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%