Hexion Specialty Chemicals, Inc. 2009 INCENTIVE COMPENSATION PLAN

Exhibit 10.25

Hexion Specialty Chemicals, Inc.

2009 INCENTIVE COMPENSATION PLAN

Purpose of the Plan

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

Plan Year

1 January 2009 – 31 December 2009

Eligibility

Participation is based on each individual associate’s scope of responsibility and contribution within the organization, as well as the market median targets for the country where they are employed.

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 1 January 2010.

Eligible compensation for incentive calculation is based on the participant’s base rate of pay as of 1 January 2009. The participant’s incentive calculation will be prorated if a change in salary or incentive target occurs during the plan year.

Plan Performance Measures

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 2009. As a result, the participants should be focused and incentivized to manage the business to achieve growth in EBITDA.

50% of the participant’s incentive target will be based on the achievement of the EBITDA targets.

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

EHS: Measures the Occupational Incidents Injury Rate (OIIR)

10% of the participant’s incentive target will be based on the achievement of the EHS Goals.

The applicable EHS goals must be achieved at 100% or better in order to be eligible for an incentive award. EHS will be measured only at Global Hexion, Divisional and Business Unit levels.

Payment of the EHS measure is contingent upon the EBITDA results of the participant’s primary area of responsibility (Global Hexion, Divisional or Business Unit) meeting the minimum financial payout threshold.

1

Cash Flow: Represents the amount of cash generated by business operations.

40% of the participant’s incentive target will be based on the achievement of Cash Flow targets.

Cash Flow will be separately calculated from EBITDA for payout. Even if EBITDA target is not achieved, it is still possible to meet or exceed Cash Flow targets for partial payout.

Cash Flow will be measured for Global Hexion and also at the Divisional level at the plan year end.

Target Incentive

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, country of employment and by the scope and contributions within the organization.

If the maximum EBITDA and Cash Flow performance targets are attained and the EHS performance is at 100%, this Plan can generate a maximum of 175% of the Target Incentive Award.

Plan 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.