Exhibit 10.5
A. SCHULMAN, INC.
AMENDED AND RESTATED
2006 INCENTIVE PLAN
INSTRUCTIONS FOR COMPLETING PERFORMANCE SHARE
AWARD AGREEMENT FOR EMPLOYEES
Code Sheet
The following codes are used in this Award Agreement and should be replaced
using your computer’s “Replace” function.

         
 
  VTA   Grantee’s name (all capital letters)
 
       
 
  VTB   Grant Date (all capital letters)
 
       
 
  Vtb   Grant Date (initial capital letters only)
 
       
 
  Vtc   Person to contact for more information
 
       
 
  Vtd   Contact’s telephone number, including area code
 
       
 
  Vte   Date that is 30 days after the Grant Date (initial capital letters only)
 
       
 
  Vtf   Number of Performance Shares granted (insert only the number in Arabic
numerals)
 
       
 
  Vtg   Contact’s street address
 
       
 
  Vth   Contact’s city, state and zip code

 

 

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A. SCHULMAN, INC.
AMENDED AND RESTATED
2006 INCENTIVE PLAN
PERFORMANCE SHARE AWARD AGREEMENT GRANTED TO
VTA on VTB
A. Schulman, Inc. (“Company”) believes that its business interests are best
served by extending to you an opportunity to earn additional compensation based
on the growth of the Company’s business. To this end, the Company adopted, and
its stockholders approved, the A. Schulman, Inc. Amended and Restated 2006
Incentive Plan (“Plan”) as a means through which employees like you may share in
the Company’s success. Capitalized terms that are not defined herein shall have
the same meanings as in the Plan.
This Award Agreement describes many features of your Award and the terms and
conditions of your Award. To ensure you fully understand these terms and
conditions, you should:

  •   Read the Plan carefully to ensure you understand how the Plan works;     •
  Read this Award Agreement carefully to ensure you understand the nature of
your Award and what you must do to earn it; and     •   Contact Vtc at Vtd if
you have any questions about your Award.

Also, no later than Vte, you must return a signed copy of the Award Agreement
to:
Vtc
A. Schulman, Inc.
Vtg
Vth
Nature of Your Award
The terms and conditions affecting your Award are described in this Award
Agreement and the Plan, both of which you should read carefully. If the terms
and conditions are satisfied, your Performance Shares will be settled and you
will receive the Shares underlying such Performance Shares. For purposes of this
Award Agreement, each Performance Share represents the right to receive one full
Share.
Grant Date: Vtb.
Number of Performance Shares: You have been granted Vtf Performance Shares
(“Total Shares”), subject to the terms and conditions of this Award Agreement
and the Plan.

 

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When Your Award Will Vest
Your Performance Shares will be settled or will be forfeited depending on
whether or not the terms and conditions described in this Award Agreement and in
the Plan are satisfied. For purposes of this Award Agreement, the Performance
Period is the period beginning on the Grant Date and ending on the third
anniversary thereof (the “Normal Vesting Date”).
Normal Vesting Date: Except as otherwise provided in this Award Agreement, the
number of Total Shares that will vest on the Normal Vesting Date will be
determined by reference to both: [1] whether the Company’s Total Shareholder
Return is positive or negative during the Performance Period; and [2] the
relative performance of the Company’s Total Shareholder Return as compared to
the Peer Group Companies during the Performance Period. The number of
Performance Shares that will vest on the Normal Vesting Date will equal the
number of Total Shares, multiplied by the applicable percentage as set forth in
the tables below. If the Company’s Total Shareholder Return is between two
percentages, the number of Performance Shares that vest will be interpolated by
the Company. Notwithstanding the foregoing, any Performance Shares that do not
vest as of the Normal Vesting Date shall be forfeited.

        Relative Performance of Total Shareholder       Return to Peer Group
Companies   Negative Total Shareholder Return   Less than 50th Percentile   0 %
50th Percentile   25 % 75th Percentile or Greater   50 %

        Relative Performance of Total Shareholder       Return to Peer Group
Companies   Positive Total Shareholder Return   25th Percentile or Less   0 %
50th Percentile   50 % 75th Percentile or Greater   100 %

As used in this Award Agreement, “Total Shareholder Return” for the Performance
Period is calculated by first taking the theoretical value of $100 invested in
the Shares at the 30-day average price of the Shares as of the Grant Date (i.e.,
the average daily closing price over the 30-day period preceding the Grant Date)
and the theoretical value of $100 invested with each of the peer group companies
in the S&P Special Chemicals Index (the “Peer Group Companies”) using the same
30-day average methodology as of the Grant Date. On the Normal Vesting Date, the
value of the Shares (using the average daily closing price over the 30 days
preceding the Normal Vesting Date and assuming all dividends are reinvested) is
compared with the value of each of the Peer Group Companies (using the same
30-day average methodology as of the Normal Vesting Date and again assuming that
all dividends are reinvested).
However, your Award may vest earlier in the circumstances described below.
How Your Award Might Vest Earlier Than the Normal Vesting Date: Your Award will
immediately vest if there is a Change in Control.

 

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How Your Termination of Employment Will Affect Your Award: You may forfeit your
Award if you Terminate before the Normal Vesting Date, although this will depend
on why you Terminate.
[1] If you Terminate because of [a] death, [b] Disability or [c] after
qualifying for Retirement if the Committee agrees to treat your Termination as a
Retirement, you will receive a prorated number of the Shares underlying your
Performance Shares granted through this Award Agreement but only if the
performance criteria described above are actually met at the Normal Vesting
Date. If they are not, all of your Performance Shares will be forfeited. If
those performance criteria are met, you will receive a number of Shares equal
to:

             
 
  Number of Shares that
would have been due to you if you had not
Terminated before the
Normal Vesting Date   X   the number of whole months between
the Grant Date and your Termination date
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[2] If you Terminate under any other circumstances, all of the Performance
Shares granted through this Award Agreement will be forfeited.
Settling Your Award
If all applicable terms and conditions have been met, you will receive the
Shares underlying your vested Performance Shares as soon as administratively
feasible, but no later than 60 days, after the Normal Vesting Date.
Other Rules Affecting Your Award
Rights During the Performance Period:
[1] During the Performance Period, you will have no voting rights with respect
to the Shares underlying the Performance Shares and, except as provided in
subsection [2] below, you will have no dividend rights with respect to the
Shares underlying the Performance Shares.
[2] You shall be entitled to receive any cash dividends that are declared and
paid during the Performance Period with respect to Shares underlying one-half of
your Total Shares (the “Target Shares”), subject to the terms and conditions of
the Plan and this Award Agreement. If a cash dividend is declared and paid
during the Performance Period on the Shares underlying the Target Shares, you
will be deemed to have been credited with a cash amount equal to the product of
[a] the number of Target Shares that have not been settled or forfeited as of
the dividend payment date, multiplied by [b] the amount of the cash dividend
paid per Share. Such amount shall be subject to the same terms and conditions as
the related Target Shares and shall vest and be settled in cash if, when and to
the extent the related Target Shares vest and are settled. In the event a Target
Share is forfeited under this Award Agreement, the related dividends will also
be forfeited.

 

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Beneficiary Designation: You may name a beneficiary or beneficiaries to receive
any portion of your Award and any other right under the Plan that is unsettled
at your death. To do so, you must complete a beneficiary designation form by
contacting Vtc at Vtd or the address below. If you previously completed a valid
beneficiary designation form, such form shall apply to the Award until changed
or revoked. If you die without completing a beneficiary designation form or if
you do not complete that form correctly, your beneficiary will be your surviving
spouse or, if you do not have a surviving spouse, your estate.
Tax Withholding: Applicable withholding taxes must be withheld with respect to
your Award. These taxes may be paid in one (or a combination) of several ways.
They are:

  •   By the Company withholding this amount from other amounts owed to you
(e.g., from your salary);     •   By the Company withholding all or a portion of
any cash amount owed to you with respect to dividends credited with respect to
the Shares that are to be distributed to you;     •   By giving the Company a
check (payable to “A. Schulman, Inc.”) in an amount equal to the taxes that must
be withheld; or     •   By having the Company withhold a portion of the Shares
that otherwise would be distributed to you. The number of Shares withheld will
have a fair market value equal to the taxes that must be withheld.

You must choose the approach you prefer before the Shares are transferred to
you, although the Company may reject your preferred method for any reason (or
for no reason). If this happens, the Company will specify (from among the
alternatives just listed) how these taxes are to be paid.
If you do not choose a method within 30 days of the Normal Vesting Date, the
Company will withhold either through payroll practices or a portion of the
Shares that otherwise would be distributed to you. The number of Shares withheld
will have a fair market value equal to the taxes that must be withheld and the
balance of the Shares will be distributed to you.
Transferring Your Award: Normally, your Award may not be transferred to another
person. However, as described above, you may complete a beneficiary designation
form to name the person to receive any portion of your Award that is settled
after you die. Also, the Committee may allow you to transfer your Performance
Shares to certain Permissible Transferees, including a trust established for
your benefit or the benefit of your family. Contact Vtc at the address or number
given below if you are interested in doing this.
Governing Law: This Award Agreement will be construed in accordance with and
governed by the laws (other than laws governing conflicts of laws) of the State
of Ohio, except to the extent that the Delaware General Corporation Law is
mandatorily applicable.

 

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Other Agreements: Also, your Award will be subject to the terms of any other
written agreements between you and the Company or a Related Entity to the extent
that those other agreements do not directly conflict with the terms of the Plan
or this Award Agreement.
Adjustments to Your Award: Subject to the terms of the Plan, your Award will be
adjusted, if appropriate, to reflect any change to the Company’s capital
structure (e.g., the number of your Performance Shares will be adjusted to
reflect a stock split).
Other Rules: Your Award also is subject to more rules described in the Plan. You
should read the Plan carefully to ensure you fully understand all the terms and
conditions of this Award.
*****
You may contact Vtc at the address or number given below if you have any
questions about your Award or this Award Agreement.
*****
Your Acknowledgment of Award Conditions
Note: You must sign and return a copy of this Award Agreement to Vtc at the
address given below no later than Vte.
By signing below, I acknowledge and agree that:

  •   A copy of the Plan has been made available to me;     •   I understand and
accept the conditions placed on my Award;     •   I will consent (in my own
behalf and in behalf of my beneficiaries and without any further consideration)
to any change to my Award or this Award Agreement to avoid paying penalties
under Section 409A of the Code, even if those changes affect the terms of my
Award and reduce its value or potential value; and     •   I must return a
signed copy of this Award Agreement to the address shown below by Vte.

 

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                      VTA       A. SCHULMAN, INC.
 
                   
 
          By:                        
(signature)
                   
 
                    Date signed:       Date signed:    
 
                   

A signed copy of this Award Agreement must be sent to the following address no
later than Vte:
Vtc
A. Schulman, Inc.
Vtg
Vth
Vtd

 

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