OMNOVA Solutions Inc.
Exhibit 10.27
OMNOVA Solutions Inc.
Summary of 2006 Executive Incentive Compensation Program
| A. | Set forth below are the plan weights and individual measures under the Executive Incentive Compensation Program applicable for the Company’s executive officers for fiscal year 2006. |
2006 Executive Incentive Plan Weights
| Financial | ||||
| Name and Position | Corporate | Segment | ||
| Kevin M. McMullen Chairman, Chief Executive Officer and President | 100% | |||
| Michael E. Hicks Senior Vice President & Chief Financial Officer; Treasurer | 100% | |||
| James C. LeMay Senior Vice President, Business Development; General Counsel | 100% | |||
| Gregory T. Troy Senior Vice President, Human Resources | 100% | |||
| Douglas E. Wenger Senior Vice President & Chief Information Officer | 100% | |||
| Robert H. Coleman President, Decorative Products | 30% | 70% | ||
| Harold P. Franze President, Building Products | 30% | 70% | ||
| James J. Hohman Vice President; President, Performance Chemicals | 30% | 70% | ||
| Individual Measures | Weighting | |
| Corporate | ||
| Earnings Per Share – fully diluted, excluding unusual items | 75% | |
| Cash Flow – daily average debt plus cash | 25% | |
| Segment | ||
| Segment Operating Profit – as stated in financial statements excluding unusual items | 75% | |
| Segment Cash Flow – 13 point average cash generated from operating activities including capital expenditures | 25% |
| B. | Pursuant to the Executive Incentive Compensation Program, the Compensation and Corporate Governance Committee establishes threshold, target and maximum performance objectives at the beginning of each fiscal year. For the 2006 fiscal year, the Committee also approved a special “upside” objective, which would provide eligibility for a payout of 115% of the individual’s maximum bonus opportunity if achieved. At the conclusion of the fiscal year, the Committee then evaluates the extent to which the performance objectives were achieved and, based on that evaluation, as well as its evaluation of the executive’s individual performance, awards a bonus commensurate with the objectives achieved and the individual’s performance during that fiscal year. In order for any payout to be achieved, the Corporate EPS threshold objective must be achieved. Set forth below are threshold, target and maximum bonus opportunities under the Executive Incentive Compensation Program for fiscal year 2006 for each of the Company’s executive officers. The bonus opportunity is expressed as a percentage of the executive officer’s base salary. |
2006 Executive Incentive Plan
Incentive Opportunities
| Name and Position | Threshold | Target | Maximum | Special “Upside” | ||||
| Kevin M. McMullen Chairman, Chief Executive Officer and President | 31% | 94% | 125% | 144% | ||||
| Michael E. Hicks Senior Vice President & Chief Financial Officer; Treasurer | 25% | 75% | 100% | 115% | ||||
| James C. LeMay Senior Vice President, Business Development; General Counsel | 25% | 75% | 100% | 115% | ||||
| Gregory T. Troy Senior Vice President, Human Resources | 25% | 75% | 100% | 115% | ||||
| Douglas E. Wenger Senior Vice President & Chief Information Officer | 25% | 75% | 100% | 115% | ||||
| Robert H. Coleman President, Decorative Products | 25% | 75% | 100% | 115% | ||||
| Harold P. Franze President, Building Products | 25% | 75% | 100% | 115% | ||||
| James J. Hohman Vice President; President, Performance Chemicals | 25% | 75% | 100% | 115% | ||||
