COMPENSATION AND BENEFITS FOR NONEMPLOYEE DIRECTORS
EFFECTIVE JANUARY 1, 2006
Each nonemployee director is entitled to an annual retainer of $47,000, of which $35,000 shall be paid in cash and the remaining $12,000 shall be paid in restricted shares of OMNOVA Solutions Inc. The number of restricted shares to be awarded will be determined based on the closing price per share of the Companys common stock on the date of the Companys Annual Meeting of Shareholders. The restricted shares will vest three years following the issue date and shall be subject to such other terms and conditions as shall be approved by the Board of Directors and in accordance with the OMNOVA Solutions Inc. Amended and Restated 1999 Equity and Performance Incentive Plan.
Each Committee Chairman is entitled to an annual Chairmans fee of $5,000.
Travel expenses incurred in attending Board and Committee meetings are reimbursed by the Company upon receipt of Expense Report forms and backup documentation.
Deferred Compensation Plan for Nonemployee Directors
A nonemployee director may elect prior to December 31 of a calendar year to defer receipt of all or a portion of his directors fees earned during the succeeding calendar year. Investment choices under the Plan are a phantom OMNOVA Solutions Common Stock fund, an equity fund which tracks the Standard & Poors 500 Index, and an interest income fund which tracks the prime rate payable by the Company. Various distribution options are available. The plan is unfunded and is not governed by ERISA.
Directors Retirement Plan
Effective February 2, 2000, the OMNOVA Retirement Plan for Nonemployee Directors was discontinued with respect to all new nonemployee directors. At the same time, the plan was frozen with respect to certain continuing directors who elected to keep their benefits under the plan accrued to that date but discontinue participation going forward. Effective December 31, 2005, the plan was frozen with respect to all remaining directors who had continued to accrue benefits under the plan to that date and, thereafter, there will be no further accruals of benefits under the plan.