Document:

EX-10.1

EXHIBIT 10.1

FIRST AMENDMENT

TO

THE GEON COMPANY

SECTION 401(a)(17) BENEFIT RESTORATION PLAN

(December 31, 2007 Restatement)

          PolyOne Corporation hereby adopts this First Amendment to The Geon Company Section 401(a)(17)
Benefit Restoration Plan (December 31, 2007 Restatement) (the “Plan”) effective March 20, 2009.
Words and phrases used herein with initial capital letters that are defined in the Plan are used
herein as so defined.

I.

          The Preamble to the Plan is hereby amended by the addition of the following new paragraph at
the end thereof:

“Effective as of the close of business on March 20, 2009, all Supplemental Restoration
Benefits and Supplemental Preretirement Surviving Spouse Death Benefits under the Plan are
permanently frozen.”

II.

          Section 3.1 of the Plan is hereby amended by the addition of the following new subsection (d)
at the end thereof:

“(d) Notwithstanding the foregoing provisions of this Section 3.1 or any other provision of
the Plan to the contrary, all Supplemental Restoration Benefits and Supplemental
Preretirement Surviving Spouse Death Benefits under the Plan are permanently frozen
effective as of the close of business on March 20, 2009. In furtherance of, but without
limiting the foregoing, a Participant shall not receive credit under this Plan for any
eligible earnings that are paid on or after March 20, 2009.”

 

 

EXECUTED as of the 15th day of January, 2009.

	 	 	 	 	 
	 	POLYONE CORPORATION

 	 
	 	By:  	 	 
	 	 	Gordon D. Harnett 	 
	 	 	Title:  	Chair, Compensation and
Governance Committee 	 

2EX-10.2

EXHIBIT 10.2

AMENDMENT NO. 1

TO THE

POLYONE SUPPLEMENTAL RETIREMENT BENEFIT PLAN

(As Amended and Restated Effective December 31, 2007)

          PolyOne Corporation (the “Company”) hereby adopts this Amendment No. 1 to the PolyOne
Supplemental Retirement Benefit Plan (As Amended and Restated Effective December 31, 2007) (the
“Plan”), effective March 20, 2009. Words and phrases used herein with initial capital letters that
are defined in the Plan are used herein as so defined.

I.

Section 8 of the Plan is hereby amended in its entirety to read as follows:

“SECTION 8. EMPLOYER CONTRIBUTIONS

As of each payroll period, the Employer shall allocate to the account of each
Participant an amount equal to the difference between, (a) the retirement
contributions that would otherwise be contributed on behalf of the Participant under
Section 4.2(b) of the Retirement Plan if the provisions of the Retirement Plan were
administered without regard to the limitations imposed by Sections 401(a)(17) and
415 of the Code and (b) the retirement contributions made on his or her behalf under
the Retirement Plan for such payroll period.”

II.

          The first sentence of Section 11 of the Plan is hereby amended in its entirety to read as
follows:

“A Participant shall be 100% vested in that portion of his or her account which is
attributable to elective deferrals made under Section 5, employer matching
contributions made under Section 7 and the employer contributions made prior to
March 21, 2009 under Section 8 that correspond to transition contributions under
Section 4.2(c) of the Retirement Plan.”

[Signature on Following Page]

 

 

EXECUTED as of the 15th day of January, 2009.

	 	 	 	 	 
	 	POLYONE CORPORATION

 	 
	 	By:  	
 	 
	 	 	Gordon D. Harnett 	 
	 	 	Title:  	Chair, Compensation and
Governance Committee 	 

2EX-10.3

EXHIBIT 10.3

[DATE]

Attn: [                    ]

PolyOne Corporation

POLYONE CORPORATION INCENTIVE AWARD

Grant of Performance Shares

THIS AGREEMENT CONSTITUTES PART OF A PROSPECTUS COVERING 
SECURITIES REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS
 AMENDED. THE COMMON SHARES OF THE COMPANY ARE LISTED ON THE 
NEW YORK STOCK
EXCHANGE.

Dear [                    ]:

          Subject to the terms and conditions of the [INSERT PLAN] (the “Plan”) and this letter
agreement (this “Agreement”), the Compensation and Governance Committee of the Board of Directors
(the “Committee”) of PolyOne Corporation (“PolyOne”) (or a subcommittee thereof) has granted to you
as of [DATE], the following award:

     [___] performance shares (the “Performance Shares”), with each such Performance Share
being equal in value to one share of PolyOne’s common stock, par
value $0.01 per share (the “Common Shares”) and the payment of which depends on PolyOne’s
performance as set forth in this Agreement.

     A copy of the Plan is available for your review through the Corporate Secretary’s office.
Unless otherwise indicated, the capitalized terms used in this Agreement shall have the same
meanings as set forth in the Plan.

	1.	 	Performance Shares.

	 	(a)	 	Your right to receive all or any portion of the Performance Shares will be
contingent upon the achievement of certain management objectives (the “Management
Objectives”), as set forth below. The achievement of the Management Objectives will be
measured during the period from [DATE] through [DATE] (the “Performance Period”).

US Form
— Performance Shares

 

 

	 	(b)	 	The Management Objectives for the Performance Period will be based solely on
achievement of performance goals relating to the stock price appreciation of Common
Shares.

	2.	 	Earning of Performance Shares.

	 	(a)	 	The number of Performance Shares that you will earn at the conclusion of the
Performance Period shall be determined as follows:

	 	(i)	 	If, upon the conclusion of the Performance Period, the market
price of the Common Shares as reported on the New York Stock Exchange —
Composite Transactions Listing or similar report has reached a minimum of
$___, but has not exceeded $___ for a minimum of three consecutive trading
days during the Performance Period, you shall earn only one-third of the
Performance Shares.
	 
	 	(ii)	 	If, upon the conclusion of the Performance Period, the market
price of the Common Shares as reported on the New York Stock Exchange —
Composite Transactions Listing or similar report has reached a minimum of
$___, but has not exceeded $___ for a minimum of three consecutive trading
days during the Performance Period, you shall earn only two-thirds of the
Performance Shares.
	 
	 	(iii)	 	If, upon the conclusion of the Performance Period, the market
price of the Common Shares as reported on the New York Stock Exchange —
Composite Transactions Listing or similar report has reached a
minimum of $___ for a minimum of three consecutive trading days during the Performance Period,
you shall earn all of the Performance Shares.

	 	(b)	 	In no event shall any Performance Shares become earned if the market price of
the Common Shares as reported on the New York Stock Exchange — Composite Transactions
Listing or similar report does not reach $___ for a minimum of three consecutive
trading days during the Performance Period.
	 
	 	(c)	 	If the Committee determines that a change in the business, operations,
corporate structure or capital structure of PolyOne, the manner in which it conducts
business or other events or circumstances render the Management Objectives to be
unsuitable, the Committee may modify such Management Objectives or the related levels
of achievement, in whole or in part, as the Committee deems appropriate;
provided, however, that no such action will be made in the case of a
Covered Employee where such action may result in the loss of the otherwise available
exemption of the award under Section 162(m) of the Code.
	 
	 	(d)	 	Subject to Section 3 and Section 4, your right to receive any Performance
Shares is contingent upon your remaining in the continuous employ of PolyOne or a
Subsidiary through [DATE] (the “Determination Date”). The Committee shall determine
the number of Performance Shares that shall have become earned hereunder as of the
Determination Date. For awards to Covered Employees, the

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	 	 	 	Committee shall only have the ability and authority to reduce, but not increase, the
amount of Performance Shares that become earned hereunder.

	3.	 	Change of Control. If a Change of Control (as defined on Exhibit A to this
Agreement) occurs prior to the end of the Performance Period, PolyOne shall pay to you 100% of
the Performance Shares as soon as administratively practicable after, but in all events no
later than 60 days following, the Change of Control.
	 
	4.	 	Retirement, Disability or Death. If your employment with PolyOne or a Subsidiary
terminates before the Determination Date due to (a) retirement at age 55 or older with at
least 10 years of service or retirement under other circumstances entitling you to receive
benefits under one of PolyOne’s (including its predecessors) defined benefit pension plans or
under an individual agreement with PolyOne, (b) permanent and total disability (as defined
under the relevant disability plan or program of PolyOne or a Subsidiary in which you then
participate) or (c) death, PolyOne shall pay to you or your executor or administrator, as the
case may be, the portion of the Performance Shares to which you would have been entitled under
Section 2 above, had you remained employed by PolyOne through the Determination Date, prorated
based on the number of days during the Performance Period that you were employed by PolyOne or
a Subsidiary. The pro-rata portion of the Performance Shares required to be paid under this
Section 4 shall be paid to you or your executor or administrator, as the case may be, as
provided in Section 6 of this Agreement.
	 
	5.	 	Other Termination. If your employment with PolyOne or a Subsidiary terminates before
the Determination Date for any reason other than as set forth in Section 4 above and before a
Change of Control, the Performance Shares will be forfeited.
	 
	6.	 	Payment of Performance Shares. Payment of any Performance Shares that become earned
as set forth herein will be made in the form of Common Shares. Payment will be made as soon
as practicable after the end of the Performance Period, but no later than [DATE]. If PolyOne
determines that it is required to withhold any federal, state, local or foreign taxes from any
payment of Performance Shares made hereunder, PolyOne shall withhold from the total number of
Performance Shares that you are to receive upon vesting a number of shares that has a total
value equal to the amount necessary to satisfy any and all such withholding tax obligations.
The value of any fraction of retained shares not necessary for required withholding shall be
applied to your income tax withholding by PolyOne generally. Instead of withholding shares as
described above, PolyOne may, in its discretion, (a) require you to remit to PolyOne on the
date on which you become the owner of Common Shares under this Agreement cash in an amount
sufficient to satisfy all applicable required withholding taxes and social security
contributions related to the shares, or (b) deduct from your regular salary payroll cash, on a
payroll date following the date on which you become the owner of Common Shares under this
Agreement, in an amount sufficient to satisfy such obligations.
	 
	7.	 	Adjustments. In the event of any change in the number of Common Shares by reason of
a merger, consolidation, reorganization, recapitalization, or similar transaction, or in the
event of a stock dividend, stock split, or distribution to shareholders (other than normal

3

 

	 	 	cash dividends), the number and class of shares subject to outstanding Performance Shares
and other value determinations, if any, applicable to outstanding Performance Shares will be
adjusted. Such adjustment shall be made automatically on the customary arithmetical basis
in the case of any stock split, including a stock split effected by means of a stock
dividend, and in the case of any other dividend paid in Common Shares. If any such
transaction or event occurs, the Committee may provide in substitution for outstanding
Performance Shares such alternative consideration (including, without limitation, in the
form of cash, securities or other property) as it may determine to be equitable in the
circumstances and may require in connection therewith the surrender of the Performance
Shares subject to this Agreement. No adjustment provided for in this Section 7 will require
PolyOne to issue any fractional shares.
	 
	8.	 	Non-Assignability. The Performance Shares subject to this grant of Performance
Shares are personal to you and may not be sold, exchanged, assigned, transferred, pledged,
encumbered or otherwise disposed of by you until they become earned as provided in this
Agreement; provided, however, that your rights with respect to such
Performance Shares may be transferred by will or pursuant to the laws of descent and
distribution. Any purported transfer or encumbrance in violation of the provisions of this
Section 7 shall be void, and the other party to any such purported transaction shall not
obtain any rights to or interest in such Performance Shares.
	 
	9.	 	Cash Dividends. Cash dividends on the Performance Shares covered by this Agreement
shall be sequestered by PolyOne from and after [DATE], until such time as any of such
Performance Shares become earned in accordance with this Agreement, whereupon such dividends
shall be converted into a number of Common Shares (based on the Market Value per Share on the
date such Performance Shares become earned) to the extent such dividends are attributable to
Performance Shares that have become earned. To the extent that Performance Shares covered by
this Agreement are forfeited, all of the dividends sequestered with respect to such
Performance Shares shall also be forfeited. No interest shall be payable with respect to any
such dividends.
	 
	10.	 	Miscellaneous.

	 	(a)	 	The contents of this Agreement are subject in all respects to the terms and
conditions of the Plan as approved by the Board and the shareholders of PolyOne, which
are controlling. The interpretation and construction by the Board and/or the Committee
of any provision of the Plan or this Agreement shall be final and conclusive upon you,
your estate, executor, administrator, beneficiaries, personal representative and
guardian and PolyOne and its successors and assigns.
	 
	 	(b)	 	The grant of the Performance Shares is discretionary and will not be considered
to be an employment contract or a part of your terms and conditions of employment or of
your salary or compensation. Information about you and your participation in the Plan,
including, without limitation, your name, home address and telephone number, date of
birth, social security number or other identification number, salary, nationality, job
title, any shares of stock or directorships held in PolyOne, and details of the
Performance Shares or other entitlement to shares of stock

4

 

	 	 	 	awarded, cancelled, exercised, vested, unvested or outstanding in your favor may be
collected, recorded, held, used and disclosed by PolyOne and any of its Subsidiaries
and any non-PolyOne entities engaged by PolyOne to provide services in connection
with this grant (a “Third Party Administrator”), for any purpose related to the
administration of the Plan. You understand that PolyOne and its Subsidiaries may
transfer such information to Third Party Administrators, regardless of whether such
Third Party Administrators are located within your country of residence, the
European Economic Area or in countries outside of the European Economic Area,
including the United States of America. You consent to the processing of
information relating to you and your participation in the Plan in any one or more of
the ways referred to above. This consent may be withdrawn at any time in writing by
sending a declaration of withdrawal to PolyOne’s chief human resources officer.
	 
	 	(c)	 	Any amendment to the Plan shall be deemed to be an amendment to this Agreement
to the extent that the amendment is applicable hereto. The terms and conditions of
this Agreement may not be modified, amended or waived, except by an instrument in
writing signed by a duly authorized executive officer at PolyOne. Notwithstanding the
foregoing, no amendment shall adversely affect your rights under this Agreement without
your consent.
	 
	 	(d)	 	By signing this Agreement, you acknowledge that you have entered into an
Employee Agreement with PolyOne. You understand that, as set forth in Paragraph 5 and
Attachment A of the Employee Agreement, you have agreed not to engage in certain
prohibited practices in competition with PolyOne following the termination of your
employment (hereinafter referred to as the “Covenant Not to Compete”). You further
acknowledge that as consideration for entering into the Covenant Not to Compete,
PolyOne is providing you the opportunity to participate in PolyOne’s long-term
incentive plan and receive the award set forth in this Agreement. You understand that
eligibility for participation in the long-term incentive plan was conditioned upon
entering into the Covenant Not to Compete. You further understand and acknowledge that
you would have been ineligible to participate in the long-term incentive plan and
receive this award had you decided not to agree to the Covenant Not to Compete. You
understand that the acknowledgment contained in this sub-section is a part of the
Employee Agreement and is to be interpreted in a manner consistent with its terms.

	11.	 	Notice. All notices under this Agreement to PolyOne must be delivered personally or
mailed to PolyOne Corporation at PolyOne Center, Avon Lake, Ohio 44012, Attention: Corporate
Secretary. PolyOne’s address may be changed at any time by written notice of such change to
you. Also, all notices under this Agreement to you will be delivered personally or mailed to
you at your address as shown from time to time in PolyOne’s records.

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	12.	 	Compliance with Section 409A of the Code.

	 	(a)	 	To the extent applicable, it is intended that this Agreement and the Plan
comply with the provisions of Section 409A of the Code, so that the income inclusion
provisions of Section 409A(a)(1) of the Code do not apply to you. This Agreement and
the Plan shall be administered in a manner consistent with this intent.
	 
	 	(b)	 	Reference 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
by the U.S. Department of the Treasury or the Internal Revenue Service.

	13.	 	Counterparts. This Agreement may be executed in separate counterparts, each of which
shall be deemed to be an original and both of which taken together shall constitute one and
the same agreement.
	 
	14.	 	Severability. If one or more of the provisions of this Agreement is invalidated for
any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed
to be separable from the other provisions hereof, and the remaining provisions hereof shall
continue to be valid and fully enforceable.

          This Agreement, and the terms and conditions of the Plan, shall bind, and inure to the benefit
of you, your estate, executor, administrator, beneficiaries, personal representative and guardian
and PolyOne and its successors and assigns.

	 	 	 	 	 
	 	Very Truly Yours,

POLYONE CORPORATION

 	 
	 	By:  	
 	 
	 	 	Kenneth M. Smith, Senior Vice President,
 Chief Information and Human Resources 
Officer	 
	 	 	 	 
	 

	 	 	 	 	 
	Accepted:

 	 	 
	
 	 	 
	 	 	 
	 	 (Date) 	 

6

 

	 	 	 	 	 

Exhibit A

A “Change of Control” means:

(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 PolyOne where such acquisition causes such Person to own 25% or more of the
combined voting power of the then outstanding voting securities of PolyOne entitled to vote
generally in the election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this paragraph (a), the following acquisitions shall not be deemed to
result in a Change of Control: (i) any acquisition directly from PolyOne that is approved by the
Incumbent Board (as defined in paragraph (b) below), (ii) any acquisition by PolyOne, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by PolyOne or
any corporation controlled by PolyOne or (iv) any acquisition by any corporation pursuant to a
transaction that complies with clauses (i), (ii) and (iii) of paragraph (c) below; provided,
further, that if any Person’s beneficial ownership of the Outstanding Company Voting Securities
reaches or exceeds 25% 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 PolyOne, such
subsequent acquisition shall be treated as an acquisition that causes such Person to own 25% 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 25%
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 25% 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 August 31, 2000, constitute the Board (the “Incumbent Board” as modified
by this paragraph (b)) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to August 31, 2000 whose
election, or nomination for election by PolyOne’s shareholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board (either by specific vote or by
approval of the proxy statement of PolyOne in which such person is named as a nominee for director,
without objection to such nomination) 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 PolyOne or the acquisition of assets of another
corporation or other transaction (“Business Combination”) excluding, however, such a Business
Combination pursuant to which (i) the individuals and entities who were the beneficial

A-1

 

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 entity
resulting from such Business Combination (including, without limitation, an entity that as a result
of such transaction owns PolyOne or all or substantially all of PolyOne’s assets either directly or
through one or more subsidiaries), (ii) no Person (excluding any employee benefit plan (or related
trust) of PolyOne, PolyOne or such entity resulting from such Business Combination) beneficially
owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding
securities entitled to vote generally in the election of directors of the entity resulting from
such 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 PolyOne of a complete liquidation or dissolution of PolyOne
except pursuant to a Business Combination that complies with clauses (i), (ii) and (iii) of
paragraph (c) above.

A-2

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