Document:

Consulting Agreement dated as of June 1, 2005 - Marvin O. Schlanger

 Exhibit 10.60 
  
 CONSULTING AGREEMENT 
  

This Consulting Agreement (this “Agreement”) is entered into by and between HEXION SPECIALTY CHEMICALS, INC., a New Jersey
corporation (the “Company”), and Marvin O. Schlanger (“Consultant”), as of June 1, 2005. 
  
 RECITALS 
  
 WHEREAS, the Company and Consultant are party to that certain Employment Agreement dated as of the date hereof, pursuant to which the Company
agreed to employ Consultant through December 31, 2005, subject to earlier termination as provided therein (the “Employment Agreement”); 
  

WHEREAS, in partial consideration for the Company having entered into the Employment Agreement, Consultant agreed that he would provide
consulting services to the Company after the completion of the term of his employment upon the terms and conditions contemplated in this Agreement. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the above recitals which are hereby incorporated and for other good and valuable consideration that the parties
acknowledge is sufficient, the parties agree as follows: 
  
 I.
ENGAGEMENT. 
  
 The Company hereby engages
Consultant, and Consultant hereby accepts such engagement, upon the terms and conditions hereinafter set forth for a term beginning with January 1, 2006 (the “Commencement Date”) and ending on December 31, 2008, subject to earlier
termination as provided herein; provided, however, that if Consultant’s prior employment with the Company pursuant to the Employment Agreement was terminated by the Company for Cause or due to Consultant’s Disability or death, in either
case prior to the Commencement Date, then Company shall have no obligations to Consultant whatsoever under this Agreement and shall not be obligated to engage Consultant or to pay Consultant any of the compensation set forth in Section III below.

  
 II. SERVICE. 
  
 Consultant shall perform consulting services under this Agreement to complete
such projects as requested by the Company from time to time. Consultant shall perform any and all services reasonably necessary to complete any such projects. 
  

III. COMPENSATION. 
  
 A. As consideration for Consultant’s performance of these services, Company shall pay Consultant a fee of Twelve Thousand Five Hundred Dollars
($12,500) per month during the term of Consultant’s engagement, with such fee for any partial 

  

 
month of service paid on a pro-rated basis. The consulting fee for any particular month shall be paid no later than the fifteenth (15th) business day of the following month. 
  
 B. During the term of Consultant’s engagement, Company shall provide or reimburse Consultant for his costs to maintain
medical and health insurance coverage for himself and his dependents that is similar to the coverage Consultant and such dependents were provided by the Company immediately prior to the Commencement Date or may be provided to senior executives of
the Company and their dependents from time to time. 
  
 C. For so
long as Consultant remains a member of the Company’s Board of Directors, Consultant shall be eligible to receive the normal and customary fees that the Company pays to other non-employee Board Members. 
  
 D. During Consultant’s engagement with the Company, Consultant shall
continue to be eligible to vest in any time-based or performance-based options that Consultant may have been granted by the Company, Resolution Performance Products, Inc., and Resolutions Specialty Materials, Inc. (as such options may have been and
may in the future be assumed and adjusted), as if Consultant’s employment with the Company had not terminated. Any termination of employment/service rules applicable to such options (including any obligation to exercise vested options) shall
not be deemed triggered until the first day that Consultant’s engagement pursuant to this Agreement terminates. 
  
 IV. TERMINATION. The Company may terminate Consultant’s engagement at any time for “Cause,” immediately upon written notice.

  
 A. For the purposes of this Agreement,
“Cause” shall be defined as: (i) an act of intentional fraud or theft of Company’s property by Consultant; (ii) Consultant’s commission of a felony (or misdemeanor involving moral turpitude), whether or not in connection
with the business of Company; (iii) an act of gross insubordination or gross negligence in the performance by Consultant of his duties hereunder; which act, if curable, is not cured or continues or is repeated after the expiration of ten (10) days
after Company provides written notice thereof to Consultant; (iv) the material breach of any provision of this Agreement, which breach is not cured, if curable, or continues after the expiration of ten (10) days after Company provides notice thereof
to Consultant; (v) Consultant’s engaging, either directly or indirectly, in any manner or capacity, whether as an officer, director, employee, partner, member, shareholder, owner (other than as a stockholder of less than 1% of the issued and
outstanding stock of a publicly-held corporation), creditor, guarantor, advisor, agent, associate or consultant of or in any company, partnership, firm, association, business or person which is in competition with any business or activity of
Company; (vi) Consultant’s use of any illegal drug, narcotic or alcohol on Company’s property; (vii) Consultant’s commission of sexual or other forms of unlawful harassment, discrimination or retaliation; and/or (viii) any other
matter which would constitute good cause for termination under applicable law. 
  

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 B. Obligations Upon Termination. If the Company terminates Consultant’s engagement for Cause
pursuant to this Section IV, Company shall have no further obligations to Consultant under this Agreement, other than for payment of Consultant’s fee prorated through the date of termination to the extent not theretofore paid, which shall be
paid to Consultant in a lump sum in cash within ten (10) days of the date of termination.  
  
 V. CONFLICT OF INTEREST.  
  
 Consultant agrees that, during the term of this Agreement, Consultant will not, directly or indirectly or through use of a third party, without the prior written consent of the Chief Executive Officer of the Company,
provide consultative service with or without pay, own, manage, operate, join, control, participate in, or be connected as a stockholder, general partner, officer, director, employee, agent, consultant, independent contractor, or otherwise with, any
business, individual, partner, firm, corporation, or other entity which is then in competition with the business of the Company or any present affiliate of the Company. Notwithstanding the foregoing, Consultant may own up to one percent (1%) of the
publicly traded stock of any company. Nothing in this section is intended to prevent Consultant from performing services for other clients, consistent with the prohibitions herein. 
  
 VI. ANTISOLICITATION. 
  
 Consultant promises and agrees that Consultant will not, during
Consultant’s engagement and for a period of twenty-four (24) months following termination of Consultant’s engagement, influence or attempt to influence customers of the Company or any of its present or future subsidiaries or affiliates,
either directly or indirectly, to divert their business to any individual, partnership, firm, corporation or other entity then in competition with the Company, or any subsidiary or affiliate of the Company. 
  
 VII. SOLICITING EMPLOYEES. 
  
 Consultant promises and agrees that Consultant will not, during
Consultant’s engagement and for a period of twenty-four (24) months following termination of Consultant’s engagement, directly or indirectly solicit any Company employee to work for any business, individual, partnership, firm, corporation,
or other entity then in competition with the business of the Company or any subsidiary or affiliate of the Company. 
  
 VIII. OWNERSHIP. 
  
 Consultant agrees that any software, hardware, equipment, know how, technical information and business information, including all copies or extracts
thereof which Consultant prepares, uses, or sees during the term of this Agreement in relation to the performance of services hereunder, shall be and remain the sole property of Company or its customers. Consultant will not remove any of the
foregoing from Company’s premises without the prior written consent of Company. 
  

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 IX. CONFIDENTIAL INFORMATION. 
  
 A. Confidential Information. During Consultant’s engagement, Company may disclose to Consultant certain
confidential or proprietary information relating to Company, its clients, vendors, and/or partners, including, but not limited to, client and prospect lists, financial and business information and plans, marketing methods, processes, formulae
(including, but not limited to, statistical formulae or models), compositions, systems, techniques, know how, inventions, machines, computer software and research projects, pricing data, sources of supply, financial data and marketing, production or
merchandising systems or plans; or other material embodying trade secrets or confidential technical or business information of Company (collectively referred to as “Confidential Information”). Such Confidential Information is being
disclosed to Consultant only for the purposes of Consultant performing services for the Company. All Confidential Information shall constitute trade secrets of the Company, which are and shall remain the sole property of the Company. The parties
agree that Confidential Information will not include any information which (a) was previously known to Consultant and not subject to any other obligation of confidentiality at the time of disclosure to Consultant by Company, (b) becomes publicly
known through no wrongful act of Consultant, (c) is rightfully received by Consultant from a third party without restriction on disclosure or use and without breach of any agreement with Company, or (d) is independently developed by Consultant, as
evidenced by Consultant’s contemporaneous written records, without use of or access to Company’s Confidential Information. 
  
 B. Use of Confidential Information. Consultant agrees that Confidential Information shall be used only for its intended purpose and shall not be
used, whether during Consultant’s term of engagement or thereafter, directly or indirectly, for any other purpose. Consultant shall (a) use such Confidential Information as necessary to provide the services hereunder, (b) not make copies or
abstracts of or retain any written Confidential Information, except as expressly permitted by Company, (c) use at least the same degree of care in keeping such Confidential Information confidential as it uses for its own confidential information of
a similar nature, but in no event less than reasonable care, and (d) not disclose such Confidential Information to any third party, unless legally required by judicial process, provided that Consultant provides Company with prior written notice of
such a request for disclosure and reasonably cooperates with Company to limit the nature and scope of any such disclosure. Consultant’s obligations under this section will survive the expiration or termination of this Agreement in perpetuity.

  
 C. Injunctive Relief. Consultant acknowledges that
should Consultant use or reveal, or threaten to use or reveal, Confidential Information, except as permitted in this Agreement, Company would suffer irreparable harm and, in addition to other remedies available under this Agreement or at law,
Company may seek equitable relief to restrain Consultant from disclosing Confidential Information or from rendering any services to any party to whom Confidential Information has been or is threatened to be disclosed. 
  

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 D. Return of Confidential Information. Upon the termination of this Agreement or at any time upon
the demand of Company, Consultant agrees to return any and all Confidential Information and all physical embodiments thereof, including, without limitation, all records, documents, photographs and electronic files that contain or reflect
Confidential Information. 
  
 X. INDEPENDENT CONTRACTOR STATUS.

  
 The parties intend Consultant to be an independent contractor
in the performance of these services. Consultant is not an employee, agent, partner, or joint venturer of or with the Company. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and
employee between the Company and Consultant. 
  
 A. Except as
provided in Article III herein, Consultant shall not be entitled to participate in any vacation, medical, retirement, or other fringe benefit of the Company and shall not make claim of entitlement to any such employee program or benefit. 

 
 B. Consultant shall have the right to control and determine the method
and means of performing the above services; Company shall not have the right to control or determine such method or means, being interested only in the results obtained, and having the general right of inspection and supervision in order to secure
the satisfactory completion of such services. 
  
 C. Consultant
and Company agree that Consultant is not an employee for state or federal tax purposes. Consultant shall be solely responsible for the payment of withholding taxes, FICA, Medicare, disability, and other such tax deductions on any earnings or
payments made and Company shall withhold no such payroll tax deductions from any payments due. Consultant agrees to defend, indemnify hold harmless Company from any claim or assessment by any taxing authority arising from this section. 

 
 D. Company will not pay worker’s compensation for Consultant.
Company will not contribute to a state unemployment fund for Consultant, and Company will not pay the federal unemployment tax for Consultant. 
  
 XI. TIME AND PLACE OF WORK. 
  
 Consultant and the Company have agreed that the nature of the projects that Consultant will be requested to complete will require Consultant to perform
services for no more than 10 hours per week at such location as the Company may reasonably request from time to time. 
  
 XII. AUTHORITY. 
  
 Consultant shall not have the power or authority to (and shall not purport to have such power or authority to) incur any debt or obligation or assume any
liability on behalf of 

  

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the Company or to make, alter, amend, discharge or waive any provision of any contract to which the Company is a party or otherwise act on behalf of the
Company. 
  
 XIII. SUCCESSORS. 
  
 This Agreement is personal to Consultant and shall not, without the prior
written consent of the Company, be assignable by Consultant. 
  
 XIV.
WAIVER. 
  
 No waiver of any breach of any term or
provision of this Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach. 
  
 XV. MODIFICATION. 
  
 This Agreement may not be amended or modified other than by a written agreement executed by Consultant and the Company.

  
 XVI. SAVINGS CLAUSE. 
  
 If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

  
 XVII. COMPLETE AGREEMENT. 
  
 This Agreement contains the entire agreement and final understanding
concerning Consultant’s consulting relationship with the Company and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matter hereof. 
  
 XVIII. CONSTRUCTION. 
  
 Each party has cooperated in the drafting and preparation of this Agreement.
Hence, in any construction to be made of this Agreement, the same shall not be construed against any party on the basis that the party was the drafter. The captions of this Agreement are not part of the provisions hereof and shall have no force or
effect. 
  
 XIX. EXECUTION. 
  
 This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose. 
  

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 XX. GOVERNING LAW; ARBITRATION.  
  
 This Agreement and the legal relations among the parties hereto shall be governed by and construed in accordance with the
laws of the State of New York, as applied to contracts entered into and to be wholly performed within such State, without regard to principles of conflict of laws. Any controversy or claim arising out of or relating to this Agreement or the breach
of this Agreement that cannot be resolved by Company on the one hand and Consultant on the other, shall be submitted to arbitration in New York, New York in accordance with New York law and the procedures of the American Arbitration Association.

  
 XXI. LEGAL COUNSEL. 
  
 In entering into this Agreement, the parties represent that they have had the
opportunity to consult with attorneys of their own choice, and that the terms of the Agreement are fully understood and voluntarily accepted by them. 
  
 [Signatures follow on next page.] 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written
above. 
  

			
	HEXION SPECIALTY CHEMICALS, INC.
		
	By:	 	 /s/ Craig O. Morrison

	 Name:
	 	 Craig O. Morrison

	 Title:
	 	 President and Chief Executive Officer

	
	CONSULTANT
	
	 /s/ Marvin O. Schlanger

	 Name:
	 	 Marvin O. Schlanger

	
	 Address:

	 15 Southwood Dr.
 Cherry Hill, New Jersey 08003Employment Agreement dated as of June 1, 2005 - Layle K Smith

 Exhibit 10.61 
  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT, dated as of June 1, 2005 (this “Agreement”), is by and between HEXION SPECIALTY
CHEMICALS, INC., a New Jersey corporation (formerly Borden Chemical, Inc. and referred to as the “Company”), and LAYLE K. SMITH (“Executive”). 
  
 WHEREAS, Executive and Resolution Performance Products LLC, a Delaware limited liability company
(“RPP”), previously had entered into that certain Employment Agreement, dated as of September 23, 2004 (the “Prior Employment Agreement”), pursuant to which Executive was employed by RPP. 
  
 WHEREAS, RPP, Resolution Specialty Materials Holdings LLC, a Delaware
limited liability company (“RSM Holdings”), BHI Acquisition Corp., a Delaware corporation, BHI Merger Sub One, Inc., a Delaware corporation, BHI Merger Sub Two Inc., a Delaware corporation, and the Company are parties to that
certain Transaction Agreement dated as of April 22, 2005 (the “Transaction Agreement”). 
  
 WHEREAS, the Company desires to provide for the continued services of Executive effective upon and following the “Closing” (as such term
is defined in the Transaction Agreement) of the transactions contemplated by the Transaction Agreement (the “Effective Time”), and provide Executive with the compensation and other benefits provided in this Agreement. 
  
 WHEREAS, Executive is willing to enter into this Agreement on the
terms and conditions hereinafter set forth. 
  
 WHEREAS,
Executive’s employment with RPP will terminate concurrently with the Effective Time and this Agreement will supersede the Prior Employment Agreement in its entirety as of that time. 
  
 WHEREAS, this Agreement shall govern the employment relationship between the parties from and after the Effective
Time and supersedes and negates all previous agreements made between the parties, whether written or oral, relating to Executive’s employment with the Company. 
  
 NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, Company and Executive
hereby agree as follows: 
  
 1. EMPLOYMENT. 
  
 a. Upon the Effective Time, the Prior Employment Agreement shall
terminate and shall be of no further force or effect. Executive shall have no further rights pursuant to the Prior Employment Agreement. RPP and its successors and assigns are third party beneficiaries of this Section 1.a. 
  
 b. Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the term hereof as President – Epoxy and Phenolics Resins 

 
Division of the Company. Executive hereby accepts employment as such and agrees to devote his full working time and efforts, to the best of his ability,
experience and talent, to the performance of services, duties and responsibilities in connection therewith. Executive will perform those duties and have such responsibilities as established by the Company from time to time. Consistent with Section 9
herein, Executive shall be entitled to join boards of directors of other companies subject to a conflict of interest evaluation by the Company’s General Counsel and approval of the Company’s Chief Executive Officer, which shall not be
unreasonably withheld. Furthermore, Executive shall have the opportunity to respond to inquiries from a previous employer or others in the industry provided that it shall not substantially interfere with the performance of his duties hereunder.

  
 2. TERM OF AGREEMENT. 
  
 The term of this Agreement shall commence and be effective from and after
the Effective Time and, subject to the terms hereof, shall terminate on December 31, 2006 (the “Expiration Date”). 
  
 3. COMPENSATION AND BENEFITS. 
  
 a. Base Salary. The Company shall pay Executive a base salary (the “Base Salary”) at the annual rate of Four Hundred
Thousand Dollars ($400,000) (less applicable deductions and withholdings). The Base Salary shall be payable in accordance with the ordinary payroll practices of the Company and shall be subject to increase as determined in its sole discretion by the
board of directors of the Company (the “Board”) or its compensation committee (the “Compensation Committee”). 
  
 b. Annual Bonus. In addition to the Base Salary, Executive shall be eligible to receive a cash bonus (the “Bonus”) with
respect to each fiscal year during the term of this Agreement, provided that Executive is employed by the Company on the last day of such fiscal year. The Bonus shall be based on the Company’s achievement of certain operating and/or financial
goals to be established by the Compensation Committee, with an annual target bonus amount equal to 50% of Executive’s then current Base Salary. 
  
 c. Benefits. During the term of employment hereunder, the Company shall provide to Executive coverage under any standard employee benefit
programs, plans and practices (including but not limited to the Company’s 401(k) plan) in accordance with the terms that the Company makes generally available to its executive officers. In addition, the Company shall provide Executive with four
(4) weeks vacation per year. 
  
 4. TERMINATION OF EMPLOYMENT.

  
 a. Termination Rights. Notwithstanding the
foregoing provisions of this Agreement, the Company (at its sole discretion) shall have the right to terminate this Agreement and Executive’s employment at any time, for any reason or no reason immediately upon written notice to Executive, and
Executive may terminate his employment at any time immediately upon written notice to the Company. 
  

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 b. Definitions. 
  
 (i) “Affiliate” of the Company shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. As used in this definition, the term “control,” including the correlative terms “controlling,” “controlled
by” and “under common control with,” means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or any partnership or other ownership
interest, by contract or otherwise) of a Person. The term “Affiliate” shall not include at any time any portfolio companies of Apollo Management IV, L.P. or its Affiliates. 
  
 (ii) “Cause” shall mean termination by the Company of Executive’s employment
(a) because Executive has engaged in conduct constituting willful misconduct or gross negligence, or breach of a fiduciary duty; (b) because Executive has breached or violated any of the provisions of the Company’s employee handbook or other
policies in effect from time to time that by their terms may result in termination of employment and which meet the standard in clause (ii)(a) above; (c) because Executive has committed a felony, has engaged in any act involving the misuse or
misappropriation of money or other property of the Company, has defrauded the Company, any Affiliate of the Company or any customer of the Company, or because of habitual intoxication while performing his job duties, or drug addiction; or (d)
because Executive has failed to take action constant with or has taken actions inconsistent with a reasonable directive of the Chief Executive Officer of the Company or the Board. 
  
 (iii) “Disability” shall mean that Executive has been unable, for 180 consecutive
days, or for periods aggregating 180 business days in any period of twelve months, to perform Executive’s duties under this Agreement, as a result of physical or mental impairment, illness or injury, as determined by a medical doctor jointly
selected by the Company and Executive. A termination of Executive’s employment by either party for Disability shall be communicated to the other party by written notice, and shall be effective on the 30th day after receipt of such notice by the
other party (the “Disability Effective Date”), unless Executive returns to full-time performance of Executive’s duties before the Disability Effective Date. 
  
 (iv) “Good Reason” shall mean the occurrence of any of the following events without
Executive’s express or written consent and which event shall not have been cured within a reasonable period after notice from Executive: (A) the assignment to Executive by the Company of duties materially inconsistent with Executive’s
duties as set forth in Section 1 hereof, or any material reduction by the Company of Executive’s duties, except in connection with the termination of Executive’s employment for any other reason; (B) a reduction by the Company in
Executive’s Base Salary or Bonus (other than due to the failure to meet applicable performance objectives); or (C) any material breach by the Company of any material provision of this Agreement after written notice of such breach shall have
been delivered to the Company and, if such breach can be cured, such breach shall not 

  

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have been cured prior to the tenth day after delivery of such notice. Notwithstanding any other provision in this Agreement, no event, act or omission that
occurred on or prior to the Effective Time shall constitute Good Reason. 
  
 (v) “Person” shall be construed broadly and shall include, without limitation, an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a
trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision hereof. 
  
 (vi) “Termination Payments” shall mean earned but unpaid amounts of compensation and benefits as of the date of
any termination under this Agreement or any other applicable benefit plans or programs. 
  
 c. Termination other than for Cause, for Good Reason, or for Death and Disability. If Executive’s employment is terminated by the Company other than for Cause, if Executive terminates his employment
for Good Reason, or if Executive dies or his employment is terminated by either party for Executive’s Disability, in each case prior to the Expiration Date, Executive (or his estate) shall be entitled to receive (i) no later than 30 days after
the date of termination, the Termination Payments; and (ii) in lieu of any other cash compensation provided for herein but not in substitution for compensation already paid or earned, payable in accordance with the Company’s customary payroll
practices for a period equal to 12 months following the date of termination (such period, the “Termination Period”), an amount equal to Executive’s Base Salary at its then current annual rate. During the Termination Period, the
Company shall continue to provide Executive with access to the Company’s health benefit programs and plans. Notwithstanding any other provision in this Agreement, Executive shall not be entitled to any payments under this Section 4.c if,
on or after the Expiration Date, Executive’s employment is terminated by the Company without Cause, due to the Executive’s death or Disability, or by Executive for Good Reason. 
  
 d. Voluntary Termination by Executive; Discharge for Other Reasons. If either (i) before the Expiration Date,
Executive’s employment is terminated by the Company for any reason other than a termination without Cause or by Executive other than for Good Reason, or (ii) on or after the Expiration Date, Executive’s employment is terminated by either
party for any reason or for no reason, then Executive shall be entitled to receive, within a reasonable time after the date of termination, the Termination Payments. 
  
 e. DEFRA. 
  
 (i) Notwithstanding anything in this Agreement or any other agreement between Executive and the Company to the contrary, in the
event that the provisions of the Deficit Reduction Act of 1984 (“DEFRA”), and Section 280G of the Internal Revenue Code of 1980 as amended (the “Code”) relating to “excess parachute payments” (as defined
in the Code) shall be applicable to any payment or benefit received or to be received by Executive, then the total amount of payments or benefits payable to Executive shall be reduced to the largest amount such that the provisions of DEFRA and
Section 280G of the Code relating to “excess parachute 

  

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payments” shall no longer be applicable. Should such a reduction be required, Executive shall determine, in the exercise of his sole discretion, which
payment or benefit to reduce or eliminate. Pending such determination, the Company shall continue to make all other required payments to Executive at the time and in the manner provided herein and shall pay the largest portion of any parachute
payments such that the provisions of DEFRA relating to “excess parachute payments” shall no longer be applicable. 
  
 (ii) Due to the complexity in the application of Section 280G of the Code, it is possible that payments made or benefits received
hereunder should not have been made under clause (e)(i) above (an “Overpayment”). If it is determined by the Company’s outside auditors in their reasonable good faith judgment or by any court of competent jurisdiction that an
Overpayment has been made resulting in an “excess parachute payment” as defined in Section 280G(b)(1) of the Code, then Executive shall promptly pay to the Company the amount of such Overpayment together with interest thereon (at the same
rate as is applied to determine the present value of payments under Section 280G or any successor thereto) from the date the reimbursable payment was received by Executive to the date the same is repaid to the Company. 
  
 f. Options. 
  
 (i) Time-Based Vesting. If either (i)
Executive has remained employed with Company through the Expiration Date, or (ii) Executive’s employment is terminated prior to the Expiration Date in circumstances that entitle Executive to the severance payments provided under Section 4.c,
then upon the earlier of the Expiration Date or the date of the termination of Executive’s employment, as applicable, all stock options originally granted by Resolution Performance Products, Inc. (“RPP Inc.”) or Resolution
Specialty Materials Inc. (“RSM Inc.”) (as such options may have been assumed and adjusted) that are subject to a time-based vesting schedule with no performance-based vesting conditions that are outstanding and otherwise unvested
immediately prior to such time shall thereupon become fully vested. 
  
 (ii) Performance-Based Vesting. If either (i) Executive’s employment terminates for any reason on or after the Expiration Date, or (ii) Executive’s employment is terminated prior to the
Expiration Date in circumstances that entitle Executive to the severance payments provided under Section 4.c, then Executive shall continue to have the right to vest in any stock options originally granted by RPP Inc. or RSM Inc. (as such options
may have been and may in the future be assumed and adjusted) that are subject to a performance-based vesting condition that are outstanding and otherwise unvested immediately prior to such termination. In such circumstances, vesting shall occur on
the date, and to the extent, that such stock options would have vested had Executive’s employment by the Company not terminated. 
  

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 (iii) Other Option Terms. The stock options originally granted by RPP Inc.
and RSM Inc. shall otherwise continue in accordance with their respective terms and conditions, subject only to the express vesting modifications set forth in this Section 4.f. Without limiting the generality of the preceding sentence, any stock
options originally granted by RPP Inc. and RSM Inc. shall continue to be subject to the limited post-termination of employment exercise period(s) set forth in the applicable stock option agreements; provided that as to any stock options that vest
pursuant to Section 4.f(ii) after the date Executive’s employment by the Company terminates, such post-termination of employment exercise period(s) shall be deemed to commence as of the vesting date of such options. 
  
 5. NOTICES. 
  
 All notices or communications hereunder shall be in writing, addressed, in the case of Executive, at the address set forth
on the signature pages hereto, and to the Company, as follows: 
  

			
	 	 	Hexion Specialty Chemicals, Inc.
	 	 	180 East Broad Street
	 	 	Columbus, Ohio 43215
	 	 	Attention: Chief Executive Officer
	 	 	[Telecopy:              (        )        -    
        
	 	 	Telephone:             (        )        -     
       ]
	 	 	 
	 With a copy to:
	 	O’Melveny & Myers LLP
	 	 	Times Square Towers
	 	 	7 Times Square
	 	 	New York, New York 10036
	 	 	Attention: Adam K. Weinstein, Esq.
	 	 	Telecopy:              (212) 326-2061
	 	 	Telephone:            (212) 408-2491

  
 Any such notice or
communication shall be sent certified or registered mail, return receipt requested, postage prepaid addressed as above (or to such other address as such party may designate in a notice duly delivered as described above), and the actual date of
mailing shall constitute the time at which notice was given. 
  
 6.
SEPARABILITY; ARBITRATION. 
  
 If any provision of
this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof, which shall remain in full-force and effect. Any controversy or claim arising
out of or relating to this Agreement or the breach of this Agreement (other than Section 9 hereof) that cannot be resolved by Executive on the one hand and the Company on the other, including any dispute as to the calculation of Executive’s
benefits or any payments hereunder, shall be submitted to arbitration in New York, New York in accordance with New York law and the procedures of the American Arbitration Association The 

  

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determination of the arbitrators shall be conclusive and binding on the Company and Executive, and judgment may be entered on the arbitrators’ award in
any court having jurisdiction. 
  
 7. ASSIGNMENT. 
  
 This Agreement shall be binding upon and inure to the benefit of the heirs
and representatives of Executive and the assigns and successors of the Company, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by Executive except by will or by operation of the laws of
intestate succession. 
  
 8. AMENDMENT. 
  
 This Agreement may only be amended by written agreement of the parties
hereto. 
  
 9. NONDISCLOSURE OF CONFIDENTIAL INFORMATION;
NON-COMPETITION. 
  
 a. Executive shall not,
without the prior written consent of the Company, divulge, disclose or make accessible to any other person, firm, partnership, corporation or other entity any Confidential Information pertaining to the business of the Company, except (i) while
employed the Company, in the business of and for the benefit of the Company, or (ii) when required to do so by a court of competent jurisdiction, by any governmental agency having supervisory authority over the business of the Company, or by any
administrative body or legislative body (including a committee thereof) with purported or apparent jurisdiction to order Executive to divulge, disclose or make accessible such information. 
  
 b. For purposes of this Section, “Confidential
Information” shall mean non-public information concerning the Company’s and its Affiliates’ financial data, strategic business plans, product development (or other proprietary product data), customer lists, marketing plans and
other non-public proprietary and confidential information of the Company and its Affiliates that is not otherwise available to the public. 
  
 c. For the period commencing on the Effective Time and ending on the last day on which Executive receives any payment from the Company or any of
its Affiliates pursuant to Section 3 or Section 4.c, whichever is later, Executive shall not, directly or indirectly, (i) either as principal, manager, agent, consultant, officer, director, stockholder partner member, investor, lender or employee or
in any other capacity, carry on, be engaged in or have any financial interest in any business that is in material direct competition with the business of the Company and/or its Affiliates, or (ii) solicit or hire any employees of the Company and/or
its Affiliates. For purposes hereof, a business shall be deemed to be in material direct competition with the Company if it is significantly involved in the rendering of any service purchased, sold, dealt in or rendered by the Company and/or its
Affiliates. As used in the preceding sentence, the term “significantly” shall be deemed to refer to activities generating gross annual sales of at least $25 million. Nothing in this Section shall be construed so as to preclude Executive
from investing in any publicly held company provided Executive’s beneficial ownership of any class of such company’s securities does not exceed 5% of the outstanding securities of such class. 
  

 7 

 d. Executive and the Company agree that the foregoing covenant not to compete is a reasonable
covenant under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction such restraint is not reasonable in any respect, such court shall have the right, power and authority to excise or modify such
provision or provisions of such covenant as to the court shall appear not reasonable and to enforce the remainder of the covenant as so amended. Executive agrees that any breach of the covenants contained in this Section would irreparably injure the
Company. Accordingly, the Company may, in addition to pursuing any other remedies it may have in law or in equity, obtain an injunction against Executive from any court having jurisdiction over the matter, restraining any further violation of this
Section by Executive. 
  
 10. GOVERNING LAW. 
  
 This, Agreement shall be construed, interpreted and governed in accordance
with the laws of the State of New York, without reference to rules relating to conflict of laws. 
  
 11. WITHHOLDING. 
  
 The Company shall be entitled to withhold from any payment hereunder or under any other agreement between the Company and Executive any amount required by law to be withheld. 
  
 12. COUNTERPARTS. 
  
 This Agreement may be executed in two or more counterparts each of which shall be deemed an original. 
  
 13. ENTIRE AGREEMENT. 
  
 This Agreement reflects the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof and replaces and replaces and supersedes any prior employment agreements. 
  
 14. SURVIVAL OF CERTAIN PROVISIONS. 
  
 Notwithstanding anything else contained herein to the contrary, the provisions of Sections 5 through 13, and this Section 14, shall survive any purported
termination of Executive’s employment and any purported termination or expiration of this Agreement. 
  
 [Signatures follow on next page.] 
  

 8 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written
above. 
  

			
	HEXION SPECIALTY CHEMICALS, INC.
		
	By	 	 /s/ Craig O. Morrison

	Name:	 	Craig O. Morrison
	Title:	 	President and Chief Executive Officer
	
	EXECUTIVE
		
	 	 	 /s/ Layle K. Smith

	Name:	 	Layle K. Smith
		
	Address:	 	 
	 7171 Buffalo Speedway, Apt 1125
 Houston, TX 77205

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