Exhibit
10.12
PENSION BENEFITS RESTORATION PLAN
FOR SALARIED EMPLOYEES
OF OMNOVA SOLUTIONS INC. AND
CERTAIN SUBSIDIARY COMPANIES
(Effective January 1, 2009)
PURPOSE
The purpose of the Pension BRP is to
restore the Pension Plan benefits which Eligible Employees and
their Beneficiaries would otherwise lose as a result of Internal
Revenue Code limitations upon contributions to, and payment of
benefits from, the Pension Plan. By restoring such benefits, the
Pension BRP permits the total benefits of such employees to be
provided on the same basis as is applicable to all other employees
under the Pension Plan. Nothing in the Pension BRP shall operate or
be construed to modify, amend or affect the terms and provisions of
the Pension Plan in any way.
Prior to January 1, 2009, the
Pension BRP was part of the Benefits Restoration Plan for Salaried
Employees of OMNOVA Solutions Inc. and Certain Subsidiary Companies
(the “Prior Plan”). The Prior Plan was originally
effective on October 1, 1999. Due to Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”),
the Prior Plan was split into the Pension BRP and the Savings
Benefits Restoration Plan for Salaried Employees of OMNOVA
Solutions Inc. and Certain Subsidiary Companies (the “Savings
BRP”) effective January 1, 2009. With respect to amounts
that accrued under the Prior Plan during the period January 1,
2005, through December 31, 2008, OMNOVA Solutions Inc.
operated the terms of the Prior Plan in accordance with a good
faith, reasonable interpretation of Code Section 409A and its
applicable regulations.
SECTION 1
DEFINITIONS
In addition to the defined terms
established above, the terms set forth below, whenever capitalized
throughout the Pension BRP, shall have the meaning ascribed
herein:
(i) “Administrative
Committee” means the Administrative Committee of OMNOVA
Solutions Inc.
(ii) “Affiliate” means a
corporation, partnership, joint venture, sole proprietorship or
other trade or business that is considered a single employer with
the Company by application of Section 414 of the Code, such
that it (A) is part of a “controlled group of
corporations” (within the meaning of Section 414(b) of
the Code) with the Company, (B) is “under common
control” (within the meaning of Section 414(c) of the
Code) with the Company, or (C) is a member of an
“affiliated service group” (within the meaning of
Section 414(m) of the Code) with the Company.
(iii) “Beneficiary”
means a named beneficiary, joint annuitant or surviving spouse of a
deceased Participant.
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(iv) “Board” means the
Company’s Board of Directors.
(v) “Change in Control”
means the occurrence of any of the following events, subject to the
provisions of paragraph (E) hereof:
(A) All or substantially all of the
assets of the Company are sold or transferred to another
corporation or entity, or the Company is merged, consolidated or
reorganized into or with another corporation or entity, with the
result that upon conclusion of the transaction less than 51% of the
outstanding securities entitled to vote generally in the election
of directors or other capital interests of the acquiring
corporation or entity are owned directly or indirectly, by the
shareholders of the Company generally prior to the transaction;
or
(B) There is a report filed on
Schedule 13D or Schedule 14D-1 (or any successor schedule, form or
report), each as promulgated pursuant to the Exchange Act,
disclosing that any person (as the term “person” is
used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act (a “Person”)) has become the beneficial
owner (as the term “beneficial owner” is defined under
Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act (a “Beneficial Owner”)) of securities
representing 20% or more of the combined voting power of the
then-outstanding voting securities of the Company; or
(C) The individuals who, at the
beginning of any period of two consecutive calendar years,
constituted the Directors of the Company cease for any reason to
constitute at least a majority thereof unless the nomination for
election by the Company’s stockholders of each new Director
of the Company was approved by a vote of at least two-thirds of the
Directors of the Company still in office who were Directors of the
Company at the beginning of any such period; or
(D) The Board determines that
(1) any particular actual or proposed merger, consolidation,
reorganization, sale or transfer of assets, accumulation of shares
or tender offer for shares of the Company or other transaction or
event or series of transactions or events will, or is likely to, if
carried out, result in a Change in Control falling within paragraph
(A), (B) or (C) hereof and (2) it is in the best
interests of the Company and its shareholders, and will serve the
intended purposes of the Change in Control provisions of this
Program and other compensation and benefit programs, plans and
agreements of the Company, if a Change in Control shall be deemed
to have occurred.
(E) Notwithstanding the foregoing
provisions of this Section 1(v):
(1) If any such merger,
consolidation, reorganization, sale or transfer of assets, or
tender offer or other transaction or event or series of
transactions or events mentioned in paragraph (D) hereof shall
be abandoned, or any such accumulations of shares shall be
dispersed or otherwise resolved, the Board may, by notice to the
Executive, nullify the effect thereof and a Change in Control shall
be deemed not to have occurred, but without prejudice to any action
that may have been taken prior to such nullification.
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(2) Unless otherwise determined in a
specific case by the Board, a Change in Control shall not be deemed
to have occurred for purposes of paragraph (B) hereof solely
because (a) the Company, (b) a subsidiary of the Company,
or (c) any Company-sponsored employee stock ownership plan or
any other employee benefit plan of the Company or any subsidiary of
the Company either files or becomes obligated to file a report or a
proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act disclosing
Beneficial Ownership by it of shares of the then-outstanding voting
securities of the Company, whether in excess of 20% or otherwise,
or because the Company reports that a change in control of the
Company has occurred or will occur in the future by reason of such
beneficial ownership.
(vi) “Code” means the
Internal Revenue Code of 1986, as presently in effect or hereafter
amended.
(vii) “Company” means
OMNOVA Solutions Inc.
(viii) “Director” means
a member of the Board.
(ix) “Disability” or
“Disabled” means either (A) the Participant is
unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a
period of at least 12 months (which shall be evidenced by the
written determination of a qualified medical doctor selected by the
Administrative Committee and specifying the date upon which such
disability commenced), or (B) the Participant, by reason of
any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, is receiving income
replacement benefits for a period exceeding six months under an
accident and health plan covering employees of the
Company.
(x) “Effective Date”
means January 1, 2009, except as otherwise specifically
provided.
(xi) “Eligible Employee”
means an employee of a Member Company who is a participant under
the Pension Plan (as defined below) or is a Beneficiary receiving a
benefit under the Pension Plan.
(xii) “ERISA” means the
Employee Retirement Income Security Act of 1974, as
amended.
(xiii) “Member Company”
means the Company and any subsidiary of the Company which is
designated as a Member Company by the Company’s
Administrative Committee pursuant to the procedures established
thereby.
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(xiv) “Participant”
means an Eligible Employee who has satisfied the eligibility
requirements under Section 2.1; provided, however, that no
Eligible Employee shall become a Participant prior to the date such
Eligible Employee’s employer became a Member
Company.
(xv) “Payment Form”
means, with respect to any Participant, the form of benefit payment
elected by the Participant in accordance with the election
provisions of Section 2.2. The available Payment Forms are
lump sum payment and annual installments over a period of between
two and ten years, as elected on a Participant’s election
form. If no Payment Form has been elected, the Payment Form shall
be a lump sum payment. In addition, Participants may elect to have
benefit payment accelerated and paid in a lump sum payment upon
Participant’s Disability. The amounts of lump sum payments
and annual installments shall be calculated using actuarial rates
and assumptions used under the Pension Plan to convert the normal
form of retirement benefit into a lump sum or installment form of
benefit.
(xvi) “Pension BRP”
means the plan set forth in this instrument known as the
“Pension Benefits Restoration Plan for Salaried Employees of
OMNOVA Solutions Inc. and Certain Subsidiary Companies,” as
it may be amended from time to time.
(xvii) “Pension Plan”
means the OMNOVA Solutions Consolidated Pension Plan.
(xviii) “Savings BRP”
means the Savings Benefits Restoration Plan for Salaried Employees
of OMNOVA Solutions Inc. and Certain Subsidiary
Companies.
(xix) “Separation from
Service” means the Participant’s termination from
employment with the Company and all Affiliates on account of the
Participant’s death, retirement or other termination of
employment, as determined in accordance with Section 409A of
the Code and the regulations thereunder. A Participant will not be
deemed to have experienced a Separation from Service if the
Participant is on military leave, sick leave or other bona fide
leave of absence, to the extent such leave does not exceed a period
of six months or, if longer, such longer period of time as is
protected by either statute or contract. A Participant will not be
deemed to have experienced a Separation from Service if the
Participant provides continuing services that average more than 20
percent of the services provided by the Participant to the Company
or its Affiliates (whether as an employee or an independent
contractor) during the immediately preceding 36-month period of
services (or such shorter period of services to the Company and its
Affiliates if the Participant has provided services to the Company
or its Affiliates for less than 36 months). If a Participant
provides services both as an employee and as an independent
contractor of the Company, the Participant must cease services in
both capacities to be treated as having experienced a Separation
from Service. If a Participant ceases providing services as an
independent contractor and begins providing services as an
employee, or vice versa, the Participant will not be considered to
have a Separation from Service until the Participant ceases
services in both capacities. If a Participant provides services
both as an employee of the Company and a member of the Board, the
services provided as a Director are not taken into account in
determining whether the Participant has a Separation from Service
under the Pension BRP unless it is aggregated with any plan in
which the Participant participates as a Director under
Section 409A of the Code and the regulations
thereunder.
(xx) “Separation from Service
Date” means the date upon which the Participant experiences a
Separation from Service.
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(xxi) “Specified
Employee” means an employee of the Company or an Affiliate
who meets the requirements of Section 416(i)(1)(A)(i),
(ii) or (iii) of the Code (applied in accordance with the
Treasury Regulations thereunder and disregarding
Section 416(i)(5) of the Code). The identification of
Specified Employees shall be conducted by the Company using a
method (i) reasonably designed to include all Specified
Employees, (ii) applying an objectively determinable standard
providing no direct or indirect election by the Participant, and
(iii) resulting in no more than 200 employees being treated as
Specified Employees for any given date. A Specified Employee
determination shall take effect four months after the
Company’s identification of the employees satisfying such
requirements and shall be valid for the next following 12-month
period.
SECTION 2
ELIGIBILITY AND
ELECTIONS
2.1 Eligibility . An Eligible
Employee who (a) qualifies for a benefit under the Pension
Plan, and (b) incurs a reduction in such benefit as a result
of the Code limitations (including but not limited to limitations
under Sections 401(a)(17) and 415(b) of the Code) upon compensation
to be considered under, and annual benefits to be paid from, the
Pension Plan as of January 1, 2005, shall be eligible to
participate in the Pension BRP.
2.2 Elections . All elections
shall be made on the administrative form required by the
Administrative Committee.
(a) Initial
Elections . An Eligible Employee who becomes a Participant
under the Pension BRP in accordance with the eligibility
requirements under Section 2.1 shall make a one-time,
irrevocable election regarding the Payment Form for benefits under
the Pension BRP not later than January 30
th
of the calendar year
following the calendar year in which the Participant first accrues
a benefit under the Pension BRP or the Savings BRP, whichever
occurs first.
(b) Elections Regarding Benefits
Accrued On or Before December
