Exhibit 10.10

 

POLYONE CORPORATION

 

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

(Effective December 9, 1993)

(Amended February 1, 1996, November 6, 1996, November 4, 1998, August 2, 2000,
September 6, 2000 and February 26, 2004)

 

ARTICLE I

PURPOSE OF THE PLAN

 

The purpose of the PolyOne Corporation (the “Company”) Deferred Compensation
Plan for Non-Employee Directors is to provide any Non-Employee Director of the
Company the option to defer receipt of the compensation payable for services as
a Director and to build loyalty to the Company through increased ownership in
the Company’s Common Stock.

 

ARTICLE II

DEFINITIONS

 

As used herein, the following words shall have the meaning stated after them
unless otherwise specifically provided:

 

2.1 “Calendar Year” shall mean the twelve month period January 1 through
December 31.

 

2.2 “Change of Control” shall mean:

 

(i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of voting securities of the
Company where such acquisition causes such Person to own 20% or more of the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not be deemed to result in a
Change of Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any corporation pursuant to
a transaction that complies with clauses (i), (ii) and (iii) of subsection (c)
below; provided, further, that if any Person’s beneficial ownership of the
Outstanding Company Voting Securities reaches or exceeds 20% as a result of a
transaction described in clause (i) or (ii) above, and such Person subsequently
acquires beneficial ownership of additional voting securities of the Company,
such

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subsequent acquisition shall be treated as an acquisition that causes such
Person to own 20% or more of the Outstanding Company Voting Securities; and
provided, further, that if at least a majority of the members of the Incumbent
Board determines in good faith that a Person has acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of the Outstanding Company Voting Securities inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares so that such
Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) less than 20% of the Outstanding Company Voting Securities, then
no Change of Control shall have occurred as a result of such Person’s
acquisition; or

 

(ii) individuals who, as of November 6, 1996, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
November 6, 1996 whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

 

(iii) The consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another corporation (“Business Combination”);
excluding, however, such a Business Combination pursuant to which (i) all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Voting
Securities, (ii) no Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of

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the Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or

 

(iv) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company;

 

except that, notwithstanding the foregoing, neither the transactions
contemplated by, nor any event, fact or circumstance arising out of or in
connection with, the Agreement and Plan of Consolidation, dated as of May 7,
2000, as amended as of August 15, 2000, by and between The Geon Company, M.A.
Hanna Company, and Consolidation Corp. (the “Consolidation Agreement”), shall
constitute, give rise to, or result in a “Change of Control” for the purposes of
this Plan.

 

2.3 “Committee” shall mean the Compensation Committee described in Section 8.1
hereof.

 

2.4 “Common stock” or “stock” means (i) for periods prior to the Effective Time,
Common Stock, $.10 par value, of The Geon Company, a Delaware corporation, and
(ii) for periods from and after the Effective Time, common shares, par value
$.01 per share, of PolyOne, including in both cases authorized and unissued
shares, treasury shares, and shares transferred from The Geon Share Ownership
Trust and/or the M.A. Hanna Company Associates Ownership Trust

 

2.5 “Company” means (i) for periods prior to the Effective Time, The Geon
Company, a Delaware corporation, and (ii) for periods from and after the
Effective Time, PolyOne.

 

2.6 “Effective Time” means the Effective Time as defined in the Consolidation
Agreement.

 

2.7 “Director” shall mean any non-employee director of the Company.

 

2.8 “PolyOne” means PolyOne Corporation, an Ohio corporation, the corporation
resulting from the consolidation contemplated by the Consolidation Agreement.

 

ARTICLE III

ELECTIONS BY DIRECTORS

 

3.1 Election to Defer. A Director may elect to defer receipt of the compensation
payable to him or her for future services as a Director. Such election shall be
made on an election form specified by the Committee (“Election Form”). Such
election shall indicate the portion of the Director’s compensation to be
invested in an interest-bearing account and the portion of such compensation to
be invested in Common Stock.

 

3.2 Effectiveness of Elections. Elections shall be effective and irrevocable
upon the delivery of an Election Form to the Committee. Subject to the
provisions of Article VI, amounts

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deferred pursuant to such elections shall be distributed at the time and in the
manner set forth in such election.

 

3.3 Amendment and Termination of Elections. A Director may terminate or amend
his or her election to defer receipt of compensation by written notice delivered
to the Committee prior to the commencement of the period with respect to which
such compensation will be earned. Amendments which serve only to change the
beneficiary designation shall be permitted at any time and as often as
necessary. Amounts credited to a Director’s Account pursuant to Section 5.2
hereof prior to the effective date of any termination or amendment shall not be
affected thereby and shall be paid at the time and in the manner specified in
the election form in effect when the deferral occurred.

 

ARTICLE IV

COMMON STOCK AVAILABLE UNDER THE PLAN

 

4.1 Common Stock. The aggregate number of shares of Common Stock that may be
granted under this Plan in any fiscal year of the Company during the term of
this Plan will be equal to one tenth of one percent (0.1 %) of the number of
shares of Common Stock outstanding as of the first day of that fiscal year.
Shares of Common Stock awarded to a Director as compensation pursuant to any
other plan or arrangement of the Company, the receipt of which the Director
defers pursuant to this Plan, shall not reduce the number of shares of Common
Stock that may be granted under this Plan in accordance with the immediately
preceding sentence.

 

4.2 Adjustment. In the event of any change in the Common Stock of the Company by
reason of a merger, consolidation, reorganization, or similar transaction, or in
the event of a stock dividend, stock split, or distribution to shareholders
(other than normal cash dividends), the Committee will adjust the number and
class of shares that may be issued under this Plan, the number and class of
shares subject to outstanding deferrals, and the fair market value of the Common
Stock, and other determinations applicable to outstanding awards.

 

ARTICLE V

ACCOUNTS

 

5.1 Accounts. The Company shall establish and maintain a Deferred Compensation
Account (an “Account”) for each Director who elects to defer compensation under
the Plan. If the Director elects to have deferred compensation invested in an
interest-bearing account, the Company shall credit the Account of the Director
with an amount equal to one hundred percent (100%) of the compensation deferred
pursuant to this Plan. Subject to the limitation stated in the last sentence of
this Section 5.1, in the event that a Director elects to have some or all of his
or her compensation invested in Common Stock, then the Company shall credit the
Account of the Director with an amount equal to one hundred twenty-five percent
(125%) of such compensation, in the form of a number of shares of Common Stock,
valued at its Fair Market Value. As used herein, the Fair Market Value of Common
Stock shall be the average of the high and low prices of the Company’s Common
Stock as reported on the composite tape for securities listed on the New York
Stock Exchange for the date immediately preceding the date of crediting the
Account, provided that if no sales of Common Stock were made on said exchange on
that date, the Fair Market Value shall be the average of the high and low prices
of Common Stock as reported on

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said composite tape for the preceding day on which sales of Common Stock were
made on said Exchange. The Accounts shall be credited as of the date on which
the compensation would otherwise have been paid to the Director, if not deferred
under the Plan. Notwithstanding the foregoing, in the event that a Director
elects to defer compensation that, but for the Director’s election to defer, the
Director would have received in the form of Common Stock (rather than cash or
some other non-stock form of compensation), then the Company shall credit the
Account of the Director with an amount equal to one hundred percent (100%) of
such compensation, in the form of the number of shares of Common Stock otherwise
payable to the Director under the plan or arrangement of the Company providing
for the payment of such compensation, valued as provided in the plan or
arrangement of the Company providing for the payment of such compensation or, if
no such provision is made, at its Fair Market Value.

 

5.2 Adjustment of Accounts. As of December 31 of each Calendar Year and on such
other dates as the Committee directs, the fair market value of the Account of
each Director shall be determined by crediting to the Account an amount equal to
the income earned during the Calendar Year, or other appropriate period, the
number of shares of Common Stock credited to the Account, and then determining
the fair market value of the shares and other amounts credited to the Account.

 

ARTICLE VI

PAYMENT OF ACCOUNTS

 

6.1 Time of Payment. Payment of the amount credited to a Director’s Account
shall commence upon a date which is not more than thirty days after the earlier
of (i) the attainment of the date specified (not younger than age 55) in his
Election Form or (ii) upon a Change of Control; provided, however, that no
Director who, immediately following the effectiveness of the consolidation
contemplated by the Consolidation Agreement, is a director of the corporation
resulting from the consolidation shall, for purposes of any such Election Form,
be deemed to have retired from or otherwise terminated his or her service as a
Director by reason of the consolidation.

 

6.2 [WITH RESPECT TO AMOUNTS DEFERRED PRIOR TO JANUARY 1, 1996] Method of
Payment. The amount credited to a Director’s Deferred Compensation Account shall
be paid, in whole or in part, to the Director in a lump sum and/or in annual
installments over a period of not more than ten years as specified in each
Director’s Election Form. Deferred Compensation Accounts shall be paid in kind,
in cash, or shares of Common Stock, as credited to the Account.

 

[WITH RESPECT TO AMOUNTS DEFERRED FROM AND AFTER JANUARY 1, 1996] Method of
Payment. The amount credited to a Director’s Deferred Compensation Account shall
be paid, in whole or in part, to the Director in a lump sum and/or in annual
installments over a period of not more than ten years as specified in each
Director’s Election Form. A Director may elect to change his or her original
payment period election, as specified in such Director’s Election Form;
provided, that (i) such change is approved by the Committee, and (ii) the
election to change is made at least 18 months prior to the date specified in the
electing Director’s Election Form on which payment of the amount credited to the
Director’s account is to commence, and such election to change shall apply to
all of the Director’s

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Election Forms with respect to amounts deferred under the Plan from and after
January 1, 1996. In the event that a Director who makes an election to change is
a member of the Committee, such Director shall abstain from the Committee’s
determination whether or not to approve the change. Deferred Compensation
Accounts shall be paid in kind, in cash, or shares of Common Stock, as credited
to the Account.

 

6.3 Hardship Distribution. Prior to the time a Director’s Account becomes
payable, the Committee, in its sole discretion, may elect to distribute all or a
portion of the Director’s Account in the event such Director requests a
distribution on account of severe financial hardship. For purposes of this Plan,
severe financial hardship shall be deemed to exist in the event the Committee
determines that a Director needs a distribution to meet immediate and heavy
financial needs resulting from a sudden or unexpected illness or accident of the
Director or a member of his or her family, loss of the Director’s property due
to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Director. A distribution
based on financial hardship shall not exceed the amount required to meet the
immediate financial need created by the hardship. The amount of a Director’s
Account shall be reduced by the amount of any hardship distribution to such
Director.

 

6.4 Designation of Beneficiary. Upon the death of a Director, the amount
credited to his or her Account shall be paid to the beneficiary or beneficiaries
designated by him or her. If there is no designated beneficiary, or no
designated beneficiary surviving at a Director’s death, payment of a Director’s
Account shall be made to his or her estate. Beneficiary designations shall be
made in writing. A Director may designate a new beneficiary or beneficiaries at
any time by notifying the Committee.

 

6.5 Taxes. In the event any taxes are required by law to be withheld or paid
from any payments made pursuant to the Plan, the appropriate amounts shall be
deducted from such payments and transmitted to the appropriate taxing authority.

 

ARTICLE VII

CREDITORS

 

7.1 Claims of the Company’s Creditors. The rights of a Director or his or her
beneficiaries to any payment under the Plan shall be no greater than the rights
of an unsecured creditor of the Company.

 

ARTICLE VIII

ADMINISTRATION

 

8.1 Appointment of Committee. The Board of Directors of the Company shall
appoint a Committee consisting of not less than three persons to administer the
Plan. Members of the Committee shall hold office at the pleasure of the Board of
Directors and may be dismissed at any time with or without cause. Such persons
serving on the Committee need not be members of the Board of Directors of the
Company.

 

8.2 Powers of the Committee. The Committee shall administer the Plan and resolve
all questions of interpretation arising under the Plan with the help of legal
counsel, if necessary.

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Whenever directions, designations, applications, requests or other notices are
to be given by a Director under the Plan, they shall be filed with the
Committee. The Committee shall have no discretion with respect to Plan
contributions or distributions but shall act in an administrative capacity only.
Except as provided in the immediately following sentence, all decisions by the
Committee will be made with the approval of not less than a majority of its
members. In furtherance and not in limitation of the authority granted in clause
(vi) of this paragraph, any interpretation by a majority of the Incumbent
Directors then serving on the Committee as to whether a sale or other
disposition of assets by the Company or an acquisition of assets of another
corporation constitutes a “sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets of another
corporation” for purposes of clause (iii) of the definition of “Change of
Control” in Section 2.2 hereof shall be final and binding for all purposes of
this Plan and any Accounts hereunder, notwithstanding that the transaction in
question was, or is contemplated to be, submitted to stockholders of the Company
for their approval and notwithstanding such approval.

 

ARTICLE IX

MISCELLANEOUS

 

9.1 Term of Plan. The Plan shall terminate on the tenth anniversary of the
approval of the Plan, as amended, by the shareholders at the 2004 Annual Meeting
of Shareholders. Once the Plan has terminated, no further shares of Common Stock
shall be granted; provided, however, that any Accounts then existing shall
continue in accordance with the provisions of the Plan until the Accounts are
paid out in accordance with the provisions of Article VI. The Company reserves
the right to amend or terminate the Plan at any time; provided, however, that no
amendment or termination shall affect the rights of Directors to amounts
previously credited to their Accounts pursuant to Section 5.1 or to future
income to be credited to their Accounts pursuant to Section 5.2.

 

9.2 Assignment. No right or interest of any Director (or any person claiming
through or under such Director) in any benefit or payment herefrom other than
the surviving spouse of such Director after he or she is deceased, shall be
assignable or transferable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance, or other legal process or in any manner
be liable for or subject to the debts or liabilities of such Director. If any
Director or any such person (other than the surviving spouse of such Director
after he or she is deceased) shall attempt to or shall transfer, assign,
alienate, anticipate, sell, pledge, or otherwise encumber his or her benefits
hereunder or any part thereof, or if by reason of his or her bankruptcy or other
event happening at any time such benefits would devolve upon anyone else or
would not be enjoyed by him or her, then the Committee, in its discretion, may
terminate his or her interest in any such benefit to the extent the Committee
considers necessary or advisable to prevent or limit the effects of such
occurrence. Termination shall be effected by filing a written “termination
declaration” with the Committee records and making reasonable efforts to deliver
a copy to such Director or his or her legal representative.

 

As long as any Director is alive, any benefits affected by the termination may,
in the Committee’s sole and absolute judgment, be paid to or expended for the
benefit of such Director, his or her spouse, his or her children or any other
person or persons in fact dependent upon him or her in such a manner as the
Committee shall deem proper. Upon the death of any Director, all

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benefits withheld from him or her and not paid to others in accordance with the
preceding sentence shall be distributed to such Director’s estate or to his or
her creditors and if such Director shall have descendants, including adopted
children, then living, distribution shall be made to such Director’s then living
descendants, including adopted children, per stirpes.

 

9.3 Effective Date of Plan. The Plan shall be effective as of December 9, 1993,
subject to approval by the stockholders of the Company. Any amounts credited to
a Director’s Deferred Compensation Account prior to such stockholder approval
shall be contingent on such approval.