Company Group.  
4.Release of Claims.

(a)You, on your own behalf and on behalf of your descendants, dependents, heirs, executors and administrators and permitted assigns, past and present (the “Releasors”), in consideration for the amounts payable and benefits to be provided to you hereunder, hereby unconditionally and 

irrevocably (subject to Section 4(f)) covenant not to sue or pursue any litigation against, and waive, release and discharge the Company, its direct and indirect parent, assigns, subsidiaries, affiliates (including, without limitation, Parent), predecessors and successors, and the past and present shareholders, partners, employees, officers, directors, members, representatives and agents of any of them (collectively, the “Releasees”), from any and all claims, demands, rights, judgments, defenses, actions, charges or causes of action whatsoever, of any and every kind and description, whether known or unknown, accrued or not accrued, that you ever had, now have or shall or may have or assert in the future, by reason of facts or omissions which have occurred on or prior to the date you sign this Agreement, against the Releasees (collectively, “Claims”), including, without limiting the generality of the foregoing, (x) any and all Claims relating to your employment with the Company Group or the separation therefrom or your service as an officer or director of any member of the Company Group or the separation from such service, including, without limiting the generality of the foregoing, any claims, demands, rights, judgments, defenses, actions, charges or causes of action related to employment or separation from employment or that arise out of or relate in any way to the Age Discrimination in Employment Act of 1967 (“ADEA,” a law that prohibits discrimination on the basis of age), the National Labor Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act of 1993, the Fair Labor Standards Act of 1938, the Sarbanes-Oxley Act of 2002, all as amended, and other Federal, state and local laws relating to discrimination on the basis of age, sex or other protected class, all claims under Federal, state or local laws for express or implied breach of contract, wrongful discharge, defamation, intentional infliction of emotional distress, whistleblowing, and any related claims for attorneys’ fees and costs and (y) any and all Claims with respect to any equity, equity-based or other incentive compensation, other than any vested equity and other rights retained by you pursuant to Section 1(c) hereof (the “Release”); provided, however, that nothing herein shall release the Company from any of its obligations to you under this Agreement (including, without limitation, its obligation to pay the amounts and provide the benefits upon which this Release is conditioned), any rights you may have as a holder of Common Units in Parent under Parent’s Limited Liability Agreement, any rights you may have under the Company’s 401(k) plan, any rights you may have to indemnification under any insurance coverage or other benefits under any directors and officers insurance or similar policies, or any rights which may not be released as a matter of law.

(b)You further agree that this Section 4 may be pleaded as a full defense to any action, suit or other proceeding for Claims that is or may be initiated, prosecuted or maintained by you or your heirs or assigns. You understand and confirm that you are executing this Agreement voluntarily and knowingly, but that this Section 4 does not affect your right to claim otherwise under ADEA. In addition, you shall not be precluded by this Section 4 from filing a charge with any relevant Federal, state or local administrative agency, but you agree to waive your rights with respect to any monetary or other financial relief arising from any such administrative proceeding.

(c)In furtherance of the agreements set forth above, you hereby expressly waive and relinquish any and all rights under any applicable statute, doctrine or principle of law restricting the right of any person to release claims that such person does not know or suspect to exist at the time of executing a release, which claims, if known, may have materially affected such person’s decision to give such a release. In connection with such waiver and relinquishment, you acknowledge that you are aware that you may hereafter discover claims presently unknown or unsuspected, or facts in addition to or different from those that you now know or believe to be true, with respect to the matters released herein.  Nevertheless, it is your intention to fully, finally and forever release all such matters, and all claims relating thereto, that now exist, may exist or theretofore have existed, as specifically provided herein.  The parties hereto acknowledge and agree that this waiver shall be an essential and material term of the release contained above. Nothing in this paragraph is intended to expand the scope of the release as specified herein.

(d)You represent and acknowledge that none of the Releasors  have filed any complaint, charge, claim or proceeding,  against any of the Releasees before any local, state or federal agency, court or other body (each individually, an “Action”).  You represent that you are not aware of any basis on which such an Action could reasonably be instituted.  You further acknowledge and agree that (i) you will not initiate or cause to be initiated on your behalf any Action and will not participate in any Action, in each case, except as required by law, and (ii) you waive any right you may have to benefit in any manner from any relief (whether monetary or otherwise) arising out of any Action, including, without limitation, any Action conducted by the Equal Employment Opportunity Commission.  Further, you understand that, by executing this Release, you will be limiting the availability of certain remedies that you may have against the Releasees and also limiting your ability to pursue certain claims against the Releasees.  

(e)The Company’s offer to you of this Agreement and the payments and benefits set forth herein are not intended as, and shall not be construed as, any admission of liability, wrongdoing or improper conduct by the Company.  You represent and acknowledge that you have not filed or caused to be filed any charges, complaints, claims, actions, proceedings or demands for arbitration of any kind in any forum against any Releasee.

(f)You acknowledge that you have been offered and have waived a period of time of at least 21 days to consider whether to sign this Agreement, and the Company agrees that you may cancel the Release and this Section 4 at any time during the seven days following the date on which this Agreement has been signed by all parties to this Agreement (the “Revocation Period”).  In order to cancel or revoke the Release and this Section 4, you must deliver to the Company’s General Counsel written notice stating that you are canceling or revoking the Release and this Section 4 during the Revocation Period.  If the Release and this Section 4 are timely cancelled or revoked, none of the provisions of this Section 4 shall be effective or enforceable, and the Company shall not be obligated to make the payments to you or to provide you with the benefits identified in Sections 1(b)(iii), 1(b)(iv) and 1(c).  You acknowledge that, even if the Release and this Section 4 are cancelled or revoked by you, the provisions of Section 1(a) hereof shall remain in full force and effect.

(g)You acknowledge and agree that you have entered into this Agreement knowingly and willingly and have had ample opportunity to consider the terms and provisions of this Agreement, including this Section 4.

5.Miscellaneous.  

(a)Amendment; No Waiver.  (i) No provisions of this Agreement may be amended, modified, waived or discharged except by a written document signed by you and a duly authorized officer of the Company (other than you).  (ii) The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.  No failure or delay by either party in exercising any right or power hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right or power, or any abandonment of any steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer of the Company as may be specifically designated by the Company’s board of directors.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation 

or be deemed a waiver of any subsequent breach.

(b)Section 409A of the Code.  The parties intend that any amounts payable hereunder comply with or are exempt from Section 409A of the Code (“Section 409A”) (including under Treasury Regulation §§ 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exceptions under subparagraph (iii) and subparagraph (v)(D)) and other applicable provisions of Treasury Regulation §§ 1.409A-1 through A-6).  For purposes of Section 409A, each of the payments that may be made under this Agreement shall be deemed to be a separate payment for purposes of Section 409A.  This Agreement shall be administered, interpreted and construed in a manner that does not result in the imposition of additional taxes, penalties or interest under Section 409A.  The Company and you agree to negotiate in good faith to make amendments to the Agreement, as the parties mutually agree are necessary or desirable to avoid the imposition of taxes, penalties or interest under Section 409A.  Notwithstanding the foregoing, the Company does not guarantee any particular tax effect, and you shall be solely responsible and liable for the satisfaction of all taxes, penalties and interest that may be imposed on or for the account of you in connection with the Agreement, as amended by this Amendment, (including any taxes, penalties and interest under Section 409A), and no member of the Company Group shall have any obligation to indemnify or otherwise hold you (or any beneficiary) harmless from any or all of such taxes, penalties or interest.  With respect to the time of payments of any amounts under the Agreement that are “deferred compensation” subject to Section 409A, references in the Agreement to “separation from employment” (and substantially similar phrases) shall mean “separation from service” within the meaning of Section 409A.  For the avoidance of doubt, it is intended that any expense reimbursement made to you hereunder shall be exempt from Section 409A.  Notwithstanding the foregoing, if any expense reimbursement made hereunder shall be determined to be “deferred compensation” within the meaning of Section 409A, then (i) the amount of the indemnification payment or expense reimbursement during one taxable year shall not affect the amount of the expense reimbursement during any other taxable year, (ii) the expense reimbursement shall be made on or before the last day of your taxable year following the year in which the expense was incurred and (iii) the right to expense reimbursement hereunder shall not be subject to liquidation or exchange for another benefit.  In addition, any reimbursements for COBRA coverage premiums described in this Agreement shall be paid to you as promptly as practicable, and in all events on or before the last day of the third taxable year of you following the taxable year of the Company in which your employment terminated.

(c)Withholding; Taxes.  The Company may deduct and withhold from any amounts payable under this Agreement such Federal, state, local, or other taxes as are required or permitted to be withheld pursuant to any applicable law or regulation, as applicable.

(d)Assignment.  (i) This Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you, except for (A) the assignment by will or the laws of descent and distribution of any accrued pecuniary interest held by you, and (B) any assignment or transfer that may be permitted under the express terms of the applicable benefit plan or agreement.  Any assignment in violation of this Agreement shall be void.  (ii) This Agreement shall be binding on, and shall inure to the benefit of, the parties to it and their respective heirs, legal representatives, successors and permitted assigns (including, without limitation, in the event of your death, your estate and heirs in the case of any payments due to you hereunder).  (iii) You acknowledge and agree that all of your covenants and obligations to the Company, as well as the rights of the Company hereunder, shall run in favor of and shall be enforceable by the Company and any successor or assign to all or substantially all of the Company’s business or assets.  

(e)Notices.  All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by facsimile or sent, postage prepaid, 

by registered, certified or express mail or overnight courier service and shall be deemed given when so delivered by hand or facsimile, or if mailed, three days after mailing (one business day in the case of express mail or overnight courier service) to the parties at the following addresses or facsimiles (or at such other address for a party as shall be specified by like notice):

If to the Company:
Hexion Inc. 
180 East Broad Street
Columbus, Ohio 43215-3799
Attention: General Counsel 

If to you:  To the most recent address listed on the Company’s books and records.

(f)Severability.  If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable law or public policy, all other conditions and provisions of this Agreement shall nonetheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party.  Any such determination pertaining to the Restrictive Covenants shall be addressed as per the severability provisions of the applicable documents.  Upon such determination that any other term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

(g)Entire Agreement.  This Agreement constitutes the entire agreement and understanding between the Company and you with respect to the subject matter hereof and supersedes all prior agreements and understandings (whether written or oral), between you and the Company, relating to such subject matter.  None of the parties shall be liable or bound to any other party in any manner by any representations and warranties or covenants relating to such subject matter except as specifically set forth herein.

(h)Governing Law; No Construction against Drafter.  This Agreement shall be deemed to be made in the State of Delaware, and the validity, interpretation, construction, and performance of this Agreement in all respects shall be governed by the laws of the State of Delaware, without regard to its principles of conflicts of law.  No provision of this Agreement or any related document will be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision.  

(i)Headings and References.  The headings of this Agreement are inserted for convenience only and neither constitute a part of this Agreement nor affect in any way the meaning or interpretation of this Agreement.  When a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.

(j)Counterparts.  This Agreement may be executed in one or more counterparts (including via facsimile and electronic image scan (pdf)), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

Please indicate your understanding and acceptance of this Agreement by executing below on both copies, and retaining one fully executed original for your files and returning one fully executed original to me.
Bill, thank you again for all of your years of dedicated service and best wishes to you and your family.

Very truly yours,
HEXION INC.

By: /s/  Craig O. Morrison
      Craig O. Morrison
      President and Chief Executive Officer  

I hereby accept the terms of this Agreement and agree to abide by the provisions hereof:

/s/  William H. Carter
William H. Carter 

Date:  January 1, 2016

Schedule A
CONTINUING DIRECTORSHIPS

Hexion 2 U.S. Finance Corp.                    Director

Hexion Escrow Corporation                    Director

Azucar Holdings, LLC                        Manager

Schedule B
EQUITY AWARDS

	
				
	 
	 
	 
	 

	BHI Acquisition Corp.
2004 Stock Incentive Plan
Nonqualified Stock Options
	 
	 

	 
	 
	 

	Vested Options
	 
	482,422

	 
	 
	 
	 

	Options are exercisable at $6.22 per unit and will expire upon the earlier to occur of (i) the 90th day following a Termination of Relationship or (ii) December 31, 2017.
	 

	 
	 
	 
	 

	
					
	 
	 
	 
	 

	Momentive Performance Materials Holdings LLC
2011 Equity Incentive Plan
Grant Date:  February 23, 2011
Nonqualified Stock Options
	 
	 

	 
	 
	 
	 

	Tranche B & C Options (0% Vested)
	 
	232,400
	

	 
	 
	 
	 

	The Tranche B Options vest upon the earlier to occur of (i) the two-year anniversary of the date that upon which or following a Realization Event a Common Unit Value of $10.00 is met or exceeded; or (ii) the six-month anniversary of the date upon which or following a Complete Change in Control a Common Unit Value of $10.00 is met or exceeded.

The Tranche C Options vest upon the earlier to occur of (i) the two-year anniversary of the date that upon which or following a Realization Event a Common Unit Value of $15.00 is met or exceeded; or (ii) the six-month anniversary of the date upon which or following a Complete Change in Control a Common Unit Value of $15.00 is met or exceeded.

To the extent vested, the Options are exercisable at $4.85 per unit and will expire upon the earlier to occur of (i) the 90th day following a Termination of Relationship or (ii) February 23, 2021.
	 
	 

	 
	 
	 
	 

	
					
	 
	 
	 
	 

	Momentive Performance Materials Holdings LLC
2011 Equity Incentive Plan
Grant Date:  February 23, 2011
Nonqualified Stock Options
	 
	 

	 
	 
	 
	 

	Tranche A Options (100% Vested)
	 
	232,401
	

	 
	 
	 
	 

	To the extent vested, the Options are exercisable at $4.85 per unit and will expire upon the earlier to occur of (i) the 90th day following a Termination of Relationship or (ii) February 23, 2021.
	 
	 

	 
	 
	 
	 

	
					
	 
	 
	 
	 

	Momentive Performance Materials Holdings LLC
2011 Equity Incentive Plan
Grant Date:  March 8, 2013
Nonqualified Stock Options
	 
	 

	 
	 
	 
	 

	Tranche A Options (75% Vested at 12/31/2015)
	 
	536,561
	

	Tranche A Options (25% Unvested)
	 
	178,854
	

	 
	 
	 
	 

	The Tranche A Options vest 25% each on December 31 of 2013, 2014, 2015 and 2016.

To the extent vested, the Options are exercisable at $1.42 per unit and will expire upon the earlier to occur of (i) the 90th day following a Termination of Relationship or (ii) March 8, 2023.
	 
	 

	 
	 
	 
	 

	
					
	 
	 
	 
	 

	Momentive Performance Materials Holdings LLC
2011 Equity Incentive Plan
Grant Date:  February 23, 2011
Restricted Deferred Units (RDU's)
	 
	 

	 
	 
	 
	 

	Tranche B & C RDU's (0% Vested)
	 
	77,466
	

	 
	 
	 
	 

	The Tranche B RDU's vest upon the earlier to occur of (i) the two-year anniversary of the date that upon which or following a Realization Event a Common Unit Value of $10.00 is met or exceeded; or (ii) the six-month anniversary of the date upon which or following a Complete Change in Control a Common Unit Value of $10.00 is met or exceeded.

The Tranche C RDU's vest upon the earlier to occur of (i) the two-year anniversary of the date that upon which or following a Realization Event a Common Unit Value of $15.00 is met or exceeded; or (ii) the six-month anniversary of the date upon which or following a Complete Change in Control a Common Unit Value of $15.00 is met or exceeded.

To the extent unvested, the RDU's will expire upon a Termination of Relationship.
	 
	 

	 
	 
	 
	 

	
					
	 
	 
	 
	 

	Momentive Performance Materials Holdings LLC
2011 Equity Incentive Plan
Grant Date:  March 8, 2013
Restricted Deferred Units (RDU's)
	 
	 

	 
	 
	 
	 

	Tranche A RDU's (0% Vested)
	 
	564,913
	

	 
	 
	 
	 

	The Tranche A RDU's vest upon the earlier to occur of (i) the one-year anniversary of the date that upon which or following a Realization Event a Common Unit Value of $3.50 is met or exceeded; or (ii) the six-month anniversary of the date upon which or following a Complete Change in Control a Common Unit Value of $3.50 is met or exceeded.

To the extent unvested, the RDU's will expire upon a Termination of Relationship.

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