Exhibit 10.22

Hexion Specialty Chemicals, Inc.

2008 INCENTIVE COMPENSATION PLAN

Purpose of the Plan

The purpose of the Plan is to reward associates for profitably growing the
business. The Plan is designed to link rewards with critical financial metrics
for the purposes of promoting leadership actions which are the most beneficial
to the company’s short-term and long-term value creation.

Plan year

1 January, 2008 – 31 December, 2008

Eligibility

Participation is based on each individual associate’s scope of responsibility
and contribution within the organization.

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 31 December 2008.

Eligible compensation for incentive calculation is based on the participant’s
base rate of pay as of 31 December, 2008. 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

Financial Measures:

The primary financial metric will be:

 

  •  

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 2008. As
a result, the participants should be focused and incentivized to manage the
business to achieve growth in EBITDA.

EBITDA will be measured for Global Hexion Specialty Chemicals and also at each
Division and specified Business Unit level.

Individual Incentive Goals Measures:

Each incentive eligible associate will also be measured on achievement of
Individual Incentive Goals. Individual Incentive Goals are to be established at
the beginning of the year as part of the IMPACT process. Individual Incentive
Goals must be specific and measurable (see IMPACT materials) and cannot be
redundant to site/business unit/division/corporate EBITDA targets. At the
conclusion of the year, the associate’s manager is responsible for the
evaluation of the percent of Individual Incentive Goals completed. A
participant’s achievement of Individual Incentive Goals cannot exceed 100%

Payment of the Individual Incentive Goals measure is first contingent upon the
achievement of the participant’s direct reporting level of Financial Measures
(Business Unit, Division or Hexion Global).

 

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This measure must meet the minimum EBITDA payout threshold for Individual
Incentive Goals to be paid. And in any case, the Individual Incentive Goals
payout will not be higher than the EBITDA performance percent payout for the
division/business unit. For example: if a participant’s division payout is at
98%, then the payout for 100% achievement of Individual Incentive Goals cannot
exceed 98%.

Examples of acceptable Individual Incentive Goals are:

 

  ¡  

To reduce imperfect inventory by 15%

 

  ¡  

To train 100% of site associates on new OSHA standard by October 1

Examples of unacceptable Individual Incentive Goals are:

 

  ¡  

To reduce imperfect inventory

 

  ¡  

To hold safety training

Plan Incentive Targets

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 and by the scope and contributions to the organization.

If the maximum EBITDA performance targets are attained and the participant’s
performance against their Individual Incentive Goals is evaluated to be at 100%,
this Plan can generate an award maximum of 175% of the Target Incentive Award.

Plan Payout 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.

 

Reporting

relationship:

  

Global Hexion

EBITDA

  

Division

EBITDA

  

Business Unit

EBITDA

   Individual
Incentive Goals Hexion   

70%

(funds Individual

Incentive Goals)

             30% Division    20%   

50%

(funds Individual

Incentive Goals)

        30% Business Unit         20%   

50%

(funds Individual

Incentive Goals)

   30%

Calculation of Incentive Payments

Financial Measure:

EBITDA

 

    Actual less Minimum Threshold     EBITDA Payment Calculation:  
Maximum Less Minimum Threshold   =     %

 

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The EBITDA measure will have the following relationship between financial
performance and incentive award payout:

 

     

Minimum

EBITDA

  

Lower

Midpoint

  

Target

EBITDA

  

Upper

Midpoint

  

Maximum

EBITDA

% of EBITDA

Target

   95.6%    97.8%    100%    103.8%    107.6%

% of Financial

Award

   50%    75%    100%    137.5%    175%

For actual performance between the points above, a straight line calculation
will be made. There is no additional payment made for performance above the
maximum. The final financial award will be determined when the 2008 audited
financial performance results are available.

Individual Incentive Goals Measure:

At the end of the year, the participant and the participant’s manager will meet
to discuss the participants’ performance against their Individual Incentive
Goals. The manager will use the participant’s feedback, as well as input from
peers to determine the overall effectiveness of the participant’s performance.
In addition, leadership judgment will be applied to determine the degree to
which the participant’s efforts and initiative contributed to the Company’s
overall success. In the case where a goal is team based, the manager will also
evaluate the participant based on the relative individual contribution as to
other participants on the team.

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 Individual Incentive Goals 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 31 December, 2008 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.

 

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Incentive Payments: Payments are subject to applicable taxes and
garnishment/wage orders, and if the associate participates in the Hexion
Specialty Chemical 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 31 December of the Plan year. If an associate is
promoted to a new incentive group, before general merit increases are effective
in April of the Plan year, there is no pro-ration for this promotion. The
participant’s award will not be prorated based on their base salary for the
first three months 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, 2008 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 April 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.

 

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Timing of Payments: Typically, financial results are announced in March
following the end of the Plan year and incentive payouts 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.

 

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