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Exhibit 10.17
AGREEMENT ON EMPLOYEE MATTERS
This Agreement on Employee Matters ("Agreement") dated as of ____ __,
1999, is made and entered into by and between GENCORP INC., an Ohio corporation
("GenCorp"), and OMNOVA SOLUTIONS INC., an Ohio corporation ("OMNOVA") and is a
wholly owned subsidiary of GenCorp.
WITNESSETH:
WHEREAS, the Board of Directors of GenCorp has determined that it is
advisable to distribute substantially all of the stock of OMNOVA to its
shareholders in a transaction intended to qualify under Section 355 of the
Internal Revenue Code (variously, the "Distribution" or the "Spin-Off");
WHEREAS, GenCorp and OMNOVA are entering into a Distribution Agreement
which, among other things, sets forth the principal corporate transactions
required to effect the Distribution and sets forth other agreements that will
govern certain other matters following the Distribution; and
WHEREAS, in connection with the Distribution, GenCorp and OMNOVA desire
to provide for the allocation of certain assets and liabilities and for certain
other matters all relating to employment, employee benefit plans and
compensation arrangements.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
1.1 Terms used but not defined herein shall have the meanings set forth
in the Distribution Agreement. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
(a) CODE. The Internal Revenue Code of 1986, as amended.
(b) DISTRIBUTION DATE. The date on which the shares of OMNOVA
are distributed to the shareholders of GenCorp.
(c) ERISA. The Employee Retirement Income Security Act of
1974, as amended. (d) GENCORP CONTROLLED GROUP. Collectively, GenCorp and any
GenCorp Group member whose employees are required by Section 414 of the Code to
be treated as if they were employed by a single employer.
(e) GENCORP MEDICAL PLAN. The GenCorp Medical and Dental
Plans.
(f) GENCORP HOURLY PENSION PLAN. The Non-Contributory Pension
Plan of GenCorp Inc., as in effect immediately before the Closing Time.
(g) GENCORP PENSION PLAN TRUSTEE. The trustee or trustees
appointed pursuant to the GenCorp Salaried Pension Plan.
(h) GENCORP SALARIED PENSION PLAN. The Pension Plan for
Salaried Employees of GenCorp Inc. and Certain Participating Subsidiaries, as in
effect immediately before the Closing Time.
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(i) GENCORP STOCK FUND. The GenCorp Stock Fund under the
Joint Savings Plan.
(j) JOINT SAVINGS PLAN. The GenCorp Retirement Savings Plan
and the Profit Sharing Retirement and Savings Plan of GenCorp Inc. and Certain
Participating Subsidiaries, as amended to be jointly sponsored by GenCorp and
OMNOVA.
(k) OMNOVA CONTROLLED GROUP. Collectively, OMNOVA and any
OMNOVA Group member whose employees are required by Section 414 of the Code to
be treated as if they were employed by a single employer.
(l) OMNOVA EMPLOYEES. Any person who is employed by OMNOVA
pursuant to Section 2.1 hereof. OMNOVA Employees shall include OMNOVA Salaried
Employees and OMNOVA Hourly Employees.
(m) OMNOVA HOURLY EMPLOYEES. OMNOVA Employees other than
OMNOVA Salaried Employees.
(n) OMNOVA HOURLY PENSION PLAN. The Non-Contributory Pension
Plan of OMNOVA Solutions Inc.
(o) OMNOVA HOURLY PENSION PLAN PARTICIPANT. OMNOVA Hourly
Employees and former hourly employees of GenCorp who terminated employment, with
accrued benefits under the GenCorp Hourly Pension Plan, from (i) business
locations of OMNOVA which are active immediately after the Closing Time and (ii)
the former GenCorp business location in Newcomerstown, Ohio
(p) OMNOVA MEDICAL PLAN. The medical and dental benefit plans
adopted by OMNOVA for the benefit of its salaried employees after the
Distribution and the separate
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medical and dental benefit programs maintained by OMNOVA pursuant to collective
bargaining agreements.
(q) OMNOVA PENSION PLAN TRUSTEE. The trustee or trustees
appointed pursuant to the trust agreement under the OMNOVA Pension Plan.
(r) OMNOVA SALARIED EMPLOYEES. OMNOVA Employees who are
compensated on a salaried basis.
(s) OMNOVA SALARIED PENSION PLAN. The Pension Plan for
Salaried Employees of OMNOVA Solutions Inc.
(t) OMNOVA SALARIED PENSION PLAN PARTICIPANTS. OMNOVA
Salaried Employees and former salaried employees of GenCorp who terminated
employment, with accrued benefits under the GenCorp Salaried Pension Plan, from
(i) business locations of OMNOVA which are active immediately after the Closing
Time and (ii) the former GenCorp business location in Newcomerstown, Ohio.
(u) OMNOVA STOCK FUND. The OMNOVA Stock Fund under the Joint
Savings Plan.
(v) UNFUNDED DEFERRED COMPENSATION. Unfunded obligations of
GenCorp as of the Closing Time to pay deferred compensation and retirement
income under its Benefits Restoration Plan, Deferred Bonus Plan, Non-Employee
Directors Retirement and Deferred Compensation Plans, 1996 Supplemental
Retirement Plan for Management Employees, individual employment agreements, and
other miscellaneous plans related to discontinued operations, including such
additional amounts as may be attributable to earnings growth after the Closing
Time in accordance with the terms of the specific plan or agreement.
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(w) UNION EMPLOYEES. Any OMNOVA Employee who is included in a
collective bargaining unit.
ARTICLE II
EMPLOYMENT AND BENEFIT PLANS
2.1 EMPLOYMENT OF OMNOVA EMPLOYEES AND UNION EMPLOYEES.
(a) Prior to the Closing Time, while OMNOVA is still a
wholly-owned subsidiary of GenCorp, GenCorp shall transfer to OMNOVA the
employment of all (i) GenCorp employees who are employed primarily in the OMNOVA
Business, including any such employee on an approved leave of absence (including
disability) at the time of such transfer, and (ii) all GenCorp employees who are
employed at Corporate Headquarters, Corporate Technology Center and Flight
Operations, including any such employee on an approved leave of absence
(including disability) at the time of such transfer, but shall exclude (A)
employees named or described on Schedule A who shall remain GenCorp employees,
and (B) employees who have elected to retire under the 1999 Voluntary Enhanced
Retirement Program, except the employees named on Schedule B who shall become
OMNOVA Employees until their retirement.
(b) OMNOVA shall employ all OMNOVA Employees transferred to
OMNOVA pursuant to Section 2.1(a). Subject to the terms and conditions of, and
except as otherwise provided in this Agreement, effective as of the Closing
Time, OMNOVA shall provide the OMNOVA Employees with terms and conditions of
employment, including, without limitation, employee benefits and other
perquisites, that are substantially similar to those provided to such persons
immediately prior to the Closing Time. However, nothing
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contained in this Agreement shall impair OMNOVA's ability to make such changes
in such terms and conditions of employment following the Distribution as OMNOVA
may deem to be necessary or appropriate for the operation of OMNOVA.
(c) Subject to Section 2.14, OMNOVA shall, at its own cost
and expense, (a) defend GenCorp from any and all claims, damages, actions or
causes of action ("Claims") which result from OMNOVA's employment and/or
termination of employment of any of the employees named on Schedule B hereto on
or after the Distribution Date, and (b) indemnify and hold GenCorp harmless from
all damages, liabilities, losses, costs, judgments, orders, assessments,
interest, penalties, fines, settlement payments, costs and expenses (including,
without limitation, attorneys fees and other investigation and defense costs and
expenses) imposed upon or incurred by GenCorp as a result of any such Claim.
(d) Subject to entering into mutually acceptable novation
agreements with the applicable Unions, OMNOVA shall assume all collective
bargaining agreements which are in effect as of the Closing Time at active
OMNOVA locations, and following the Distribution it will continue to employ all
Union Employees pursuant to the terms and conditions of such collective
bargaining agreements.
2.2 JOINT SAVINGS PLAN. (a) Effective on the Distribution Date, the
GenCorp Retirement Savings Plan and the Profit Sharing Retirement and Savings
Plan of GenCorp Inc. and Certain Participating Subsidiaries will become multiple
employer plans (collectively, "Joint Savings Plan") in which both GenCorp and
OMNOVA will be unrelated participating employers. Day-to-day administration of
the Joint Savings Plan will be performed by
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GenCorp with cooperation and assistance of OMNOVA pursuant to the separate
Services and Support Agreement between GenCorp and OMNOVA.
(b) GenCorp will continue to be both the administrator and
sponsor of the Joint Savings Plan, as defined in ERISA sections 3(16)(A) and
(B), for purposes of complying with the reporting and disclosure requirements
imposed by ERISA and the Code in administering the Joint Savings Plan.
Notwithstanding the preceding sentence, GenCorp and OMNOVA agree that no changes
will be made to the Joint Savings Plan, except as hereinafter described unless
(i) such changes are determined, with the advice of legal counsel, to be
required for compliance with applicable laws, or (ii) GenCorp and OMNOVA
mutually agree to such changes. In addition,
(1) The Administrative Committee for the Joint
Savings Plan, which will have general responsibility for interpreting
and assuring uniform administration of the provisions of the Joint
Savings Plan, will be composed of three (3) members of the GenCorp
Administrative Committee and two (2) members of the OMNOVA
Administrative Committee; and
(2) The Benefits Management Committee for the Joint
Savings Plan, which will have the responsibilities related to
maintaining relationships with the trustee and investment managers and
investment of the trust fund, will be composed of two (2) members of
the GenCorp Benefits Management Committee and two (2) members of the
OMNOVA Benefits Management Committee.
(c) On and after the Distribution Date, employer matching
contributions on behalf of GenCorp employees will be made solely by GenCorp and
solely to the GenCorp
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Stock Fund and employer matching contributions on behalf of OMNOVA Employees
will be made solely by OMNOVA and solely to the OMNOVA Stock Fund. Not later
than the later of October 31, 2001 or two years after the Distribution Date, the
accounts of OMNOVA Employees and former OMNOVA Employees will be transferred to
a new separate savings plan to be established by OMNOVA. Thereafter, neither
OMNOVA nor its employees will participate in the GenCorp Retirement Savings
Plan.
(d) Following the Distribution, OMNOVA common stock held in
the accounts of GenCorp employees that is attributable to contributions made
before the Distribution may be retained in the OMNOVA Stock Fund, transferred to
the GenCorp Stock Fund or transferred to any other investment funds in the Joint
Savings Plan at the participant's election in accordance with the terms of the
Joint Savings Plan. Except as provided in the preceding sentence, contributions
made to or held under the Joint Savings Plan on behalf of GenCorp employees may
not be invested in the OMNOVA Stock Fund. OMNOVA common stock held in the
accounts of GenCorp employees that is attributable to employer matching
contributions that have been in the plan for at least two full plan years may be
withdrawn, in cash or in kind. Any dividends on OMNOVA common stock in accounts
of GenCorp employees will be reinvested in the OMNOVA Stock Fund.
(e) Following the Distribution, GenCorp common stock held in
the accounts of OMNOVA Employees that is attributable to contributions made
before the Distribution may be retained in the GenCorp Stock Fund, transferred
to the OMNOVA Stock Fund or transferred to any other investment fund in the
Joint Savings Plan at the Participant's election in accordance with the terms of
the Joint Savings Plan. Except as provided in the preceding
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sentence, contributions made to or held under the Joint Savings Plan on behalf
of OMNOVA Employees may not be invested in the GenCorp Stock Fund. GenCorp
common stock held in the accounts of OMNOVA Employees that is attributable to
employer matching contributions that have been in the plan at least two full
plan years may be withdrawn, in cash or in kind. Any dividends after the
Distribution Date on GenCorp common stock in accounts of OMNOVA Employees will
be reinvested in the GenCorp Stock Fund.
2.3 OMNOVA SALARIED PENSION PLAN. (a) OMNOVA shall implement, before
the Closing Time, the OMNOVA Salaried Pension Plan, a qualified defined benefit
plan substantially similar to the GenCorp Salaried Pension Plan for the benefit
of OMNOVA Pension Plan Participants. OMNOVA Salaried Employees shall be eligible
for immediate participation in the OMNOVA Salaried Pension Plan as of the date
their employment is transferred to OMNOVA pursuant to Section 2.1(a). OMNOVA
Salaried Employees shall be credited under the OMNOVA Salaried Pension Plan, for
eligibility and vesting purposes, with the service credited to them under the
GenCorp Salaried Pension Plan. An OMNOVA Salaried Employee shall be credited
under the OMNOVA Salaried Pension Plan, for benefit accrual purposes, with the
service credited to him or her under the GenCorp Salaried Pension Plan only if a
transfer described in subsection (b) of this Section is made with respect to
such OMNOVA Salaried Employee.
(b) OMNOVA Salaried Employees shall cease to accrue benefits
under the GenCorp Salaried Pension Plan as of the date their employment is
transferred to OMNOVA pursuant to Section 2.1(a). Such transfer shall not be an
event requiring a distribution of benefits under the GenCorp Salaried Pension
Plan.
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(c) As soon as practicable after the Distribution Date,
GenCorp shall cause the GenCorp Pension Plan Trustee to segregate within the
GenCorp Pension Plan Trust the Segregated Salaried Pension Assets (as defined in
the following sentence) determined to be allocable with respect to accrued
benefits of OMNOVA Salaried Pension Plan Participants as of the Closing Time.
For purposes of the preceding sentence, the Segregated Salaried Pension Assets
shall mean assets with a value equal to the present value as of the Closing Time
of the accrued benefits of the OMNOVA Salaried Pension Plan Participants under
the GenCorp Salaried Pension Plan, determined by the plan's actuary using
interest assumptions prescribed by the PBGC for valuing annuities in plan
termination situations, plus an amount of surplus assets allocated in proportion
to the allocation of liabilities in accordance with ERISA section 4044.
(d) GenCorp and OMNOVA shall make or cause to be made all
required filings and submissions to appropriate governmental and regulatory
authorities and all necessary or appropriate amendments to the GenCorp Salaried
Pension Plan and the OMNOVA Salaried Pension Plan, and shall take all other
steps necessary and appropriate, to permit the transfer of the Segregated
Salaried Pension Assets from the GenCorp Pension Plan Trustee to the OMNOVA
Pension Plan Trustee. As soon as practicable after the filings, submissions,
amendments and other steps described in this subsection are completed, and after
the expiration of any waiting periods imposed under applicable law, GenCorp
shall direct the GenCorp Pension Plan Trustee to transfer to the OMNOVA Pension
Plan Trustee, and OMNOVA shall direct the OMNOVA Pension Plan Trustee to accept
assets of the GenCorp Salaried Pension Plan equal to the Segregated Salaried
Pension Assets, as adjusted for
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contributions, benefit payments, expenses and investment experience through the
date of such transfer. Such transfer shall be in cash, securities or other
property or a combination thereof, as mutually determined by GenCorp and OMNOVA
and acceptable to both the GenCorp Pension Plan Trustee and the OMNOVA Pension
Plan Trustee. After such transfer, each OMNOVA Salaried Pension Plan Participant
for whom such transfer was made shall be credited with benefits under the OMNOVA
Salaried Pension Plan attributable to service prior to the Closing Time at least
equal to his or her accrued benefit under the GenCorp Salaried Pension Plan, and
the GenCorp Salaried Pension Plan shall have no further obligations with respect
to such accrued benefit. GenCorp and OMNOVA shall prepare a list, certified by a
duly authorized officer of each, of all OMNOVA Salaried Pension Plan
Participants with respect to which a transfer pursuant to this subsection has
been made.
(e) GenCorp shall have no obligation to direct the transfer
described in subsection (d) of this Section unless and until GenCorp receives
either a favorable determination letter issued by the IRS as to the qualified
status of the OMNOVA Salaried Pension Plan under Section 401(a) of the code or
an opinion of counsel to OMNOVA that the OMNOVA Salaried Pension Plan meets the
requirements of Section 401(a) of the Code as to form. The OMNOVA Pension Plan
Trustee shall have no obligation to accept any transfer from the GenCorp
Salaried Pension Plan unless and until OMNOVA and the OMNOVA Pension Plan
Trustee receives either a favorable determination letter issued by the IRS as to
the qualified status of the GenCorp Salaried Pension Plan under Section 401(a)
of the Code or an opinion of counsel to GenCorp that the GenCorp Salaried
Pension Plan meets the requirements
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of Section 401(a) of the Code as to form. GenCorp and OMNOVA will cooperate as
necessary to facilitate obtaining such favorable determination letters.
(f) The OMNOVA Salaried Pension Plan shall be a continuation
of the GenCorp Salaried Pension Plan as to the OMNOVA Salaried Pension Plan
Participants for whom the transfer described in subsection (d) of this Section
was made and the transfer of assets and liabilities from the GenCorp Salaried
Pension Plan to the OMNOVA Pension Plan Trustee pursuant to this Agreement shall
not be deemed a termination or partial termination of the GenCorp Salaried
Pension Plan.
(g) In the event a former employee of GenCorp who
participated in the GenCorp Salaried Pension Plan prior to the Distribution Date
becomes an OMNOVA Employee eligible to participate in the OMNOVA Salaried
Pension Plan after the Distribution Date, GenCorp and OMNOVA agree that the
liabilities to pay pension benefits to such individual and the assets
attributable to such liabilities, in an amount which (based on the certification
of the actuary for the Plans) meets the requirements of Section 414(1) of the
Code and the regulations thereunder, will be transferred by the GenCorp Pension
Plan Trustee from the GenCorp Salaried Pension Plan to the OMNOVA Salaried
Pension Plan and the OMNOVA Pension Plan Trustee in the manner described in, and
in compliance with, Section 414(1) of the Code and the regulations thereunder.
In the event of any such transfer, such employee shall be credited under the
OMNOVA Salaried Pension Plan, for eligibility, vesting and benefit accrual
purposes, with the service credited to him under the GenCorp Salaried Pension
Plan.
(h) The GenCorp Salaried Pension Plan shall provide that an
individual who is an employee of OMNOVA on the Distribution Date shall not be
eligible to commence
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receiving benefits from the GenCorp Salaried Pension Plan until he terminates
employment with OMNOVA after the Distribution Date. Until the completion of the
transfer of assets and liabilities from the GenCorp Salaried Pension Plan to the
OMNOVA Salaried Pension Plan and the OMNOVA Pension Plan Trustee described in
subsection (c) of this Section, benefits under the OMNOVA Salaried Pension Plan
payable to a OMNOVA Salaried Employee thereunder shall be computed on the basis
of his or her total service with GenCorp and OMNOVA, but shall be reduced by any
benefits accrued by such OMNOVA Salaried Employee under the GenCorp Salaried
Pension Plan.
2.4 OMNOVA HOURLY PENSION PLAN. (a) OMNOVA shall implement, before the
Closing Time, the OMNOVA Hourly Pension Plan, a qualified defined benefit plan
substantially similar to the GenCorp Hourly Pension Plan for the benefit of
OMNOVA Hourly Pension Plan Participants. OMNOVA Hourly Employees who participate
in the GenCorp Hourly Pension Plan immediately before the Closing Time shall be
eligible for immediate participation in the OMNOVA Hourly Pension Plan as of the
Closing Time. OMNOVA Hourly Employees shall be credited under the OMNOVA Hourly
Pension Plan, for eligibility and vesting purposes, with the service credited to
them under the GenCorp Hourly Pension Plan. An OMNOVA Hourly Employee shall be
credited under the OMNOVA Hourly Pension Plan, for benefit accrual purposes,
with the service credited to him or her under the GenCorp Hourly Pension Plan
only if a transfer described in subsection (b) of this Section is made with
respect to such OMNOVA Hourly Employee.
(b) OMNOVA Hourly Employees shall cease to accrue benefits
under the GenCorp Hourly Pension Plan as of the time their employment is
transferred to OMNOVA.
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Such transfer shall not be an event requiring distribution of benefits under the
GenCorp Hourly Pension Plan.
(c) As soon as practicable after the Distribution Date,
GenCorp shall cause the GenCorp Pension Plan Trustee to segregate within the
GenCorp Pension Plan Trust the Segregated Hourly Pension Assets (as defined in
the following sentence) determined to be allocable with respect to accrued
benefits of OMNOVA Hourly Pension Plan Participants as of the Closing Time. For
purposes of the preceding sentence, the Segregated Hourly Pension Assets shall
mean assets with a value equal to the present value as of the Closing Time of
the accrued benefits of the OMNOVA Hourly Pension Plan Participants under the
GenCorp Hourly Pension Plan, determined by the plan's actuary using interest
assumptions prescribed by the PBGC for valuing annuities in plan termination
situations, plus an amount of surplus assets allocated in proportion to the
allocation of liabilities in accordance with ERISA section 4044.
(d) GenCorp and OMNOVA shall make or cause to be made all
required filings and submissions to appropriate governmental and regulatory
authorities and all necessary or appropriate amendments to the GenCorp Hourly
Pension Plan and the OMNOVA Hourly Pension Plan, and shall take all other steps
necessary and appropriate, to permit the transfer of the Segregated Hourly
Pension Assets from the GenCorp Pension Plan Trustee to the OMNOVA Pension Plan
Trustee. As soon as practicable after the filings, submissions, amendments and
other steps described in this subsection are completed, and after the expiration
of any waiting periods imposed under applicable law, GenCorp shall direct the
GenCorp Pension Plan Trustee to transfer to the OMNOVA Pension Plan Trustee, and
OMNOVA shall
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direct the OMNOVA Pension Plan Trustee to accept assets of the GenCorp Hourly
Pension Plan equal to the Segregated Hourly Pension Assets, as adjusted for
contributions, benefit payments, expenses and investment experience through the
date of such transfer. Such transfer shall be in cash, securities or other
property or a combination thereof, as mutually determined by GenCorp and OMNOVA
and acceptable to both the GenCorp Pension Plan Trustee and the OMNOVA Pension
Plan Trustee. After such transfer, each OMNOVA Hourly Pension Plan Participant
for whom such transfer was made shall be credited with benefits under the OMNOVA
Hourly Pension Plan attributable to service prior to the Closing Time at least
equal to his or her accrued benefit under the GenCorp Hourly Pension Plan, and
the GenCorp Hourly Pension Plan shall have no further obligations with respect
to such accrued benefit. GenCorp and OMNOVA shall prepare a list, certified by a
duly authorized officer of each, of all OMNOVA Hourly Pension Plan Participants
with respect to which a transfer pursuant to this Subsection has been made.
(e) GenCorp shall have no obligation to direct the transfer
described in subsection (d) of this Section unless and until GenCorp receives
either a favorable determination letter issued by the IRS as to the qualified
status of the OMNOVA Hourly Pension Plan under Section 401 (a) of the code or an
opinion of counsel to OMNOVA that the OMNOVA Hourly Pension Plan meets the
requirements of Section 401(a) of the Code as to form. The OMNOVA Pension Plan
Trustee shall have no obligation to accept any transfer from the GenCorp Hourly
Pension Plan unless and until OMNOVA and the OMNOVA Pension Plan Trustee
receives either a favorable determination letter issued by the IRS as to the
qualified status of the GenCorp Hourly Pension Plan under Section 401(a) of the
Code or an
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opinion of counsel to GenCorp that the GenCorp Hourly Pension Plan meets the
requirements of Section 401(a) of the Code as to form. GenCorp and OMNOVA will
cooperate as necessary to facilitate obtaining such favorable determination
letters.
(f) The OMNOVA Hourly Pension Plan shall be a continuation of
the GenCorp Hourly Pension Plan as to the OMNOVA Hourly Pension Plan
Participants for whom the transfer described in subsection (d) of this Section
was made and the transfer of assets and liabilities from the GenCorp Hourly
Pension Plan to the OMNOVA Pension Plan Trustee pursuant to this Agreement shall
not be deemed a termination or partial termination of the GenCorp Hourly Pension
Plan.
(g) The GenCorp Hourly Pension Plan shall provide that an
individual who is an employee of OMNOVA on the Distribution Date shall not be
eligible to commence receiving benefits from the GenCorp Hourly Pension Plan
until he terminates employment with OMNOVA after the Distribution Date. Until
the completion of the transfer of assets and liabilities from the GenCorp Hourly
Pension Plan to the OMNOVA Hourly Pension Plan and the OMNOVA Pension Plan
Trustee described in subsection (c) of this Section, benefits under the OMNOVA
Hourly Pension Plan payable to an OMNOVA Hourly Employee thereunder shall be
computed on the basis of his or her total service with GenCorp and OMNOVA, but
shall be reduced by any benefits accrued by such OMNOVA Hourly Employee under
the GenCorp Hourly Pension Plan.
2.5 OMNOVA WELFARE BENEFIT PLANS. (a) OMNOVA MEDICAL PLAN. As of the
Closing Time, OMNOVA Employees (and their eligible dependent(s)) shall be
covered by the OMNOVA Medical Plan, which shall be substantially identical to
the medical plan coverage
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provided to OMNOVA Employees immediately prior to the Closing Time. The OMNOVA
Medical Plan made available to OMNOVA Employees and their dependent(s) as of the
Closing Time shall waive any applicable waiting periods for coverage of OMNOVA
Employees and their dependent(s) which did not exist with respect to such OMNOVA
Employee or dependent(s) immediately prior to the Closing Time. The OMNOVA
Medical Plan shall not contain any exclusion or limitation with respect to any
pre-existing condition of any OMNOVA Employee or dependent(s) which did not
apply with respect to such OMNOVA Employee or dependent immediately prior to the
Closing Time. For purposes of the two preceding sentences, service with GenCorp
and OMNOVA prior to the Closing Time shall be taken into account for purposes of
meeting any such waiting period or pre-existing condition, exclusion or
limitation.
(b) OMNOVA EMPLOYEE MEDICAL CLAIMS. As of the Closing Time,
the OMNOVA Medical Plan shall have sole responsibility for all obligations,
financial and otherwise, with respect to medical expense claims submitted by
OMNOVA Employees and their dependent(s) from and after the Closing Time, and
such claims will be processed and paid by OMNOVA's third party administrator.
(c) CLAIM APPEALS. As of the Closing Time, OMNOVA shall have
sole responsibility for the determination of claim appeals filed by OMNOVA
Employees under the OMNOVA Medical Plan. Claim appeals filed by employees of
OMNOVA under the GenCorp Medical Plan will be determined by GenCorp under the
GenCorp Medical Plan.
(d) FLEXIBLE BENEFIT PLANS. (i) OMNOVA shall implement, as of
the Closing Time, a flexible spending account plan, a dependent care
reimbursement plan, a health care
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reimbursement plan and a pre-tax premium plan (collectively referred to as the
"OMNOVA Flexible Benefit Plan") with provisions substantially similar to similar
plans provided to OMNOVA Employees by GenCorp prior to the Closing Time; and
(ii) Plan Year 1999 deferrals and reimbursements by or to OMNOVA Employees under
the GenCorp Flexible Benefit Plan, shall be carried over and applied to their
accounts under the OMNOVA Flexible Benefit Plan. Within a reasonable time after
the Closing Time, GenCorp will pay to OMNOVA the net aggregate dependent day
care reimbursement and health care reimbursement account balances of OMNOVA
Employees held by GenCorp as of the Closing Time.
2.6 POSTRETIREMENT BENEFITS. GenCorp currently provides certain health
care and life insurance benefits to most retired employees in the United States
with varied coverage by employee groups. The health care plans generally provide
for cost sharing in the form of retiree contributions, deductibles and
coinsurance between the company and its retirees. A portion of the unfunded
benefit obligation reported in GenCorp's financial statements for such
postretirement benefits attributable to OMNOVA Hourly Employees and former
employees of GenCorp who terminated employment from (i) business locations of
OMNOVA active as of the Closing Time, and (ii) the former GenCorp business
location in Newcomerstown, Ohio, will be assumed by OMNOVA.
2.7 GENCORP 1993 AND 1997 STOCK OPTION PLANS. (a) Prior to the
Distribution Date, exercisable options under the GenCorp 1993 and 1997 Stock
Option Plans for (1) active employees, (2) retirees, and (3) other former
employees whose options remain exercisable, will be split into options to
acquire GenCorp common stock and OMNOVA common stock. Except with respect to
options held by the chief executive officers of GenCorp and OMNOVA, the
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number of exercisable options in each company will each equal the number of
exercisable options under the GenCorp Stock Option Plans. With respect to
exercisable options held by the chief executive officers, (1) Xx. Xxxxx'x
options will be converted into 66 2/3% GenCorp options and 33 1/3% OMNOVA
options, and (2) Xx. Xxxxxxxx'x options will be converted into 66 2/3% OMNOVA
options and 33 1/3% GenCorp options. The exercise price of each resulting option
will bear the same ratio to the market price, as of the Distribution Date, of
the respective company's stock, as the exercise price of the original GenCorp
option bore to the market price of GenCorp shares immediately before the
Distribution Date. GenCorp and OMNOVA agree that each will issue the appropriate
shares of their common stock to non-employees who exercise the options described
in this subsection (a).
(b) Unexercisable options under the GenCorp 1997 Stock Option
Plan for GenCorp employees will be replaced with a number of unexercisable
GenCorp options under that plan which will, based upon (1) the market price of
GenCorp shares immediately after the Distribution Date and (2) the exercise
prices for those options, have an aggregate intrinsic value equal to that of the
unexercisable GenCorp options immediately before the Distribution Date.
(c) Unexercisable options under the GenCorp 1997 Stock Option
Plan for OMNOVA Employees will be replaced with a number of unexercisable OMNOVA
options which will, based upon (1) the market price of OMNOVA shares immediately
after the Distribution Date and (2) the exercise price for such options, have an
aggregate intrinsic value equal to that of the unexercisable GenCorp options
immediately before the Distribution.
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(d) In converting the stock option plans for the
Distribution, the exercisable and unexercisable aggregate intrinsic value of the
options immediately after the conversion will be equal to the aggregate
intrinsic value immediately before the conversion. The ratio of the exercise
price per option to the market value per share will not be reduced and the
vesting provisions and option period of the OMNOVA and GenCorp options will be
the same as for the original GenCorp options. Accordingly, no compensation
expense will be recognized by OMNOVA or GenCorp.
2.8 UNFUNDED DEFERRED COMPENSATION.
(a) Subject to legal requirements for employee acquiescence,
GenCorp's legal obligation to pay Unfunded Deferred Compensation for: (1) all
active employees transferred to OMNOVA, (2) all retired employees who terminated
employment from business locations of OMNOVA which are active as of the Closing
Time, and (3) all GenCorp directors resigning to become members of the OMNOVA
Board will be assumed by OMNOVA.
(b) The legal obligation to pay Unfunded Deferred
Compensation for: (1) all active employees remaining GenCorp employees, (2) all
GenCorp directors remaining on the GenCorp Board, (3) all other retired
employees, and (4) all retired directors, will be retained by GenCorp.
(c) Former employees and directors of GenCorp or OMNOVA will
be able to elect a lump-sum payment of their Unfunded Deferred Compensation,
subject to (1) a 10% reduction in order to avoid adverse tax consequences, and
(2) all applicable tax withholding. Active employees and directors may receive
lump-sum payments of their Unfunded Deferred Compensation upon termination of
employment or board service with GenCorp or OMNOVA
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based upon appropriate advance elections or discretionary approval by the
company's benefit management committee.
(d) GenCorp hereby indemnifies OMNOVA for the obligations to
pay Unfunded Deferred Compensation assumed by OMNOVA pursuant to subsection (a),
and will pay only those amounts of such Unfunded Deferred Compensation that
OMNOVA proves it is unable to pay.
(e) OMNOVA hereby indemnifies GenCorp for the obligation to
pay Unfunded Deferred Compensation retained by GenCorp pursuant to subsection
(b), and will pay only those amounts of Unfunded Deferred Compensation that
GenCorp proves it is unable to pay.
2.9 ANNUAL BONUSES. Bonus amounts under GenCorp's Executive Incentive
Compensation Plan for the period ending November 30, 1999 will be determined
based upon (1) actual performance up to the Distribution Date, and (2) budgeted
performance, for the remainder of the period, according to GenCorp's annual
operating plan. Subject to all legal requirements for employee acquiescence,
bonus obligations will be assumed by OMNOVA for all OMNOVA Employees, and paid
in cash on January 3, 2000. Bonus obligations will be paid in cash on January 3,
2000 by GenCorp for all GenCorp employees and for terminated GenCorp employees
who are not employed by OMNOVA.
2.10 LONG TERM INCENTIVE COMPENSATION. Performance awards under
GenCorp's Long-Term Incentive Program for the three-year performance period
ending November 30, 1999 will be determined based upon (1) actual performance up
to the Distribution Date, and (2) budgeted performance, for the remainder of the
period, according to GenCorp's annual
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operating plan. Pro rata performance awards will be paid under the GenCorp plan
for the performance periods ending November 30, 2000 and November 30, 2001. Pro
rata performance awards for each partial performance period will be determined
based upon (1) actual performance up to the Distribution Date, and (2) budgeted
performance, for the remainder of the fiscal year ending November 30, 1999,
according to GenCorp's annual operating plan. Subject to legal requirements for
employee acquiescence, performance award obligations for the three-year
performance period ending November 30, 1999 will be assumed by OMNOVA for all
OMNOVA Employees and paid in cash on January 3, 2000. Performance award
obligations for the three-year performance period ending November 30, 1999 will
be paid in cash on January 3, 2000 by GenCorp for all GenCorp employees and for
terminated GenCorp employees who are not employed by OMNOVA. All pro rata
performance awards will be paid in cash to all eligible employees of GenCorp and
OMNOVA by GenCorp on the day preceding the Distribution Date.
2.11 DIRECTOR COMPENSATION. Subject to legal requirements for director
acquiescence, benefit obligations under the Retirement Plan for Nonemployee
Directors of GenCorp Inc. and the Deferred Compensation Plan for Nonemployee
Directors of GenCorp Inc. (hereafter the "GenCorp Director Plans") for GenCorp
directors resigning to become members of the OMNOVA Board will be assumed by
OMNOVA. Benefit obligations under the GenCorp Director Plans for GenCorp
directors remaining on the GenCorp Board and retired directors will be retained
by GenCorp.
2.12 ENHANCED RETIREMENT AND SEPARATION PAY PLANS. GenCorp adopted a
Voluntary Enhanced Retirement Program (VERP) and Enhanced Involuntary Separation
Pay Plan (EISP)
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which are associated with and contingent upon the Distribution. Pension and
Separation Pay obligations under the VERP and EISP for GenCorp employees who
become OMNOVA Employees in connection with the Spin-Off will be assumed and paid
by OMNOVA. Pension and Separation Pay obligations under the VERP and EISP for
GenCorp employees who do not become employed by OMNOVA in connection with the
Spin-Off will be retained and paid by GenCorp. The total number and identity of
participants and the timing of their departure are not yet known.
2.13 TRANSITION ADMINISTRATIVE SERVICES. For a transition period
extending up to October 31, 2001, the Joint Savings Plan and other benefit
programs currently applicable to GenCorp active employees and retirees will be
administered under a Services and Support Agreement between GenCorp and OMNOVA.
The purpose of the transition services arrangement will be to allow for an
orderly transition of administrative responsibility for ongoing GenCorp benefit
programs to administrative staffs of GenCorp, and for the implementation and
administration of new employee benefit plans for OMNOVA. In accordance with the
Services and Support Agreement, (i) GenCorp will reimburse OMNOVA specified
allocated costs plus all direct expenses incurred by OMNOVA on behalf of
GenCorp, and (ii) OMNOVA will reimburse GenCorp specified allocated costs plus
all direct expenses incurred by GenCorp on behalf of OMNOVA.
2.14 LIABILITIES TO OMNOVA EMPLOYEES ARISING PRIOR TO DISTRIBUTION
DATE. GenCorp shall retain sole responsibility for (a) payments of any and all
wages, vacation pay, bereavement pay, jury duty pay, disability income,
supplemental unemployment benefits, fringe benefits (excluding medical/dental
claims described in Section 2.5(b)) or other
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perquisites of employment, or similar benefits, payroll taxes and other payroll
related expenses, (b) workers' compensation claims or related litigation claims,
(c) claims filed with the equal Employment Opportunity Commission or related
litigation claims and (d) other similar employment-related claims, in any such
case arising out of or relating to (i) the employment of the OMNOVA Employees by
GenCorp prior to the Closing Time or (ii) the employment of former employees
whose employment with OMNOVA or GenCorp or the Controlled Group of either
terminated on or before the Closing Time.
2.15 AT WILL EMPLOYMENT. Nothing in this Agreement shall limit the at
will nature of the employment of any of the OMNOVA Employees who do not have any
other contractual rights with respect to employment by OMNOVA or the right of
GenCorp or OMNOVA to alter or terminate any employee benefit plan.
2.16 SEPARATION PAY. GenCorp and OMNOVA agree that with respect to
individuals who, in connection with the Distribution, cease to be employees of
GenCorp and become employees of OMNOVA at any time prior to the day after the
Distribution, such cessation shall not be deemed a severance of employment from
GenCorp for purposes of the GenCorp Involuntary Separation Pay Plan. GenCorp
shall retain and be solely responsible for, and shall indemnify OMNOVA against,
all liabilities and obligations whatsoever in connection with claims made by or
on behalf of former employees of GenCorp in respect of separation pay and
similar obligations relating to the termination or alleged termination of any
such person's employment from GenCorp on or before the Distribution Date.
2.17 INTERNAL REVENUE SERVICE FORMS. GenCorp and OMNOVA agree that,
pursuant to the "Alternative Procedure" provided in Section 5 of Revenue
Procedure 84-77, 1984-2
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C.B. 753, with respect to filing and furnishing Internal Revenue Service Forms
W-2, W-3 and 941, respectively: (a) GenCorp and OMNOVA shall report on a
"predecessor-successor" basis as set forth therein; (b) GenCorp shall be
relieved from furnishing Forms W-2 to GenCorp's employees whose employment is
transferred to OMNOVA in connection with the Spin-Off and to whom GenCorp would
have been obligated to furnish such Forms; and (c) OMNOVA shall assume GenCorp's
obligation to furnish such Forms to all such employees for the full 1999
calendar year. Upon OMNOVA's request, GenCorp will promptly provide OMNOVA with
the information relating to periods ending on the Closing Time necessary for
OMNOVA to prepare and distribute Forms W-2 to such employees for the year ending
December 31, 1999, which Forms W-2 will include all remuneration earned by such
employees from both GenCorp and OMNOVA during the year ending December 31, 1999.
ARTICLE III
ACCESS AND SHARING OF INFORMATION
3.1 SHARING OF INFORMATION. Each of GenCorp and OMNOVA agrees to
provide the other, as soon as practicable after the Distribution Date, with such
information regarding employee benefit plan participants prior to the
Distribution Date (including term of service for eligibility, vesting and
benefit accrual purposes under such Plans and a listing of accrued benefits) as
may be reasonably requested by a party to establish and administer effectively
its employee benefit plans.
3.2 ACCESS TO INFORMATION. (a) From and after the Closing Time each
party hereto shall afford the other party and its accountants, counsel and other
designated representative reasonable access (including using reasonable efforts
to give duplicating rights during normal
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business hours) to all records, books, contracts, instruments, computer data and
other data and information in such party's possession relating to the business
and affairs of such other party (other than data and information subject to an
attorney/client or other privilege), insofar as such access is reasonably
required by such other party including, without limitation, for audit,
accounting and litigation purposes and administration of employee benefit plans,
as well as for purposes of fulfilling disclosure and reporting obligations.
(b) For a period of up to 24 months from and after the
Distribution Date, (or longer as required in connection with the Joint Savings
Plan) each party shall make available to the other during normal business hours
and in a manner which will not unreasonably interfere with such party's
business, its financial, tax, accounting, legal, employee benefits and such
other staff and services to the extent that the same may be reasonably required
in connection with the preparation of tax returns, audits, claims,
administration of employee benefit plans and otherwise to assist in effecting an
orderly transition following the Distribution.
ARTICLE IV
MISCELLANEOUS
4.1 COMPLETE AGREEMENT. This Agreement, together with the Distribution
Agreement, and the exhibits thereto, shall constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and shall
supersede all previous negotiations, commitments and writings with respect to
such subject matter.
4.2. GOVERNING LAW. This Agreement and (unless otherwise provided) all
amendments hereof shall be governed by the internal laws of the State of Ohio,
without regard to the conflicts of law principles thereof.
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4.3 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, mailed by
registered or certified mail (return receipt requested) or sent by telecopy or
by a recognized overnight courier service, addressed as follows:
To OMNOVA at: OMNOVA Solutions Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: General Counsel
Fax Number: 000-000-0000
To GenCorp at: GenCorp Inc.
P. O. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax Number: 000-000-0000
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section.
4.4 AMENDMENT. This Agreement may be amended, modified or supplemented
only by a written agreement signed by all the parties hereto.
4.5 WAIVER. No waiver by any party of any of the provisions of this
Agreement will be deemed, or will constitute, a waiver of any other provision,
whether similar, nor will any waiver constitute a continuing waiver. No waiver
will be binding unless executed in writing by the party making the waiver.
4.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument and all of
which together shall constitute one and the same instrument.
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4.7 INTERPRETATION. The Section headings contained in this Agreement
are solely for the purpose of reference, are not part of the agreement of the
parties hereto and shall not in any way affect the meaning or interpretation of
this Agreement.
4.8 TERMINATION. Notwithstanding any provision hereof, this Agreement
may be terminated at any time prior to the Distribution. Any termination of the
Distribution Agreement shall result in the termination of this Agreement. In the
event of such termination, no party hereto shall have any liability to any
person by reason of this Agreement.
4.9 NO THIRD PARTY BENEFICIARY. Nothing in this Agreement, express or
implied, shall confer on any person other than the parties any rights or
remedies under or by virtue of this Agreement.
4.10 DISPUTE RESOLUTION. Any dispute between the parties concerning the
performance of this Agreement which cannot be resolved by good faith negotiation
of the parties shall be determined in accordance with the provisions of the
Alternative Dispute Resolution Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GENCORP INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
OMNOVA SOLUTIONS INC.
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By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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SCHEDULE A
EMPLOYEES RETAINED BY GENCORP
(i) NAMED EMPLOYEES
Employee Benefits Legal
----------------- -----
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxx
Xxx Xxxxxxx
Xxxxx Xxxxxx
Xxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx
(ii) Employees designated for termination under the GenCorp Enhanced
Involuntary Separation Pay Plan
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SCHEDULE B
EMPLOYEES WHO WILL RETIRE FROM OMNOVA
UNDER THE 1999 VOLUNTARY ENHANCED RETIREMENT PROGRAM
Xxxx Xxxxxxx
Xxx Xxxxxxxx
Xxxxx Xxxx
Dock Xxxxxx
Xxx Xxxxxxxxxxx
Xxx Xxxxx
Xxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxx
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