Document:

EX-10.1

 

EXHIBIT 10.1

DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT

     This Director and Officer Indemnification Agreement, entered into as of June 30, 2006 (this
“Agreement”), is made by and between PolyOne Corporation, an Ohio corporation (the “Company”), and
[Name of the Indemnitee] (the “Indemnitee”), a director and/or officer of the Company.

RECITALS:

     A. The Indemnitee is currently serving as a director and/or officer of the Company, and the
Company desires that the Indemnitee continue serving in such capacity. The Indemnitee is willing,
subject to certain conditions, including the execution and performance of this Agreement by the
Company, to continue serving in such capacity.

     B. In addition to the indemnification to which the Indemnitee is entitled under the Amended
Articles of Incorporation of the Company (the “Articles”) and the Regulations of the Company (the
“Regulations”), the Company has obtained, at its sole expense, insurance protecting the Company and
its officers and directors, including the Indemnitee, against certain losses arising out of any
threatened, pending or completed action, suit, proceeding or claim to which such persons may be
made or are threatened to be made parties.

AGREEMENT:

     NOW, THEREFORE, in order to induce the Indemnitee to continue to serve in his current
capacity, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Indemnitee agree as follows:

     1. Certain Definitions. In addition to terms defined elsewhere in this Agreement, the
following terms have the following meanings when used in this Agreement with initial capital
letters:

          (a) “Board” means the Board of Directors of the Company.

          (b) “Change in Control” has the meaning ascribed thereto in the form of the Management
Continuity Agreement by and between the Company and certain of its directors and officers, as it
may be amended from time to time and referenced in the exhibit list of the Company’s most recent
Annual Report on Form 10-K (the “Management Continuity Agreement”).

          (c) “Exchange Act” means the Securities Exchange Act of 1934.

          (d) “Incumbent Board” has the meaning ascribed thereto in the Management Continuity Agreement.

          (e) “Independent Counsel” means nationally recognized legal counsel designated for such
purpose by the Indemnitee and reasonably acceptable to a majority of the

 

 

members of the Incumbent Board, even if less than a quorum, which shall not be an attorney, or
a firm having associated with it an attorney, who has been retained by or who has performed
services (in each case in the past five years) for (x) the Company, (y) any person who may be
indemnified in such action, suit, proceeding or claim, or (z) any holder of 5% or more of the then
outstanding shares of any class of the Company’s voting stock.

          (f) “ORC” means the Ohio Revised Code.

     2. Continued Service. The Indemnitee shall serve or continue to serve as a director and/or
officer of the Company so long as he is duly elected in accordance with the Regulations or until he
resigns in writing or is removed from office in accordance with applicable law.

     3. Initial Indemnity. (a) The Company shall indemnify the Indemnitee if or when he is a
party or is threatened to be made a party to any threatened, pending or completed action, suit,
proceeding or claim, whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Company), by reason of the fact that he is or was a director and/or
officer of the Company or is or was serving at the request of the Company as a director, trustee,
officer, employee, member, manager or agent of another corporation, domestic or foreign, nonprofit
or for profit, a limited liability company, or a partnership, joint venture, trust or other
enterprise, or by reason of any action alleged to have been taken or omitted in any such capacity,
against any and all costs, charges, expenses (including fees and expenses of attorneys or others;
all such costs, charges and expenses being herein jointly referred to as “Expenses”), judgments,
fines and amounts paid in settlement actually incurred by the Indemnitee in connection therewith,
including any appeal of or from any judgment or decision, (i) in the case of an Indemnitee that is
a director of the Company, unless it is proved by clear and convincing evidence in a court of
competent jurisdiction that the Indemnitee’s action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to the Company or undertaken with reckless
disregard for the best interests of the Company and (ii) in the case of an Indemnitee that is an
officer of the Company but not a director of the Company, if the Indemnitee acted in good faith and
in a manner which he reasonably believed to be in or not opposed to the best interests of the
Company. In addition, with respect to any criminal action or proceeding, indemnification hereunder
shall be made only if the Indemnitee had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit, proceeding or claim by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not satisfy the foregoing applicable standard of conduct.

          (b) The Company shall indemnify the Indemnitee if or when he is a party or is threatened to be
made a party, to any threatened, pending or completed action, suit, proceeding or claim by or in
the right of the Company to procure a judgment in its favor, by reason of the fact that the
Indemnitee is or was a director and/or officer of the Company or is or was serving at the request
of the Company as a director, trustee, officer, employee, member, manager or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have
been taken or omitted in any such capacity, against any and all Expenses, judgments, fines and
amounts paid in settlement actually incurred by the Indemnitee in connection therewith, including
any appeal of or from any judgment or decision, (i) in the case of an Indemnitee that is

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a director of the Company, unless it is proved by clear and convincing evidence in a court of
competent jurisdiction that the Indemnitee’s action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to the Company or undertaken with reckless
disregard for the best interests of the Company and (ii) in the case of an Indemnitee that is an
officer of the Company but not a director of the Company, if the Indemnitee acted in good faith and
in a manner which he reasonably believed to be in or not opposed to the best interests of the
Company. Notwithstanding the foregoing provisions of this Section 3(b), no indemnification
pursuant to this Section 3(b) shall be made (A) in the case of an Indemnitee that is an
officer but not a director of the Company, in respect of any claim, issue or matter as to which the
Indemnitee is adjudged to be liable for negligence or misconduct in the performance of his duty to
the Company unless, and only to the extent that, the court of common pleas or other court in which
such action, suit, proceeding or claim was brought determines, notwithstanding any adjudication of
liability, that in view of all the circumstances of the case the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses, judgments, fines and amounts paid in settlement
as such court of common pleas or other court shall deem proper, or (B) in the case of an Indemnitee
that is a director of the Company, in respect of any action, suit, proceeding or claim in which the
only liability asserted against the Indemnitee is pursuant to Section 1701.95 of the ORC.

          (c) Any indemnification under Section 3(a) or Section 3(b) (unless ordered by
the court in which such action, suit, proceeding or claim was brought) shall be made by the Company
only upon a determination relating to the specific case that indemnification of the Indemnitee is
proper in the circumstances because he has met the applicable standard of conduct set forth in
Section 3(a) or Section 3(b). Prior to a Change in Control, such determination
shall be made (i) by the Board by a majority vote or consent of a quorum consisting of directors
who were not and are not parties to or threatened with such action, suit, proceeding or claim
(“Disinterested Directors”) or (ii) if such a quorum of Disinterested Directors is not available or
if a majority of such quorum so directs, by Independent Counsel in a written opinion to the Board
(with a copy to the Indemnitee; provided, however, that if the Indemnitee is no
longer serving as a director of the Company or as an officer of the Company at the time that such
action, suit, proceeding or claim is initiated, then such determination shall be made by
Independent Counsel in a written opinion to the Board (with a copy to the Indemnitee), unless the
Indemnitee shall have elected in writing to have such determination made by a majority vote or
consent of a quorum of Disinterested Directors, in which case such determination shall be made by
such quorum of Disinterested Directors. Following a Change in Control, such determination shall be
made by Independent Counsel in a written opinion to the Board (with a copy to the Indemnitee),
unless the Indemnitee shall have elected in writing to have such determination made by a majority
vote or consent of a quorum consisting of Disinterested Directors, in which case such determination
shall be made by such quorum of Disinterested Directors.

          (d) To the extent that the Indemnitee has been successful on the merits or otherwise,
including the dismissal of an action without prejudice, in defense of any action, suit, proceeding
or claim referred to in Section 3(a) or Section 3(b), or in defense of any claim,
issue or matter therein, he shall be indemnified against Expenses actually incurred by him in
connection therewith.

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          (e) Expenses actually incurred by the Indemnitee in defending any action, suit, proceeding or
claim referred to in Section 3(a) or Section 3(b), or in defense of any claim,
issue or matter therein, shall be paid by the Company as they are incurred in advance of the final
disposition of such action, suit, proceeding or claim under the procedure set forth in Section
5(b).

          (f) For purposes of this Agreement, references to “other enterprises” shall include employee
benefit plans; references to “fines” shall include any excise taxes assessed on the Indemnitee with
respect to any employee benefit plan; references to “serving at the request of the Company” shall
include any service as a director, officer, employee, member, manager or agent of the Company which
imposes duties on, or involves services by, the Indemnitee with respect to an employee benefit
plan, its participants or beneficiaries; references to the masculine shall include the feminine;
references to the singular shall include the plural and vice versa; and the word including is used
by way of illustration only and not by way of limitation.

          (g) No amendment to the Articles or the Regulations may deny, diminish or encumber the
Indemnitee’s rights to indemnity pursuant to the Regulations, the ORC or any other applicable law
as applied to any act or failure to act occurring in whole or in part prior to the date (the
“Effective Date”) upon which the amendment was approved by the shareholders of the Company. In the
event that the Company shall purport to adopt any amendment to its Articles or Regulations or take
any other action the effect of which is to deny, diminish or encumber the Indemnitee’s rights to
indemnity pursuant to the Articles, the Regulations, the ORC or any such other law, such amendment
shall apply only to acts or failures to act occurring entirely after the Effective Date thereof.

     4. Additional Indemnification. (a) Pursuant to Section 1701.13(E)(6) of the ORC, without
limiting any right which the Indemnitee may have pursuant to Section 3 or any other
provision of this Agreement or the Articles, the Regulations, the ORC, any policy of insurance or
otherwise, but subject to any limitation on the maximum permissible indemnity which may exist under
applicable law at the time of any request for indemnity hereunder and subject to the following
provisions of this Section 4, the Company shall indemnify the Indemnitee against any amount
which he is or becomes obligated to pay relating to or arising out of any claim made against him
because of any act, failure to act or neglect or breach of duty, including any actual or alleged
error, misstatement or misleading statement, that he commits, suffers, permits or acquiesces in
while acting in his capacity as a director and/or officer of the Company or at the request of the
Company as a director, trustee, officer, employee, member, manager or agent of another corporation,
domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint
venture, trust or other enterprise. The payments which the Company is obligated to make pursuant
to this Section 4 shall include any and all Expenses, judgments, fines and amounts paid in
settlement, actually incurred by the Indemnitee in connection therewith including any appeal of or
from any judgment or decision; provided, however, that the Company shall not be
obligated under this Section 4 to make any payment in connection with any claim against the
Indemnitee:

     (i) to the extent of any fine or similar governmental imposition which the
Company is prohibited by applicable law from paying (as determined by final order of
a court of competent jurisdiction); or

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     (ii) to the extent based upon or attributable to the Indemnitee having actually
realized a personal profit to which he was not legally entitled, including profit
(A) from the purchase and sale by the Indemnitee of equity securities of the Company
which are recoverable by the Company pursuant to Section 16(b) of the Exchange Act
and (B) arising from transactions in publicly traded securities of the Company which
were effected by the Indemnitee in violation of Section 10(b) of the Exchange Act or
Rule 10b-5 promulgated thereunder.

          (b) A determination as to whether the Indemnitee shall be entitled to indemnification under
this Section 4 shall be made in accordance with Section 5(a). Expenses incurred by
the Indemnitee in defending any claim to which this Section 4 applies shall be paid by the
Company as they are actually and reasonably incurred in advance of the final disposition of such
claim under the procedure set forth in Section 5(b).

     5. Certain Procedures Relating to Indemnification. (a) For purposes of pursuing his rights
to indemnification under Section 4, the Indemnitee shall (i) submit to the Board a sworn
statement of request for indemnification substantially in the form of Exhibit 1 attached hereto and
made a part hereof (the “Indemnification Statement”) averring that he is entitled to
indemnification hereunder and (ii) present to the Company evidence in reasonable detail of all
amounts for which indemnification is requested. Submission of an Indemnification Statement to the
Board shall create a presumption that the Indemnitee is entitled to indemnification hereunder, and
the Company shall, within 30 calendar days after submission of the Indemnification Statement, make
the payments requested in the Indemnification Statement to or for the benefit of the Indemnitee,
unless (A) within such 30-calendar-day period by the vote or consent of a majority of the members
of the Incumbent Board, even if less than a quorum, shall determine that the Indemnitee is not
entitled to indemnification under Section 4, (B) such vote shall be based upon clear and
convincing evidence sufficient to rebut the foregoing presumption, and (C) the Company shall notify
the Indemnitee within such period of such vote, which notice shall disclose with particularity the
evidence upon which the vote is based. The foregoing notice shall be sworn to by each member of
the Incumbent Board who participated in the vote and voted to deny indemnification. The provisions
of this Section 5(a) are intended to be procedural only and shall not affect the right of
the Indemnitee to indemnification under Section 4 so long as the Indemnitee follows the
prescribed procedure, and any determination by a majority of the members of the Incumbent Board
that the Indemnitee is not entitled to indemnification and any failure to make the payments
requested in the Indemnification Statement shall be subject to de novo judicial review by any court
of competent jurisdiction.

          (b) For purposes of obtaining payments of Expenses in advance of final disposition pursuant to
Section 3(e) or the last sentence of Section 4(b), the Indemnitee shall submit to
the Company a sworn request for advancement of Expenses substantially in the form of Exhibit 2
attached hereto and made a part hereof (the “Undertaking”), averring that he has incurred or in
good faith expects to incur actual Expenses in defending an action, suit, proceeding or claim
referred to in Section 3(a) or Section 3(b) or any claim referred to in Section
4, or pursuant to Section 11. Unless determined in a final order of a court of
competent jurisdiction to be prohibited from payment at the time of the Indemnitee’s act or
omission at issue, or unless the only liability asserted against the Indemnitee in the subject
action, suit, proceeding or claim is pursuant to ORC Section 1701.95, the Indemnitee shall be
eligible to

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execute Part A of the Undertaking by which he undertakes to: (i) (A) in the case of an
Indemnitee that is a director of the Company, repay such amount if it is proved by clear and
convincing evidence in a court of competent jurisdiction that the Indemnitee’s action or failure to
act involved an act or omission undertaken with deliberate intent to cause injury to the Company or
undertaken with reckless disregard for the best interests of the Company and (B) in the case of an
Indemnitee that is an officer of the Company but not a director of the Company, (1) repay such
amount if (x) with respect to any action, suit, proceeding or claim (other than an action by or in
the right of the Company) brought against the Indemnitee by reason of the fact that the Indemnitee
is or was an officer of the Company for which the Indemnitee has received advancement of Expenses,
it is determined that the Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company or (y) with respect to any
action, suit, proceeding or claim brought against the Indemnitee by or in the right of the Company
for which the Indemnitee has received advancement of Expenses, the Indemnitee is adjudged to be
liable for negligence or for misconduct in the performance of his duty to the Company and the court
has not determined that the Indemnitee is entitled to indemnification and (ii) reasonably
cooperate, at the Company’s sole cost and expense, with the Company concerning the action, suit,
proceeding or claim. In all cases, the Indemnitee shall be eligible to execute Part B of the
Undertaking by which he undertakes to repay such amount if it ultimately is determined by a final
order of a court of competent jurisdiction that he is not entitled to be indemnified by the Company
under this Agreement or otherwise. In the event that the Indemnitee is eligible to and does
execute both Part A and Part B of the Undertaking, the Expenses which are paid by the Company
pursuant thereto shall be required to be repaid by the Indemnitee only if he is required to do so
under the terms of both Part A and Part B of the Undertaking. Upon receipt of the Undertaking, the
Company shall thereafter promptly pay such Expenses of the Indemnitee as are noticed to the Company
in reasonable detail arising out of the matter described in the Undertaking. No security shall be
required in connection with any Undertaking.

     6. Limitation on Indemnity. Notwithstanding anything in this Agreement to the contrary, (a)
the Company shall not be required hereby to indemnify the Indemnitee with respect to any action,
suit, proceeding or claim that was initiated by the Indemnitee prior to a Change in Control, unless
the initiation by the Indemnitee of such action, suit, proceeding or claim shall have been approved
in advance by the vote or consent of a majority of the members of the Incumbent Board, even if less
than a quorum, and (b) the Company shall not be required hereby to indemnify the Indemnitee with
respect to any action, suit, proceeding or claim that was initiated by the Indemnitee following a
Change in Control unless the initiation by the Indemnitee of such action, suit, proceeding or claim
was (i) to enforce any rights to indemnification arising hereunder but relates to any action, suit,
proceeding or claim initiated by or on behalf of the Company or any third party prior to a Change
in Control, (ii) authorized by an agreement other than this Agreement entered into prior to a
Change in Control to which the Company is a party whether heretofore or hereafter entered, (iii)
otherwise ordered by the court in which the suit was brought.

     7. Subrogation; Duplication of Payments. (a) In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the rights of recovery of
the Indemnitee, who shall execute all papers required and shall do everything that may be necessary
to secure such rights, including the execution of such documents necessary to

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enable the Company effectively to bring suit to enforce such rights; provided,
however, that such subrogation shall be subject to the Company executing an instrument in
writing satisfactory to the Indemnitee in his discretion under which the Company agrees to fully
indemnify, defend and hold harmless the Indemnitee from any Expense or other liability that may
arise therein or therefrom.

          (b) The Company shall not be liable under this Agreement to make any payment in connection
with any claim made against the Indemnitee to the extent the Indemnitee has actually received
payment (under any insurance policy, the Regulations or otherwise) of the amounts otherwise payable
hereunder without any reservation of rights or other claim for potential disgorgement thereof, as
determined by the Indemnitee in good faith.

     8. Defense of Claims. The Company shall be entitled to participate in the defense of any
threatened or pending action, suit, proceeding or claim in respect of which the Indemnitee requests
indemnification hereunder or to assume the defense thereof, with counsel reasonably satisfactory to
the Indemnitee; provided that if the Indemnitee believes, after consultation with counsel
selected by the Indemnitee, that (a) the use of counsel chosen by the Company to represent the
Indemnitee would present such counsel with an actual or potential conflict, (b) the named parties
in any such action, suit, proceeding or claim (including any impleaded parties) include both the
Company and the Indemnitee and the Indemnitee shall conclude that there may be one or more legal
defenses available to him that are different from or in addition to those available to the Company,
(c) any such representation by such counsel would be precluded under the applicable standards of
professional conduct then prevailing or (d) any such representation could be reasonably expected to
increase the Indemnitee’s risk of liability, then the Indemnitee shall be entitled to retain
separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of
any particular action, suit, proceeding or claim) at the Company’s expense. The Company shall not,
without the prior written consent of the Indemnitee, effect any settlement of any threatened or
pending action, suit, proceeding or claim to which the Indemnitee is, or could have been, a party
unless such settlement solely involves the payment of money and includes a complete and
unconditional release of the Indemnitee from all liability on any claims that are the subject
matter of such action, suit, proceeding or claim. The Indemnitee shall not unreasonably withhold
its consent to any proposed settlement, provided that the Indemnitee may withhold consent
to any settlement that does not provide a complete and unconditional release of the Indemnitee.

     9. Liability Insurance. For the duration of the Indemnitee’s service as a director and/or
officer of the Company, and thereafter for so long as the Indemnitee shall be subject to any
pending or possible action, suit, proceeding or claim of the type described in Section 3 or
any pending or possible claim of the type described in Section 4, the Company shall cause
to be maintained in effect policies of directors’ and officers’ liability insurance providing
coverage for directors and officers of the Company that is at least substantially comparable in
scope and amount to that provided by the Company’s current policies of directors’ and officers’
liability insurance. The Company shall provide the Indemnitee with a copy of all directors’ and
officers’ liability insurance applications, binders, policies, declarations, endorsements and other
related materials, and shall provide the Indemnitee with a reasonable opportunity to review and
comment on the same. Without limiting the generality or effect of the two immediately preceding
sentences, the Company shall not discontinue or significantly reduce the scope or

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amount of coverage from one policy period to the next (a) without the prior approval thereof
by the vote or consent of a majority of the members of the Incumbent Board, even if less than a
quorum or (b) if at the time that any such discontinuation or significant reduction in the scope or
amount of coverage is proposed there are no directors that are members of the Incumbent Board,
without the prior written consent of the Indemnitee. In all policies of directors’ and officers’
liability insurance obtained by the Company, the Indemnitee shall be named as an insured in such a
manner as to provide the Indemnitee the same rights and benefits, subject to the same limitations,
as are accorded to the Company’s directors and officers most favorably insured by such policy.

     10. Shareholder Ratification. The Company may, at its option, propose at any future meeting
of shareholders of the Company that this Agreement be ratified by the shareholders of the Company;
provided, however, that the Indemnitee’s rights hereunder shall be fully
enforceable in accordance with the terms of this Agreement whether or not such ratification is
sought or obtained.

     11. Fees and Expenses of Enforcement. It is the intent of the Company that the Indemnitee not
be required to incur the expenses associated with the enforcement of his rights under this
Agreement by litigation or other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be extended to the Indemnitee hereunder.
Accordingly, if it should appear to the Indemnitee that the Company has failed to comply with any
of its obligations under this Agreement or in the event that the Company or any other person or
entity initiates any litigation or other legal action to declare this Agreement void or
unenforceable or to deny to, or to recover from, the Indemnitee the benefits intended to be
provided to the Indemnitee hereunder, the Company irrevocably authorizes the Indemnitee from time
to time to retain counsel of his choice, at the expense of the Company as hereafter provided, to
represent the Indemnitee in connection with the initiation and prosecution by the Indemnitee of any
litigation or other legal action to enforce his rights under this Agreement or in connection with
the defense by the Indemnitee of any litigation or other legal action initiated by the Company or
any other person or entity to declare this Agreement void or unenforceable or to deny to, or to
recover from, the Indemnitee the benefits intended to be provided to the Indemnitee hereunder.
Regardless of the outcome thereof, the Company shall pay and be solely responsible for any and all
costs, charges, and expenses, including fees and expenses of attorneys and others, reasonably
incurred by the Indemnitee in connection with any litigation or other legal action referred to in
the immediately preceding sentence of this Section 11. In addition, the Company shall pay
and be solely responsible for the fees and expenses of any Independent Counsel.

     12. Merger or Consolidation. In the event that the Company shall be a constituent corporation
in a consolidation, merger, or other reorganization, the Company, if it shall not be the surviving,
resulting, or acquiring corporation therein, shall require as a condition thereto that the
surviving, resulting, or acquiring corporation agree to assume all of the obligations of the
Company hereunder and to indemnify the Indemnitee to the full extent provided herein. Whether or
not the Company is the resulting, surviving, or acquiring corporation in any such transaction, the
Indemnitee shall stand in the same position under this Agreement with respect to the resulting,
surviving, or acquiring corporation as he would have with respect to the Company if its separate
existence had continued.

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     13. Non-Exclusivity; Nontransferability. The rights to indemnification provided by this
Agreement shall not be exclusive of any other rights of indemnification to which the Indemnitee may
be entitled under the Articles, the Regulations, the ORC or any other applicable statute, any
insurance policy, other agreement or vote of shareholders or directors or otherwise, as to any
actions or failures to act by the Indemnitee, and shall continue after he has ceased to be a
director, officer, employee or agent of the Company or other entity for which his service gives
rise to a right hereunder, and shall inure to the benefit of his heirs, executors and
administrators. For the avoidance of doubt, limitations on indemnification under any such other
agreement or right will not affect the parties’ relative rights hereunder. Except as provided in
Section 13, the rights to indemnification provided by this Agreement are personal to the
Indemnitee and are non-transferable by the Indemnitee, and no party other than the Indemnitee is
entitled to indemnification under this Agreement.

     14. Severability. If any provision of this Agreement or the application of any provision of
this Agreement to any person or circumstances is held invalid, unenforceable or otherwise illegal,
the remainder of this Agreement and the application of such provision to other persons or
circumstances shall not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.

     15. Security. To ensure that the Company’s obligations pursuant to this Agreement can be
enforced by the Indemnitee, the Company may, at its option, establish a trust pursuant to which the
Company’s obligations pursuant to this Agreement and other similar agreements can be funded.

     16. Notices. All notices and other communications hereunder shall be in writing and shall be
personally delivered or sent by recognized overnight courier service (a) if to the Company, to the
then-current principal executive offices of the Company (Attention: General Counsel) or (b) if to
the Indemnitee, to the last known address of the Indemnitee as reflected in the Company’s records.
Either party may change its address for the delivery of notices or other communications hereunder
by providing notice to the other party as provided in this Section 16. All notices shall
be effective upon actual delivery by the methods specified in this Section 16.

     17. Effectiveness; Governing Law. This Agreement shall be deemed to be effective as of May
25, 2006 and shall be governed by and construed in accordance with the laws of the State of Ohio,
without giving effect to the principles of conflict of laws thereof.

     18. Modification. This Agreement and the rights and duties of the Indemnitee and the Company
hereunder may be modified only by an instrument in writing signed by both parties hereto.

     19. References. References to Sections and Exhibits in this Agreement are references to
Sections of and Exhibits to this Agreement unless otherwise specified.

     20. Counterparts. This Agreement may be executed in any number of counterparts and each of
such counterparts will for all purposes be deemed to be an original, and all counterparts together
will constitute but one and the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
above written.

	 	 	 	 	 	 	 
	 	 	POLYONE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	[Signature of the Indemnitee]	 	 

 

 

Exhibit 1

INDEMNIFICATION STATEMENT

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	)	 	 	SS
	COUNTY OF

	 	 

	 	 	)	 	 	 

     I,                     , being first duly sworn, do depose and say as follows:

     1. This Indemnification Statement is submitted pursuant to the Indemnification Agreement,
dated
                    , 20___ (the “Indemnification Agreement”), between PolyOne Corporation, an Ohio
corporation (the “Company”), and the undersigned.

     2. I am requesting indemnification against costs, charges, expenses (which may include fees
and expenses of attorneys and/or others), judgments, fines and amounts paid in settlement
(collectively, “Liabilities”), which have been actually and reasonably incurred by me in connection
with a claim referred to in Section 4 of the Indemnification Agreement.

     3. With respect to all matters related to any such claim, I am entitled to be indemnified as
herein contemplated pursuant to the Indemnification Agreement.

     4. Without limiting any other rights which I have or may have, I am requesting indemnification
against Liabilities which have or may arise out of

 

      

 

.

	 	 	 	 	 
	 

	 	 

[Signature of the Indemnitee]
	 	 

     Subscribed and sworn to before me, a Notary Public in and for said County and State, this
                     day of                     , 20___.

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

[Seal]

     My commission expires the                     day of                     , 20___.

 

 

Exhibit 2

UNDERTAKING

	 	 	 	 	 	 	 	 	 
	STATE OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	)	 	 	SS
	COUNTY OF

	 	 

	 	 	)	 	 	 

     I,                                                                   
              , being first duly sworn, do depose and say as follows:

     1. This Undertaking is submitted pursuant to the Indemnification Agreement, dated
                     , 20___
(the “Indemnification Agreement”), between PolyOne Corporation, an Ohio
corporation (the “Company”), and the undersigned.

     2. I am requesting payment of costs, charges and expenses which I have reasonably incurred or
will reasonably incur in defending an action, suit, proceeding or claim, referred to in Section
3(a) or Section 3(b) or any claim referred to in Section 4, or pursuant to Section 11, of the
Indemnification Agreement.

     3. The costs, charges, and expenses for which payment is requested are, in general, all
expenses related to

 

      

 

.

          4. Part A1

     [Use this paragraph if the Indemnitee is a director of the Company] I hereby undertake to (a)
repay all amounts paid pursuant hereto if it is proved by clear and convincing evidence in a court
of competent jurisdiction that my action or failure to act which is the subject of the matter
described herein involved an act or omission undertaken with deliberate intent to cause injury to
the Company or undertaken with reckless disregard for the best interests of the Company and (b)
reasonably cooperate, at the Company’s sole cost and expense, with the Company concerning the
action, suit, proceeding or claim.

 

			
	1	 	The Indemnitee shall not be eligible to execute Part A of this
Undertaking if, at the time of the Indemnitee’s act or omission at issue,
the Amended Articles of Incorporation or the Regulations of the Company
prohibit such advances by specific reference to the Ohio Revised Code (the
“ORC”) Section 1701.13(E)(5)(a), or if the only liability asserted
against the Indemnitee is in an action, suit, proceeding or claim on the
Company’s behalf pursuant to ORC Section 1701.95. In the event that the
Indemnitee is eligible to and does execute both Part A and Part B hereof, the
costs, charges and expenses which are paid by the Company pursuant hereto shall
be required to be repaid by the Indemnitee only if he is required to do so
under the terms of both Part A and Part B hereof.

 

 

     [Use this paragraph if the Indemnitee is an officer of the Company but not a director of the
Company] I hereby undertake to (a) repay all amounts paid pursuant hereto (i) with respect to any
action, suit, proceeding or claim (other than an action by or in the right of the Company) brought
against me by reason of the fact that I am or was an officer of the Company for which I received
advancement of Expenses, it is determined that I did not act in good faith and in a manner which I
reasonably believed to be in or not opposed to the best interests of the Company or (ii) with
respect to any action, suit, proceeding or claim brought against me by or in the right of the
Company for which I received advancement of Expenses, I am adjudged to be liable for negligence or
for misconduct in the performance of my duty to the Company and the court has not determined that I
am entitled to indemnification and (b) reasonably cooperate, at the Company’s sole cost and
expense, with the Company concerning the action, suit, proceeding or claim.

	 	 	 	 	 
	 

	 	 

[Signature of the Indemnitee]
	 	 

          4. Part B

     I hereby undertake to repay all amounts paid pursuant hereto if it ultimately is determined
that I am not entitled to be indemnified by the Company under the Indemnification Agreement or
otherwise.

	 	 	 	 	 
	 

	 	 

[Signature of the Indemnitee]
	 	 

     Subscribed and sworn to before me, a Notary Public in and for said County and State, this
                    day of                     , 20___.

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

[Seal]

     My commission expires the                     day of                      , 20___.

-2-EX-10.2

 

EXHIBIT 10.2

SCHEDULE OF DIRECTORS AND EXECUTIVE OFFICERS WITH

INDEMNIFICATION AGREEMENTS

Directors

J. Douglas Campbell

Carol A. Cartwright

Gale Duff-Bloom

Wayne R. Embry

Richard H. Fearon

Robert A. Garda

Gordon D. Harnett

Stephen D. Newlin (as director)

Farah M. Walters

Executive Officers

Stephen D. Newlin, Chairman, President and Chief Executive Officer

Bernard P. Baert, Senior Vice President and General Manager, Colors and Engineered Materials, Europe and Asia

Michael E. Kahler, Senior Vice President, Commercial Development

Michael L. Rademacher, Senior Vice President and General Manager, Distribution

Robert M. Rosenau, Senior Vice President and General Manager, Vinyl Compounds

Wendy C. Shiba, Senior Vice President, Chief Legal Officer and Secretary

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

W. David Wilson, Senior Vice President and Chief Financial Officer

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