Document:

EX-10.13

 

Exhibit 10.13

[PolyOne Letterhead]

[Date]

[Name]

[Title]

[Address]

Dear ________________:

PolyOne Corporation (the “Company”) considers the establishment and maintenance of a sound and
vital senior management to be essential to protecting and enhancing the best interests of the
Company and its shareholders. In this connection, the Company recognizes that, as is the case with
many publicly-held corporations, the possibility of a change of control may exist and that such
possibility, and the uncertainty and questions that it may raise among management, may result in
the distraction and even the departure of senior management personnel to the detriment of the
Company and its shareholders. Accordingly, the Company’s Board of Directors has determined that
appropriate steps should be taken to reinforce and encourage the continued attention and dedication
of members of the Company’s senior management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the possibility of a
change of control of the Company.

In order to induce you to remain in the employ of the Company, and to continue your employment
notwithstanding the occurrence or threat of occurrence of a transaction that results in a change of
control of the Company, this letter agreement (“Agreement”) sets forth the benefits that the
Company agrees shall be provided to you in the event a Change of Control (as hereinafter defined in
Paragraph 3) should occur during the term of this Agreement and in the event that your employment
is thereafter terminated under such circumstances as are expressly provided in Paragraph 4.

In making provision for the payment of these benefits, it is not the Company’s intention to alter
in any way the compensation and benefits that would be paid to you in the absence of a Change of
Control.

1. TERM. This Agreement shall commence on [DATE] and shall continue through December 31, 20___,
provided, however, that commencing on January 1, 20___ and each January 1st thereafter, the term of
this Agreement shall automatically be extended for one additional year, unless at least 90 days
prior to such January 1st date, the Company shall have given notice that it does not wish to extend
this Agreement; provided, however, that prior to the occurrence of a Change of Control,
notwithstanding such extension, the term of this Agreement shall automatically end when you cease
to serve as an elected officer of the Company. Upon the occurrence of a Change of Control during
the term of this Agreement, including any extensions thereof, this Agreement shall automatically be
extended until the end of your Period of Employment (as hereinafter defined in Paragraph 2), and
may not be terminated by the Company during such time.

 

 

2. PERIOD OF EMPLOYMENT. Your “Period of Employment” shall commence on the date on which a Change
of Control occurs and shall end on the date that is ___ months after the date on which such Change
of Control occurs. Notwithstanding the foregoing, however, your Period of Employment shall not
extend beyond the Mandatory Retirement Date (as hereinafter defined in Paragraph 3) applicable to
you.

3. CERTAIN DEFINITIONS. For purposes of this Agreement:

     (a) A “Change of Control” shall mean

          (i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
voting securities of the Company where such acquisition causes such Person to own 25% 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 subparagraph (i), the following acquisitions shall not be deemed
to result in a Change of Control: (A) any acquisition directly from the Company that is approved
by the Incumbent Board (as defined in subparagraph (ii), below), (B) any acquisition by the
Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (D) any acquisition by
any Person pursuant to a transaction that complies with clauses (A), (B) and (C) of subparagraph
(iii) 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
(A) or (B) 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 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% of 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 meanings 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

          (ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board” (as
modified by this clause (ii)) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the date hereof 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 (either by a specific vote or
by approval of the proxy statement of the Company 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

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actual or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or

          (iii) The consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of assets
of another corporation, or other transaction (“Business Combination”) excluding, however, such a
Business Combination pursuant to which (A) 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 entity
resulting from such Business Combination (including, without limitation, an entity 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) (B) no Person (excluding any employee benefit plan
(or related trust) of the Company, the Company 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 (C) 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

          (iv) approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company except pursuant to a Business Combination that complies with clauses (A), (B) and (C)
of subparagraph (iii), above.

     (b) The term “Mandatory Retirement Date” shall mean the compulsory retirement date, if any,
established by the Company for those executives of the Company who, by reason of their positions
and the size of their nonforfeitable annual retirement benefits under the Company’s pension,
profit-sharing, and deferred compensation plans, are exempt from the provisions of the Age
Discrimination in Employment Act, 29 U.S.C. Sections 621, et seq., which date shall not in any
event be earlier for any executive than the last day of the month in which such executive reaches
age 65.

     (c) The term “Section 409A Guidance” shall mean collectively Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), any proposed, temporary or final regulations or
other formal guidance issued by the Secretary of the Treasury or the Internal Revenue Service with
respect thereto.

4. COMPENSATION UPON TERMINATION OF EMPLOYMENT. If, during the Period of Employment, the Company
shall terminate your employment for any reason (other than for a reason and as expressly provided
in Paragraph 5 hereof), or if you shall terminate your employment for “Good Reason” (as hereinafter
defined in subparagraph 4(g)), then the Company shall be obligated to compensate you as follows:

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     (a) (i) If the Change of Control constitutes a change in the ownership or effective control of
the Company, or a change in the ownership of a substantial portion of the assets of the Company,
within the meaning of the Section 409A Guidance (a “Section 409A Change of Control”), the Company
shall pay to you in a lump sum an amount equal to the product of one-twelfth of your annualized
Base Salary, multiplied by the number of months, including fractional months, in the Payment
Period. For purposes of this Paragraph 4, (A) the “Payment Period” shall be equal to the shorter
of (I) [12 or 24 or 36] months, commencing on the Date of Termination, or (II) the period from the
Date of Termination to your Mandatory Retirement Date, if any, and (B) “Base Salary” shall be equal
to your base salary at the rate in effect immediately prior to the Change of Control or, if
greater, immediately prior to the Date of Termination. If the Change of Control does not
constitute a Section 409A Change of Control, the Company shall continue your Base Salary for the
Payment Period.

          (ii) Subject to Paragraph 4(f), payment made pursuant to this Paragraph 4(a): (A) shall be
made, in the case of payment following a Section 409A Change of Control, on the date 60 calendar
days after the Date of Termination (the “Initial Payment Date”), and (B) shall commence, in the
case of payments following a Change of Control that does not constitute a Section 409A Change of
Control, with the first payroll period that commences on or after the Initial Payment Date. Each
payment under this Paragraph 4 shall be considered a separate payment and not one of a series of
payments.

     (b) The Company shall pay you in a lump sum an amount equal to the product of (x) the number
of months, including fractional months, in the Payment Period and (y) under the Company’s annual
bonus or similar incentive plan (the “Annual Incentive Plan”), one-twelfth of your “target annual
incentive amount” in effect prior to the Change of Control for the calendar year in which the
Change of Control occurs. Your “target annual incentive amount” under the Annual Incentive Plan is
determined by multiplying your salary range midpoint by the incentive target percentage that is
applicable to your incentive category under such Plan. Subject to Paragraph 4(f), payment made
pursuant to this Paragraph 4(b) shall be made on the Initial Payment Date.

     (c) (i) The Company shall maintain in full force and effect, for your continued benefit, for
the Payment Period, all health and welfare benefit plans and programs or arrangements, other than
the Company’s long-term disability plan, in which you were entitled to participate immediately
prior to the Date of Termination (collectively, the “Health Plans”), as long as your continued
participation is possible under the general terms and provisions of such plans and programs. In
the event that your participation in any such plan or program is barred, the Company shall provide
you with benefits substantially similar to those to which you would have been entitled to receive
under such plans and programs (“Comparable Benefits”), had you continued to participate in them as
an employee of the Company. Notwithstanding the preceding two sentences, this subparagraph 4(c)(i)
shall not restrict the Company’s right to modify or discontinue any benefit; provided, however,
that you shall not be treated less favorably than similarly situated active employees (including
non-highly compensated, salaried employees as similarly situated for such purpose) who were
employed by the Company immediately prior to the Change of Control.

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          (ii) You will be required to pay the full cost during the Payment Period of continuation
coverage in the Health Plans and of any Comparable Benefits that are subject to Code section 105 on
an after-tax basis. On the Initial Payment Date and on January 2 of each of the years during the
Payment Period following the year in which the Initial Payment Date occurs, the Company will make a
payment to you (the “Health Plans Premium Reimbursement”) equal to the difference between (A) the
amount you are required to pay during the calendar year of payment for such continuation coverage
and, with respect to the payment on the Initial Payment Date, the amount, if any, you are required
to pay for such continuation coverage in the prior year, and (B) the amount you would have been
required to pay during such years for such continuation coverage if you had paid the same
percentage of the cost that a similarly situated active employee would pay, as of the Date of
Termination. The Company will reimburse the amount of the federal, state and local taxes imposed
on you as a result of your receipt of the Health Plans Premium Reimbursement, such reimbursement to
be made subject to Paragraph 4(f) and no later than December 31 of the year following the year in
which you remitted the applicable taxes. Your right to continuation coverage under the Health
Plans and any Comparable Benefits pursuant to Paragraph 4(c)(i) shall satisfy the Health Plans’
obligation to provide you continuation coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended.

          (iii) If you have met the requirements for retirement eligibility under the Company’s general
retirement policies on the Date of Termination, the Company shall provide you after the end of the
Payment Period with those health and welfare benefits, if any, as in effect from time to time, to
which you would have been entitled under the Company’s general retirement policies if you had been
eligible to retire and you had retired immediately prior to the Change of Control, with the Company
paying that percentage of the premium cost of the plans that it would have paid under the terms of
the plans in effect immediately prior to the Change of Control with respect to individuals who
retire at age 65, regardless of your actual age on the Date of Termination. If the percentage of
premium cost that the Company pays for you is greater than the percentage of premium cost that the
Company pays for other similarly situated retirees, the Company may treat the differential amount
as taxable to you and pay you an additional amount in cash equal to the amount necessary to cause
the after-tax value of the benefit that you receive to be equal to the after-tax value of the
benefit you would have received had the Company not treated the differential amount as taxable to
you. Such payment shall be made subject to Paragraph 4(f) and no later than December 31 of the
year following the year in which you remitted the applicable taxes. Notwithstanding the preceding
two sentences, this subparagraph 4(c)(iii) shall not restrict the Company’s right to modify or
discontinue any benefit, or the portion of the premium cost thereof paid by the Company; provided,
however, that you shall not be treated less favorably with respect to any such modification or
discontinuance than similarly situated individuals (including non-highly compensated, salaried
employee retirees as similarly situated for such purpose) who retired at or after age 65 under the
terms and conditions in effect immediately prior to the Change of Control (or under the terms and
conditions that would have applied to persons who were eligible to retire, if they had retired,
immediately prior to the Change of Control);

     (d) The Company shall pay you a financial planning/tax preparation allowance equal to the full
amount of the annual financial planning/tax preparation allowance you were entitled to receive
immediately prior to the Change of Control (without the requirement to submit itemized

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invoices). Such amount will be paid (i) in a lump sum on the Initial Payment Date if the
Change of Control constitutes a Section 409A Change of Control, or (ii) in twelve equal monthly
installments commencing on the Initial Payment Date if the Change of Control does not constitute a
Section 409A Change of Control; and

     (e) (i) The Company shall, in addition to the benefits to which you are entitled under the
retirement plans or programs in which, as of immediately prior to the Change of Control, you both
participate and are actually accruing benefits, pay you in a lump sum in cash an amount equal to
the excess, if any, of (A) the actuarial equivalent of the retirement pension to which you would
have been entitled under the terms of such retirement plans or programs had you accumulated
additional years of continuous service under such plans equal in length to your Payment Period,
over (B) the actuarial equivalent of the retirement pension to which you are entitled under the
terms of such retirement plans or programs, determined without regard to this subparagraph (i).
For purposes of subparagraph (i), (w) the terms of a retirement plan or program shall be those in
effect immediately prior to the Change of Control or the Date of Termination, whichever is more
favorable to you; (x) the length of the Payment Period shall be added to total years of continuous
service for determining vesting and the amount of benefit accrual and to the age that you will be
considered to be for the purposes of determining eligibility for normal or early retirement
calculations; (y) your actual age shall be used for determining the amount of any actuarial
reduction; and (z) for the purposes of calculating benefit accrual, the amount of compensation you
shall be deemed to have received during each month of your Payment Period shall be equal to the sum
of your Base Salary prorated on a monthly basis, plus under the Annual Incentive Plan, one-twelfth
of your “target annual incentive amount” in effect prior to the Change of Control for the calendar
year in which the Change of Control occurs. For purposes of this subparagraph (i), “retirement
plan or program” shall mean any plan or program to the extent such plan or program is a “defined
benefit plan,” within the meaning of Section 3(35) of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”); and “actuarial equivalent” shall be determined using the same
methods and assumptions as those utilized immediately prior to the Change of Control under the
applicable retirement plan or program in which you participate for purposes of this subparagraph
(i). Subject to Paragraph 4(f), payment made pursuant to this Paragraph 4(e)(i) shall be made on
the Initial Payment Date.

          (ii) The Company shall, in addition to the benefits to which you are entitled under any
defined contribution plans and programs in which, as of immediately prior to the Change of Control,
you are eligible to participate and receive employer contributions, pay you in a lump sum in cash
an amount equal to the product of (A) the sum of all amounts payable to you under subparagraphs
4(a) and 4(b), multiplied by (B) the sum of (x) the aggregate maximum percentage(s) of eligible
compensation you were eligible to receive as employer matching contributions under all such defined
contribution plans for the plan year(s) in which occurs the Change of Control or the Date of
Termination, whichever is more favorable to you, determined without regard to any change in any
such plan adverse to you adopted after the Change of Control, plus (y) the aggregate maximum
percentage(s) of eligible compensation you were eligible to receive as employer non-elective
contributions under all such defined contribution plans for the plan year(s) in which occurs the
Change of Control or the Date of Termination, whichever is more favorable to you, determined
without regard to any change in any such plan adverse to you adopted after the Change of Control.
For purposes of this subparagraph (ii), defined contribution plan or program shall mean any plan or
program to the extent such plan or

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program is a “defined contribution plan,” within the meaning of Section 3(34) of ERISA;
“employer matching contributions” shall mean those employer contributions that are conditioned upon
your making employee after-tax contributions and/or employee pre-tax contributions and that are not
“discretionary contributions” (as hereinafter defined), but in no event shall employer matching
contributions be deemed to include employee pre-tax contributions regardless of whether employee
pre-tax contributions are considered employer contributions for any purpose; “employer non-elective
contributions” shall mean employer contributions that are not employer matching contributions and
that are not “discretionary contributions” (as hereinafter defined); “discretionary contributions”
shall mean employer contributions that under the terms of the applicable defined contribution plan
as in effect immediately prior to the Change of Control or the Date of Termination, whichever is
more favorable to you, were not required to be made, determined without regard to any requirement
that the participant be employed during the plan year or at another relevant time in order to be
eligible to receive such contributions, except that an employer contribution that would otherwise
be considered a discretionary contribution under this definition shall not be considered a
discretionary contribution if prior to the Date of Termination, the Company (or other employer
related to the Company maintaining the plan) has communicated to participants in such plan that
such contribution will, or is likely to, be made. For purposes of determining the maximum
percentage of eligible compensation you were eligible to receive as employer matching contributions
and/or for purposes of determining the maximum percentage of eligible compensation you were
eligible to receive as employer non-elective contributions, if under the terms of the applicable
defined contribution plan the contribution structure is a per capita structure or a step-rate or
similar structure, or if the contribution structure has changed during the plan year, then the
maximum percentage shall be determined or adjusted as necessary or appropriate to carry out the
intent of this subparagraph (ii); provided that if you are also covered with respect to any such
defined contribution plan (the “first plan”) by another defined contribution plan that provides for
contributions in respect of any limitations under the terms of the first plan, there shall be no
duplication of payment with respect to those arrangements. Subject to Paragraph 4(f), payment made
pursuant to this Paragraph 4(e)(ii) shall be made on the Initial Payment Date.

     (f) Notwithstanding anything to the contrary in this Paragraph 4, if you are a “specified
employee,” as determined by the Company in its Specified Employee Designation Procedure, on the
Date of Termination and any payment under this Agreement would be considered to be deferred
compensation under Section 409A of the Code, then any such payment that is considered to be
deferred compensation that would otherwise be payable during the six-month period following the
Date of Termination will instead be paid on the earlier of (i) the first business day of the
seventh month following the Date of Termination, or (ii) your death. Any amount that would have
been paid during the six-month period following the Date of Termination if payment would have been
made or commenced on the Initial Payment Date shall not be paid during such period, but instead
shall be paid on the first business day of the seventh month following the Date of Termination.

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     (g) For purposes of this Agreement, “Good Reason” shall mean the failure of the Company to
remedy any of the following within 10 calendar days after receipt by the Company within the
Employment Period of written notice thereof from you:

          (i) except as a result of the termination of your employment pursuant to Paragraph 5 hereof
and without your express written consent, (A) one or more changes in your duties, responsibilities,
reporting relationships and status that, when considered in the aggregate as compared with your
duties, responsibilities, reporting relationships and status immediately prior to a Change of
Control, constitute a material demotion, (B) the assignment to you of new duties or
responsibilities that, in the aggregate, (1) are materially inconsistent with, and (2) materially
and adversely change, your positions, duties, responsibilities, reporting relationships and status
as in effect immediately prior to a Change of Control, (C) a reduction in your annual Base Salary
or target annual incentive amount, (D) the failure to continue your health, welfare and retirement
benefits, perquisites, vacation policy, fringe benefits, long-term incentive compensation programs,
and relocation benefits and policies (including indemnification against loss on the sale of your
residence in connection with your relocation) on either a substantially similar basis or with
substantially similar aggregate economic value, as compared with immediately prior to a Change of
Control, (E) the Company requires that you change the principal location of your work, which
results in an additional commute of more than 50 miles, or (F) the Company requires you to travel
away from your office in the course of discharging your responsibilities or duties at least
one-third more (in terms of aggregate days in any calendar year or in any calendar quarter when
annualized for purposes of comparison) than was required of you for the calendar year immediately
preceding the Change of Control;

          (ii) the failure of the Company to obtain the assumption of and the agreement to perform this
Agreement by any successor as contemplated in Paragraph 11 hereof; [or]

          (iii) any purported termination of your employment that is not effected pursuant to a Notice
of Termination satisfying the requirements of Paragraph 6 hereof[; or/.]

          (iv) [FOR THE CEO, CFO AND GENERAL COUNSEL AGREEMENTS ONLY: without regard to any obligation
to provide notice and an opportunity to cure, your election to terminate your employment with the
Company for any reason during the 30-day period immediately following the first anniversary of the
first occurrence of a Change of Control].

5. TERMINATION FOR CAUSE OR UPON DISABILITY, RETIREMENT OR DEATH. If your employment is terminated
for any of the following reasons and in accordance with the provisions of this Paragraph 5, you
shall not be entitled by virtue of this Agreement to any of the benefits provided in the foregoing
Paragraph 4:

     (a) If, as a result of your incapacity due to physical or mental illness, you shall have been
absent from your duties with the Company on a full-time basis for 120 consecutive business days,
and within thirty (30) days after a written Notice of Termination (as hereinafter defined in
Paragraph 6) is given, you shall not have returned to the full-time performance of your duties;

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     (b) If the Company shall have Cause. For the purposes of this Agreement, the Company shall
have “Cause” to terminate your employment hereunder upon (i) the willful and continued failure by
you to substantially perform your duties with the Company, which failure causes material and
demonstrable injury to the Company (other than any such failure resulting from your incapacity due
to physical or mental illness), after a demand for substantial performance is delivered to you by
the Board which specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, and after you have been given a period (hereinafter known as
the “Cure Period”) of at least thirty (30) days to correct your performance, or (ii) the willful
engaging by you in other gross misconduct materially and demonstrably injurious to the Company.
For purposes of this paragraph, no act, or failure to act, on your part shall be considered
“willful” unless conclusively demonstrated to have been done, or omitted to be done, by you not in
good faith and without reasonable belief that your action or omission was in the best interests of
the Company.

Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to you a Notice of Termination which shall include a copy of
a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board (excluding you for this purpose, if you are then a member of the Board) at
a meeting of the Board called and held for the purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the Board), finding that in the
good faith opinion of the Board you were guilty of conduct set forth above in clauses (i) or (ii),
including the expiration of the Cure Period without the correction of your performance, or of the
preceding subparagraph and specifying the particulars thereof in detail.

     (c) If you die while employed by the Company or if you retire from such employment during your
Period of Employment, then you shall not be entitled to any of the benefits provided by this
Agreement and the benefits to which you or your beneficiary shall be entitled shall be determined
without regard to the provisions hereof.

6. NOTICE OF TERMINATION. Any termination of your employment by the Company or any termination by
you for Good Reason shall be communicated by written notice to the other party hereto. For
purposes of this Agreement, such notice shall be referred to as a “Notice of Termination.” Such
notice shall, to the extent applicable, set forth the specific reason for termination, and shall
set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.

7. DATE OF TERMINATION. “Date of Termination” shall mean the date on which you incur a “separation
from service” from the Company within the meaning of Section 409A(c)(2)(A)(i) of the Code.

     (a) If you terminate your employment for Good Reason, the proposed Date of Termination shall
be the date specified in the Notice of Termination, which in no event will be more than sixty (60)
days after Notice of Termination is given;

     (b) If your employment is terminated for Cause under subparagraph 5(b), the proposed Date of
Termination shall be the date on which a Notice of Termination is given,

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except that the Date of Termination shall not be any date prior to the date on which the Cure
Period expires without the correction of your performance;

     (c) If your employment pursuant to this Agreement is terminated following absence due to
physical incapacity, under subparagraph 5(a), then the proposed Date of Termination shall be thirty
(30) days after Notice of Termination is given (provided that you shall not have returned to the
performance of your duties on a full-time basis during such thirty (30) day period); or

     (d) If your employment is terminated by the Company other than under subparagraph 7(b) or
7(c), the proposed Date of Termination shall be the date specified in the Notice of Termination.

Subject to subparagraph 10(b), a termination of employment by either the Company or by you shall
not affect any rights you or your surviving spouse may have pursuant to any other agreement or plan
of the Company providing benefits to you, except as provided in such agreement or plan.

8. CERTAIN ADDITIONAL PAYMENTS.

     (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined (as hereafter provided) that any payment or distribution by the Company or any of its
affiliates to you or for your benefit (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Paragraph 8) (a “Payment”) would be subject to the excise
tax imposed by Section 4999 (or any successor provisions) of the Code, or to any similar tax
imposed by state or local law, or any interest or penalties are incurred by you with respect to
such excise tax (such tax or taxes, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then you shall be entitled to receive an additional
payment or payments (collectively, a “Gross-Up Payment”) in an amount such that after payment by
you of all taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed on the Gross-Up Payment, you retain an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. For purposes of determining
the amount of the Gross-Up Payment, you shall be considered to pay (x) federal income taxes at the
highest rate in effect in the year in which the Gross-Up Payment will be made and (y) state and
local income taxes at the highest rate in effect in the state or locality in which the Gross-Up
Payment would be subject to state or local tax, net of the maximum reduction in federal income tax
that could be obtained from deduction of such state and local taxes.

     (b) Subject to the provisions of subparagraph 8(c), all determinations required to be made
under this Paragraph 8, including whether and when such a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the accounting firm that was, immediately prior to the Change of
Control, the Company’s independent auditor (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and to you within fifteen (15) business

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days of the receipt of notice from you that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control, you shall appoint
another nationally recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses
of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Paragraph 8, shall be paid by the Company to you as provided in subparagraph 8(h).
If the Accounting Firm determines that no Excise Tax is payable by you, it shall furnish you with
a written opinion that you have substantial authority not to report any Excise Tax on your federal,
state or local income or other tax return with respect to such benefit or amount. Any
determination by the Accounting Firm shall be binding upon the Company and you. As a result of the
uncertainty of the application of Section 4999 of the Code and the possibility of similar
uncertainty regarding applicable state or local tax law at the time of the initial determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments that will not have been made
by the Company should have been made (“Underpayment”), consistent with the calculations required to
be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant
to subparagraph 8(c) and you thereafter are required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that-has occurred and any
such Underpayment shall be paid by the Company to you or for your benefit as provided in
subparagraph 8(h).

     (c) You shall notify the Company in writing of any claim by the Internal Revenue Service or
any other taxing authority that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten
(10) business days after you are informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be paid. You shall not
pay such claim prior to the expiration of the thirty (30) day period following the date on which
you give such notice to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies you in writing prior to the
expiration of such period that it desires to contest such claim, you shall:

          (i) give the Company any information reasonably requested by the Company relating to such
claim,

          (ii) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,

          (iii) cooperate with the Company in good faith in order effectively to contest such claim, and

          (iv) permit the Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall indemnify and hold you
harmless, on an after-tax basis, for any Excise Tax or income tax

11

 

(including interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the foregoing provisions
of this subparagraph 8(c), the Company shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of any such claim and
may, at its sole option, either direct you to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and you agree to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company directs you to pay
such claim and sue for a refund, the Company shall advance the amount of such payment to you, on an
interest-free basis and shall indemnify and hold you harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations relating to payment of taxes for
your taxable year with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable hereunder and you shall
be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

     (d) If, after the receipt by you of an amount advanced by the Company pursuant to subparagraph
8(c), you become entitled to receive any refund with respect to such claim, you shall (subject to
the Company’s complying with the requirements of subparagraph 8(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by you of an amount advanced by the Company pursuant to
subparagraph 8(c), a determination is made that you shall not be entitled to any refund with
respect to such claim and the Company does not notify you in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

     (e) You and the Company shall each provide the Accounting Firm access to and copies of any
books, records and documents in your possession or the Company’s possession, as the case may be, as
reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determinations and calculations contemplated by
this Paragraph 8.

     (f) The federal, state and local income or other tax returns filed by you shall be prepared
and filed on a consistent basis with the determination of the Accounting Firm with respect to the
Excise Tax payable by you. You shall report and make proper payment of the amount of any Excise
Tax, and at the request of the Company, provide to the Company true and correct copies (with any
amendments) of your federal income tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested by the Company, evidencing such payment.
If prior to the filing of your federal income tax return, or corresponding state or local tax
return, if relevant, the Accounting Firm determines that the

12

 

amount of the Gross-Up Payment should be reduced, you shall within five business days pay to
the Company the amount of such reduction.

     (g) Notwithstanding any provision of this Agreement to the contrary, but giving effect to any
redetermination of the amount of Gross-Up Payments otherwise required by this Paragraph 8, if (i)
but for this sentence, the Company would be obligated to make a Gross-Up Payment to you, and (ii)
the aggregate “present value” of the “parachute payments” to be paid or provided to you under this
Agreement or otherwise does not exceed 1.05 multiplied by three times your “base amount,” then the
payments and benefits to be paid or provided under this Agreement shall be reduced (or repaid to
the Company, if previously paid or provided) to the minimum extent necessary so that no portion of
any payment or benefit to you, as so reduced or repaid, constitutes an “excess parachute payment.”
For purposes of this subparagraph 8(g), the terms “excess parachute payment,” “present value,”
“parachute payment,” and “base amount” shall have the meanings assigned to them by Section 280G of
the Code. The determination of whether any reduction in or repayment of such payments or benefits
to be provided under this Agreement is required pursuant to this subparagraph 8(g) shall be made at
the expense of the Company, if requested by you or the Company, by the Accounting Firm.
Appropriate adjustments shall be made to amounts previously paid to you, or to amounts not paid
pursuant to this subparagraph 8(g), as the case may be, to reflect properly a subsequent
determination that you owe more or less Excise Tax than the amount previously determined to be due.
In the event that any payment or benefit intended to be provided under this Agreement or otherwise
is required to be reduced or repaid pursuant to this subparagraph 8(g), the amount payable pursuant
to subparagraph 4(a) shall be reduced.

     (h) Notwithstanding any other provision of this Paragraph 8 to the contrary, all taxes and
expenses described in this Paragraph 8 shall be paid or reimbursed within 5 business days after you
submit evidence of incurrence of such taxes and/or expenses, provided that in all events such
reimbursement shall be made on or before the last day of the year following (a) the year in which
the applicable taxes are remitted or expenses are incurred, or (b) in the case of reimbursement of
expenses incurred due to a tax audit or litigation in which there is no remittance of taxes, the
year in which the audit is completed or there is a final and nonappealable settlement or other
resolution of the litigation, in accordance with Treasury Regulation §1.409A-3(i)(1)(v). You shall
be required to submit all requests for reimbursements no later than 30 days prior to the last day
for reimbursement described in the prior sentence. Each provision of reimbursements pursuant to
this Paragraph 8 shall be considered a separate payment and not one of a series of payments for
purposes of Section 409A of the Code. Any expense reimbursed by the Company in one taxable year in
no event will affect the amount of expenses eligible for reimbursement, or in-kind benefits to be
provided, by the Company in any other taxable year.

9. COVENANTS.

     (a) [FOR 24 AND 36 MONTH AGREEMENTS ONLY:] During the term of this Agreement specified in
Paragraph 1 (the “Term”) and for a period ending one year following the Date of Termination, if you
have received or are receiving benefits under this Agreement, you shall not, without the prior
written consent of an officer of the Company, directly or indirectly, engage in any Competitive
Activity. For this purpose, “Competitive Activity” means your participation in the management of
any business enterprise if such enterprise engages in

13

 

substantial and direct competition with the Company and such enterprise’s sales of any product
or service competitive with any product or service of the Company amounted to 10% of such
enterprise’s net sales for its most recently completed fiscal year and if the Company’s net sales
of said product or service amounted to 10% of the Company’s net sales for its most recently
completed fiscal year. “Competitive Activity” shall not include (i) the mere ownership of
securities in any publicly-traded enterprise, if such ownership is less than 5% of the outstanding
voting securities or units of such enterprise or (ii) participation in the management of any such
enterprise other than in connection with the competitive operations of such enterprise.

     (b) During the Term, the Company agrees that it will disclose to you its confidential or
proprietary information (as defined in this subparagraph 9(b)) to the extent necessary for you to
carry out your obligations to the Company. You hereby covenant and agree that you will not during
the Term or thereafter disclose to any person not employed by the Company, or use in connection
with engaging in competition with the Company, any confidential or proprietary information of the
Company. For purposes of this Agreement, the term “confidential or proprietary information” shall
include all information of any nature and in any form that is owned by the Company and that is not
publicly available (other than by your breach of this subparagraph 9(b)) or generally known to
persons engaged in businesses similar or related to those of the Company. Confidential or
proprietary information shall include, without limitation, the Company’s financial matters,
customers, employees, industry contracts, strategic business plans, product development (or other
proprietary product data), marketing plans, and all other secrets and all other information of a
confidential or proprietary nature. For purposes of the preceding two sentences, the term
“Company” shall also include any subsidiary controlled by the Company (collectively, the
“Restricted Group”). The foregoing obligations imposed by this subparagraph 9(b) shall not apply
(i) during the Term, in the course of the business of and for the benefit of the Company, (ii) if
such confidential or proprietary information has become, through no fault of yours, generally known
to the public or (iii) if you are required by law to make disclosure (after giving the Company
notice and an opportunity to contest such requirement). These rights of the Company are in
addition to and without limitation to those rights and remedies otherwise available by law for
protection of the types of such confidential or proprietary information.

     (c) You hereby covenant and agree that during the Term and for a period ending one year after
the Date of Termination you will not, without the prior written consent of the Company, on your
behalf or on behalf of any person, firm or company, directly or indirectly, attempt to influence,
persuade or induce, or assist any other person in so persuading or inducing, any employee or
customer of the Restricted Group to give up, or to not commence, employment or a business
relationship with the Restricted Group.

     (d) You and the Company agree that the covenants contained in this Paragraph 9 are reasonable
under the circumstances, and further agree that if in the opinion of any court of competent
jurisdiction any such covenant is not reasonable in any respect, such court shall have the right,
power and authority to excise or modify any provision or provisions of such covenants as to the
court will appear not reasonable and to enforce the remainder of the covenants as so amended. You
acknowledge and agree that the remedy at law available to the Company for breach of any of your
obligations under this Paragraph 9 would be inadequate and that damages flowing from such a breach
may not readily be susceptible to being measured in monetary terms.

14

 

Accordingly, you acknowledge, consent and agree that, in addition to any other rights or
remedies that the Company may have at law, in equity or under this Agreement, upon adequate proof
of your violation of any such provision of this Agreement, the Company shall be entitled to
immediate injunctive relief and may obtain a temporary order restraining any threatened or further
breach, without the necessity of proof of actual damage.

10. NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER CONTRACTUAL RIGHTS.

     (a) You shall not be required to refund the amount of any payment or employee benefit provided
for or otherwise mitigate damages under this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for under this Agreement be reduced by any
compensation or the value of any benefits earned by you as the result of any employment by another
employer after the date of termination of your employment with the Company, or otherwise. Subject
to subparagraph 10(b), the provisions of this Agreement, and any payment or benefit provided for
hereunder, shall not reduce any amount otherwise payable, or in any way diminish your existing
rights, or rights which would occur solely as a result of the passage of time, under any other
agreement, contract, plan or arrangement with the Company.

     (b) To the extent, and only to the extent, a payment or benefit that is paid or provided under
this Agreement would also be paid or provided under the terms of another plan, program, agreement
or arrangement of, or assumed by, the Company or any of its affiliates, or required to be provided
by local law, including, without limitation, any employment agreement or Management Continuity
Agreement, you will be entitled to payment or benefit under this Agreement or such other plan,
program, agreement, arrangement or legal requirement, whichever provides for greater benefits, but
will not be entitled to benefits under both this Agreement and such other plan, program, agreement,
arrangement or legal requirement.

11. SUCCESSORS AND BINDING AGREEMENT.

     (a) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or assets of the Company,
by agreement in form and substance satisfactory to you, to assume and agree to perform this
Agreement.

     (b) This Agreement shall be binding upon the Company and any successor of or to the Company,
including, without limitation, any person acquiring directly or indirectly all or substantially all
of the assets of the Company whether by merger, consolidation, sale or otherwise (and such
successor shall thereafter be deemed “the Company” for the purposes of this Agreement), but shall
not otherwise be assignable by the Company.

     (c) This Agreement shall inure to the benefit of and be enforceable by you and your personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amounts would still be payable to you pursuant to Paragraph
4 hereunder if you had continued to live, all such amounts, unless

15

 

otherwise provided herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee, or other designee or, if there be no such designee, to your estate.

12. NOTICES. For the 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 to
the respective addresses set forth on the first page of this Agreement, provided that all notices
to the Company shall be directed to the attention of the Chief Executive Officer of the Company
with a copy to the Secretary of the Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.

13. GOVERNING LAW. The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Ohio, without giving effect to the principles of
conflict of laws of such State.

14. MISCELLANEOUS. No provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in a writing signed by you and the Company. No
waiver by either party hereto at any time of any breach by the other party hereto 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. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof, have been made by either party which are not set forth
expressly in this Agreement. This Agreement embodies the complete agreement and understanding
between the parties with respect to the subject matter hereof and effective as of its date
supersedes and preempts any prior understandings, agreements or representations by or between the
parties, written or oral, which may have related to the subject matter hereof in any way.
References to Paragraphs and subparagraphs are to paragraphs and subparagraphs of this Agreement.
Any reference in this Agreement to a provision of a statute, rule or regulation shall also include
any successor provision thereto.

15. VALIDITY. The invalidity or unenforceability of any provisions 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.

16. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and the same agreement.

17. WITHHOLDING OF TAXES. The Company may withhold from any amounts payable under this Agreement
all federal, state, city or other taxes as shall be required pursuant to any law or government
regulation or ruling.

18. NONASSIGNABILITY. This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder, except as provided in Paragraph 11 above. Without limiting the foregoing,
your right to receive payments hereunder shall not be assignable or transferable,

16

 

whether by pledge, creation of a security interest or otherwise, other than by a transfer by your
will or by the laws of descent and distribution and in the event of any attempted assignment or
transfer contrary to this Paragraph 18, the Company shall have no liability to pay any amounts so
attempted to be assigned or transferred.

19. DISPUTE RESOLUTION.

     (a) All disputes arising out of, relating to or concerning this Agreement, the breach of this
Agreement, your termination, or the termination of your employment shall be resolved pursuant to
this Paragraph 19. This includes all claims or disputes whether arising in tort or contract and
whether arising under statute or common law, including, without limitation, Ohio Revised Code
Chapter 4112.01 et seq., Ohio Revised Code Section 4117.01, Title VII of the Civil Rights Act of
1964, as amended, the Americans with Disabilities Act, the Age Discrimination in Employment Act of
1967, as amended, and all other federal and state employment statutes. Any such dispute shall be
resolved by arbitration held in Cleveland, Ohio, under the then-current Employment Dispute rules of
the American Arbitration Association (“AAA”). The arbitration shall be governed by the United
States Arbitration Act, 9 U.S.C. Sections l-16, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. This agreement to arbitrate
shall be specifically enforceable. Notwithstanding the foregoing, the Company shall not be
required to seek or participate in arbitration regarding any breach of your covenants contained in
Paragraph 9, but may pursue its remedies for such breach in a court of competent jurisdiction in
the city in which the Company’s principal executive offices are based.

     (b) You and the Company agree that you or it must file any request for arbitration with the
AAA and serve on the other party within six (6) months after the date on which the dispute arose
and hereby waive any statute of limitations to the contrary.

     (c) The arbitrator shall have no authority to extend, modify, or suspend any of the terms of
this Agreement. The arbitrator is not empowered to award damages in excess of compensatory damages
and you and the Company hereby waive any right to recover such damages with respect to any dispute
resolved by arbitration. The Company shall pay the fees and costs of the arbitrator. The
arbitrator shall make his award in writing and shall accompany it with an opinion discussing the
evidence and setting forth the reasons for his award. The decision of the arbitrator within the
scope of the submission shall be final and binding on you and the Company, and any right to
judicial action on any matter subject to arbitration hereunder is waived (unless otherwise required
by applicable law), except suit to enforce this arbitration award. If the rules of the AAA differ
from those of this Paragraph 19, the provisions of this Paragraph 19 shall control.

20. LEGAL FEES AND EXPENSES. If a Change of Control shall have occurred, thereafter the Company
shall pay and be solely responsible for:

          (i) 00% of the first $100,000 and

          (ii) 70% of any excess above $100,000, of

17

 

any and all attorneys’ and related fees and expenses incurred by you to successfully (in whole or
in part, and whether by modification of the Company’s position, agreement, compromise, settlement,
or administrative or judicial determination) enforce this Agreement or any provision hereof or as a
result of the Company or any shareholder of the Company contesting the validity or enforceability
of this Agreement or any provision hereof. To secure the foregoing obligation, the Company shall,
within 90 days after being requested by you to do so, enter into a contract with an insurance
company, open a letter of credit or establish an escrow in a form satisfactory to you. All
reimbursements under this Paragraph 20 shall be for expenses incurred by you during your lifetime.
Reimbursement shall be made no sooner than the first business day of the seventh month following
the Date of Termination and in all events shall be made prior to the last day of the calendar year
following the calendar year in which you incurred the expense. In no event will the amount of
expenses so reimbursed by the Company in one year affect the amount of expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year. Each provision of
reimbursement pursuant to this Paragraph 20 shall be considered a separate payment and not one of a
series of payments for purposes of Section 409A of the Code.

21. EMPLOYMENT RIGHTS. Nothing expressed or implied in this Agreement shall create any right or
duty on your part or on the part of the Company to have you remain in the employment of the Company
prior to the commencement of the Period of Employment; provided, however, that any termination of
your employment, for any reason other than those set forth in Paragraph 5, following the
commencement of any discussion with a third party, or the announcement by a third party of the
commencement of, or the intention to commence, a tender offer, or other intention to acquire all or
a portion of the equity securities of the Company that ultimately results in a Change of Control
shall (unless such termination is conclusively demonstrated to have been wholly unrelated to any
such activity relating to a Change of Control) be deemed to be a termination of your employment
after a Change of Control for purposes of this Agreement and both the Period of Employment and the
Payment Period shall be deemed to have begun on the date of such termination.

22. RIGHT OF SETOFF. There shall be no right of setoff or counterclaim against, or delay in, any
payment by the Company to you or your designated beneficiary or beneficiaries provided for in this
Agreement in respect of any claim against you or any debt or obligation owed by you, whether
arising hereunder or otherwise.

23. RIGHTS TO OTHER BENEFITS. Except as provided in subparagraph 10(b), the existence of this
Agreement and your rights hereunder shall be in addition to, and not in lieu of, your rights under
any other of the Company’s compensation and benefit plans and programs, and under any other
contract or agreement between you and the Company.

24. RELEASE. Notwithstanding any provision of this Agreement to the contrary, the Company shall
not pay or provide any compensation or benefits hereunder in connection with the termination of
your employment unless, prior to the sixtieth (60th) day following the Date of
Termination, you first sign a general release substantially in the form attached hereto as Exhibit
A and you do not revoke such release during the time period set forth therein for revocation.

25. SURVIVAL. Notwithstanding any provision of this Agreement to the contrary, the parties’
respective rights and obligations under Paragraphs 4, 8, 9, 19, 20, 21 and 26 shall survive

18

 

any termination or expiration of this Agreement or the termination of your employment following a
Change of Control for any reason whatsoever.

26. SOURCE OF PAYMENT. All payments under this Agreement shall be made solely from the general
assets of the Company or one of its subsidiaries (or from a grantor trust, if any, established by
the Company for purposes of making payments under this Agreement and other similar agreements), and
you shall have the rights of an unsecured general creditor of the Company with respect thereto.
The Company may, but need not, establish a trust to fund its obligations under the Agreement;
provided, however, that if the Company establishes such a trust, any funds contained therein shall
remain liable for the claims of the Company’s general creditors. Notwithstanding the above, upon
the earlier to occur of (a) a Change of Control or (b) a declaration by the Company’s Board of
Directors that a Change of Control is imminent, to the extent permitted by applicable law, the
Company shall promptly, to the extent it has not previously done so, establish a trust to fund its
obligations under this Agreement and transfer to the trustee of such trust, to be added to the
principal thereof, an amount sufficient to fund all payments which would be made to you hereunder
if your employment was terminated on the date of the Change of Control under circumstances in which
payments under Paragraph 4 hereof would become due and payable to you, including, without
limitation, cash in an amount sufficient to fund payments of all future welfare plan benefits as
provided in subparagraph 4(c) hereof, and the Gross-Up Payment as defined in Paragraph 8 hereof, in
each case based on reasonable estimates. In no event shall any amount be transferred to a trust
described in this Paragraph 26 if, pursuant to Section 409A(b)(3)(A) of the Code, such amount
would, for purposes of Section 83 of the Code, be treated as property transferred in connection
with the performance of services.

27. SECTION 409A COMPLIANCE. It is intended that this Agreement 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 you or your beneficiaries. This Agreement
shall be administered in a manner consistent with such intent.

If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and
return to the Company the enclosed copy of this letter which will then constitute our agreement on
this subject.

	 	 	 	 	 	 
	

Accepted And Agreed To 

As Of The Date Hereof

 	 	Sincerely,

POLYONE CORPORATION

By direction of the Compensation and

Governance Committee of the Board of

Directors

 	 
	 	 	By  	
 	 
	[Name] 	 	 	[Name] 	 
	 	 	 	 	 

19EX-10.14

 

Exhibit 10.14

Schedule of Executives with

Continuity Agreements

	 	 	 	 	 	 	 
	Title	 	Name	 	Years/Comp*
	Chairman, President and Chief Executive
Officer

	 	Stephen D. Newlin
	 	 	3	 
	 
	 	 	 	 	 	 
	Senior Vice President and General
Manager, Distribution

	 	Michael L. Rademacher
	 	 	3	 
	 
	 	 	 	 	 	 
	Senior Vice President , Operations

	 	Thomas J. Kedrowski
	 	 	3	 
	 
	 	 	 	 	 	 
	Senior Vice President and Chief
Information and Human Resources Officer

	 	Kenneth M. Smith
	 	 	3	 
	 
	 	 	 	 	 	 
	Senior Vice President and
Chief Financial Officer

	 	W. David Wilson
	 	 	3	 
	 
	 	 	 	 	 	 
	Senior Vice President, Commercial 

Development

	 	Michael E. Kahler
	 	 	3	 
	 
	 	 	 	 	 	 
	Senior Vice President and General Manager,
Vinyl Business

	 	Robert M. Rosenau
	 	 	3	 
	 
	 	 	 	 	 	 
	Senior Vice President and General
Manager, Colors and Engineered
Materials, Europe and Asia

	 	Bernard P. Baert
	 	 	2	 
	 
	 	 	 	 	 	 
	Vice President, General Counsel and
Secretary

	 	Lisa K. Kunkle
	 	 	3	 
	 
	 	 	 	 	 	 
	Vice President and General Manager,
Producer Services

	 	Patrick F. Burke
	 	 	1	 
	 
	 	 	 	 	 	 
	Vice President, Color and Engineered
Materials — Asia

	 	Willie Chien
	 	 	1	 
	 
	 	 	 	 	 	 
	Vice President and General Manager, North
America Engineered Materials

	 	Craig M. Nikrant
	 	 	1	 
	 
	 	 	 	 	 	 
	Vice President and General Manager, North
America Color and Additives

	 	John V. Van Hulle
	 	 	1	 
	 
	 	 	 	 	 	 
	Vice President, Research and Innovation

	 	Cecil Chappelow
	 	 	1	 
	 
	 	 	 	 	 	 
	Corporate Vice President, Technology

	 	Roger W. Avakian
	 	 	1	 
	 
	 	 	 	 	 	 
	Vice President and General Manager,
Specialty Coatings and Resins

	 	Daniel L. Kickel
	 	 	1	 
	 
	 	 	 	 	 	 
	Treasurer

	 	John L. Rastetter
	 	 	1	 

 

			
	*	 	Years of compensation payable upon change of control.

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