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Exhibit 10.14  

 
 

NOVEON INTERNATIONAL, INC.
  
  (formerly Noveon Holdings, Inc.)
  
  AMENDED AND RESTATED STOCK OPTION PLAN
  
  ARTICLE 1
  
  GENERAL    
    

        1.1    Purpose.    The purpose of this Noveon International, Inc. Amended and Restated Stock Option Plan (the
"Plan") is to provide for certain key employees, consultants and/or directors of Noveon International, Inc., a Delaware corporation (the "Company"), and its subsidiaries and affiliates, an
incentive (i) to join and/or remain in the service of the Company and its subsidiaries and affiliates, (ii) to maintain and enhance the long-term performance and
profitability of the Company and its subsidiaries and affiliates and (iii) to acquire a proprietary interest in the success of the Company and its subsidiaries and affiliates. 

        1.2    Definition of Certain Terms.    

        (a)   "Agreement"
means an agreement issued pursuant to Section 2.1. 

        (b)   "Board"
means the Board of Directors of the Company. 

        (c)   "Code"
means the Internal Revenue Code of 1986, as amended. 

        (d)   "Committee"
means the Committee appointed to administer the Plan in accordance with Section 1.3. 

        (e)   "Company"
means Noveon International, Inc., a Delaware corporation. 

        (f)    "Common
Stock" means the shares of common stock, $.01 par value, of the Company and any other shares into which such common stock shall thereafter be exchanged by reason
of a recapitalization, merger, consolidation, split-up, combination, exchange of shares or the like. 

        (g)   "IPO"
means an initial underwritten public offering of the Common Stock registered under the Securities Act of 1933, as amended, whether for the sale of shares of Common
Stock by the Company or by shareholders. 

        (h)   "Optionee"
means an employee, consultant and/or director of the Company or any of its subsidiaries or affiliates who has been awarded any Option under this Plan. 

        (i)    "Option"
means a "nonqualified" stock option, as described in Section 1.5, granted under the Plan. 

        (j)    "Plan"
means this Noveon International, Inc. Amended and Restated Stock Option Plan. 

        (k)   "Termination
With Cause," with respect to any Optionee, means, unless otherwise set forth in an Option Agreement or an employment or similar agreement between the
Company and an Optionee, termination by the Company or any of its subsidiaries or affiliates of such Optionee's employment for: (i) misappropriation of any significant monies or significant
assets or properties of the Company or any subsidiary, (ii) commission of a felony or a crime involving moral turpitude, (iii) substantial and repeated failure to comply with directions
of the Chief Executive Officer of the Company or other superior of the Optionee or the Board of Directors of the Company or any of its subsidiaries or affiliates, (iv) gross negligence or
willful misconduct, (v) chronic alcoholism or drug addiction together with Optionee's refusal to cooperate with or participate in counseling and/or treatment of same or (vi) any willful
action or inaction of the Optionee which, in the reasonable opinion of the Board, constitutes dereliction (willful neglect or willful abandonment of 

 

assigned
duties), or a material breach of Company or subsidiary policy or rules which, if susceptible to cure, is not cured by the Optionee within five (5) days following the Optionee's receipt
of written notice from the Company advising the Optionee with reasonable specificity as to the action or inaction viewed by the Company or subsidiary to be dereliction or a material breach of Company
or subsidiary policy or rules. 

        1.3    Administration.    

        (a)   Subject
to Section 1.3(e), the Plan shall be administered by a committee of the Board which shall consist of at least two directors and which shall have the power
of the Board to authorize awards under the Plan. The members of the Committee shall be appointed by, and may be changed from time to time in the discretion of, the Board. 

        (b)   The
Committee shall have the authority (i) to exercise all of the powers granted to it under the Plan, (ii) to construe, interpret and implement the Plan
and any Agreement executed pursuant to Section 2.1 in accordance with the terms thereof, (iii) to prescribe, amend and rescind rules and regulations relating to the Plan, (iv) to
make all determinations necessary or advisable in administering the Plan, (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan, and (vi) to grant
Options on such terms, not inconsistent with the Plan, as it shall determine. 

        (c)   The
determination of the Committee on all matters relating to the Plan or any Agreement shall be conclusive. 

        (d)   No
member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any award thereunder. 

        (e)   Notwithstanding
anything to the contrary contained herein: (i) until the Board shall appoint the members of the Committee, the Plan shall be administered by the
Board; and (ii) the Board may, in its sole discretion, at any time and from time to time, resolve to administer the Plan. In either of the foregoing events, the term "Committee" as used herein
shall be deemed to mean the Board. 

        (f)    Notwithstanding
anything in the Plan to the contrary, with respect to any Optionee or eligible person who is resident outside of the United States, the Committee may, in
its sole discretion, amend the terms of the Plan in order to conform such terms with the requirements of local law or to meet the objectives of the Plan. The Committee may, where appropriate,
establish one or more sub-plans for this purpose. 

        1.4    Persons Eligible for Awards.    Awards under the Plan may be made from time to time to such key employees,
consultants and/or directors of the Company or its subsidiaries and/or affiliates as the Committee shall in its sole discretion select. 

        1.5    Types of Awards Under the Plan.    Awards may be made under the Plan in the form of stock options, which shall
be "nonqualified" stock options subject to the provisions of section 83 of the Code, all as more fully set forth in Article 2. 

        1.6    Shares Available for Awards.    

        (a)   Subject
to Section 3.4 (relating to adjustments upon changes in capitalization), the maximum number of shares of Common Stock with respect to which Options may be
awarded under the Plan shall be equal to 394,444 shares. Shares of Common Stock covered by Options granted under the Plan which expire or terminate for any reason shall again become available for
award under the Plan. 

        (b)   Shares
that are issued upon the exercise of Options awarded under the Plan shall be authorized and unissued or treasury shares of Common Stock. 

        (c)   Without
limiting the generality of the preceding provisions of this Section 1.6, the Committee may, but solely with the Optionee's consent, agree to cancel any
award of Options under the Plan and issue new Options in substitution therefor, provided that the Options as so substituted shall satisfy all of the requirements of the Plan as of the date such new
Options are awarded. 

2

  

 
 

ARTICLE 2
  
  STOCK OPTIONS    
    

        2.1    Agreements Evidencing Stock Options    

        (a)   Options
awarded under the Plan shall be evidenced by Agreements which shall not be inconsistent with the terms and provisions of the Plan, and which shall contain such
provisions as the Committee may in its sole discretion deem necessary or desirable. Without limiting the generality of the foregoing, the Committee may in any Agreement impose such restrictions or
conditions upon the exercise of an Option or upon the sale or other disposition of the shares of Common Stock issuable upon exercise of an Option as the Committee may in its sole discretion determine.
By accepting an award pursuant to the Plan each Optionee shall thereby agree that each such award and shares of Common Stock acquired upon exercise of an Option shall be subject to all of the terms
and provisions of the Plan, including, but not limited to, the provisions of Section 1.3(d). 

        (b)   Each
Agreement shall set forth the number of shares of Common Stock subject to the Option granted thereby. 

        (c)   Each
Agreement relating to Options shall set forth the amount payable by the Optionee to the Company upon exercise of the Option evidenced thereby. Unless otherwise
determined by the Committee, the Option exercise price per share of Common Stock shall be not less than the fair market value of the Common Stock on the date of grant, adjusted as determined by the
Committee to reflect changes in capitalization as contemplated by Section 3.4. 

        2.2    Term of Options.    

         Each
Agreement shall set forth the period during which the Option evidenced thereby shall be exercisable, whether in whole or in part, such periods to be determined by the
Committee in its discretion. 

        2.3    Exercise of Options.    Subject to the provisions of this Article 2, each Option granted under the Plan
shall be exercisable as follows: 

        (a)   An
Option shall become exercisable at such times and subject to such conditions as the applicable Agreement may provide or as subsequently determined by the Committee. 

        (b)   Unless
the applicable Agreement otherwise provides, an Option granted under the Plan may be exercised from time to time as to all or part of the shares as to which such
Option shall then be exercisable. 

        (c)   An
Option shall be exercisable by the filing of a written notice of exercise with the Company, on such form and in such manner as the Committee shall in its sole
discretion prescribe. 

        (d)   Unless
the applicable Agreement otherwise provides, any written notice of exercise of an Option shall be accompanied by payment of the exercise price for the shares
being purchased. Such payment shall be made by certified or official bank check payable to the Company (or the equivalent thereof as may be set forth in an Agreement or as may be acceptable to the
Committee). Subject to Section 3.10 of the Plan, as soon as practicable after receipt of such payment and the satisfaction of the withholding taxes referred to in Section 3.3, the
Company shall deliver to the Optionee a certificate or certificates for the shares of Common Stock so purchased. 

        2.4    Termination of Options.    

        (a)   Notwithstanding
anything to the contrary in this Plan, except as the Agreement or the Committee may otherwise provide or as set forth in Section 2.4(b) or
Section 2.4(d), Options granted to an Optionee (and already vested but not yet exercised) shall terminate on the date 

3

 

which
is forty-five (45) days after termination of his employment with the Company for any reason (other than by reason of death or disability in which case the Options shall
terminate on the date which is one hundred eighty (180) days after the date of such termination). 

        (b)   Notwithstanding
anything to the contrary in this Plan, unless otherwise determined by the Committee or as set forth in an Agreement, all Options granted to an Optionee
(whether vested or unvested) shall immediately expire and cease to be exercisable and all rights granted to an Optionee
under this Plan and such Optionee's Agreement shall immediately expire in the event of a Termination With Cause of the Optionee by the Company at any time. 

        (c)   Unless
the applicable Agreement expressly provides otherwise, Options awarded to Optionees under the terms of the Plan will be exercisable only in accordance with the
following vesting schedule:  

	Applicable Date
 
	 	Cumulative

Percentage of

Total Shares
	 
	On the first anniversary of the date of the Agreement	 	20	%
	On the second anniversary of the date of the Agreement	 	40	%
	On the third anniversary of the date of the Agreement	 	60	%
	On the fourth anniversary of the date of the Agreement	 	80	%
	On the fifth anniversary of the date of the Agreement	 	100	%

The
Committee may modify this vesting schedule in any manner that it deems appropriate in any Agreement or otherwise, and may provide different vesting schedules in different Agreements in its sole
discretion. Except as the Committee may otherwise provide or as otherwise set forth in an Agreement, in the event that Optionee's employment with the Company is terminated for any reason prior to the
date on which the Optionee's right to exercise the Options has fully vested pursuant to this Section 2.4(c), the unvested portion of the Options will immediately cease to be exercisable. The
Committee may accelerate the vesting of any Options at any time. 

        (d)   Unless
otherwise set forth in an Agreement or as determined by the Committee, in the event that an Optionee's employment with the Company is terminated for any reason
(including, but not limited to, death or disability), if at the time of such termination the Common Stock is not publicly traded on a national securities exchange or
over-the-counter market, the Company shall have the right, at its election, on giving ten days written notice to such Optionee to repurchase any and all shares of Common Stock
acquired upon exercise of Options owned at the time of such termination by such Optionee, as well as any and all shares of Common Stock acquired upon exercise of Options owned by such Optionee at the
time of such termination which are, or in connection with such termination become, vested. Such repurchase right may be exercised by the Company at any time after the shares of Common Stock have been
owned of record by the Optionee for at least six months. The purchase price payable by the Company to the Optionee on exercise of its right to repurchase will
be: (A) in the event such termination is a Termination With Cause, the lesser of the fair market value of the Common Stock which is being repurchased, determined as of the date of the
repurchase, or the price paid by the Optionee; or (B) in the event such termination is by such Optionee or by the Company without Cause or by reason of death or disability, the greater of the
fair market value of the Common Stock held by the Optionee which is being repurchased, determined as of the date of the repurchase, or the price paid by the Optionee. The fair market value will be
determined by the Board in its absolute discretion, unless otherwise expressly set forth in the applicable Agreement. 

        (e)   Unless
otherwise set forth in an Agreement or as determined by the Committee, in the event of a Non-Control Transaction (as hereinafter defined),
(A) all outstanding Options shall remain outstanding and subject to the terms and conditions of the Plan and the related 

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Agreements,
including the vesting schedule contained in Section 2.4(c), and (B) each Optionee shall be entitled to receive in respect of each share of Common Stock subject to the Option,
upon exercise of such Option after the vesting thereof, the same amount and kind of stock, securities, cash, property or other consideration that each holder of a share of Common Stock was entitled to
receive in the Non-Control Transaction in respect of a share. Unless otherwise set forth in an Agreement or as determined by the Committee, in the event of a Transaction (as hereinafter
defined), 50% of the outstanding Options that have not then vested ("Outstanding Unvested Options") held by each Optionee then actively employed by the Company or any of its subsidiaries or affiliates
shall immediately vest on the date of consummation of the Transaction (the "Transaction Date"). Any remaining Outstanding Unvested Options held by an Optionee shall immediately vest upon:
(i) the first anniversary of the Transaction Date, if the Optionee is actively employed by the Company or any of its subsidiaries or affiliates on such first anniversary, or (ii) the
date of termination of the Optionee's employment, if the Optionee's employment is involuntarily terminated (other than a Termination With Cause) between the Transaction Date and the first anniversary
thereof. For purposes of the preceding sentence, an Optionee's employment shall be deemed to have been involuntarily terminated if the Optionee voluntarily terminates his or her employment promptly
following a material reduction in such Optionee's (i) duties, title, or responsibilities or (ii) base salary, in either case from that in effect immediately prior to the Transaction;  provided,
that for the avoidance of doubt, a change in title, duties or responsibilities that is inherent in the fact of the occurrence of the
Transaction, such as a change in title or reporting responsibilities that merely reflects that the Company is owned by another entity, will not by itself be deemed a material reduction for purposes of
this sentence. 

Notwithstanding
the foregoing, in the event of a Transaction or a Non-Control Transaction, outstanding Options may, in the Company's sole discretion and without the consent of the
Optionee, be converted into or exchanged for substantially equivalent options to purchase shares of the surviving corporation. In addition, as of the Transaction Date, the Company shall also have the
right to cancel any or all Options which have not been exercised as of the Transaction Date, subject to the payment of the purchase price described below. The purchase price payable by the Company to
the Optionee upon the cancellation of each unexercised Option will be the aggregate fair market value of the Common Stock underlying each such Option determined as of the Transaction Date less the
aggregate exercise price of each such Option. The fair market value will be determined in good faith by the Board based on the value being paid to or received by the holders of Common Stock in such
Transaction for their shares of Common Stock. 

Unless
otherwise provided in an Agreement or as determined by the Committee, "Transaction" means (i) the approval by partners or stockholders of the liquidation or dissolution of the Company,
(ii) a sale or other disposition of 51% or more of the outstanding interests or voting stock, respectively, of the Company, (iii) the merger or consolidation of the Company with or into
any entity, or (iv) a sale or other disposition of substantially all of the assets of the Company; provided, however, that the term "Transaction" shall exclude each transaction which is a
"Non-Control Transaction." Unless otherwise provided in an Agreement or as determined by the Committee, the term "Non-Control Transaction" means (i) any transaction
following which either (A) AEA Investors Inc. ("AEA") and/or its affiliates, participants, investors and/or employees (collectively, "AEA Entities"), or (B) DLJMB Funding
III, Inc. ("DLJMB") and/or its affiliates, participants, investors, related investment funds and/or employees (collectively, "DLJMB Entities"), have not suffered a material reduction in
percentage voting ownership from that in effect as of February 28, 2001 of the Company or any successor thereto (disregarding any reduction due to the grant or exercise of any Options or other
stock-based compensatory awards to employees, consultants or directors of the Company or any of its affiliates); (ii) there is, after the transaction, no other person or group who owns a
greater percentage of voting control over the purchasing or surviving entity than the AEA Entities or DLJMB Entities; provided that, for 

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purposes
of this clause, any transferee of substantially all of the interests in the Company held by either the AEA Entities or the DLJMB Entities shall itself be considered to be an AEA Entity or
DLJMB Entity, as applicable; but provided further, that the foregoing proviso shall be applied only as to one of either the AEA Entities or DLJMB Entities, so that, for example, if any person acquires
substantially all the interests in the Company held by AEA Entities, and any person subsequently acquires substantially all the interests in the Company held by the DLJMB Entities, such subsequent
person shall not be deemed to be a DLJMB Entity for purposes of this clause; (iii) a merger or consolidation following which those persons who owned directly or indirectly a majority of the
outstanding interests or shares of voting stock of PMD Investors I LP and PMD Investors II LP (collectively "PMD") and DLJMB and/or the Company immediately prior to such merger or consolidation will
own directly or indirectly a majority of the outstanding interests or shares of voting stock of the surviving corporation; (iv) a sale or other disposition of interests or capital stock,
respectively, of the Company following which those persons who owned directly or indirectly a majority of the outstanding interests or shares of voting stock immediately prior to such sale will own
directly or indirectly a majority of the outstanding interests or shares of voting stock of the purchasing entity; (v) a sale or other disposition of substantially all of the assets of the
Company to an AEA Entity, a DLJMB Entity or an affiliate of the Company; (vi) an IPO of the Company or (vii) any transaction following which any of the following, alone or in
combination, constitute a majority of the directors of the Board or have a right to elect a majority of the Board: PMD, DLJMB, an AEA Entity, DLJMB Entity or any officers, directors, employees,
participants, shareholders or agents of an AEA Entity or DLJMB Entity or partners of PMD or a DLJMB Entity. 

 
 

ARTICLE 3
  
    MISCELLANEOUS    
    

        3.1    Amendment of the Plan; Modification of Awards.    

        (a)   The
Board may, without stockholder approval, from time to time suspend or discontinue the Plan or revise or amend it in any respect whatsoever, except that no such
suspension, discontinuance, revision or amendment shall adversely alter or impair any rights or obligations under any award theretofore made under the Plan without the consent of the person to whom
such award was made. 

        (b)   With
the consent of the Optionee and subject to the terms and conditions of the Plan (including Section 3.1(a)), the Committee may amend outstanding Agreements
with such Optionee, for example, to (i) accelerate the time or times at which an Option may be exercised or (ii) extend the scheduled expiration date of the Option. 

        3.2    Nonassignability.    Unless otherwise provided in an Agreement or as determined by the Committee, no right
granted to any Optionee under the Plan or under any Agreement shall be assignable or transferable other than by will or by the laws of descent and distribution. Unless otherwise determined by the
Committee, during the life of the Optionee, all rights granted to the Optionee under the Plan or under any Agreement shall be exercisable only by him. 

        3.3    Withholding of Taxes.    The Company shall be entitled to withhold an amount sufficient to satisfy any federal,
state and other governmental tax requirements related to an Option. Whenever, under the Plan, shares of Common Stock are to be delivered upon exercise of an Option, the Company shall be entitled to
require as a condition of delivery that the Optionee remit an amount sufficient to satisfy all federal, state and other governmental tax withholding requirements related thereto, which may, in the
sole discretion of the Committee, include delivery or withholding of shares of Common Stock. 

6

 

        3.4    Adjustments Upon Changes in Capitalization.    Except as otherwise provided in an Agreement, if and to the
extent specified by the Committee, the exercise price for Options and the number of shares of Common Stock or other property which may be issued pursuant to the exercise of Options granted under the
Plan shall be automatically adjusted to reflect any stock splits, reverse stock splits or
dividends paid in the form of Common Stock and equitably adjusted as determined by the Committee to be appropriate and reasonable for any other increase or decrease in the number of issued shares of
Common Stock resulting from the subdivision or combination of shares of Common Stock or other capital adjustments, or the payment of any other stock dividend or other extraordinary dividend after the
effective date of this Plan, or other increase or decrease in the number of such shares of Common Stock or any substantial sale of the assets of the Company; provided, however, that, unless otherwise
determined by the Committee, any Options to purchase fractional shares of Common Stock resulting from any such adjustment shall be eliminated. Adjustments under this Section 3.4 shall be made
by the Committee, whose determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive. 

        3.5    Right of Discharge Reserved.    Nothing in this Plan or in any Agreement shall confer upon any employee or
other person the right to continue in the employment or service of the Company or any of its subsidiaries or affiliates or affect any right which the Company or any of its subsidiaries or affiliates
may have to terminate the employment or service of such employee or other person. 

        3.6    No Rights as a Stockholder.    No Optionee or other person holding an Option shall have any of the rights of a
stockholder of the Company with respect to shares subject to an Option until the issuance of a stock certificate to him for such shares. Except as otherwise provided in Section 3.4, no
adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the
date such stock certificate is issued. 

        3.7    Nature of Payments.    

        (a)   Any
and all payments of shares of Common Stock or cash hereunder shall be granted, transferred or paid in consideration of services performed by the Optionee for the
Company or any of its subsidiaries or affiliates. 

7

  

        (b)   All
such grants, issuances and payments shall constitute a special incentive payment to the Optionee and shall not, unless otherwise determined by the Committee, be
taken into account in computing the amount of salary or compensation of the Optionee for the purposes of determining any pension, retirement, death or other benefits under (i) any pension,
retirement, life insurance or other benefit plan of the Company or any of its subsidiaries or affiliates or (ii) any agreement between the Company or any of its subsidiaries or affiliates and
the Optionee. 

        3.8    Non-Uniform Determinations.    The Committee's determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or are eligible to receive, awards under the Plan (whether or not such persons are similarly situated). Without limiting the generality of
the foregoing, the Committee shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Agreements, as
to (i) the persons to receive awards under the Plan, (ii) the terms and provisions of awards under the Plan, and (iii) the treatment of awards under the Plan pursuant to
Section 3.4. 

        3.9    Other Payments or Awards.    Nothing contained in the Plan shall be deemed in any way to limit or restrict the
Company or any of its subsidiaries or affiliates or the Committee from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter
in effect. 

        3.10    Restrictions.    

        (a)   If
the Committee shall at any time determine that any Consent (as hereinafter defined) is necessary or desirable as a condition of, or in connection with, the granting
of any award under the Plan, the issuance or purchase of shares or the exercise of other rights hereunder or the taking of any other action hereunder (each such action being hereinafter referred to as
a "Plan Action"), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained to the full satisfaction of the Committee. Without
limiting the generality of the foregoing, if (i) the Committee is entitled under the Plan to make any payment in cash, Common Stock or both, and (ii) the Committee determines that a
Consent is necessary or desirable as a condition of, or in connection with, payment in any one or more of such forms, the Committee shall be entitled to determine not to make any payment whatsoever
until such Consent shall have been obtained in the manner aforesaid. In such event, the Committee will use reasonable efforts to obtain such Consent. 

        (b)   The
term "Consent" as used herein with respect to any Plan Action means (i) any and all listings, registrations, qualifications or similar requirements in respect
thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the grantee with respect to the
disposition of shares, or with respect to any other matter, which the Committee shall deem necessary or desirable to comply with the terms of any such listing, registration, qualification or similar
requirement or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents, clearances and approvals in respect of a
Plan Action by any governmental or other regulatory bodies. 

        3.11        This Plan and the agreements entered into hereunder shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to its rules of conflict of laws. 

        3.12    Section Headings.    The section headings contained herein are for the purposes of convenience only and are
not intended to define or limit the contents of said sections. 

        3.13    Effective Date and Term of Plan.    

        (a)   This
Plan shall be deemed adopted and become effective upon the approval thereof by the Board. 

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        (b)   Subject
to Section 3.1(a) hereof, the Plan shall terminate 10 years after the date on which it becomes effective, and no awards shall thereafter be made
under the Plan. Notwithstanding the foregoing, all awards made under the Plan prior to the date on which the Plan terminates shall remain in effect until such awards have been satisfied or terminated
in accordance with the terms and provisions of the Plan. 

Adopted
as of this 31st day of October, 2001. 

	By	 	/s/  CHRISTOPHER R. CLEGG      
	 	 

	Title:	 	Christopher R. Clegg, Senior

    Vice President and Secretary	 	 

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QuickLinks

NOVEON INTERNATIONAL, INC. (formerly Noveon Holdings, Inc.) AMENDED AND RESTATED STOCK OPTION PLAN ARTICLE 1 GENERAL

ARTICLE 2 STOCK OPTIONS

ARTICLE 3 MISCELLANEOUSExhibit 10.17  

Noveon Sales Holland B.V.
  Oosterhorn 4

NL-9936

HD Farmsum

The Netherlands

Tel.: +31 596 648700

Fax.: +31 596 648790

HR Groningen: 27093978

BTW: NL 809 46 44 69 B01 

January 1,
2003 

EMPLOYMENT CONTRACT  

THE
UNDERSIGNED: 

	(1)
	Noveon Sales Holland B.V. (the "Company"), whose registered office is in Farmsum (Oosterhorn 4), and an indirect subsidiary of Noveon,
Inc (the "Parent Company") for these presents lawfully represented by P. Poty, and  

 
	(2)
	 K. Verhaar ("Mr. Verhaar"),
born on August 28, 1953 and residing at Ter Wadding 45b (2253 LZ) Voorschoten. 

WHEREAS:

	(A)
	The
Parent Company intends to enter into an employment contract with Mr. Verhaar in the United States in the course of 2003;

	(B)
	Due
to circumstances beyond control of parties, the exact date of commencement of employment in the United States is uncertain;

	(c)
	Parties
have agreed that employment by the Parent Company in the United States commences in any event as per January 1, 2004;

	(D)
	Parties
have further agreed that prior to (and until) the commencement of aforementioned employment in the United States, Mr. Verhaar shall be employed by the Company in the
Netherlands;

	(E)
	Notwithstanding
the aforementioned, the employment contract between Mr. Verhaar and the Company shall end as per the commencement of employment by the Parent Company in the
United States. 

 

  

HEREBY
AGREE AS FOLLOWS:

	1
	 Commencement and term of employment

	1.1
	As
of 1 January 2003 Mr. Verhaar shall be employed by the Company as Vice President and General Manager Textile Coatings Global Business Unit.

	1.2
	This
Agreement has been entered into for a fixed period of time. This agreement shall commence on January 1, 2003 and shall terminate as per the date Mr. Verhaar enters
into employment with the Parent Company in the United States. Notwithstanding any other provision herein, this agreement shall in any event end on December 31, 2003 without prior notice or
termination being required.  

 
	2
	 Duties and powers

	2.1
	As
Vice President and General Manager Textile Coatings Global Business Unit of the Company, Mr. Verhaar shall devote all his energy and skill to the Company.

	2.2
	In
the performance of his functions Mr. Verhaar shall also observe and comply with the guidelines of the Parent Company in effect from time to time.

	2.3
	Mr. Verhaar
shall also perform the functions reasonably assigned to him by the Company for any companies affiliated with the Company or the Parent Company. Such functions shall
be governed by the terms and conditions contained in this Agreement and shall not entitle Mr. Verhaar to any further remuneration.

	2.4
	Mr. Verhaar
shall perform his functions from the office of the Company in Delfzijl. Mr. Verhaar acknowledges that in the performance of his duties he shall have to
travel frequently throughout Europe and the United States. If so required in the opinion of the Company, Mr. Verhaar may be transferred to another location.  

 
	3
	 Salary and holiday allowance

Mr. Verhaar
shall receive a salary of Euro 263.175 gross per year. This corresponds to a monthly salary of Euro 18.664,89 which will be paid 14.1 times per year (and which does also include the
holiday allowance of 8%). 

	4
	 Bonus

	4.1
	Mr. Verhaar
shall participate in the Parent Company's Management Incentive Program ("MIP"), which is an annual bonus program. The target bonus opportunity for the year 2003
will be 55% of Mr. Verhaar's base salary as specified in Article 3. Metrics and objectives by which Mr. Verhaar will be evaluated for this discretionary bonus program will be
identified in an separate document.

	4.2
	Payment
of the bonus shall be made in accordance with the Parent Company's MIP Plan. 

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	5
	 Pension

The
Company has a group pension scheme which Mr. Verhaar may join if and to the extent that he satisfies the requirements set out therein. 

	6
	 Other insurances

	6.1
	Mr. Verhaar
will be eligible to receive the reimbursement for medical insurance applicable to white collar employees of the Company.

	6.2
	Mr. Verhaar
may participate in the Company's Group Accident Insurance Policy. A copy of the insurance policy shall be supplied to Mr. Verhaar. The premium shall be paid
by Mr. Verhaar.  

 
	7
	 Holidays  

For
each full calendar year during which his employment hereunder continues, Mr. Verhaar shall be entitled to 24 work days' holiday on full pay, to be taken in consultation with the Company. 

	8
	 Illness or disablement

	8.1
	In
the event of Mr. Verhaar's incapacity to work on account of illness or disablement the Company shall for a maximum period of twelve months, but until no later than the date
when Mr. Verhaar's employment hereunder ends (if that date is the earlier), continue to pay 100 per cent of the salary as specified in Article 3 of this Agreement, subject to deduction
of any benefits to be received by Mr. Verhaar under the social security laws and/or benefits under any other relevant insurances taken out by the Company.

	8.2
	During
the period specified in 8.1 the Company shall continue to pay the premiums referred to in Articles 5 and 6, at any rate to the extent that such premiums are under said Articles
to be borne by the Company and are not on any other account not payable.

	8.3
	For
the purposes of this Article and Article 4, periods of incapacity to work following each other at intervals of less than four weeks shall be regarded as one consecutive
period of incapacity to work.

	8.4
	On
pain of forfeiture of his entitlement to continued payment of salary pursuant to this Article, Mr. Verhaar must strictly comply with the guidelines and instructions given by
or on behalf of the Company regarding sick leave (of which Mr. Verhaar declares to be familiar with) and if so requested must co-operate in any medical examination with regard
thereto. Forfeiture of the right on continued payment as provided above shall not prejudice the application of other sanctions in this respect.  

 
	9
	
Side activities/remuneration from third parties

	9.1
	During
his employment Mr. Verhaar shall not perform any paid or unpaid side activities without prior written approval of the Company. 

3

 

  

	9.2
	During
his employment hereunder Mr. Verhaar shall not be permitted to have or take in any way, whether directly or indirectly, any interest in companies pursuing activities in
competition with or similar or related to the activities of the Company and/or the companies affiliated with the Company, or any interest in companies who are suppliers and/or licensors and/or
principals and/or buyers and/or licensees of the Company and/or the companies affiliated with the Company.

	9.3
	Mr. Verhaar
shall not accept any monies or other remuneration from third parties in connection with his activities for the Company and/or the companies affiliated with the
Company.  

 
	10
	 Confidentiality and non-disclosure

	10.1
	During
his employment hereunder as well as after its termination -irrespective of the manner in which and the reasons for which his employment may be terminated- Mr. Verhaar
shall treat as strictly confidential and not disclose to third parties, whether directly or indirectly, in any form or manner whatsoever, any information which comes to his knowledge regarding the
business and interests of the Company (including the Parent Company and its subsidiaries and affiliates) and/or the companies affiliated with the Company and/or its customers and other business
relations, all this in the broadest sense, unless the discharge of his duties requires the disclosure of such information to third parties on a need-to-know basis.

	10.2
	In
the event that Mr. Verhaar is suspended and upon termination of his employment hereunder - irrespective of the manner in which and the reasons for which his employment may
be terminated-Mr. Verhaar shall at the Company's first request to that effect surrender to the Company all property of the Company in his possession as well as all documents which in any way
whatever relate to the Company and/or the companies affiliated with the Company and/or its customers and other business relations, all this in the broadest sense, as well as all copies of such
documents (whether or not recorded on data carriers) and property.  

 
	11
	 Intellectual property rights

	11.1
	All
intellectual property nghts, including but not limited to copyright and patent, design and trade mark rights, in any products, works and/or services developed by
Mr. Verhaar during or in connection with his employment hereunder shall vest in the Company.

	11.2
	Mr. Verhaar
hereby, in so far as necessary, assigns to the Company, which assignment is hereby accepted by the Company, all intellectual property rights in any products, works
and/or services developed (completely or in part) by Mr. Verhaar during or in connection with his employment hereunder. Mr. Verhaar agrees that where this assignment (or part thereof)
should at any time prove to be legally invalid, he shall at such time assign said rights -without imposing any condition thereon- to the Company by a separate deed. 

4

 

  

	11.3
	In
respect of the products, works and/or services referred to in this Article, Mr. Verhaar hereby waives any and all moral rights as defined in Section 25 of the
Copyright Act.

	11.4
	The
provisions of this Article imply that both during his employment hereunder and at any time thereafter Mr. Verhaar shall not be permitted to commercially exploit or cause
others to commercially exploit in whatever manner and/or to register or cause others to register any products, works and/or services developed by him during or in connection with his employment
hereunder. 

The
parties agree that the salary of Mr. Verhaar is deemed to include compensation for deprivation (if any) of intellectual property rights. 

	12
	 Remedy for breach of contract

	12.1
	In
the event that Mr. Verhaar commits any breach of Articles 9, 10 and/or 11 he shall, in variance from the provisions of Section 7:650 subsections 3, 4 and 5 of the
Civil Code, forfeit to the Company an immediately payable penalty of EUR 50,000 for each such breach, to be increased by EUR 5,000 for each day that any such breach continues, without prior notice or
judicial intervention being required and entirely without prejudice to the Company's right to demand full compensation for the loss actually suffered by it and/or to demand specific performance
instead of the aforesaid penalty.

	12.2
	Payment
of the penalty referred to in 12.1 shall not release Mr. Verhaar from his obligations specified in Articles 9, 10 and 11.  

 
	13
	 Final
provisions

	13.1
	This
Agreement and any and all disputes which may arise from or in connection with this Agreement shall be governed by the laws of the Netherlands.

	13.2
	Any
and all disputes which may arise from or in connection with this Agreement shall be submitted to the Dutch competent court.

	13.3
	All
income tax and social security contributions which an employer must by law deduct from his employees' salaries and pay to the relevant authorities shall be so deducted from and
paid in respect of all amounts to be paid to Mr. Verhaar under this Agreement, unless it follows from the nature of the payment that it may be made tax-free.

	13.4
	If
at any time it is determined by the Inspector of Taxes and/or the Implementing Authority Employees Insurances ("UVVV") that any of the payments to be made to Mr. Verhaar
under Article 4 are (in part) subject to the levy of income tax and/or social security contributions, the compulsory deductions shall be made yet and charged to the debit of Mr. Verhaar. As
from such time the amounts of the relevant future payments under Article 4 shall be reduced to the level at which such payments may be made tax-free. 

5

 

  

	13.5
	Within
the limits of reasonableness the Company reserves the right to modify and/or supplement this Agreement and all arrangements made hereunder between the parties, if in the
Company's judgement circumstances warrant such modification or supplementation.

	13.6
	Except
for the non-competition agreement executed with the Parent Company, the foregoing constitutes the entire agreement between the parties and supersedes all
agreements and undertakings previously made and given by and between Mr. Verhaar and the (bodies of the) Company and/or companies affiliated with the Company. Variations from or supplements to
this Agreement shall be valid only if based on a resolution of the General Meeting of Shareholders of the Company.  

 
	14
	 Severance
pay

	14.1
	If
the employment is terminated (i) by the Company prior to the expiration of this Contract and for any reason other than for cause or (ii) because of the expiration of
the Contract at the end of its term, in either case without Mr. Verhaar being offered employment by the Parent Company, then in order to prevent a situation of unfair dismissal and to settle in
advance any dispute thereon the Company shall by way of a hereby fixed compensation pay to Mr. Verhaar on the effective date of termination a sum equal to the amount paid by the Company to
Mr. Verhaar's salary (as referred to in Article 3) in the last twelve months of his employment, including his benefits.

	14.2
	The
parties expressly consider the arrangements described in this Article to be a "vaststellingsovereenkoms!" (agreement establishing
the parties' existing legal relationship) in the terms of Section 7:900 of the Netherlands Civil Code. 

In
witness whereof this Agreement was executed in three originals and signed by the parties effective as of January 1, 2003. 

NOVEON
SALES HOLLAND B.V. 

	

 
 P. Poty

Director Human Resources and Regulatory Affairs EMEAI	 	 
	

	 	 
	

 
 K. VERHAAR	 	 

6

 

  

Noveon Sales Holland B.V.
  Oosterhorn 4

NL-9936

HD Farmsum

The Netherlands

Tel.: +31 596 648700

Fax.: +31 596 648790

HR Groningen: 27093978

BTW: NL 809 46 44 69 B01 

ADDENDUM
  to the employment contract with
 NOVEON SALES HOLLAND B.V. AND KEES VERHAAR
  signed on January 1, 2003 

With
respect to the application of the 30%-facility, the following will be taken into account: 

	1.
	If,
and insofar, Kees Verhaar is, based on article 9 of the 'Uitvoeringsbesluit loonbelasting 1965', entitled to receive a tax-free cost reimbursement for
extraterritorial costs, it has been agreed with Kees Verhaar that his current employment income ('loon uit tegenwoordige dienstbetrekking') as described in article 9 of the 'Uitvoeringsbesluit
loonbelasting 1965', will be reduced according to labour law so that 100/70 of his current employment income equals the originally agreed employment income.

	2.
	If,
and insofar, article 1 is applicable, Kees Verhaar receives a cost reimbursement for extraterritorial costs from Noveon Sales Holland B.V. equal to 30/70 of
the current employment income as agreed in article 1.

	3.
	Kees
Verhaar acknowledges the fact that an adjustment of the agreed remuneration of article 1 can influence all employment income related payments and benefits like pension and
social security benefits. Nevertheless above-mentioned, pension will be built up over the reduced employment income as mentioned under article 1 increased with the cost reimbursement for
extraterritorial cost as mentioned in article 2. 

Herewith,
Noveon Sales Holland B.V. and Kees Verhaar acknowledge the above. 

	Kees Verhaar	 	Noveon Sales Holland B.V.

P. Poty
	 	 	 
	

 	 	

 
	
	 	

	(signature)	 	(signature)
	 	 	 
	Date: January 1, 2003	 	Date: January 1, 2003

7

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