Table of Contents Restricted Deferred Units Financial Statement Impact Options Activity In 2013, the Company granted RDUs with performance and market conditions with an aggregate grant date fair value of approximately $4. The fair value was estimated at the grant date using the same Monte Carlo valuation method and assumptions used for the Unit Options. The RDUs have an indefinite life, thus the term used in the valuation model was 30 years, which resulted in a weighted-average expected life of 22 years. As of December 31, 2018, it is not probable the related RDUs will vest. Compensation cost will be recognized over the service period once the satisfaction of the performance condition is probable. In 2011, the Company granted Tranche A RDUs with an aggregate grant date fair value of approximately $4. In 2011, the Company granted Tranche B and Tranche C RDUs with performance and market conditions, each with an aggregate grant date fair value of approximately $2. The fair value was estimated at the grant date using the same Monte Carlo valuation method and assumptions used for the Tranche B and Tranche C Options. The RDUs have an indefinite life, thus the term used in the valuation model was 30 years, which resulted in a weighted-average expected life of 21.4 years. As of December 31, 2018 it is not probable the related RDUs will vest. Compensation cost will be recognized over the service period once the satisfaction of the performance condition is probable. Although the 2011 Equity Plan was issued by Hexion Holdings, the underlying compensation cost represents compensation costs paid for by Hexion Holdings on Hexion’s behalf, as a result of the employees’ service to Hexion. All compensation cost is recorded over the requisite service period on a graded- vesting basis. Share-based compensation expense is recognized, net of estimated forfeitures, over the requisite service period on a graded-vesting basis. The Company adjusts compensation expense periodically for forfeitures. The Company recognized no share-based compensation expense for the year ended December 31, 2018 and less than $1 for the years ended December 31, 2017 and 2016, respectively. The amounts are included in “Selling, general and administrative expense” in the Consolidated Statements of Operations. The Company expects additional compensation expense of $17, which will be recognized upon an initial public offering or other future contingent event. Following is a summary of the Company’s stock option plan activity for the year ended December 31, 2018: At December 31, 2018, exercise prices for options outstanding ranged from $1.21 to $29.42, with a weighted average remaining contractual life of 2.2 years. The weighted average remaining contractual life for options exercisable and options expected to vest was 2.5 and 0 years, respectively. At December 31, 2018, the aggregate intrinsic value of both options exercisable and options expected to vest was $0. The total amount of cash received and total intrinsic value (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) of options exercised during the years ended December 31, 2018, 2017, and 2016 was $0. (1) Includes 2,318,200 of options that expired on December 31, 2017. 81 Hexion Holdings Common Units Weighted Average Exercise Price Options outstanding at December 31, 2017  (1) 10,512,385 $ 4.01 Options granted — $ — Options forfeited  (1) (2,470,024 ) $ 6.82 Options outstanding at December 31, 2018 8,042,361 $ 3.14 Exercisable at December 31, 2018 6,100,631 $ 2.54