Exhibit 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made
and entered into as of the 17th day of December, 2008, by and between A.
SCHULMAN, INC., a Delaware corporation (the “Employer” or “Company”), and Paul
F. DeSantis (the “Employee”).
     WHEREAS, the Employer and the Board of Directors of the Company desire to
provide for the continued employment of the Employee as a member of the
Employer’s management, in the best interest of the Company and its stockholders.
The Employee is willing to commit himself to continue to serve the Employer, on
the terms and conditions herein provided;
     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, the parties hereto agree as follows:
     1. DEFINED TERMS
     The definitions of capitalized terms used in this Agreement (unless stated
where first used) are provided in Section 20 hereof.
     2. EMPLOYMENT
     The Employer hereby agrees to continue to employ Employee as Vice
President, Chief Financial Officer and Treasurer for the Employer, and the
Employee hereby accepts such employment on the terms and conditions herein
contained.
     3. DUTIES AND CONDITIONS OF EMPLOYMENT
          3.1 DUTIES. The Employee shall devote his entire business time,
attention and energies to the Employer and shall not engage in any conduct which
shall reflect adversely upon the Employer. The Employee shall perform such
duties for the Employer as may be assigned to one in his executive status and
capacity by the Chief Executive Officer of the Company or the Board of the
Company. The Employee shall serve diligently and to the best of his ability.
     During his employment by the Employer, the Employee shall not, without the
Company’s prior written consent, be engaged in any other business activity,
whether or not such business activity is pursued for gain, profit or other
pecuniary advantage, except that notwithstanding the foregoing, he may invest
his personal funds for his own account; provided that such investment shall be
passive and not controlling in any such investment and subject to the provisions
of Section 13.2 hereof and provided further that he will not be required to
provide any substantial services on behalf of such enterprise. Notwithstanding
the foregoing, the Employee may serve on the Boards of Directors of other
corporations during the Term as long as the Employee notifies the Employer’s
Chief Executive Officer and the Chief Executive Officer determines that such
service will not interfere with the performance of Employee’s duties hereunder.

 

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          3.2 CONDITIONS. The Employee shall be provided with suitable office
space, furnishings, secretarial and administrative assistance. Without the
Employee’s consent, the Employee shall not be required to report principally to
an office located more than five hundred (500) miles from his principal office
at the date of this Agreement, except to the extent the Employee may be required
to report to the Company’s principal office.
     4. TERM OF AGREEMENT; TERMINATION OF EMPLOYMENT; ESCROW DURING DISPUTE
          4.1 TERM OF AGREEMENT. The Employer hereby employs the Employee for a
Term commencing as of January 1, 2009 and ending December 31, 2009 (“Initial
Term”); provided, however, at the end of the Initial Term and any subsequent
Extended Term, this Agreement shall automatically be extended for a term of one
(1) year (“Extended Term”) unless either party shall give notice to the other of
non-extension not less than thirty (30) days prior to the expiration of the
Initial Term or any Extended Term; provided, further, however, that if a Change
in Control shall have occurred during the Term of this Agreement, Sections 7 and
8 and 10 through 21 of this Agreement shall continue in effect until at least
the end of the Change-in-Control Protective Period (whether or not the Term of
the Agreement shall have expired for other purposes).
          4.2 TERMINATION OF EMPLOYMENT. The Company may terminate the
employment of the Employee for Cause pursuant to this Agreement. Prior to any
Change in Control, the Employee may terminate his employment pursuant to this
Agreement if the Employer fails to make full and timely payments of all sums
provided for in Sections 5 and 6 hereof (subject to Section 7.2 hereof), or
otherwise shall breach its covenants hereunder in any material respect
(“Resignation for Cause”). A termination of employment by the Employee due to
Resignation for Cause will entitle the Employee to the same benefits as if the
Employee’s employment was terminated without Cause.
          4.3 ESCROW DURING A TERMINATION DISPUTE. Prior to any Change in
Control, if the Employee shall be terminated for Cause, and, within thirty
(30) days of such termination, shall notify the Employer of his intention to
adjudicate such termination as improper, the Employer agrees that it will
deposit with JP Morgan Chase, Cleveland, Ohio, as Escrow Agent the installments
of the Employee’s Base Salary (as provided in Section 5 below) as the same would
have become payable but for such termination. In the event of a final
adjudication by a tribunal of competent jurisdiction that such termination was
not for Cause, then the amounts so deposited in escrow, plus any interest earned
by the Escrow Agent thereon, shall be delivered promptly to the Employee. If
such adjudication shall be in favor of the Employer, the Escrow Agent shall
return the sums so deposited, plus such interest, to the Employer.
     The escrowed salary shall not be deemed to be liquidated damages but the
Employer shall be entitled to a credit against any such award to the extent of
the sums so delivered to the Employee.

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     5. COMPENSATION
     The Employer agrees to pay to the Employee as compensation for his services
hereunder a Base Salary initially equal to the fixed annual salary currently
being paid to the Employee as shown on the Employer’s employment records,
payable in substantially equal weekly, biweekly, bimonthly or monthly
installments, as the case may be, in a manner consistent with the Employer’s
payroll practices. The Base Salary may be discretionarily increased by the Board
from time to time as the Board deems appropriate in its reasonable business
judgment. The Base Salary in effect from time to time shall not be decreased
during the Term (except as provided in Section 7.2).
     It is understood and agreed that the Employee’s compensation may not be
limited to his Base Salary and that the Employee may receive an annual bonus
(“Bonus”) in an amount, if any, determined annually by the Employer. During the
Initial Term, Employee will be eligible to participate in an annual bonus plan
at a target based on 50% of Base Salary.
     The Employee shall also participate in employee compensation and benefit
plans available generally to executives of the Employer (including, without
limitation, any tax-qualified profit sharing plan, nonqualified profit sharing
plan, life insurance plan and health insurance plan) on a level appropriate to
his position and shall receive the employee fringe benefits available generally
to executives of the Employer (including, without limitation, cellular
telephone/pager, laptop computer and printer) in accordance with Employer
policies.
     6. EXPENSES
     The Employee is authorized to incur reasonable expenses for promoting the
business of the Employer, including expenses for entertainment, travel and
similar items. The Employer shall reimburse the Employee in accordance with the
Employer’s policy for all such expenses upon the presentation by the Employee,
from time to time, of an itemized account of such expenditures.
     7. PRE-TERMINATION COMPENSATION; DISABILITY
          7.1 NORMAL PRE-TERMINATION COMPENSATION. If the Employee’s employment
shall be terminated for any reason during the Term (or, if later, prior to the
end of the Change-in-Control Protective Period), the Employer shall pay the
Employee’s Base Salary to the Employee through the Date of Termination at the
rate in effect at the time the Notice of Termination is given (subject to
Section 7.2 hereof) within thirty (30) days following the Date of Termination,
together with all compensation and benefits payable to the Employee through the
Date of Termination under the terms of any compensation or benefit plan, program
or arrangement maintained by the Employer during such period. Subject to
Sections 8, 9, 10 and 11 hereof, after completing the expense reimbursements
required by Section 6 hereof and making the payments and providing the benefits
required by this Section 7, the Employer shall have no further obligations to
the Employee under this Agreement.
          7.2 DISABILITY ADJUSTMENT TO BASE SALARY PAYMENTS. During the Term
(or, if later, at any time prior to the end of the Change-in-Control Protective
Period),

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during any period that the Employee is Disabled (but in no event for more than
twenty-four (24) months) (the “Disability Period”), the Employer shall pay only
sixty percent (60%) of the Employee’s Base Salary to the Employee at the rate in
effect at the commencement of any such Disability Period (less amounts, if any,
payable to the Employee at or prior to the time of any such Base Salary payment
under disability benefit plans of the Employer or under the Social Security
disability insurance program). After six (6) months of Disability, the Employer
shall have the right to terminate the Employee’s employment pursuant to this
Agreement and all Base Salary payments shall cease; provided, however, that the
sixty percent (60%) payments pursuant to the foregoing sentence shall continue
for the Disability Period. All payments made pursuant to this Section 7.2 shall
be made in accordance with the regular payroll practices of the Employer. Except
to the extent provided in this Section 7.2, all Base Salary payments to the
Employee shall be abated during the Disability Period. Subject to Sections 8, 9,
10 and 11 hereof, after completing the expense reimbursements required by
Section 6 hereof and making the payments and providing the benefits required by
this Section 7, the Employer shall have no further obligations to the Employee
under this Agreement.
     8. NORMAL POST-TERMINATION PAYMENTS; CONTINUATION PAY; TERMINATION PAY;
PROMPT PAYMENT
     Whenever used in this Agreement, the word “terminate” or “termination” in
connection with the Employee’s employment shall mean the Employee’s “separation
from service,” within the meaning of section 409A of the Code and Treasury
Regulation section 1.409A-1(h), from the Employer and any person with whom the
Employer would be considered a single employer under sections 414(b) and (c) of
the Code.
          8.1 NORMAL POST-TERMINATION PAYMENTS. If the Employee’s employment
shall be terminated for any reason during the Term of this Agreement (or, if
later, prior to the end of the Change-in-Control Protective Period), the
Employer shall pay the Employee’s normal post-termination compensation and
benefits to the Employee as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Employer’s retirement, insurance and other compensation or benefit
plans, programs and arrangements (other than this Agreement).
          8.2 CONTINUATION PAY; TERMINATION PAY. Notwithstanding anything to the
contrary in Section 7.2, 9.1 or 10.1(A) hereof, if the laws governing this
Agreement shall require that the Employer continue to pay or otherwise
compensate the Employee for any period of time following termination of the
Employee’s employment (“Continuation Pay”) or if such laws require certain
amounts of severance pay, termination compensation or the like (collectively,
“Termination Pay”), then to the fullest extent permitted by law any payments to
the Employee pursuant to Section 7.2, 9.1 or 10.1(A) hereof shall be included in
the calculation of Continuation Pay and Termination Pay and such payments shall
be deducted from the amount of Continuation Pay or Termination Pay due the
Employee.

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          8.3 TIME OF PAYMENT.
               (A) Any payments due under Section 5, 6, 7 or 9 hereof or this
Section 8 shall be made as specified in such sections and shall be made to the
Employee or in accordance with Section 14.2 hereof, as the case may be.
               (B) Notwithstanding anything in this Agreement to the contrary,
if the Employee is a “specified employee,” within the meaning of section 409A of
the Code and as determined under the Company’s policy for determining specified
employees, on the Date of Termination, all payments under this Agreement that
are subject to section 409A of the Code and become payable in connection with
the Employee’s termination shall not be paid (or commence to be paid) until the
first business day of the seventh month following the Date of Termination (or,
if earlier, the Employee’s death). The first payment that can be made shall
include the cumulative amount of any amounts that could not be paid during such
postponement period.
     9. POST-TERMINATION PAYMENTS UPON TERMINATION (PRIOR TO A CHANGE IN
CONTROL) BY DEATH OR BY THE EMPLOYER WITHOUT CAUSE
          9.1 DEATH BENEFIT. If the Employee’s employment shall be terminated by
death during the Term and prior to a Change in Control, then, in addition to the
compensation and benefits provided by Sections 7.1 and 8 hereof, within ninety
(90) days following the Employee’s death, the Employer shall pay a lump sum
amount equal to sixty percent (60%) of the Base Salary for twenty-four (24)
months in accordance with Section 14.2.
          9.2 TERMINATION BY THE EMPLOYER WITHOUT CAUSE. If the Employer shall
terminate the Employee’s employment during the Initial Term or any Extended Term
and prior to a Change in Control, without Cause (and not for Disability or in
connection with the Employee’s death), the Employer shall pay the Employee
commencing within sixty (60) days following termination, in consideration of
Employee’s obligations under Section 13.2, and only if those obligations
continue to be met during this payment period: (a) his Base Salary for a period
of one (1) year in accordance with Employer’s regular payroll practices; and
(b) a bonus payment in a lump sum equal to one-half (1/2) times the average
annual Bonus paid to the Employee during the most recent five (5) calendar years
of the Employee’s employment by the Company or such shorter period during which
Employee has been employed, if less than five (5) years.
     10. SEVERANCE PAYMENTS; EXCISE TAX GROSS-UP
          10.1 SEVERANCE PAYMENTS. The Employer shall pay the Employee the
payments described in this Section 10.1 (the “Severance Payments”) upon the
termination of the Employee’s employment following a Change in Control and prior
to the end of the Change-in-Control Protective Period, in addition to any
payments and benefits to which the Employee is entitled under Sections 5, 6, 7
and 8.1 hereof, unless such termination is (i) by the Employer for Cause,
(ii) by reason of death or Disability, or (iii) by the Employee without Good
Reason. For purposes of this Agreement, the Employee’s employment shall be
deemed to have been terminated by the Employer without Cause following a Change
in Control or by the Employee with Good Reason following a Change in Control, as
the case may be, if (i) the Employee’s

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employment is terminated without Cause prior to a Change in Control and such
termination was at the request or direction of a Person who has entered into an
agreement with the Employer the consummation of which would constitute a Change
in Control, (ii) the Employee terminates his employment with Good Reason prior
to a Change in Control and the circumstance or event which constitutes Good
Reason occurs at the request or direction of such Person, or (iii) the
Employee’s employment is terminated by the Employer without Cause prior to a
Change in Control (but following a Potential Change in Control) and such
termination is otherwise in connection with or in anticipation of a Change in
Control which actually occurs. For purposes of any determination regarding the
applicability of the immediately preceding sentence, any position taken by the
Employee shall be presumed to be correct unless the Employer establishes to the
Committee by clear and convincing evidence that such position is not correct.
               (A) In lieu of any further salary payments to the Employee for
periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Employee, the Employer shall pay to the
Employee a lump sum severance payment, in cash, equal to three (3) times the sum
of (i) the higher of the Employee’s Base Salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of Termination
is based or the Employee’s Base Salary in effect immediately prior to the Change
in Control, and (ii) the higher of the annual Bonus earned by the Employee in
respect of the Employer’s fiscal year immediately preceding that in which the
Date of Termination occurs, or the average annual Bonus so earned in respect of
the three fiscal years immediately preceding that in which the Change in Control
occurs. One-third of this lump sum severance payment shall be in consideration
of Employee’s obligations under Section 13.2.
               (B) Notwithstanding any provision of any annual incentive plan to
the contrary, the Employer shall pay to the Employee a lump sum amount, in cash,
equal to the sum of (i) any annual incentive compensation which has been
allocated or awarded to the Employee for a completed fiscal year preceding the
Date of Termination and which, as of the Date of Termination, is contingent only
upon the continued employment of the Employee to a subsequent date, and (ii) a
pro rata portion to the Date of Termination of a deemed annual bonus for the
Employer’s fiscal year in which the Date of Termination occurs, calculated by
multiplying (i) the higher of the annual Bonus earned by the Employee with
respect to the immediately preceding fiscal year or the average annual Bonus
earned by the Employee with respect to the immediately preceding three fiscal
years of the Employer by (ii) the fraction obtained by dividing the number of
days in the fiscal year of the Employer in which termination occurs up to and
including the Date of Termination by 365.
               (C) For the thirty-six (36) month period immediately following
the Date of Termination, the Employer shall arrange to provide the Employee with
life, disability, accident and health insurance benefits substantially similar
to those which the Employee is receiving immediately prior to the Notice of
Termination (without giving effect to any amendment to such benefits made
subsequent to a Change in Control, which amendment adversely affects in any
manner the Employee’s entitlement to or the amount of such benefits); PROVIDED,
HOWEVER, that, unless the Employee consents to a different method, such health
insurance benefits shall be provided through a third-party insurer. Benefits
otherwise receivable by the Employee pursuant to this Section 10.1(C) shall be
reduced to the extent comparable benefits are actually received by or made
available to the Employee without cost during the thirty-six (36)

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month period following the Employee’s termination of employment (and any such
benefits actually received by or made available to the Employee shall be
reported to the Employer by the Employee). Notwithstanding the foregoing, any
benefits or payments provided under this Section 10.1(C) shall be subject to the
following: (i) the amount of expenses eligible for reimbursement or benefits
provided under this Section 10.1(C) during any taxable year of the Employee may
not affect the expenses eligible for reimbursement or the benefits to be
provided to the Employee in any other taxable year; (ii) the reimbursement of an
eligible expense must be made on or before the last day of the Employee’s
taxable year following the taxable year in which the expense was incurred; and
(iii) the right to reimbursement or such benefits may not be subject to
liquidation or exchange for another benefit.
          10.2 EXCISE TAX GROSS-UP.
               (A) Notwithstanding any other provisions of this Agreement, in
the event that any payment, benefit or right paid or distributed, or treated as
paid or distributed, to or for the benefit of the Employee in connection with a
Change in Control or termination of the Employee’s employment (whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement with
the Employer, any Person whose actions result in a Change in Control or any
Person affiliated with the Employer or such Person) (each such payment, benefit
and right, including any Severance Payment, being hereinafter referred to as a
“Payment” and, collectively, “Payments”) is subject to the excise tax imposed by
section 4999 of the Code (the “Excise Tax”), then the Employee shall be entitled
to receive an additional payment (a “Gross-Up Payment”) equal to the Excise Tax
imposed upon the Payments.
               (B) Subject to the provisions of Section 10.2(C), all
determinations under this Section 10.2, including whether a Gross-Up Payment is
required and the amount of the Gross-Up Payment, shall be made by a certified
public accounting firm which was, immediately before the Change in Control, the
Employer’s certified public accounting firm (the “Accounting Firm”). The
Accounting Firm shall provide detailed supporting calculations to both the
Employer and the Employee within ten (10) business days after receipt of notice
from the Employer or the Employee that there has been a Payment, or such earlier
time as is requested by the Employer. All fees and expenses of the Accounting
Firm shall be borne solely by the Employer. The initial Gross-Up Payment
determined pursuant to this Section 10.2(B) shall be paid by the Employer to the
Employee within five (5) days after it receives the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding on the
Employer and the Employee. Notwithstanding the foregoing, as a result of
uncertainty in applying section 4999 of the Code, it is possible that the
Employer will not have made Gross-Up Payments that it should have made hereunder
(an “Underpayment”). If the Employer exhausts its remedies pursuant to
Section 10.2(C) and the Employee thereafter is required to pay any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment, inform the
Employer and the Employee of the Underpayment in writing, and, within five
(5) days of receiving such written report, the Employer shall pay the amount of
such Underpayment to the Employee.
               (C) The Employee shall notify the Employer in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Employer of the Gross-Up Payment. Such notification shall be
given as soon as practicable but not later than five (5) business days after the
Employee is informed in writing of such claim and shall apprise the Employer of
the nature of such claim and the date on which such claim is required to be
paid.

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The Employee shall not pay such claim before the expiration of thirty (30) days
following the date on which he gives such notice to the Employer (or such
shorter period ending on the date that any payment of taxes with respect to such
is due). If the Employer notifies the Employee in writing before the expiration
of such thirty (30) day period that it desires to contest such claim, the
Employee shall (i) give the Employer any information reasonably requested by the
Employer relating to such claim, and (ii) take such action in connection with
contesting such claim as the Employer shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Employer, provided that the
Employer shall pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Employee harmless, on an after-tax basis, for any tax,
including interest and penalties, imposed as a result of such representation and
payment of costs and expenses. The Employer shall control all proceedings in
connection with such contest and may, at its sole option, either direct the
Employee to pay the tax claimed and sue for a refund or to contest the claim in
any permissible manner, and the Employee agrees to prosecute such contest to a
determination before any appropriate administrative tribunal or court, as the
Employer shall determine; provided, that if the Employer directs the Employee to
pay such claim and sue for a refund, the Employer shall advance the amount of
such payment to the Employee, on an interest-free basis, and shall indemnify and
hold the Employee harmless, on an after-tax basis, from any tax, including
interest or penalties, imposed with respect to such advance. The Employer’s
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder, and the Employee shall be entitled
to settle or contest any other issue.
               (D) If, after the Employee receives an advance by the Employer
pursuant to Section 10.2(C), the Employee becomes entitled to receive a refund
claimed pursuant to such Section 10.2(C), the Employee shall (subject to the
Employer’s complying with the requirements of such Section 10.2(C)) promptly pay
to the Employer the amount of such refund (together with any interest thereon,
after taxes applicable thereto). If, after the Employee receives an amount
advanced by the Employer pursuant to Section 10.2(C), a determination is made
that the Employee shall not be entitled to any refund claimed pursuant to such
Section 10.2(C), and the Employer does not notify the Employee in writing of its
intent to contest such denial of refund before the expiration of thirty
(30) days after such determination, the Employee shall not be required to repay
such advance, and the amount of such advance shall offset, to the extent
thereof, the amount of the required Gross-Up Payment.
               (E) Notwithstanding anything in this Section 10.2 to the
contrary, any Gross-Up Payment under this Section 10.2 shall be made by
December 31 of the calendar year immediately following the calendar year in
which the Employee remits the related Excise Tax.
          10.3 Except as provided in Section 8.3 hereof, the payments provided
in Sections 10.1(A) and (B) hereof shall be made within sixty (60) days
following the later of (A) the Date of Termination or (B) the Change in Control.
          At the time that payments are made under this Section, the Employer
shall provide the Employee with a written statement setting forth the manner in
which such payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the Employer has
received from outside counsel, auditors or consultants (and any such opinions or
advice which are in writing shall be attached to the statement).

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          10.4 The Employer also shall pay to the Employee all legal fees and
expenses incurred by the Employee (i) in disputing in good faith any issue
relating to the termination of the Employee’s employment following a Change in
Control and prior to the end of the Change-in-Control Protective Period, (ii) in
seeking in good faith to obtain or enforce any benefit or right provided by this
Agreement, or (iii) in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made within five (5) business
days after delivery of the Employee’s written requests for payment accompanied
with such evidence of fees and expenses incurred as the Employer reasonably may
require.
          10.5 In consideration of, and as a pre-condition to, receipt of any of
the payments or benefits set forth in this Section 10 or under Section 9 hereof,
Employee shall execute and deliver to Employer a written release no later than
thirty (30) days after the event of termination, in a manner compliant with the
respective requirements for release of claims under the Age Discrimination in
Employment Act and the Older Workers Benefit Protection Act, pursuant to which
Employee shall fully and forever surrender, release, acquit and discharge the
Employer, and its principals, stockholders, directors, officers, agents,
administrators, insurers, subsidiaries, affiliates, employees, successors,
assigns, related entities, and legal representatives, personally and in their
representative capacities, and each of them (collectively, “Released Parties”),
of and from any and all claims for costs of attorneys’ fees, expenses,
compensation, and all losses, demands and damage of whatsoever nature or kind in
law or in equity, whether known or unknown, including without limitation those
claims arising out of, under, or by reason of Employee’s employment with the
Employer or any of the Companies, Employee’s relationship with the Employer or
any of the Companies and/or any termination of Employee’s employment
relationship and any and all claims which were or could have been asserted in
any charge, complaint, or related lawsuit. Notwithstanding the foregoing, no
such release shall constitute a waiver of, or in any manner restrict or limit,
the Employee’s rights of indemnification relating to his status as an officer of
the Employer, whether arising under Delaware law, contractually, or under
Employer’s insurance coverage.

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     11. TERMINATION PROCEDURES
          11.1 NOTICE OF TERMINATION. During the Term (and, if longer, until the
end of the Change-in-Control Protective Period), any purported termination of
the Employee’s employment (other than by reason of death) shall be communicated
by written Notice of Termination from one party hereto to the other party hereto
in accordance with Section 15 hereof. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee’s employment under the provision so indicated.
Further, with respect to any purported termination of the Employee’s employment
after a Change in Control and prior to the end of the Change-in-Control
Protective Period, a Notice of Termination for Cause is required to include a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a meeting of the
Board which was called and held for the purpose of considering such termination
(after reasonable notice to the Employee and an opportunity for the Employee,
together with the Employee’s counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Employee was guilty of conduct
set forth in clause (i) or (ii) of the definition of Cause herein, and
specifying the particulars thereof in detail.
          11.2 DATE OF TERMINATION. “Date of Termination,” with respect to any
purported termination of the Employee’s employment during the Term (and, if
longer, prior to the end of the Change-in-Control Protective Period), shall mean
the date of the Employee’s “separation from service” within the meaning of
section 409A of the Code and Treasury Regulation section 1.409A-1(h). Any Notice
of Termination relating to a termination for Disability shall be provided thirty
(30) days prior to the Date of Termination (provided that the Employee shall not
have returned to the full-time performance of the Employee’s duties during such
thirty (30) day period). Any Notice of Termination relating to the termination
of the Employee’s employment by the Employer for any other reason shall be
provided not less than thirty (30) days prior to the Date of Termination (except
in the case of a termination for Cause). Any Notice of Termination relating to
the termination of the Employee’s employment by the Employee for any other
reason shall be provided not less than fifteen (15) days nor more than sixty
(60) days prior to the Date of Termination.
     12. NO MITIGATION
     The Employer agrees that, if the Employee’s employment with the Employer
terminates following a Change in Control and prior to the end of the
Change-in-Control Protective Period, the Employee is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Employee by the Employer pursuant to Section 10 hereof. Further, the amount of
any payment or benefit provided for in this Agreement (other than
Section 10.1(C) hereof) shall not be reduced by any compensation earned by the
Employee as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Employee to the
Employer, or otherwise.
     13. CONFIDENTIALITY; NON-COMPETITION AND NON-SOLICITATION

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          13.1 CONFIDENTIALITY. The Companies’ methods, plans for doing
business, processes, pricing, compounds, customers and supplies are vital to the
Companies and, to the extent not made public by the Companies, constitute
confidential information subject to the Companies’ proprietary rights therein.
The Employee covenants and agrees that during the Term and at all times
thereafter, the Employee will not, directly or indirectly, make known, divulge,
furnish, make available or use, otherwise than in the regular course of the
Employee’s employment by the Employer, any invention, product, process,
apparatus or design of any of the Companies, or any knowledge or information in
respect thereof (including, but not limited to, business methods and
techniques), or any other confidential or so-called “insider” information of any
of the Companies. This covenant shall apply without regard to the time or
circumstances of any termination of the Employee’s employment.
          13.2 NON-COMPETITION AND NON-SOLICITATION. The Employee covenants and
agrees that during the period of one (1) year following any termination of the
Employee’s employment, the Employee will not, directly or indirectly, either as
an individual for the Employee’s own account or as an investor, or other
participant in, or as an employee, agent, or representative of, any other
business enterprise:
          (i) solicit, employ, entice, take away or interfere with, or attempt
to solicit, employ, entice, take away or interfere with, any employee of the
Employer or the Companies; or
          (ii) engage or participate in or finance, aid or be connected with any
enterprise which competes with the business of the Companies, or any of them.
     The geographical limitations of the foregoing shall include any country in
which the Companies or any of them shall be doing business as of such date of
such termination.
          13.3 The Employee acknowledges that the covenants contained in this
Section 13 are of the essence of this Agreement and said covenants shall be
construed as independent of any other provisions of this Agreement. Recognizing
the irreparable nature of the injury that could result from the Employee’s
violation of any of the covenants and agreement to be performed and/or observed
by the Employee pursuant to the provisions of this Section 13, and that damages
would be inadequate compensation, it is agreed that any violations by the
Employee of the provisions of this Section 13, shall be the proper subject for
immediate injunctive and other equitable relief to the Employer.
     14. SUCCESSORS; BINDING AGREEMENT
          14.1 In addition to any obligations imposed by law upon any successor
to the Employer, the Employer will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Employer to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Employer would be required to perform it if no such succession
had taken place. Failure of the Employer to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Employee to terminate the Employee’s employment
for Good Reason after a Change in Control.

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Except as provided in this Section 14.1, this Agreement shall not be assignable
by either party without the written consent of the other party hereto.
          14.2 This Agreement shall inure to the benefit of and be enforceable
by the Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Employee shall
die while any amount would still be payable to the Employee hereunder (other
than amounts which, by their terms, terminate upon the death of the Employee) if
the Employee had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Employee’s estate.
     15. NOTICES
     For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid, addressed, if to the Employee, to the
address shown for the Employee in the personnel records of the Employer and, if
to the Employer, to the address set forth below, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon actual
receipt:
To the Employer:
Cathy Brown, Director of Human Resources
A. Schulman, Inc.
P.O. Box 1710
Akron, Ohio 44309-1710
With a copy to:
J. Bret Treier
Vorys, Sater, Seymour and Pease LLP
106 South Main Street, Suite 1100
Akron, Ohio 44308
     16. MISCELLANEOUS
     No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by the
Employee and such officer as may be specifically designated by the Board. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. This Agreement supersedes any other agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof which
have been made by either party, except as expressly set forth in this Agreement.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Ohio. All references

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to sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for hereunder shall
be paid net of any applicable withholding required under federal, state or local
law and any additional withholding to which the Employee has agreed. The
obligations of the Employer and the Employee under this Agreement which by their
nature may require (partial or total) performance after the expiration of the
Term or the Change-in-Control Protective Period (including, without limitation,
those under Sections 5 through 11 and Section 13 hereof) shall survive such
expiration.
     17. VALIDITY
     The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
     18. COUNTERPARTS
     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.
     19. SETTLEMENT OF DISPUTES AFTER CHANGE IN CONTROL; ARBITRATION
     After a Change in Control and prior to the end of the Change-in-Control
Protective Period, all claims by the Employee for benefits under this Agreement
shall be directed to and determined by the Committee and shall be in writing.
Any denial by the Committee of a claim for benefits under this Agreement shall
be delivered to the Employee in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The
Committee shall afford a reasonable opportunity to the Employee for a review of
the decision denying a claim and shall further allow the Employee to appeal to
the Committee a decision of the Committee within sixty (60) days after
notification by the Committee that the Employee’s claim has been denied. Any
further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Akron, Ohio, in
accordance with the rules of the American Arbitration Association with respect
to employment disputes then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. Notwithstanding any
provision of this Agreement to the contrary, the Employee shall be entitled to
seek specific performance of the Employee’s right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
     20. DEFINITIONS
     For purposes of this Agreement, the following terms shall have the meanings
indicated below:
     (A) “Accounting Firm” shall have the meaning stated in Section 10.2(B)
hereof.

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     (B) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under
the Exchange Act.
     (C) “Board” shall mean the Board of Directors of the Employer.
     (D) “Cause” for termination by the Employer of the Employee’s employment
shall mean the following:
          (i) any act of fraud, embezzlement, misappropriation or conversion by
the Executive of the assets or business opportunities of the Employer;
          (ii) conviction of the Employee of (or plea by the Executive of guilty
to) a felony (or a misdemeanor that originally was charged as a felony but was
reduced to a misdemeanor as part of a plea bargain);
          (iii) intentional and repeated material violations by the Employee of
the Employer’s written policies or procedures or intentional and material breach
of any contract with or violation of any legal obligation owed to the Employer
provided that a breach or violation shall be considered intentional and material
only if the Employee fails to cure to the best of the Employee’s ability such
breach within thirty (30) days after delivery to the Employee of a written
notice from the Board specifying such breach; or
          (iv) willful engagement in gross misconduct or intentional
misrepresentation that is materially and demonstrably injurious to the Employer,
provided that such breach is not cured within thirty (30) days after delivery to
the Employee of a written notice requesting cure.
     For purposes of the above definition, no act or failure to act, on
Employee’s part shall be deemed “willful” unless done, or omitted to be done, by
the Employee not in good faith and without reasonable belief that the Employee’s
act or failure to act, was in the best interest of the Employer. In the event of
a dispute concerning the application of the definition of Cause, no claim by the
Employer that Cause exists shall be given effect unless the Employer establishes
to the Committee by clear and convincing evidence that Cause exists.
     (E) A “Change in Control” shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred:
          (i) the acquisition by any person (as defined under section 409A of
the Code), or more than one person acting as a group (as defined under section
409A of the Code), of stock of the Company that, together with the stock of the
Company held by such person or group, constitutes more than fifty percent (50%)
of the total fair market value or total voting power of the stock of the
Company;
          (ii) the acquisition by any person, or more than one person acting as
a group, within any twelve (12) month period, of stock of the Company possessing
thirty percent (30%) or more of the total voting power of the stock of the
Company;

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          (iii) a majority of the members of the Board is replaced during any
twelve (12) month period by directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the date of the
appointment or election; or
          (iv) the acquisition by any person, or more than one person acting as
a group, within any twelve (12) month period, of assets from the Company that
have a total gross fair market value equal to or more than forty percent (40%)
of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions.
     This definition of Change in Control shall be interpreted in a manner that
is consistent with the definition of “change in control event” under section
409A of the Code and the Treasury Regulations promulgated thereunder.
     Notwithstanding the foregoing, no “Change in Control” shall be deemed to
have occurred if there is consummated any transaction or series of integrated
transactions immediately following which the record holders of the common stock
of the Employer immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Employer immediately
following such transaction or series of transactions.
     Further, notwithstanding the foregoing, any event or transaction which
would otherwise constitute a Change in Control (a “Transaction”) shall not
constitute a Change in Control for purposes of this Agreement if, in connection
with the Transaction, the Employee participates as an equity investor in the
acquiring entity or any of its affiliates (the “Acquiror”). For purposes of the
preceding sentence, the Employee shall not be deemed to have participated as an
equity investor in the Acquiror by virtue of (i) obtaining beneficial ownership
of any equity interest in the Acquiror as a result of the grant to the Employee
of an incentive compensation award under one or more incentive plans of the
Acquiror (including, but not limited to, the conversion in connection with the
Transaction of incentive compensation awards of the Employer into incentive
compensation awards of the Acquiror), on terms and conditions substantially
equivalent to those applicable to other executives of the Employer immediately
prior to the Transaction, after taking into account normal differences
attributable to job responsibilities, title and similar matters, (ii) obtaining
beneficial ownership of any equity interest in the Acquiror on terms and
conditions substantially equivalent to those obtained in the Transaction by all
other stockholders of the Employer, or (iii) passive ownership of less than
three percent (3%) of the stock of the Acquiror.
     (F) “Change-in-Control Protective Period” shall mean the period from the
occurrence of a Change in Control until the second anniversary of such Change in
Control.
     (G) “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.
     (H) “Committee” shall mean (i) the individuals (not fewer than three in
number) who, immediately prior to a Potential Change in Control, constitute the
Compensation Committee of the Board, plus (ii) in the event that fewer than
three individuals are available from the group

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specified in clause (i) above for any reason, such individuals as may be
appointed by the individual or individuals so available (including for this
purpose any individual or individuals previously so appointed under this clause
(ii)); provided, however, that the maximum number of individuals constituting
the Committee shall not exceed five.
     (I) “Companies” shall mean, collectively, the Employer and each entity
which is now and hereafter shall become a subsidiary of, or a parent of, the
Employer, together with their respective successors and assigns.
     (J) “Continuation Pay” shall mean those payments so described in
Section 8.2 hereof.
     (K) “Date of Termination” shall have the meaning stated in Section 11.2
hereof.
     (L) “Disability” or “Disabled” shall mean: (i) the Employee is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months; or (ii) the Employee is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three
(3) months under an accident and health plan covering employees of the Employer;
or (iii) the Employee is determined to be totally disabled by the Social
Security Administration or the Railroad Retirement Board.
     (M) “Disability Period” shall have the meaning stated in Section 7.2
hereof.
     (N) “Employee” shall mean the individual named in the first paragraph of
this Agreement.
     (O) “Employer” shall mean A. Schulman, Inc. and, except in determining
under Section 20(E) hereof whether or not any Change in Control of the Employer
has occurred, any successor to its business and/or assets which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
     (P) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.
     (Q) “Excise Tax” shall have the meaning stated in Section 10.2(A) hereof.
     (R) “Good Reason” for termination by the Employee of the Employee’s
employment shall mean the occurrence (without the Employee’s express prior
written consent) after any Change in Control, or after any Potential Change in
Control and prior to the end of the Change in Control Protective Period, of any
one of the following acts by the Employer, or failures by the Employer to act,
unless, in the case of any act or failure to act described in paragraph (i),
(v), (vi) or (vii) below, such act or failure to act is corrected prior to the
Date of Termination specified in the Notice of Termination given in respect
thereof:

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     (i) the assignment to the Employee of any duties inconsistent with the
Employee’s status as an executive officer of the Employer or a substantial
adverse alteration in the nature or status of the Employee’s responsibilities
from those in effect immediately prior to the Change in Control (other than any
such alteration primarily attributable to the fact that the Employer may no
longer be a public company);
     (ii) a reduction by the Employer in the Employee’s annual base salary as in
effect on the date hereof or as the same may be increased from time to time
except for across-the-board salary reductions similarly affecting all executives
of the Employer and all executives of any Person in control of the Employer;
     (iii) the relocation of the Employer’s principal executive offices to a
location more than fifty (50) miles from the location of such offices
immediately prior to the Change in Control or the Employer’s requiring the
Employee to be based anywhere other than the Employer’s principal executive
offices except for required travel on the Employer’s business to an extent
substantially consistent with the Employee’s present business travel
obligations;
     (iv) the failure by the Employer, without the Employee’s consent, to pay to
the Employee any portion of the Employee’s current compensation, or to pay to
the Employee any portion of an installment of deferred compensation under any
deferred compensation program of the Employer, within seven (7) days of the date
such compensation is due;
     (v) the failure by the Employer to continue in effect any compensation plan
in which the Employee participates immediately prior to the Change in Control
which is material to the Employee’s total compensation, including but not
limited to the Employer’s 2006 Incentive Plan and Nonqualified Profit Sharing
Plan or any substitute plans adopted prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Employer to
continue the Employee’s participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms of the
amount of benefits provided and the level of the Employee’s participation
relative to other participants, as existed at the time of the Change in Control;
     (vi) the failure by the Employer to continue to provide the Employee with
benefits substantially similar to those enjoyed by the Employee under any of the
Employer’s pension, life insurance, medical, health and accident, or disability
plans in which the Employee was participating at the time of the Change in
Control, the taking of any action by the Employer which would directly or
indirectly materially reduce any of such benefits or deprive the Employee of any
material fringe benefit enjoyed by the Employee at the time of the Change in
Control, or the failure by the Employer to provide the Employee with the number
of paid vacation days to which the Employee is entitled on the basis of years of
service with the Employer in accordance with the Employer’s normal vacation
policy in effect at the time of the Change in Control; or

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     (vii) any purported termination of the Employee’s employment which is not
effected pursuant to a Notice of Termination satisfying the requirements of
Section 11.1 hereof; for purposes of this Agreement, no such purported
termination shall be effective.
     The Employee’s right to terminate the Employee’s employment for Good Reason
shall not be affected by the Employee’s incapacity due to physical or mental
illness. The Employee’s continued employment shall not constitute consent to, or
a waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.
     For purposes of any determination regarding the existence of Good Reason,
any claim by the Employee that Good Reason exists shall be presumed to be
correct unless the Employer establishes to the Committee by clear and convincing
evidence that Good Reason does not exist.
     (S) “Gross-Up Payment” shall have the meaning stated in Section 10.2(A)
hereof.
     (T) “Notice of Termination” shall have the meaning stated in Section 11.1
hereof.
     (U) “Payment” and “Payments” shall have the meaning stated in
Section 10.2(A) hereof.
     (V) “Person” shall have the meaning given in Section 3(a) (9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Employer or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Employer or any of its subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the stockholders of the
Employer in substantially the same proportions as their ownership of stock of
the Employer.
     (W) “Potential Change in Control” shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:
     (i) the Employer enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control;
     (ii) the Employer or any Person publicly announces an intention to take or
to consider taking actions which, if consummated, would constitute a Change in
Control;
     (iii) any Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Employer representing 15% or more of either the then
outstanding shares of common stock of the Employer or the combined voting power
of the Employer’s then outstanding securities; or
     (iv) the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
     (X) “Severance Payments” shall mean those payments described in
Section 10.1 hereof.

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     (Y) “Term” shall mean the Initial Term and any Extended Term as described
in Section 4.1 hereof.
     (Z) “Termination Pay” shall mean those payments so described in Section 8.2
hereof.
     (AA) “Underpayment” shall have the meaning stated in Section 10.2(B)
hereof.
     21. SECTION 409A OF THE CODE
     It is intended that this Agreement comply with section 409A of the Code and
the Treasury Regulations promulgated thereunder (and any subsequent notices or
guidance issued by the Internal Revenue Service), and this Agreement will be
interpreted, administered and operated accordingly. Nothing herein shall be
construed as an entitlement to or guarantee of any particular tax treatment to
the Employee.
     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed (the corporate signatory by the respective officer duly authorized) as
of the day and year first above written.

                  EMPLOYEE:       EMPLOYER:    
 
                /s/ Paul F. DeSantis       A. Schulman, Inc.    
 
               
 
               
Name: Paul F. DeSantis
      By:   /s/ Joseph M. Gingo
 
Joseph M. Gingo    

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