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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated December 1, 2000, between OMNOVA Solutions
Inc. ("OMNOVA"), an Ohio corporation whose headquarter offices are located at
000 Xxxxx Xxxx, Xxxxxxxx, Xxxx 00000-0000, and XXXXX X. XXXXXXXX, an individual
residing at 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxxxxxx Xxxxxxx, Xxxx 00000.
This will confirm our understanding concerning, and further define, the
terms and conditions of your employment with OMNOVA from and after December 1,
2000.
1. STATUS AS CHIEF EXECUTIVE OFFICER.
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Effective December 1, 2000, you will be employed as the Chief Executive
Officer ("CEO"). In this capacity, you will devote your full time and
efforts to the performance of those duties customarily and usually
performed by the CEO, subject at all times to the direction of the
Board of Directors ("Directors").
2. STATUS AS CHAIRMAN.
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We anticipate that the Directors will elect you Chairman ("Chairman")
of OMNOVA at the February 2001 meeting of Directors. If the Directors
remove you as CEO prior to such meeting or fail to elect you Chairman
at or before such meeting, or if, after electing you as Chairman,
remove you from such position prior to your attaining age 65, you may
elect to terminate your employment and receive the termination payment
specified in paragraph 4(e). The preceding sentence notwithstanding,
you shall not be entitled to the termination payment specified in
paragraph 4(e) if the Directors decide to remove you as either CEO or
Chairman or not to elect you Chairman for or due to cause. As used in
this Employment Agreement, "cause" means any willful (i) failure to
follow any instruction or policy of OMNOVA, the Directors, or the
Chairman, (ii) commission of any felony, (iii) falsification of any
company document or (iv) act committed to provoke dismissal.
3. STATUS AS DIRECTOR.
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You will continue to serve as a Director upon becoming CEO and
Chairman, and thereafter by mutual agreement between you and the
Directors.
4. COMPENSATION
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(a) BASE SALARY. Effective December 1, 2000, your base annual
salary will be $550,000, and thereafter will be subject to
review and adjustment by the non-employee Directors in
accordance with OMNOVA's established practice. Your base
salary will be payable in twenty-four semi-monthly
installments in accordance with OMNOVA's regular pay
practices.
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(b) ANNUAL INCENTIVE. You will continue to participate in OMNOVA's
Executive Incentive Compensation Program. Based upon OMNOVA's
achievement of specified objectives and the non-employee
Directors' evaluation of your personal performance, you will
have the opportunity to earn an incentive bonus in an amount
ranging up to 125% of your base salary and payable in cash
and/or shares of OMNOVA's stock. Bonuses are payable in
January or February following the end of OMNOVA's fiscal year
and in accordance with OMNOVA's regular pay practices and
discretion of the CEO.
(c) LONG-TERM INCENTIVE. You will continue to participate in the
Long-Term Incentive Program under the Company's 1999 Equity
and Performance Incentive Plan. If OMNOVA achieves specified
performance goals, you will be entitled to receive an
incentive award, payable in cash and/or shares of OMNOVA's
stock, having a value which equals 30% of your average annual
compensation during the performance period.
(d) STOCK OPTIONS. Effective December 1, 2000, the Directors will
grant you an award of Options for 350,000 shares of OMNOVA
stock under the Company's 1999 Equity and Performance
Incentive Plan. Such award will include Options for 200,000
shares in respect of your election as CEO, plus Options for
150,000 shares as an annual grant for the 2001 fiscal year.
(e) TERMINATION PAY. The term of your employment will be
indefinite in duration and, therefore, subject to termination
at will by notice from you or OMNOVA. However, if OMNOVA
elects to terminate your employment before you reach age 65
for any reason except cause or if you elect to terminate your
employment solely due to a decision of the Directors to remove
you as CEO and Chairman, which decision is not based on or due
to cause,
(i) OMNOVA will pay you an amount equal to two times the
sum of (A) your annual base salary at the time of
such termination and (B) the highest year-end bonus
which OMNOVA paid to you in respect of the last three
fiscal years preceding such termination; for this
purpose, your highest-year-end bonus will be deemed
to be no less than 100% of your current annual base
salary;
(ii) All OMNOVA stock options that you hold will be
exercisable in accordance with their terms and
conditions for the remainder of their respective
10-year terms; and
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(iii) All performance awards under the OMNOVA Solutions
Inc. 1999 Equity and Performance Incentive Plan due
to you at the time of such termination for any
performance period already completed, plus a prorated
performance award for each performance period which
has not been completed at the time of such
termination (calculated using the greater of actual
or "target" attainment of performance goals for that
portion of any performance period not completed, will
be paid in accordance with the provisions of such
Plan.
provided that you execute and deliver to OMNOVA a release of
all claims and/or causes of action that arise during or in
connection with the termination of your employment, except
claims (1) to the termination payment specified in this
paragraph 4(e) and any other payment specified herein, (2)
under any stock option awarded to you, and (3) under any
employee compensation and/or benefit plan of OMNOVA.
5. SEVERANCE AGREEMENT FOR CHANGE IN CONTROL. Your current severance
agreement for change in control will be replaced by a new agreement
providing for severance pay, in the event of a change in control, in an
amount equal to three (3) times the sum of Base Pay plus Incentive Pay
(as those terms are defined therein) and containing
(a) the standard terms and conditions utilized for the Company's
executive officers;
(b) a "walk at will" provision; and
(c) an additional provision which requires that any amount which
may become payable under that severance agreement be offset by
termination pay payable under this Employment Agreement as a
result of the termination of your employment due to a change
in control.
6. EMPLOYEE BENEFITS
You will continue to participate in the following OMNOVA employee
benefit plans in accordance with their normal terms and conditions:
(a) Pension Plan for Salaried Employees of OMNOVA Solutions Inc.;
(b) Benefits Restoration Plan for Salaried Employees of OMNOVA
Solutions Inc.;
(c) OMNOVA Solutions Retirement Savings Plan;
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(d) OMNOVA Solutions Inc. Flexible Benefits Plan;
(e) OMNOVA Solutions Inc. Medical Plan;
(f) OMNOVA Solutions Inc. Dental Plan;
(g) OMNOVA Solutions Inc. Long-Term Disability Plan;
(h) OMNOVA Solutions Inc. Short-Term Disability Plan;
(i) OMNOVA Solutions Inc. Basic and Dependent Life Insurance Plan;
(j) OMNOVA Solutions Inc. Accidental Death and Dismemberment Plan;
(k) OMNOVA Solutions Inc. Voluntary Personal Accident Plan;
(l) OMNOVA Solutions Inc. Business Travel Accident Insurance Plan;
and
(m) OMNOVA Solutions Inc. Involuntary Separation Pay Plan. This
list may not be inclusive of other benefit plans currently in
place.
Since your original hire date was subsequent to January 1, 1995, you
will not be eligible to participate in the OMNOVA Solutions Inc.
Retiree Medical Plan.
7. VACATION
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You will continue to be entitled to four weeks of vacation with pay
during each year of your employment. You may not carry forward to a
subsequent year any unused vacation nor will you be entitled to receive
pay in lieu of any unused vacation. Additionally, you will enjoy all
paid holidays that OMNOVA designates for its salaried employees in the
Fairlawn area.
8. COUNTRY CLUB MEMBERSHIP
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Building and maintaining business relationships with community leaders,
customers, and suppliers is an important function which the CEO is
expected to perform. OMNOVA will pay or reimburse you for membership
fees and dues at a local country club for your business and personal
use. All such payments and reimbursements will be treated as personal
income to you in accordance with and as required by law.
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9. FINANCIAL PLANNING
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OMNOVA's arrangement with AYCO to provide individual financial
counseling for its corporate officers will continue to be available to
you on a cost-sharing basis. If you elect to participate, your cost
will be 10% of the annual fees charged by AYCO. You will have an
imputed income liability for the company-paid 90%.
10. ANNUAL PHYSICAL
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OMNOVA will provide you the opportunity to receive a physical
examination at any other medical center that you may select. The
frequency and extent of any such examination will be pursuant and
subject to the provisions of OMNOVA's Executive Physical Directive.
11. LIFE INSURANCE
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OMNOVA will obtain and pay premiums for term life insurance coverage on
your life in the amount of $4 million, the proceeds of which will be
payable to a beneficiary designated by you. OMNOVA will gross up your
income in order to pay for additional income tax you may owe with
respect to such life insurance coverage. Upon termination of your
employment, OMNOVA will cease to pay premiums for such life insurance
coverage, and you will be able to continue such coverage at your own
expense for the remainder of the term.
12. RELOCATION
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OMNOVA will pay or reimburse you for relocation expenses that you incur
pursuant to OMNOVA's Relocation Program, including assistance on the
sale of your residence, transportation of household goods, purchase of
a residence in the immediate Akron area. A copy of this Program is
being sent to you under separate cover.
13. AGREEMENT
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(a) This Employment Agreement supercedes the Employment Agreement
dated July 16, 1996 between you and GenCorp Inc., and assumed
by OMNOVA in connection with the October 1, 1999 spinoff of
OMNOVA from GenCorp Inc.
(b) This Employment Agreement constitutes the entire understanding
between you and OMNOVA regarding the terms of your employment
with OMNOVA.
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(c) Except as expressly provided herein, this Employment Agreement
may not be changed, amended or terminated, in whole or in
part, except by a writing executed by you and by an authorized
officer of OMNOVA.
(d) This Employment Agreement shall in all respects be construed
in accordance with the laws of the State of Ohio.
(e) This Employment Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of OMNOVA,
including any successor resulting from a change in control.
OMNOVA SOLUTIONS INC.
Date: 2/7/01 By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Senior Vice President,
Human Resources
Date: 2/7/01 /s/ Xxxxx X. Xxxxxxxx
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XXXXX X. XXXXXXXX
