OMNOVA SOLUTIONS INC
EXHIBIT 10.3
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>ex10-3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>

<PAGE>   1
                                                                    Exhibit 10.3

                               SEVERANCE AGREEMENT
                               -------------------


                  THIS AMENDED AND RESTATED SEVERANCE AGREEMENT (this
"Agreement"), dated as of January 4, 2000, is made and entered into by and
between OMNOVA Solutions Inc., an Ohio corporation (the "Company"), and Kevin M.
McMullen (the "Executive").

                                   WITNESSETH:
                                   -----------

                  WHEREAS, the Executive is a senior executive or a key employee
of the Company or one or more of its Subsidiaries and has made and is expected
to continue to make major contributions to the short- and long-term
profitability, growth and financial strength of the Company;

                  WHEREAS, the Company recognizes that, as is the case for most
publicly held companies, the possibility of a Change in Control (as defined
below) exists;

                  WHEREAS, the Company desires to assure itself of both present
and future continuity of management and desires to establish certain minimum
severance benefits for certain of its senior executives and key employees,
including the Executive, applicable in the event of a Change in Control;

                  WHEREAS, the Company wishes to ensure that its senior
executives and key employees are not practically disabled from discharging their
duties in respect of a proposed or actual transaction involving a Change in
Control; and

                  WHEREAS, the Company desires to provide additional inducement
for the Executive to continue to remain in the ongoing employ of the Company.

                  NOW, THEREFORE, the Company and the Executive agree as
follows:

                  1. CERTAIN DEFINED TERMS. In addition to terms defined
elsewhere herein, the following terms have the following meanings when used in
this Agreement with initial capital letters:

                  (a) "Base Pay" means the Executive's annual base salary at a
         rate not less than the Executive's annual fixed or base compensation as
         in effect for Executive immediately prior to the occurrence of a Change
         in Control or such higher rate as may be determined from time to time
         by the Board or a committee thereof.

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

                  (c) "Cause" means that, prior to any termination pursuant to
         Section 3(b), the Executive shall have committed:



<PAGE>   2


                           (i) a criminal violation involving fraud,
                  embezzlement or theft in connection with his duties or in the
                  course of his employment with the Company or any Subsidiary;

                           (ii) intentional wrongful damage to property of the
                  Company or any Subsidiary;

                           (iii) intentional wrongful disclosure of secret
                  processes or confidential information of the Company or any
                  Subsidiary; or

                           (iv) intentional wrongful engagement in any
                  Competitive Activity;

         and any such act shall have been demonstrably and materially harmful to
         the Company. For purposes of this Agreement, no act or failure to act
         on the part of the Executive shall be deemed "intentional" if it was
         due primarily to an error in judgment or negligence, but shall be
         deemed "intentional" only if done or omitted to be done by the
         Executive not in good faith and without reasonable belief that his
         action or omission was in the best interest of the Company.
         Notwithstanding the foregoing, the Executive shall not be deemed to
         have been terminated for "Cause" hereunder unless and until there shall
         have been delivered to the Executive a copy of a resolution duly
         adopted by the affirmative vote of not less than two-thirds of the
         Board then in office at a meeting of the Board called and held for such
         purpose, after reasonable notice to the Executive and an opportunity
         for the Executive, together with his counsel (if the Executive chooses
         to have counsel present at such meeting), to be heard before the Board,
         finding that, in the good faith opinion of the Board, the Executive had
         committed an act constituting "Cause" as herein defined and specifying
         the particulars thereof in detail. Nothing herein will limit the right
         of the Executive or his beneficiaries to contest the validity or
         propriety of any such determination.

                  (d) "Change in Control" means the occurrence during the Term
         of any of the following events, subject to the provisions of Section
         1(d)(v) hereof:

                           (i) All or substantially all of the assets of the
                  Company are sold or transferred to another corporation or
                  entity, or the Company is merged, consolidated or reorganized
                  into or with another corporation or entity, with the result
                  that upon conclusion of the transaction less than 51% of the
                  outstanding securities entitled to vote generally in the
                  election of directors or other capital interests of the
                  acquiring corporation or entity are owned directly or
                  indirectly, by the shareholders of the Company generally prior
                  to the transaction; or

                           (ii) There is a report filed on Schedule 13D or
                  Schedule 14D-1 (or any successor schedule, form or report),
                  each as promulgated pursuant to the

                                      -2-

<PAGE>   3



                  Exchange Act, disclosing that any person (as the term "person"
                  is used in Section 13(d)(3) or Section 14(d)(2) of the
                  Exchange Act (a "Person")) has become the beneficial owner (as
                  the term "beneficial owner" is defined under Rule 13d-3 or any
                  successor rule or regulation promulgated under the Exchange
                  Act (a "Beneficial Owner")) of securities representing 20% or
                  more of the combined voting power of the then-outstanding
                  voting securities of the Company; or

                           (iii) The individuals who, at the beginning of any
                  period of two consecutive calendar years, constituted the
                  Directors of the Company cease for any reason to constitute at
                  least a majority thereof unless the nomination for election by
                  the Company's stockholders of each new Director of the Company
                  was approved by a vote of at least two-thirds of the Directors
                  of the Company still in office who were Directors of the
                  Company at the beginning of any such period; or

                           (iv) The Board determines that (A) any particular
                  actual or proposed merger, consolidation, reorganization, sale
                  or transfer of assets, accumulation of shares or tender offer
                  for shares of the Company or other transaction or event or
                  series of transactions or events will, or is likely to, if
                  carried out, result in a Change in Control falling within
                  Section 1(d)(i), (ii) or (iii) and (B) it is in the best
                  interests of the Company and its shareholders, and will serve
                  the intended purposes of this Agreement, if this Agreement
                  shall thereupon become immediately operative.

                           (v) Notwithstanding the foregoing provisions of this
                  Section 1(d):

                                    (A) If any such merger, consolidation,
                           reorganization, sale or transfer of assets, or tender
                           offer or other transaction or event or series of
                           transactions or events mentioned in Section 1(d)(iv)
                           shall be abandoned, or any such accumulations of
                           shares shall be dispersed or otherwise resolved, the
                           Board may, by notice to the Executive, nullify the
                           effect thereof and reinstate this Agreement as
                           previously in effect, but without prejudice to any
                           action that may have been taken prior to such
                           nullification.

                                    (B) Unless otherwise determined in a
                           specific case by the Board, a "Change in Control"
                           shall not be deemed to have occurred for purposes of
                           Section (1)(d)(ii) solely because (X) the Company,
                           (Y) a Subsidiary, or (Z) any Company-sponsored
                           employee stock ownership plan or any other employee
                           benefit plan of the Company or any Subsidiary either
                           files or becomes obligated to file a report or a
                           proxy statement under or in response to Schedule 13D,
                           Schedule 14D-1, Form 8-K or Schedule

                                      -3-

<PAGE>   4


                            14A (or any successor schedule, form or report or
                           item therein) under the Exchange Act disclosing
                           Beneficial Ownership by it of shares of the
                           then-outstanding voting securities of the Company,
                           whether in excess of 20% or otherwise, or because the
                           Company reports that a change in control of the
                           Company has occurred or will occur in the future by
                           reason of such beneficial ownership.

                  (e) "Competitive Activity" means the Executive's
         participation, without the written consent of an officer of the
         Company, in the management of any business enterprise if such
         enterprise engages in substantial and direct competition with the
         Company and such enterprise's sales of any product or service
         competitive with any product or service of the Company amounted to 25%
         of such enterprise's net sales for its most recently completely fiscal
         year and if the Company's net sales of said product or service amounted
         to 25% of the Company's net sales for its most recently completed
         fiscal year. "Competitive Activity" will not include (i) the mere
         ownership of securities in any such enterprise and the exercise of
         rights appurtenant thereto or (ii) participation in the management of
         any such enterprise other than in connection with the competitive
         operations of such enterprise.

                  (f) "Employee Benefits" means the perquisites, benefits and
         service credit for benefits as provided under any and all employee
         retirement income and welfare benefit policies, plans, programs or
         arrangements in which Executive is entitled to participate, including
         without limitation any stock option, performance share, performance
         unit, stock purchase, stock appreciation, savings, pension,
         supplemental executive retirement, or other retirement income or
         welfare benefit, deferred compensation, incentive compensation, group
         or other life, health, medical/hospital or other insurance (whether
         funded by actual insurance or self-insured by the Company), disability,
         salary continuation, expense reimbursement and other employee benefit
         policies, plans, programs or arrangements that may now exist or any
         equivalent successor policies, plans, programs or arrangements that may
         be adopted hereafter by the Company or a Subsidiary.

                  (g) "Exchange Act" means the Securities Exchange Act of 1934,
         as amended.

                  (h) "Incentive Pay" means an annual amount equal to not less
         than the average of the annual bonus made or to be made in regard to
         services rendered in any fiscal year during the three fiscal years
         immediately preceding, or, if greater, 75% of the maximum bonus
         opportunity for, the fiscal year in which the Change in Control occurs
         pursuant to the Executive Incentive Compensation Program or similar
         annual bonus plan, program or arrangement (whether or not funded) of
         the Company, or any successor thereto.

                                      -4-

<PAGE>   5




                  (i) "Severance Period" means the period of time commencing on
         the date of the first occurrence of a Change in Control and continuing
         until the earliest of (i) the third anniversary of the occurrence of
         the Change in Control, (ii) the Executive's death, or (iii) the
         Executive's attainment of age 65.

                  (j) "Subsidiary" means a corporation, company or other entity
         (i) more than 50% of whose outstanding shares or securities
         (representing the right to vote for the election of directors or other
         managing authority) are, or (ii) which does not have outstanding shares
         or securities (as may be the case in a partnership, joint venture or
         unincorporated association), but more than 50% of whose ownership
         interest representing the right generally to make decisions for such
         other entity is, now or hereafter, owned or controlled, directly or
         indirectly, by the Company except that for purposes of determining
         whether any person may be a Participant for purposes of any grant of
         incentive stock options, "Subsidiary" means any corporation in which at
         the time the Company owns or controls, directly or indirectly, more
         than 50% of the total combined voting power represented by all classes
         of stock issued by such corporation.

                  (k) "Term" means the period commencing as of the date hereof
         and expiring as of the later of (i) the close of business on December
         31, 2002, or (ii) the expiration of the Severance Period; PROVIDED,
         HOWEVER, that (A) commencing on January 1, 2001and each January 1
         thereafter, the term of this Agreement will automatically be extended
         for an additional year unless, not later than September 30 of the
         immediately preceding year, the Company or the Executive shall have
         given notice that it or the Executive, as the case may be, does not
         wish to have the Term extended and (B) subject to the last sentence of
         Section 9, if, prior to a Change in Control, the Executive ceases for
         any reason to be an employee of the Company and any Subsidiary,
         thereupon without further action the Term shall be deemed to have
         expired and this Agreement will immediately terminate and be of no
         further effect. For purposes of this Section 1(k), the Executive shall
         not be deemed to have ceased to be an employee of the Company and any
         Subsidiary by reason of the transfer of Executive's employment between
         the Company and any Subsidiary, or among any Subsidiaries.

                  (l) "Termination Date" means the date on which the Executive's
         employment is terminated (the effective date of which shall be the date
         of termination, or such other date that may be specified by the
         Executive if the termination is pursuant to Section 3(b)).

                  2. OPERATION OF AGREEMENT. This Agreement will be effective
and binding immediately upon its execution, but, anything in this Agreement to
the contrary notwithstanding, this Agreement will not be operative unless and
until a Change in Control occurs. Upon the occurrence of a Change in Control at
any time during the Term, without further action, this Agreement shall become
immediately operative.

                                      -5-
<PAGE>   6



                  3. TERMINATION FOLLOWING A CHANGE IN CONTROL.

                  (a) If the Executive's employment is terminated by the Company
         or any Subsidiary during the Severance Period, the Executive shall be
         entitled to the benefits provided by Section 4 unless such termination
         is the result of the occurrence of one or more of the following events:

                           (i) The Executive's death;

                           (ii) If the Executive becomes permanently disabled
         within the meaning of, and begins actually to receive disability
         benefits pursuant to, the long-term disability plan in effect for, or
         applicable to, Executive immediately prior to the Change in Control; or

                           (iii) Cause.

                  (b) If the Executive terminates his employment with the
         Company and its Subsidiaries during the Severance Period, the Executive
         shall be entitled to the benefits provided by Section 4 if such
         termination follows the occurrence of one or more of the following
         events (regardless of whether any other reason, other than Cause as
         hereinabove provided, for such termination exists or has occurred,
         including without limitation other employment):

                           (i) Failure to elect or reelect or otherwise to
                  maintain the Executive in the office or the position, or a
                  substantially equivalent office or position, of or with the
                  Company and/or a Subsidiary, as the case may be, which the
                  Executive held immediately prior to a Change in Control, or
                  the failure to reelect or the removal of the Executive as a
                  Director of the Company (or any successor thereto) if the
                  Executive shall have been a Director of the Company
                  immediately prior to the Change in Control;

                           (ii) (A) A significant adverse change in the nature
                  or scope of the authorities, powers, functions,
                  responsibilities or duties attached to the position with the
                  Company and any Subsidiary which the Executive held
                  immediately prior to the Change in Control, (B) a reduction in
                  the Executive's Base Pay, (C) a reduction in the Executive's
                  opportunities for Incentive Pay (including but not limited to
                  a reduction in target bonus percentage or target award
                  opportunity (whether measured by dollar amount or management
                  objectives)) provided by the Company, or (D) the termination
                  or denial of the Executive's rights to Employee Benefits or a
                  reduction in the scope or aggregate value thereof, any of
                  which is not remedied by the Company within ten calendar days
                  after receipt by the Company of written notice from the
                  Executive of such change, reduction or termination, as the
                  case may be;

                                      -6-

<PAGE>   7


                           (iii) A determination by the Executive (which
                  determination will be conclusive and binding upon the parties
                  hereto provided it has been made in good faith and in all
                  events will be presumed to have been made in good faith unless
                  otherwise shown by the Company by clear and convincing
                  evidence) that a change in circumstances has occurred
                  following a Change in Control, including, without limitation,
                  a change in the scope of the business or other activities for
                  which the Executive was responsible immediately prior to the
                  Change in Control, which has rendered the Executive
                  substantially unable to carry out, has substantially hindered
                  Executive's performance of, or has caused Executive to suffer
                  a substantial reduction in, any of the authorities, powers,
                  functions, responsibilities or duties attached to the position
                  held by the Executive immediately prior to the Change in
                  Control, which situation is not remedied within ten calendar
                  days after written notice to the Company from the Executive of
                  such determination;

                           (iv) The liquidation, dissolution, merger,
                  consolidation or reorganization of the Company or transfer of
                  all or substantially all of its business and/or assets, unless
                  the successor or successors (by liquidation, merger,
                  consolidation, reorganization, transfer or otherwise) to which
                  all or substantially all of its business and/or assets have
                  been transferred (directly or by operation of law) assumed all
                  duties and obligations of the Company under this Agreement
                  pursuant to Section 12(a);

                           (v) The Company relocates its principal executive
                  offices, or requires the Executive to have his principal
                  location of work changed, to any location that is in excess of
                  thirty miles from the location thereof immediately prior to
                  the Change in Control, or requires the Executive to travel
                  away from his office in the course of discharging his
                  responsibilities or duties of his employment more than
                  fourteen consecutive calendar days or an aggregate of more
                  than ninety calendar days in any consecutive 365 calendar-day
                  period, without, in either case, his prior written consent; or

                           (vi) Without limiting the generality or effect of the
                  foregoing, any material breach of this Agreement by the
                  Company or any successor thereto which is not remedied by the
                  Company within ten calendar days after receipt by the Company
                  of written notice from the Executive of such breach.

                  (c) A termination by the Company pursuant to Section 3(a)
         (other than as described in Section 3(a)(i), (ii) or (iii)) or by the
         Executive pursuant to Section 3(b) will not affect any rights that the
         Executive may have pursuant to any agreement, policy, plan, program or
         arrangement of the Company providing Employee Benefits, which rights
         shall be governed by the terms thereof.

                                      -7-

<PAGE>   8



                  4. SEVERANCE COMPENSATION.

                  (a) Severance benefits to which the Executive is entitled
         pursuant to Section 3 are described on Annex A. The Company will pay to
         the Executive the amounts described in Paragraphs (1), (2) and (3) of
         Annex A within five business days after the Termination Date or, if
         later, upon the expiration of the revocation period provided for in
         Annex C. The benefits and perquisites described in Paragraphs (4), (5),
         (6) and (7) of Annex A will be provided to the Executive as described
         therein.

                  (b) Without limiting the rights of the Executive at law or in
         equity, if the Company fails to make any payment or provide any benefit
         required to be made or provided hereunder on a timely basis, the
         Company will pay interest on the amount or value thereof at an
         annualized rate of interest equal to the so-called composite "prime
         rate" as quoted from time to time during the relevant period in the
         Midwest Edition of THE WALL STREET JOURNAL. Such interest will be
         payable as it accrues on demand. Any change in such prime rate will be
         effective on and as of the date of such change.

                  (c) Notwithstanding any provision of this Agreement to the
         contrary, the parties' respective rights and obligations under this
         Section 4 and under Sections 5 and 7 will survive any termination or
         expiration of this Agreement or the termination of the Executive's
         employment following a Change in Control for any reason whatsoever.

                  5. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

                  (a) Anything in this Agreement to the contrary
         notwithstanding, in the event that this Agreement shall become
         operative and it shall be determined (as hereafter provided) that any
         payment or distribution by the Company or any of its affiliates to or
         for the benefit of the Executive, whether paid or payable or
         distributed or distributable pursuant to the terms of this Agreement or
         otherwise pursuant to or by reason of any other agreement, policy,
         plan, program or arrangement, including without limitation any stock
         option, performance share, performance unit, stock appreciation right
         or similar right, or the lapse or termination of any restriction on, or
         the vesting or exercisability of, any of the foregoing (a "Payment"),
         would be subject to the excise tax imposed by Section 4999 of the
         Internal Revenue Code of 1986, as amended (the "Code") (or any
         successor provision thereto) by reason of being considered "contingent
         on a change in ownership or control" of the Company, within the meaning
         of Section 280G of the Code (or any successor provision thereto) or to
         any similar tax imposed by state or local law, or any interest or
         penalties with respect to such tax (such tax or taxes, together with
         any such interest and penalties, being hereafter collectively referred
         to as the "Excise Tax"), then the Executive shall be entitled to
         receive an additional payment or payments (collectively, a "Gross-Up
         Payment"); PROVIDED, HOWEVER, that no Gross-up Payment shall be made
         with respect to the Excise Tax, if any, attributable to (i) any
         incentive stock option, as defined by Section 422 of the Code ("ISO")
         granted prior to the execution of this Agreement, or (ii) any stock
         appreciation or similar right, whether or not limited, granted in
         tandem with any ISO described in clause (i). The Gross-Up Payment shall
         be

                                      -8-

<PAGE>   9

         in an amount such that, after payment by the Executive of all taxes
         (including any interest or penalties imposed with respect to such
         taxes), including any Excise Tax imposed upon the Gross-Up Payment, the
         Executive retains an amount of the Gross-Up Payment equal to the Excise
         Tax imposed upon the Payment.

                  (b) Subject to the provisions of Section 5(f), all
         determinations required to be made under this Section 5, including
         whether an Excise Tax is payable by the Executive and the amount of
         such Excise Tax and whether a Gross-Up Payment is required to be paid
         by the Company to the Executive and the amount of such Gross-Up
         Payment, if any, shall be made by a nationally recognized accounting
         firm (the "Accounting Firm") selected by the Executive in his sole
         discretion. The Executive shall direct the Accounting Firm to submit
         its determination and detailed supporting calculations to both the
         Company and the Executive within 30 calendar days after the Termination
         Date, if applicable, and any such other time or times as may be
         requested by the Company or the Executive. If the Accounting Firm
         determines that any Excise Tax is payable by the Executive, the Company
         shall pay the required Gross-Up Payment to the Executive within five
         business days after receipt of such determination and calculations with
         respect to any Payment to the Executive. If the Accounting Firm
         determines that no Excise Tax is payable by the Executive, it shall, at
         the same time as it makes such determination, furnish the Company and
         the Executive an opinion that the Executive has substantial authority
         not to report any Excise Tax on his federal, state or local income or
         other tax return. As a result of the uncertainty in the application of
         Section 4999 of the Code (or any successor provision thereto) and the
         possibility of similar uncertainty regarding applicable state or local
         tax law at the time of any determination by the Accounting Firm
         hereunder, it is possible that Gross-Up Payments which will not have
         been made by the Company should have been made (an "Underpayment"),
         consistent with the calculations required to be made hereunder. In the
         event that the Company exhausts or fails to pursue its remedies
         pursuant to Section 5(f) and the Executive thereafter is required to
         make a payment of any Excise Tax, the Executive shall direct the
         Accounting Firm to determine the amount of the Underpayment that has
         occurred and to submit its determination and detailed supporting
         calculations to both the Company and the Executive as promptly as
         possible. Any such Underpayment shall be promptly paid by the Company
         to, or for the benefit of, the Executive within five business days
         after receipt of such determination and calculations.

                  (c) The Company and the Executive shall each provide the
         Accounting Firm access to and copies of any books, records and
         documents in the possession of the Company or the Executive, as the
         case may be, reasonably requested by the Accounting Firm, and otherwise
         cooperate with the Accounting Firm in connection with the preparation
         and issuance of the determinations and calculations contemplated by
         Section 5(b). Any determination by the Accounting Firm as to the amount
         of the Gross-Up Payment shall be binding upon the Company and the
         Executive.

                  (d) The federal, state and local income or other tax returns
         filed by the Executive shall be prepared and filed on a consistent
         basis with the determination of the Accounting Firm with respect to the
         Excise Tax payable by the Executive. The

                                      -9-

<PAGE>   10

         Executive shall make proper payment of the amount of any Excise
         Payment, and at the request of the Company, provide to the Company true
         and correct copies (with any amendments) of his federal income tax
         return as filed with the Internal Revenue Service and corresponding
         state and local tax returns, if relevant, as filed with the applicable
         taxing authority, and such other documents reasonably requested by the
         Company, evidencing such payment. If prior to the filing of the
         Executive's federal income tax return, or corresponding state or local
         tax return, if relevant, the Accounting Firm determines that the amount
         of the Gross-Up Payment should be reduced, the Executive shall within
         five business days pay to the Company the amount of such reduction.

                  (e) The fees and expenses of the Accounting Firm for its
         services in connection with the determinations and calculations
         contemplated by Section 5(b) shall be borne by the Company. If such
         fees and expenses are initially paid by the Executive, the Company
         shall reimburse the Executive the full amount of such fees and expenses
         within five business days after receipt from the Executive of a
         statement therefor and reasonable evidence of his payment thereof.

                  (f) The Executive shall notify the Company in writing of any
         claim by the Internal Revenue Service or any other taxing authority
         that, if successful, would require the payment by the Company of a
         Gross-Up Payment. Such notification shall be given as promptly as
         practicable but no later than ten business days after the Executive
         actually receives notice of such claim and the Executive shall further
         apprise the Company of the nature of such claim and the date on which
         such claim is requested to be paid (in each case, to the extent known
         by the Executive). The Executive shall not pay such claim prior to the
         earlier of (i) the expiration of the thirty calendar-day period
         following the date on which he gives such notice to the Company and
         (ii) the date that any payment of amount with respect to such claim is
         due. If the Company notifies the Executive in writing prior to the
         expiration of such period that it desires to contest such claim, the
         Executive shall:

                           (i) provide the Company with any written records or
                  documents in his possession relating to such claim reasonably
                  requested by the Company;

                           (ii) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including without limitation accepting
                  legal representation with respect to such claim by an attorney
                  competent in respect of the subject matter and reasonably
                  selected by the Company;

                           (iii) cooperate with the Company in good faith in
                  order effectively to contest such claim; and

                           (iv) permit the Company to participate in any
                  proceedings relating to such claim;

                                      -10-

<PAGE>   11


         PROVIDED, HOWEVER, that the Company shall bear and pay directly all
         costs and expenses (including interest and penalties) incurred in
         connection with such contest and shall indemnify and hold harmless the
         Executive, on an after-tax basis, for and against any Excise Tax or
         income tax, including interest and penalties with respect thereto,
         imposed as a result of such representation and payment of costs and
         expenses. Without limiting the foregoing provisions of this Section
         5(f), the Company shall control all proceedings taken in connection
         with the contest of any claim contemplated by this Section 5(f) and, at
         its sole option, may pursue or forego any and all administrative
         appeals, proceedings, hearings and conferences with the taxing
         authority in respect of such claim (provided, however, that the
         Executive may participate therein at his own cost and expense) and may,
         at its option, either direct the Executive to pay the tax claimed and
         sue for a refund or contest the claim in any permissible manner, and
         the Executive agrees to prosecute such contest to a determination
         before any administrative tribunal, in a court of initial jurisdiction
         and in one or more appellate courts, as the Company shall determine;
         PROVIDED, HOWEVER, that if the Company directs the Executive to pay the
         tax claimed and sue for a refund, the Company shall advance the amount
         of such payment to the Executive on an interest-free basis and shall
         indemnify and hold the Executive harmless, on an after-tax basis, from
         any Excise Tax or income or other tax, including interest or penalties
         with respect thereto, imposed with respect to such advance; and
         PROVIDED FURTHER, HOWEVER, that any extension of the statute of
         limitations relating to payment of taxes for the taxable year of the
         Executive with respect to which the contested amount is claimed to be
         due is limited solely to such contested amount. Furthermore, the
         Company's control of any such contested claim shall be limited to
         issues with respect to which a Gross-Up Payment would be payable
         hereunder and the Executive shall be entitled to settle or contest, as
         the case may be, any other issue raised by the Internal Revenue Service
         or any other taxing authority.

                  (g) If, after the receipt by the Executive of an amount
         advanced by the Company pursuant to Section 5(f), the Executive
         receives any refund with respect to such claim, the Executive shall
         (subject to the Company's complying with the requirements of Section
         5(f)) promptly pay to the Company the amount of such refund (together
         with any interest paid or credited thereon after any taxes applicable
         thereto). If, after the receipt by the Executive of an amount advanced
         by the Company pursuant to Section 5(f), a determination is made that
         the Executive shall not be entitled to any refund with respect to such
         claim and the Company does not notify the Executive in writing of its
         intent to contest such denial or refund prior to the expiration of
         thirty calendar days after such determination, then such advance shall
         be forgiven and shall not be required to be repaid and the amount of
         any such advance shall offset, to the extent thereof, the amount of
         Gross-Up Payment required to be paid by the Company to the Executive
         pursuant to this Section 5.

                  6. NO MITIGATION OBLIGATION. The Company hereby acknowledges
that it will be difficult and may be impossible for the Executive to find
reasonably comparable employment following the Termination Date and that the
non-competition covenant contained in Section 8 will further limit the
employment opportunities for the Executive. In addition, the Company
acknowledges that its severance pay plans applicable in general to its salaried
employees do not

                                      -11-

<PAGE>   12

provide for mitigation, offset or reduction of any severance payment received
thereunder. Accordingly, the payment of the severance compensation by the
Company to the Executive in accordance with the terms of this Agreement is
hereby acknowledged by the Company to be reasonable, and the Executive will not
be required to mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise, nor will any profits, income, earnings
or other benefits from any source whatsoever create any mitigation, offset,
reduction or any other obligation on the part of the Executive hereunder or
otherwise, except as expressly provided in the last sentences of Paragraphs (2)
and (4) of Annex A.

                  7. FUNDING; PROFESSIONAL FEES AND EXPENSES.

                  (a) It is the intent of the Company that the Executive not be
         required to incur fees and related expenses for the retention of
         attorneys, accountants, actuaries, consultants, and/or other
         professionals ("professionals") in connection with the interpretation,
         enforcement or defense of Executive's rights under this Agreement by
         litigation or otherwise because the cost and expense thereof would
         substantially detract from the benefits intended to be extended to the
         Executive hereunder. Accordingly, if it should appear to the Executive
         that the Company has failed to comply with any of its obligations under
         this Agreement or in the event that the Company or any other person
         takes or threatens to take any action to declare this Agreement void or
         unenforceable, or institutes any litigation or other action or
         proceeding designed to deny, or to recover from, the Executive the
         benefits provided or intended to be provided to the Executive
         hereunder, the Company irrevocably authorizes the Executive from time
         to time to retain one or more professionals of the Executive's choice,
         at the expense of the Company as hereafter provided, to advise and
         represent the Executive in connection with any such interpretation,
         enforcement or defense, including without limitation the initiation or
         defense of any litigation or other legal action, whether by or against
         the Company or any Director, officer, stockholder or other person
         affiliated with the Company, in any jurisdiction. Notwithstanding any
         existing or prior relationship between the Company and such
         professional, the Company irrevocably consents to the Executive's
         entering into a relationship with any such professional, and in that
         connection the Company and the Executive agree that a confidential
         relationship shall exist between the Executive and any such
         professional. Without respect to whether the Executive prevails, in
         whole or in part, in connection with any of the foregoing, the Company
         will pay and be solely financially responsible for any and all
         reasonable fees and related expenses incurred by the Executive in
         connection with any of the foregoing.

                  (b) Without limiting the obligations of the Company pursuant
         to this Agreement, in the event a Change in Control occurs, the
         performance of the Company's obligations under this Agreement shall be
         secured by amounts deposited or to be deposited in trust pursuant to
         certain trust agreements to which the Company shall be a party,
         providing, among other things for the payment of severance compensation
         to the Executive pursuant to Section 4, and the Gross-Up Payment to the
         Executive pursuant to Section 5, and providing that the reasonable fees
         and related expenses of one or more professionals selected from time to
         time by the Executive pursuant to Section 7(a) shall be paid, or
         reimbursed to the Executive if paid by the Executive, either in
         accordance

                                      -12-

<PAGE>   13

         with the terms of such trust agreements, or, if not so provided, on a
         regular, periodic basis upon presentation by the Executive to the
         trustee of a statement or statements prepared by such professional in
         accordance with its customary practices. Any failure by the Company to
         satisfy any of its obligations under this Section 7(b) shall not limit
         the rights of the Executive hereunder. Upon the earlier to occur of (i)
         a Change of a Control or (ii) a declaration by the Board that a Change
         in Control is imminent, the Company shall promptly to the extent it has
         not previously done so, and in any event within five business days:

                           (A) transfer to trustees of such trust agreements to
                  be added to the principal of the trusts a sum equal to (I) the
                  present value on the date of the Change in Control (or on such
                  fifth business day if the Board has declared a Change in
                  Control to be imminent) of the payments to be made to the
                  Executive under the provisions of Sections 4 and 5 hereof,
                  such present value to be computed using the assumptions set
                  forth on Annex B, less (II) the balance in the Executive's
                  accounts provided for in such trust agreements as of the most
                  recent completed valuation thereof, as certified by the
                  trustee under each trust agreement; provided, however, that if
                  the trustee under any trust agreement, respectively, does not
                  so certify by the end of the fourth business day after the
                  earlier of such Change in Control or declaration, then the
                  balance of such respective account shall be deemed to be zero.
                  Any payments of severance compensation or other benefits
                  hereunder by the trustee pursuant to any trust agreement
                  shall, to the extent thereof, discharge the Company's
                  obligation to pay severance compensation and other benefits
                  hereunder, it being the intent of the Company that assets in
                  such trusts be held as security for the Company's obligation
                  to pay severance compensation and other benefits under this
                  Agreement; and

                           (B) transfer to the trustees to be added to the
                  principal of the trusts under the trust agreements the sum of
                  FIVE HUNDRED THOUSAND DOLLARS ($500,000) less any principal in
                  such trusts on such fifth business day dedicated to the
                  payment of the Company's obligations under Section 7(a)
                  hereto. Any payments of the Executive's reasonable
                  professional fees and related expenses by the trustees
                  pursuant to the trust agreements shall, to the extent thereof,
                  discharge the Company's obligation hereunder, it being the
                  intent of the Company that assets in such trust be held as
                  security for the Company's obligation under Section 7(a)
                  hereof. The Executive understands and acknowledges that the
                  corpus of the trust, or separate portion thereof, dedicated to
                  the payment of the Company's obligations under Section 7(a)
                  hereto will be $500,000 and that such amount will be available
                  to discharge not only the obligations of the Company to the
                  Executive under Section 7(a) hereof, but also similar
                  obligations of the Company to other executives and employees
                  under similar provisions of other agreements.

                                      -13-

<PAGE>   14

                  (c) Subject to the foregoing, the Executive shall have the
         status of a general unsecured creditor of the Company and shall have no
         right to, or security interest in, any assets of the Company or any
         Subsidiary.

                  8. COMPETITIVE ACTIVITY. During a period ending three (3)
years following the Termination Date, if the Executive shall have received or
shall be receiving benefits under Section 4, the Executive shall not, without
the prior written consent of the Company, which consent shall not be
unreasonably withheld, engage in any Competitive Activity.

                  9. EMPLOYMENT RIGHTS. Nothing expressed or implied in this
Agreement will create any right or duty on the part of the Company or the
Executive to have the Executive remain in the employment of the Company or any
Subsidiary prior to or following any Change in Control. Any termination of
employment of the Executive or the removal of the Executive from the office or
position in the Company or any Subsidiary following the commencement of any
action by or discussion with a third person that ultimately results in a Change
in Control shall be deemed to be a termination or removal of the Executive after
a Change in Control for purposes of this Agreement entitling the Executive to
severance benefits provided by Section 4.

                  10. RELEASE. Payment of the severance compensation set forth
in Section 4 hereto is conditioned upon the Executive executing and delivering a
release (the "Release") substantially in the form provided in Annex C.

                  11. WITHHOLDING OF TAXES. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes as
the Company is required to withhold pursuant to any law or government regulation
or ruling.

                  12. SUCCESSORS AND BINDING AGREEMENT.

                  (a) The Company will require any successor (whether direct or
         indirect, by purchase, merger, consolidation, reorganization or
         otherwise) to all or substantially all of the business or assets of the
         Company, by agreement in form and substance satisfactory to the
         Executive, expressly to assume and agree to perform this Agreement in
         the same manner and to the same extent the Company would be required to
         perform if no such succession had taken place. This Agreement will be
         binding upon and inure to the benefit of the Company and any successor
         to the Company, including without limitation any persons acquiring
         directly or indirectly all or substantially all of the business or
         assets of the Company whether by purchase, merger, consolidation,
         reorganization or otherwise (and such successor shall thereafter be
         deemed the "Company" for the purposes of this Agreement), but will not
         otherwise be assignable, transferable or delegable by the Company.

                  (b) This Agreement will inure to the benefit of and be
         enforceable by the Executive's personal or legal representatives,
         executors, administrators, successors, heirs, distributees and
         legatees.

                                      -14-

<PAGE>   15


                  (c) This Agreement is personal in nature and neither of the
         parties hereto shall, without the consent of the other, assign,
         transfer or delegate this Agreement or any rights or obligations
         hereunder except as expressly provided in Sections 12(a) and 12(b).
         Without limiting the generality or effect of the foregoing, the
         Executive's right to receive payments hereunder will not be assignable,
         transferable or delegable, whether by pledge, creation of a security
         interest, or otherwise, other than by a transfer by Executive's will or
         by the laws of descent and distribution and, in the event of any
         attempted assignment or transfer contrary to this Section 12(c), the
         Company shall have no liability to pay any amount so attempted to be
         assigned, transferred or delegated.

                  13. NOTICES. For all purposes of this Agreement, all
communications, including without limitation notices, consents, requests or
approvals, required or permitted to be given hereunder will be in writing and
will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed), or
five business days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid, or three business
days after having been sent by a nationally recognized overnight courier service
such as Federal Express, UPS, or Purolator, addressed to the Company (to the
attention of the Secretary of the Company) at its principal executive office and
to the Executive at his principal residence, or to such other address as any
party may have furnished to the other in writing and in accordance herewith,
except that notices of changes of address shall be effective only upon receipt.

                  14. GOVERNING LAW. The validity, interpretation, construction
and performance of this Agreement will be governed by and construed in
accordance with the substantive laws of the State of Ohio, without giving effect
to the principles of conflict of laws of such State.

                  15. VALIDITY. If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances will not
be affected, and the provision so held to be invalid, unenforceable or otherwise
illegal will be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid or legal.

                  16. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. References to Sections are to references to
Sections of this Agreement.

                                      -15-
<PAGE>   16

                  17. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same agreement.

                  18. PRIOR AGREEMENT. This Agreement amends and restates the
Severance Agreement, dated as of October 1, 1999 (the "Prior Agreement"),
between the Company and the Executive, which Prior Agreement shall, without
further action, be superseded as of the date first above written.

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.




                                       /s/   Kevin M. McMullen
                                   ---------------------------------------------
                                   Kevin M. McMullen



                                   OMNOVA SOLUTIONS INC.



                                   By:    /s/   Gregory T. Troy
                                          --------------------------------------
                                          Gregory T. Troy
                                          Senior Vice President, Human Resources



                                   By:    /s/   Cynthia A. Slack
                                          --------------------------------------
                                          Cynthia A. Slack
                                          Secretary


                                      -16-


<PAGE>   17



                                                                         Annex A
                                                                         -------



                             Severance Compensation
                             ----------------------


                  1. BASE PAY AND ANNUAL BONUS. A lump sum payment in an amount
equal to (a) any unpaid Base Pay through the date of the Executive's termination
of employment and (b) any annual bonus payable in the year in which the
Executive's termination of employment occurs, determined in accordance with the
provisions of the Executive Incentive Compensation Program.

                  2. SEVERANCE PAY. A lump sum payment in an amount equal to
three (3) times the sum of (A) Base Pay (at the highest rate in effect for any
period prior to the Termination Date), plus (B) Incentive Pay (determined in
accordance with the standards set forth in Section 1(h)), but not less than 375%
of Base Pay (at the highest rate in effect for any period prior to the
Termination Date).

                  3. PERFORMANCE AWARDS: Upon an Executive's termination of
employment pursuant to Section 3(b), all performance awards under the OMNOVA
Solutions Inc. 1999 Equity and Performance Incentive Plan, if any, will be paid
in accordance with the provisions of such Plan.

                  4. HEALTH AND LIFE BENEFITS. For a period of 36 months
following the Termination Date (the "Continuation Period"), the Company will
arrange to provide the Executive with Employee Benefits that provide health and
life benefits (but not disability, stock option, performance share, performance
unit, stock purchase, stock appreciation or similar compensatory benefits)
substantially similar to those that the Executive was receiving or entitled to
receive immediately prior to the Termination Date (or, if greater, immediately
prior to the reduction, termination, or denial described in Section 3(b)(ii)),
except that the level of any such Employee Benefits to be provided to the
Executive may be reduced in the event of a corresponding reduction generally
applicable to all recipients of or participants in such Employee Benefits. If
and to the extent that any benefit described in this Paragraph 4 is not or
cannot be paid or provided under any policy, plan, program or arrangement of the
Company or any Subsidiary, as the case may be, then the Company will itself pay
or provide for the payment to the Executive, his dependents and beneficiaries,
of such Employee Benefits. Employee Benefits otherwise receivable by the
Executive pursuant to this Paragraph 4 will be reduced to the extent comparable
welfare benefits are actually received by the Executive from another employer
during the Continuation Period following the Executive's Termination Date, and
any such benefits actually received by the Executive shall be reported by the
Executive to the Company.





                                       A-1

<PAGE>   18



                  5. RETIREMENT BENEFITS. Retirement benefits under the
applicable qualified pension plan sponsored by the Company or Subsidiary and the
Benefits Restoration Plan for Salaried Employees of OMNOVA Solutions Inc. and
Certain Subsidiary Companies ("Benefits Restoration Plan") that are accrued but
not vested at the time of the Executive's termination of employment will be
vested in accordance with the provisions of the Benefits Restoration Plan.

                  6. OUTPLACEMENT SERVICES. Outplacement services for a period
of up to twelve months by a firm selected by the Executive, at the expense of
the Company in an amount up to 20% of the Executive's Pay.

                  7. FINANCIAL COUNSELING. Financial counseling for the
Continuation Period as defined in Paragraph (4) of this Annex A in a manner
similar to that provided to executive officers prior to a Change in Control.

                                      A-2

<PAGE>   19


                                                                         Annex B
                                                                         -------


                              Funding Assumptions
                              -------------------


In calculating the present value of payments to be made to the Executive under
Sections 4 and 5 of the Agreement, as required by Section 7(b)(B) of the
Agreement, the Company shall

                  (1) Assume that all payments to be made to the Executive shall
         be paid on a date which is six (6) months following the date of the
         Change in Control; and

                  (2) Apply a discount factor which is equal to the yield to
         maturity, as reported in the Midwest Edition of THE WALL STREET
         JOURNAL, of the 26-week Treasury Bill most recently issued as of the
         date of the Change in Control.


                                       B-1

<PAGE>   20



                                                                         Annex C
                                                                         -------


                                 Form of Release
                                 ---------------


         WHEREAS, the Executive's employment has been terminated in accordance
with Section 3(a) (other than as described in Section 3(a)(i), (ii) or (iii)) or
(b) of the Severance Agreement dated as of         , 2000, by and between
(the "Executive") and OMNOVA Solutions Inc. (the "Agreement").

         WHEREAS, the Executive is required to sign this Release in order to
receive the Severance Compensation as described in Annex A of the Agreement and
the other benefits described in the Agreement.

         NOW THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound, the
Executive agrees as follows:

         1. This Release is effective on the date hereof and will continue in
effect as provided herein.

         2. In consideration of the payments to be made and the benefits to be
received by the Executive pursuant to the Agreement, which the Executive
acknowledges are in addition to payments and benefits which the Executive would
be entitled to receive absent the Agreement, the Executive, for himself and his
dependents, successors, assigns, heirs, executors and administrators (and his
and their legal representatives of every kind), hereby releases, dismisses,
remises and forever discharges OMNOVA Solutions Inc., its predecessors, parents,
subsidiaries, divisions, related or affiliated companies, officers, directors,
stockholders, members, employees, heirs, successors, assigns, representatives,
agents and counsel (the "Company") from any and all arbitrations, claims,
including claims for attorney's fees, demands, damages, suits, proceedings,
actions and/or causes of action of any kind and every description, whether known
or unknown, which Executive now has or may have had for, upon, or by reason of
any cause whatsoever ("claims"), against the Company, including but not limited
to:

            (a) any and all claims arising out of or relating to Executive's
        employment by or service with the Company and his termination from the
        Company;






                                       C-1

<PAGE>   21




                  (b) any and all claims of discrimination, including but not
         limited to claims of discrimination on the basis of sex, race, age,
         national origin, marital status, religion or handicap, including,
         specifically, but without limiting the generality of the foregoing, any
         claims under the Age Discrimination in Employment Act, as amended,
         Title VII of the Civil Rights Act of 1964, as amended, the Americans
         with Disabilities Act, Ohio Revised Code Section 4101.17 and Ohio
         Revised Code Chapter 4112, including Sections 4112.02 and 4112.99
         thereof; and

                  (c) any and all claims of wrongful or unjust discharge or
         breach of any contract or promise, express or implied.

         3. Executive understands and acknowledges that the Company does not
admit any violation of law, liability or invasion of any of his rights and that
any such violation, liability or invasion is expressly denied. The consideration
provided for this Release is made for the purpose of settling and extinguishing
all claims and rights (and every other similar or dissimilar matter) that
Executive ever had or now may have against the Company to the extent provided in
this Release. Executive further agrees and acknowledges that no representations,
promises or inducements have been made by the Company other than as appear in
the Agreement.

         4. Executive further agrees and acknowledges that:

                  (a) The release provided for herein releases claims to and
         including the date of this Release;

                  (b) He has been advised by the Company to consult with legal
         counsel prior to executing this Release, has had an opportunity to
         consult with and to be advised by legal counsel of his choice, fully
         understands the terms of this Release, and enters into this Release
         freely, voluntarily and intending to be bound;

                  (c) He has been given a period of 21 days to review and
         consider the terms of this Release, prior to its execution and that he
         may use as much of the 21 day period as he desires; and

                  (d) He may, within 7 days after execution, revoke this
         Release. Revocation shall be made by delivering a written notice of
         revocation to the Vice President of Human Resources at the Company. For
         such revocation to be effective, written notice must be actually
         received by the Vice President of Human Resources at the Company no
         later than the close of business on the 7th



                                       C-2

<PAGE>   22

         day after Executive executes this Release. If Executive does exercise
         his right to revoke this Release, all of the terms and conditions of
         the Release shall be of no force and effect and the Company shall not
         have any obligation to make payments or provide benefits to Executive
         as set forth in Sections 4, 5 and 7 of the Agreement.

         5. Executive agrees that he will never file a lawsuit or other
complaint asserting any claim that is released in this Release.

         6. Executive waives and releases any claim that he has or may have to
reemployment after __________________.


         IN WITNESS WHEREOF, the Executive has executed and delivered this
Release on the date set forth below.


Dated:_____________________         ___________________________________
                                    Executive




                                       C-3


</TEXT>
</DOCUMENT>
