exv10w1






Exhibit 10.1




POLYONE CORPORATION




DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

(As Amended and Restated Effective July 13, 2010)



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 in Control" shall mean any of the following events:




(a) 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 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




(b) Individuals who, as of July 13, 2010, 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 July 13, 2010 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




(c) 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 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




(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company.



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



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     2.4 “Common Stock” or “stock” means common shares, par value $.01 per share, of the Company,
including authorized and unissued shares and treasury shares.



     2.5 “Company” means PolyOne Corporation, an Ohio corporation.



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



ARTICLE III

ELECTIONS BY DIRECTORS




     3.1 Election to Defer. At any time designated by the Company before the beginning of
a taxable year (the “Election Period”), a Director may elect to defer receipt of the compensation
payable to him or her for services as a Director during the taxable year. Such election shall be
made on an election form specified by the Company (the “Election Form”). A Director’s initial
Election Form will, subject to the following sentence, include an election as to the time of
payment or the commencement of payment and the manner of payment of all amounts in his or her
Account. In addition, if a Director has elected to receive or commence payment in a specified
year, the Election Form for the Election Period immediately prior to such specified year shall
contain the Director’s election regarding the time and manner of payment of amounts in his or her
Account for that and all future Election Periods. Notwithstanding the foregoing, with respect to
the first taxable year in which a person becomes a Director, such Director may, within 30 days of
becoming a Director, make an election to defer compensation payable to him or her in such taxable
year for services as a Director subsequent to the election. Each Director’s Election Form 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, except as set forth
in Section 3.3, irrevocable upon the delivery of an Election Form to the Committee. Subject to the
provisions of Article VI, amounts 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 during
the Election Period prior to the commencement of the taxable year 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.



ARTICLE IV

COMMON STOCK AVAILABLE UNDER THE PLAN




     4.1 Common Stock. The aggregate number of shares of Common Stock that may be credited
to Accounts pursuant to the third sentence of Section 5.1 shall not be limited. The aggregate
number of shares of Common Stock that may be granted and credited to Accounts pursuant to the last
sentence of Section 5.1 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



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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 cash 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. In the event that a Director elects to have
some or all of his or her cash compensation invested in Common Stock, 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 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 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. 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, and 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.




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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 earliest of (i) as elected by the
Director in his Election Form, upon a specified date or the date of the Director’s separation from
service with the Company, as determined in accordance with Section 409A of the Code (the
“Separation from Service Date”); provided, however, that the Director shall not
have the right to designate the taxable year of payment and further provided that
if the payment is to commence upon the Director’s Separation from Service Date and the Director is
a “specified employee,” as determined by the Company in its Specified Employee Designation
Procedure (a “Specified Employee”), at the Separation from Service Date, the payment shall commence
on the first day of the seventh month following the Director’s Separation from Service Date, (ii)
the death of the Director or (iii) upon a Change in Control. To the extent a Director would be
entitled to payment upon the occurrence of a Change in Control pursuant to the preceding sentence
and such Change in Control does not constitute a permitted distribution event under Section
409A(a)(2) of the Code, then payment will be made, to the extent necessary to comply with the
provisions of Section 409A of the Code, to the Director on the earliest of (A) the Director’s
Separation from Service Date, provided, further, that if the Director is a
Specified Employee at the time of the Separation from Service Date, the payment to the Director
shall be made on the first day of the seventh month following such Separation from Service Date or
(B) the Director’s death. If a Director fails to make a valid election as to the time of payment
or the time of commencement of payment on his Election Form completed after July 13, 2010, for
purposes of clause (i) of this Section 6.1, the Director will be deemed to have elected to commence
payment on the Director’s Separation from Service Date.



     6.2 Method of Payment. The amount credited to a Director’s 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. Payments to be paid in annual
installments shall be paid in a series of substantially equal annual installments commencing on the
initial date of payment set forth in Section 6.1 and on each anniversary of such date thereafter.
Each installment payment shall be treated as a separate payment and not as part of a series of
payments for purposes of Section 409A of the Code. Accounts shall be paid in kind, in cash, or
shares of Common Stock, as credited to the Account. If a Director fails to make a valid election
as to the manner of payment on his Election Form completed after July 13, 2010, the Director will
be deemed to have elected payment in a lump sum.



     6.3 Subsequent Payment Elections. A Director may elect to change his or her election
with respect to time of commencement or method of payment, or both, with respect to an amount
credited to the Director’s Account, provided that the following requirements are met: (i) the
election to change does not take effect until at least 12 months after the date on which the
election is made, (ii) with respect to an election related to a payment that is to be made at a
specified time or pursuant to a fixed schedule, the election to change is made at least 12 months
prior to the date on which that payment is scheduled to be made and (iii) in the case of an
election related to a distribution not described in Section 6.4 or 6.5, the payment under such
election will be made no less than 5 years from the original date on which such payment would be
made. If an election to change an original payment election is not timely made, or for any



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reason is not effective, amounts credited to the Director’s Account will automatically be paid
to the Director in the form(s) elected on the Director’s Election Form(s).




     6.4 Unforeseeable Emergency Distribution. The Committee may at any time, upon written
request of a Director, cause to be paid to such Director, an amount equal to all or any part of the
Director’s Account if the Committee determines, based on such reasonable evidence that it shall
require, that such a payment is necessary for the purpose of alleviating the consequences of an
Unforeseeable Emergency. Payments of amounts because of an Unforeseeable Emergency may not exceed
the amount necessary to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes or
penalties reasonably anticipated as a result of the distribution after taking into account the
extent to which the Unforeseeable Emergency is or may be relieved through reimbursement or
compensation from insurance or otherwise, by liquidation of the Director’s assets (to the extent
the liquidation of such assets would not itself cause severe financial hardship), or by cessation
of deferrals under the Plan. For purposes of this Plan, Unforeseeable Emergency shall mean an
event which results in a severe financial hardship to the Director resulting from (a) an illness or
accident of the Director, the Director’s spouse, the Director’s beneficiary or a dependent of the
Director, (b) loss of the Director’s property due to casualty or (c) other similar extraordinary
and unforeseeable circumstances as a result of events beyond the control of the Director. The
amount of a Director’s Account shall be reduced by the amount of any Unforeseeable Emergency
distribution to the Director.



     6.5 Designation of Beneficiary/Payment upon Death. Notwithstanding the time and
manner of payment elected by a Director on his or her Election Form, upon the death of a Director,
the amount credited to his or her Account (including any amount remaining in such Director’s
Account after commencement of installment payments to the Director) shall be paid in a single lump
sum to the beneficiary or beneficiaries designated by him or her within thirty days after the date
of the death of the Director, provided that no beneficiary will have the right to designate the
taxable year of payment. 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 Company.



     6.6 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.



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ARTICLE VIII

ADMINISTRATION




     8.1 Appointment of Committee. The Committee shall 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.



     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.



          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. 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.




          It is intended that the Plan comply with the provisions of Section 409A of the Code, so as to
prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is
prior to the taxable year or years in which such amounts would otherwise actually be distributed or
made available to Directors or beneficiaries. This Plan shall be administered in a manner that
effects such intent. Any reference in this Plan to Section 409A of the Code will also include any
proposed, temporary or final regulations, or any other guidance, promulgated with respect to such
Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.




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,
except as provided in the following sentence, 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. Effective July 13, 2010, the portion of the Plan comprised of amounts
that were deferred (as such term is defined in Section 409A of the Internal Revenue Code of 1986,
as amended) as of December 31, 2004 (and earnings thereon) (“Grandfathered Accounts”) is
terminated, and following such termination, the Grandfathered Accounts shall be paid in lump sum
payments as soon as practicable thereafter and no later than December 31, 2010. The Company
reserves the right to amend or terminate the Plan at any time;



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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, except as provided for the termination of the
Grandfathered Accounts and to the extent that such amendment or termination is deemed necessary by
the Company to ensure compliance with Section 409A of the Code.




     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. Any attempt to
transfer, assign, alienate, anticipate, sell, pledge, or otherwise encumber benefits hereunder or
any part thereof shall be void.



     9.3 Effective Date of Plan. The Plan’s original effective date was December 9, 1993,
and it is hereby amended and restated effective as of July 13, 2010.



 





IN WITNESS WHEREOF, the Company, by its duly authorized officer, has caused this Plan to be
executed as of the ____ day of _______________, 2010.




	 	 	 	 	 
	 	POLYONE CORPORATION

 	 
	 	By:  	 	 
	 	 	Kenneth M. Smith 	 
	 	 	Senior Vice President and

Chief Information and

Human Resources Officer 	 
	 




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