Exhibit
10.13
CORPORATE OFFICERS’
SEVERANCE PLAN
OF OMNOVA SOLUTIONS
INC.
Article 1
Introduction
1.1 OMNOVA Solutions Inc.
(“OMNOVA”) hereby amends and restates this Corporate
Officers’ Severance Plan of OMNOVA Solutions Inc.
(“Plan”), effective as of January 1, 2009, to
provide salary continuation, a supplemental payment, welfare
benefit continuation and outplacement assistance (collectively, the
“Severance Benefits”) to Eligible Officers of OMNOVA
(a) whose employment is involuntarily terminated and
(b) who satisfy all Plan requirements for the receipt of
Severance Benefits. This Plan is intended to supersede and
substitute for the provisions of the OMNOVA Involuntary Separation
Pay Plan as that plan relates to any Officer of OMNOVA who
participates in this Plan.
The Plan is being amended and
restated for the purpose of compliance with Section 409A of
the Internal Revenue Code and the related regulations (the
“Code”). This amendment and restatement of the Plan
supersedes the Corporate Officers’ Severance Plan of OMNOVA
Solutions Inc. that was originally adopted effective July 13,
2000.
1.2 While the term of this Plan is
indefinite, OMNOVA as the Plan Sponsor reserves the right to amend,
modify or terminate this Plan without notice; provided, however,
any such amendment, modification or termination shall not adversely
affect an Eligible Officer’s right to Severance Benefits
(a) if all conditions in Article 2 are satisfied at the time
of the proposed amendment, modification or termination, (b) if
a Change in Control has occurred, or (c) Board has determined
that a Change in Control will occur, or is likely to occur, and
that it is in the best interests of the Company and its
shareholders and will serve the intended purposes of this Plan for
the Board to render such a determination and ensure the
availability of the protections and benefits afforded by this Plan.
Lastly, nothing herein shall be deemed to modify the at-will
employment status of any OMNOVA Officer who is not subject to a
specific employment agreement.
1.3 OMNOVA intends to pay the
Severance Benefits provided hereunder from the general assets of
OMNOVA; however, OMNOVA reserves the right to fund and provide all
or part of the Severance Benefits hereunder through one or more
welfare trusts.
1.4 This plan document contains all
information required by law to be provided to employees.
Information regarding the Plan, its claims procedures and
employees’ rights under the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), are
included as Section 4.4 and Articles 5 and 6.
1.5 This Plan shall be administered,
in all respects, by the Compensation and Corporate Governance
Committee of the Board of Directors of OMNOVA or its adopted
designee (the “Committee”), including sole
responsibility for and absolute discretionary authority in
determining eligibility to participate in this Plan, eligibility
for benefits under the Plan, interpreting Plan terms, and resolving
disputes under the Plan.
1.6 As used herein, the following
terms shall have the following meanings:
(a) Affiliate : For purposes
of this Plan, an “Affiliate” shall mean a corporation,
partnership, joint venture, sole proprietorship or other trade or
business that is considered a single employer with OMNOVA by
application of Section 414 of the Code, such that it
(i) is part of a “controlled group of
corporations” (within the meaning of Section 414(b) of
the Code) with OMNOVA, (ii) is “under common
control” (within the meaning of Section 414(c) of the
Code) with OMNOVA, or (iii) is a member of an
“affiliated service group” (within the meaning of
Section 414(m) of the Code) with OMNOVA.
(b) Board : For purposes of
this Plan, the “Board” shall mean OMNOVA’s Board
of Directors.
(c) Cause : For the purposes
of this Plan, “Cause” shall be defined as:
(i) A material violation of any of
OMNOVA’s Business Conduct Policies;
(ii) The conviction for any felony
or any offense involving moral turpitude;
(iii) Officer’s willful
failure to perform the Officer’s duties; or
(iv) Any material act deliberately
committed to provoke termination.
(d) Change in Control : means
the occurrence of any of the following events, subject to the
provisions of paragraph (v) hereof:
(i) 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
2
(ii) 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
(iii) 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
(iv) The Board determines that
(A) 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
(i), (ii) or (iii) hereof and (B) 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.
(v) Notwithstanding the foregoing
provisions of this Section 1.6(d):
(A) 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 (iv) 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.
(B) 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 (ii) hereof solely
because (1) the Company, (2) a subsidiary of the Company,
or (3) 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.
3
(e) Director : For purposes
of this Plan, a “Director” shall mean a member of the
Board.
(f) Involuntary Separation from
Service : For purposes of this Plan, an “Involuntary
Separation from Service” shall mean a Separation from Service
due to the independent exercise by OMNOVA (or any successor
company) of the unilateral authority to terminate the Eligible
Officer’s services, other than due to the Eligible
Officer’s implicit or explicit request, where the Eligible
Officer was willing and able to continue performing
services.
(g) Separation from Service :
For purposes of this Plan, a “Separation from Service”
shall mean the Eligible Officer’s termination from employment
with OMNOVA and all Affiliates on account of the Eligible
Officer’s death, retirement or other termination of
employment, as determined in accordance with Section 409A of
the Code. An Eligible Officer will not be deemed to have
experienced a Separation from Service if 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. An
Eligible Officer will not be deemed to have experienced a
Separation from Service if the Eligible Officer provides continuing
services that average more than 20 percent of the services provided
by the Eligible Officer to OMNOVA 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 OMNOVA and its Affiliates, if the Eligible Officer has
provided services to OMNOVA or its Affiliates for less than 36
months). If an Eligible Officer provides services both as an
employee and as an independent contractor of OMNOVA, the Eligible
Officer must cease providing services both as an employee and as an
independent contractor to be treated as having experienced a
Separation from Service. If an Eligible Officer ceases providing
services as an independent contractor and begins providing services
as an employee, or vice versa, the Eligible Officer will not be
considered to have a Separation from Service until the Eligible
Officer has ceased providing services in both capacities. If an
Eligible Officer provides services both as an employee of OMNOVA
and as a member of the Board of Directors, the services provided as
a Director are not taken into account in determining whether the
Eligible Officer has a Separation from Service under this Plan
unless it is aggregated with any plan in which the Eligible Officer
participates as a Director under Section 409A of the Code and
the regulations thereunder.
4
Article 2
Eligibility For Severance
Benefits
2.1 Eligibility : An OMNOVA
Officer must satisfy all of the following conditions of this Plan
in order to be eligible for Severance Benefits under this
Plan:
(a) OMNOVA must offer such Officer a
Letter Agreement incorporating the terms and conditions of this
Plan and setting forth the Severance Benefits available to the
Officer under Article 3 hereof. Those Officers to be offered a
Letter Agreement will be designated by OMNOVA, in its sole and
complete discretion, and status as an OMNOVA Officer alone shall
not include the right to participate in this Plan;
(b) The Officer must execute and
deliver to OMNOVA the Letter Agreement within the time period set
forth in the Letter Agreement; and
(c) The Officer must experience an
Involuntary Separation from Service from OMNOVA for reasons other
than (i) Cause, or (ii) following a leave of absence
exceeding six months and without a return to active
employment.
An Officer who satisfies the
foregoing conditions shall be deemed to be an “Eligible
Officer” under the Plan.
Article 3
Severance Benefits
3.1 Salary Continuation :
Subject to the terms of this Plan, an Eligible Officer shall be
provided salary continuation for 12 months after the effective date
of the Involuntary Separation from Service, payable on a bi-weekly
basis (assuming the Code Section 409A Severance Limit
described in Section 3.5 is not exceeded) and subject to
normal tax withholding. In the event that the total amount of
Severance Benefits provided pursuant to this Article 3 exceeds the
Code Section 409A Severance Limit described in
Section 3.5, salary continuation benefits shall be payable in
accordance with the Alternate Payment Timing provisions of
Section 3.5.
3.2 Bonus : Incentive Bonus
as payable under the terms of the OMNOVA Solutions Inc. Executive
Incentive Compensation Program (the “EICP”) shall be
paid in accordance with the terms of the EICP.
3.3 Benefit Continuation :
Subject to the terms of this Plan, an Eligible Officer shall
receive medical, dental and life insurance benefit continuation for
12 months after the effective date of the Separation from Service.
Such benefit continuation shall be at the same levels elected prior
to the Eligible Officer’s Separation from Service, and OMNOVA
will pay any required medical and dental benefit contributions on
behalf of the Eligible Officer during this 12-month period.
Thereafter, the Eligible Officer will be eligible for medical and
dental benefit continuation under COBRA for 18 months, subject to
payment of COBRA rates by the Eligible Officer. For life insurance
benefit continuation, OMNOVA will pay any required benefit
contributions on behalf of the Eligible Officer during the initial
12-month period; pr
