Table of Contents 1 .  Annual Cash Compensation Base Salaries Annual Incentive Awards The 2019 Annual Incentive Compensation Plan • Segment EBITDA, which equals earnings before interest, taxes, depreciation and amortization, adjusted to exclude discontinued operations, certain non-cash and other unusual income and expense items. See Items 7 & 8 of Part II of this Annual Report on Form 10-K for a reconciliation of Hexion Net Income to Segment EBITDA. For the 2019 ICP, the targeted Hexion Segment EBITDA was set at $470 million. The targeted segment EBITDA for the Epoxies business (“Epoxies Segment EBITDA”) for 2019 was set at $200.1 million. In early 2019, the Committee approved the 2019 annual incentive compensation plan for associates, including the NEOs, of the Company and its subsidiaries, which we refer to as the “2019 ICP.” Under the 2019 ICP, our NEOs and other eligible participants had the opportunity to earn annual cash incentive compensation based upon the achievement of certain financial and environmental health & safety (“EH&S”) goals. The Hexion performance goals were established based on the following measures: The performance targets for the applicable components of the annual incentive compensation plan are identical for executives and other eligible, salaried associates. We strive to set annual incentive award targets that are achievable only through strong performance, believing that this motivates our executives and other participants to deliver ongoing value-creation, while allowing the Company to attract and retain highly talented senior executives. Annual incentive award targets are determined in connection with the development of an overall budget for Hexion Holdings Corporation and its subsidiaries. Performance measures may be based on a number of factors, such as our prior-year performance, current market trends, anticipated synergies, integration efforts around acquired assets or businesses, potential pricing actions, raw material projections, the realization of planned productivity initiatives, expansion plans, new product development, environmental, health and safety, and other strategic factors that could potentially impact operations. Our annual incentive compensation plan is a short-term performance incentive designed to reward participants for delivering increased value to the organization against specific financial and other critical business objectives. Annual incentive compensation awards are targeted at a level that, when combined with base salaries and other components of our total rewards program, is intended to yield total annual compensation that is competitive in the external marketplace, while performance above the target is intended to yield total annual compensation above the market median. (1) Ms. Frederix’s local currency salary was converted from Euros to US Dollars based on a year-end exchange rate of 1.1225 Euros per US Dollar. The base salary change for each NEO is shown in the table below. Mr. Rogerson’s compensation arrangements changed effective July 1, 2019 based on employment negotiations upon emergence from Chapter 11. Mr. Sokol’s salary increased when he was appointed Chief Administrative Officer of the Company in March 2019. The salary increase for Ms. Frederix reflects the increased responsibilities she assumed when she was named leader of the Global Epoxies segment. The salary increases for Messrs. Knight, Johns, Sokol and Ms. Frederix took into consideration the changes outlined above, internal equity, and external competitive market considerations. The effective date of the salary increases for Messrs. Knight, Johns and Ms. Frederix was July 1, 2019, consistent with our past practice in delivering annual merit increases. The Committee reviews our NEOs' base salary levels (i) annually, in conjunction with annual performance reviews, and (ii) in conjunction with new hires, promotions or significant changes in job responsibilities. When approving base salary increases, the Committee considers various factors, such as job performance, total target compensation, impact on value-creation and the external competitive marketplace. The Committee reviews the performance and achievements of the NEOs in determining whether any increases are merited based on the prior year’s performance. The annual base salaries of our NEOs are designed to be commensurate with professional status, accomplishments, scope of responsibility, overall impact on the organization, and the size and complexity of the business or functional operations managed. The annual base salaries of our NEOs are also intended to be externally competitive with the market. Name 2019 Base Salary 2018 Base Salary 2019 Increase (Decrease) Mr. Rogerson $ 1,250,000 $ 1,000,000 25.00 % Mr. Knight 524,579 506,350 3.60% Ms. Frederix  (1) 395,262 351,682 12.39 % Mr. Johns 530,660 517,212 2.60% Mr. Sokol 375,000 343,945 9.03 % Mr. Bevilaqua 631,108 631,108 —% 114