Exhibit 10.20

Hexion Specialty Chemicals, Inc.

2007 INCENTIVE COMPENSATION PLAN (the 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

January 1, 2007  December 31, 2007

Eligibility

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

Associates must be employed in a bonus-eligible position for at least three full months during the plan period and must be actively employed by Hexion Specialty Chemicals, Inc. or a subsidiary company on December 31, 2007.

Eligible compensation for incentive is based on the participants rate of pay as of December 31, 2007. The participants incentive calculation will be
prorated if a change in salary or incentive target occurs during the course 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), gain/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 2007. As a result, the participants who belong to the global divisions are focused and incentivized to manage the business to achieve growth in EBITDA.

EBITDA will be measured for global Hexion Specialty Chemicals and also at the global level for each division/business unit.

Personal Objectives Measures:

Each bonus-eligible associate will
also be measured on achievement of personal performance objectives. Personal Objectives are to be established at the beginning of the year as part of the IMPACT process. Personal Objectives 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 Personal Objectives completed. A participants
achievement of Personal Objectives cannot exceed 100%



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Payment of the Personal Objectives measure is first contingent upon the achievement of the participants lowest
level of Financial Measures (business unit, division or Hexion Global). This measure must meet the minimum EBITDA payout threshold for Personal Objectives to payout. And in any case, the Personal Objectives 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 Personal Objectives cannot exceed 98%.

Examples of acceptable Personal Objectives are:



| | o | To reduce imperfect inventory by 15%
| | - | ------------------------------------

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

Examples of unacceptable Personal Objectives are:



| | o | To reduce imperfect inventory
| | - | -----------------------------

| | o | 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 Personal Objectives goals is evaluated to be Exceeds, 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            |  | Personal Objectives
|Hexion                  |  | 70% (funds Personal Objectives) |  |                                 |  |                                 |  | 30%                
|Division                |  | 20%                             |  | 50% (funds Personal Objectives) |  |                                 |  | 30%                
|Business Unit           |  |                                 |  | 20%                             |  | 50% (funds Personal Objectives) |  | 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   |  | 92%            |  | 96%            |  | 100%          |  | 104%           |  | 108%          
|% 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.

Personal Objectives Measure:

At the end of the year, the participant and the participants manager will meet to discuss the participants performance against their Personal Objectives. 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. The participant may receive an incentive payment for goal performance based on the relative individual contribution as to other participants.

When the 2007 audited financial performance results are available, the financial award will be determined by first comparing the actual EBITDA with the plan. When the
actual results are between two of the numbers shown, the award percentage is calculated using a proportional increase or decrease.

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 payout regardless of whether Measure 2: Site is met.

c.
Payment on achievement of Personal Objectives is contingent upon meeting the 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 target,
based on acquisitions or divestitures which 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 December 31, 2007 and must have been in an incentive eligible position for at least three full months during the
financial year.



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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 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 based on the base salary as of December 31stof the plan year. If an associate is promoted to a new incentive group, prior to April 1stof the plan year, there is no pro-ration for this promotion. The associate will be incentivized for the prior three months at
the new incentive level.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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 year. Employees who commence
employment before the 15th of any month will be considered to have a full months service for that month but must be employed before October 1, 2007 to be eligible to receive any payout
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. | Promotions/Incentive Target Changes: Awards to participants whose base rate of pay and/or incentive group changes after
April 1stof 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.)
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | 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.)
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | e. | 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 incentive payouts are
made in April. In no event shall payments be made prior to the approval of the final audited financials results of Hexion Specialty Chemicals, Inc. by the Audit Committee of the Board of Directors.

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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