Document:

EX-10.1

Exhibit 10.1

July 16, 2008

Mr. Stephen D. Newlin

355 Calomus Circle

Medina, MN 55340

Dear Steve:

     By letter dated January 30, 2006, PolyOne Corporation (“PolyOne”) confirmed its verbal offer
of employment to you, with a start date (the “Effective Date”) on or before February 21, 2006. By
your acceptance dated February 6, 2006, you accepted the terms and conditions of employment set
forth in that letter agreement. PolyOne amended and restated that letter agreement on February 21,
2008 to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and any proposed, temporary or final regulations, or any guidance promulgated
with respect to Section 409A by the U.S. Department of Treasury or the Internal Revenue Service
(“Section 409A”). PolyOne desires to further amend and restate the February 21, 2008 letter
agreement.

1. Position and Duties.

     You will have the title of Chairman, President and Chief Executive Officer, reporting to
PolyOne’s Board of Directors (the “Board”) and will have the normal duties, responsibilities and
authority of an executive serving in such position. During the term of employment, you will devote
your best efforts and your full business time and attention (except for permitted vacation periods
and reasonable periods of illness or other incapacity) to the business and affairs of PolyOne. You
will perform your duties and responsibilities to the best of your abilities in a diligent,
trustworthy, businesslike and efficient manner. You will perform your duties and responsibilities
principally in the metropolitan area of PolyOne’s headquarters.

     You will be appointed by the Board, upon the Effective Date, as a member of the Board, and so
long as you serve as Chairman, President and Chief Executive Officer, the Board will nominate you
to stand for election as a member of the Board at PolyOne’s annual meeting of shareholders.

2. Compensation.

	 	(a)	 	Salary. Your initial base salary during the Employment Period (as defined
below) will be equal to $700,000 per year and will be subject to annual review by the
Board or the Compensation and Governance Committee of the Board (the “Committee”).
	 
	 	(b)	 	Bonus/Annual Incentive.

	 	(i)	 	You will be entitled to a signing bonus of $600,000, payable
within 30 calendar days of the Effective Date.
	 
	 	(ii)	 	In addition, during the Employment Period, you will be eligible
for an annual incentive award based on achievement of specified performance

 

 

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Page 2

goals (as determined by the Committee). For 2006, you will be eligible to
participate in the 2006 Senior Executive Annual Incentive Plan, with a target
attainment equal to 100% of your base salary.

	 	(c)	 	Equity/Long-Term Incentive Awards.

	 	(i)	 	You will be entitled to receive a grant, effective upon the
Effective Date, of 200,000 shares of restricted stock (the “Restricted Shares”)
under the PolyOne Corporation 2005 Equity and Performance Incentive Plan (the
“Plan”) and upon the following terms:

	 	(A)	 	The Restricted Shares will be subject to a risk
of forfeiture until the third anniversary of the date of grant.
	 
	 	(B)	 	The Restricted Shares will be forfeited if your
employment is terminated for any reason prior to their becoming
nonforfeitable, except that if your employment terminates by reason of
death or your permanent and total disability (as defined under the
relevant disability plan or program of PolyOne in which you then
participate) (“Disability”) or if a change in control (as defined in
PolyOne’s standard award agreements) (a “Change in Control”) of PolyOne
shall occur, all restrictions with respect to the Restricted Shares
will lapse.
	 
	 	(C)	 	The Restricted Shares will not be transferable
by you, except by will or the laws of descent and distribution, until
the shares become nonforfeitable as provided herein.
	 
	 	(D)	 	You will be entitled to all rights as a
shareholder with respect to the Restricted Shares granted (including
the right to vote and receive dividends thereon).
	 
	 	(E)	 	Any additional shares or other securities that
you may be entitled to receive under the terms of the Plan pursuant to
a stock dividend, stock split, combination of shares, recapitalization,
merger, consolidation, separation or reorganization or any other change
in the capital structure of the Company (a “Change in Capitalization”)
will be subject to the same restrictions as the Restricted Shares
granted.
	 
	 	(F)	 	Any tax withholding obligation of the Company
in connection with the Restricted Shares will be satisfied by PolyOne
withholding shares otherwise deliverable pursuant to the award of
Restricted Shares in order to satisfy the minimum withholding amount permissible
under the method that results in the least amount withheld.

 

 

Mr. Stephen D. Newlin

Page 3

	 	(ii)	 	You will also be entitled to participate in PolyOne’s 2006-2008
Long-Term Incentive Plan, consisting of awards of SARs and cash-settled
performance units, granted under the Plan. The total award value for the
2006-2008 award will be equal in value to $1,505,000, provided that in no event
will the number of SARs granted exceed 250,000, and the grant of such 2006-2008
award will be made on the Effective Date.
	 
	 	(iii)	 	You will also be entitled to participate in a two-year cash
incentive plan for the period January 1, 2006 through December 31, 2007 (the
“Performance Period”) upon the following terms:

	 	(A)	 	Such cash incentive plan will be in the form of
a grant to you, effective upon the Effective Date, of 87,000 phantom
units (the “Units”). Each Unit will be equal in value to one share of
PolyOne’s common stock. Any earned Units will entitle you to a cash
payment, to be made in the year immediately following the end of the
Performance Period and by March 15 of such year, equal to the number of
Units earned multiplied by the high-low average of PolyOne’s common
stock on the day immediately preceding the date of the approval of the
payment by the Committee.
	 
	 	(B)	 	Payment of the Units is contingent on the
attainment of certain pre-established metrics (including, threshold,
target and maximum levels of achievement), as most recently approved by
the Committee relating to the following equally-weighted financial
performance measures: Return on Invested Capital, Ratio of
Debt-to-EBITDA and Operating Cash Flow (as defined and approved by the
Committee); provided, however, that the actual payout
of the Units shall be not less than the targeted number of Units
(87,000) at the grant date stock price of $9.185.
	 
	 	(C)	 	Payment of the Units is also contingent upon
your remaining in the continuous employ of PolyOne or a subsidiary
through the end of the Performance Period and if your employment
terminates before the end of the Performance Period (except as set
forth below), the Units will be forfeited. Notwithstanding the
preceding sentence, upon a Change in Control, you will be entitled to
payment of 100% of the Units awarded and if your employment with
PolyOne terminates during the Performance Period due to your death or
Disability, PolyOne will pay to you or your executor or administrator,
as the case may be, after the end of the Performance Period, the
portion of the Units to which you would have been
entitled had you remained employed by PolyOne through the end of the
Performance Period, prorated based on the portion of the Performance
Period during which you were employed by PolyOne.

 

 

Mr. Stephen D. Newlin

Page 4

	 	(D)	 	The Units will not be transferable by you,
except by will or the laws of descent and distribution.
	 
	 	(E)	 	The Units will be adjusted by the Committee in
the event of any Change in Capitalization.

	 	(iv)	 	In future years, you will be eligible to receive long-term
incentive awards, together with PolyOne’s other executive officers, as approved
by the Committee.
	 
	 	(v)	 	If you have a Qualifying Separation from Service, as defined
below, you will be treated as a retiree for the purposes of any Stock
Appreciation Rights (“SARs”), Restricted Stock Units (“RSUs”) and Performance
Units awarded to you as long-term incentive awards. The portion of any
agreements applicable to such long-term incentive awards related to retirement
are hereby amended to reflect the following if your termination of employment
occurs as a result of your Qualifying Separation from Service:

	 	(A)	 	Any SARs that are vested at the time of your
Qualifying Separation from Service and any SARs that will become vested
in the six-month period following your Qualifying Separation from
Service may be exercised for the shorter of (1) three years from the
date of your Qualifying Separation from Service or (2) the remainder of
the term of the SARs.
	 
	 	(B)	 	On the tenth business day following the third
anniversary of the date of the grant of any RSUs, you will receive a
pro-rata portion of the RSUs. Such pro-ration will be based on the
portion of the Restriction Period, as defined in the award agreement
for the RSUs, during which you were employed by PolyOne.
	 
	 	(C)	 	Following the end of the Performance Period set
forth in the award agreement for any Performance Units, you will
receive the Performance Units to which you would have been entitled had
you remained employed by PolyOne through the end of the Performance
Period, pro-rated based on the portion of the Performance Period during
which you were employed by PolyOne.

	 	(vi)	 	You will be considered to have a Qualifying Separation from
Service if:

	 	(A)	 	(1) You have attained the age of 55 and have
at least five years of service with PolyOne (“Retirement Eligible”),
serving as Chairman and Chief Executive Officer at the time of your retirement, provided,
however, that if the Board, in its sole discretion, has identified a
suitable successor for the position of Chief Executive Officer, you
need only be serving as Chairman at the time of your

 

 

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retirement, and
(2) the Board, in its sole discretion, has identified a suitable
successor to the position of Chief Executive Officer; or

	 	(B)	 	Your employment is involuntarily terminated
other than for Serious Cause after the date hereof.

Notwithstanding the forgoing, in no event will you be considered to have a
Qualifying Separation from Service if your employment is involuntarily
terminated for Serious Cause.

	 	(d)	 	Expense Reimbursement. PolyOne will reimburse you for all reasonable business
expenses incurred by you during the Employment Period in the course of performing your
duties under this agreement that are consistent with PolyOne’s policies in effect from
time to time with respect to travel, entertainment and other business expenses, subject
to PolyOne’s requirements applicable generally with respect to reporting and
documentation of such expenses.
	 
	 	(e)	 	Standard Benefits. You will be entitled during the Employment Period to
participate, on the same basis as other salaried employees of PolyOne, in PolyOne’s
standard benefit programs (the “Standard Benefits Package”). The Standard Benefits
Package means those benefits (including the PolyOne Retirement Savings Plan, the
PolyOne Supplemental Retirement Savings Plan, the health care programs, short-term and
long-term disability benefits, life insurance, business travel accident coverage,
flexible spending accounts, and an employee assistance program) for which PolyOne
salaried employees are from time to time generally eligible, as determined from time to
time by the Committee or the Board. As part of the Standard Benefits Package, you will
also be entitled to reimbursement of relocation expenses under the PolyOne Plus
Relocation Program (the “Relocation Program”) (except that PolyOne will provide
reimbursement for up to 24 months). Notwithstanding anything to the contrary contained
in this agreement, the Standard Benefits Package will not include the right to
participate in the PolyOne Employee Transition Plan (the “ETP”) or the Executive
Severance Plan (“ESP”), both of which the parties agree do not apply to you.
	 
	 	(f)	 	Additional Relocation Benefits. As an additional benefit, PolyOne will
reimburse you for reasonable expenses relating to lodging, meals and travel between
your residence and work (Avon Lake, Ohio) during the 90-day period immediately
following the Effective Date, provided that, following such 90-day period and until
such time as you initiate your relocation under the Relocation Program, you will be
responsible for any and all expenses associated with commuting between your residence
and work (Avon Lake, Ohio) locations, together with your living expenses.

	 	(g)	 	Other. You will also be entitled to the following: (i) five weeks of paid
vacation per year; (ii) a car allowance equal to $1200 per month; (iii) an annual
allowance for financial planning and tax preparation in an amount equal to up to
$13,000 per 

 

 

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	 		 	year, payable upon submission of itemized invoices; and (iv) participation
in the PolyOne Group Excess Liability policy.

	 	(h)	 	Reimbursement. Any reimbursement of expenses under this Paragraph 2 shall be
for expenses incurred by you during the Employment Period and such reimbursement shall
be made not later than December 31 of the year following the year in which you incur
the expense. In no event will the amount of expenses so reimbursed by PolyOne in one
year affect the amount of expenses eligible for reimbursement, or in-kind benefits to
be provided, in any other taxable year.

	3.	 	Other Agreements. You agree, in connection with your employment with PolyOne, to
execute and be bound by the terms and conditions of PolyOne’s standard: (a) Management
Continuity Agreement for executive officers (providing for 36 months of compensation upon the
terms and conditions in such agreement); (b) Confidential Information, Invention and
Non-Solicitation Agreement; (c) Code of Conduct; and (d) Code of Ethics for Senior Officers
(collectively, the “Other Agreements”).

	4.	 	Employment Period.

	 	(a)	 	The Employment Period. Except as otherwise provided herein, the Employment
Period will commence on the Effective Date and will continue thereafter until
terminated as provided in this Paragraph 4 (the “Employment Period”).
	 
	 	(b)	 	Termination. Notwithstanding anything to the contrary contained in this
agreement, the Employment Period will end on the first to occur of any of the following
events: (i) your death; (ii) PolyOne’s termination of your employment on account of
your Disability; (iii) a voluntary termination of your employment by you (including
your retirement); (iv) an involuntary termination of your employment by PolyOne for
Serious Cause (as defined below); or (v) an involuntary termination of your employment
by PolyOne without Serious Cause (as defined below).
	 
	 	(c)	 	Serious Cause. For purposes of this agreement, “Serious Cause” will have the
meaning ascribed to such term in the ETP, as such ETP may be amended from time to time,
and will also include any breach of a provision of this agreement or of any of the
Other Agreements. A copy of the current definition of “Serious Cause” has been
delivered to you concurrently with this agreement.

	5.	 	Post-Employment Period Payments.

	 	(a)	 	Accrued Compensation/Benefits. Except as provided in Paragraph 5(b) below, at
the end of the Employment Period for any reason, you will cease to have any rights to
compensation or benefits and you shall be entitled only to (i) any base salary that has
accrued but is unpaid, any reimbursable expenses that have been
incurred but are unpaid, and any unexpired vacation days that have accrued under
PolyOne’s vacation policy but are unused, as of the end of the Employment Period;
(ii) any plan benefits that by their terms extend beyond termination of

 

 

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your
employment (but only to the extent provided in any such benefit plan in which you
have participated as an employee of PolyOne and excluding the ETP and the ESP); and
(iii) any benefits to which you are entitled under the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended (“COBRA”).

	 	(b)	 	Severance Payments. Notwithstanding the foregoing, if (i) your Employment
Period ends early for any reason other than as set forth in Paragraph 4(b)(i) through
4(b)(iv) above and the end of your Employment Period constitutes a “separation from
service,” as defined for purposes of Section 409A (a “Separation From Service”),
(ii) such termination is not following a change in control of PolyOne entitling you to
benefits under your Management Continuity Agreement and (iii) on or before the 45th day
following such end of your Employment Period, you agree to standard non-compete and
non-solicitation covenants for a period of 36 months following the date of termination
and to other standard terms and conditions, including a full release of claims, you
will also be entitled to the following amounts and benefits, all payable in accordance
with the requirements of Section 409A:

	 	(A)	 	36 months of salary continuation, car allowance and financial
planning/tax preparation allowance, with monthly payments to commence, except
as provided in Paragraph 5(d), with the first normal pay period that occurs on
or after 60 calendar days after the end of your Employment Period (the “Initial
Payment Date”);
	 
	 	(B)	 	An annual incentive amount as earned for the year in which
termination of employment occurs, to be paid in the year following the year in
which your Employment Period terminates but no later than March 15 of such
year, prorated for the amount of time that has elapsed from the beginning of
the applicable performance period until the date of termination of employment;
and
	 
	 	(C)	 	24 months of continuation in PolyOne’s medical and dental plans
(the “Health Plans”), provided that Health Plans expressly do not include life
insurance, short-term disability or long-term disability. You will be required
to pay the full cost of the continuation coverage in the Health Plans on an
after-tax basis. On the Initial Payment Date and on January 2 of the year
following the year in which the Initial Payment Date occurs, PolyOne 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 your employment terminated. PolyOne will reimburse the

 

 

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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 5(d), 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 pursuant to this Paragraph
5(b)(C) shall satisfy the Health Plans’ obligation to provide you
continuation coverage pursuant to COBRA.

	 	 	 	The monthly financial planning/tax preparation allowance to be provided pursuant to
subparagraph (A) above shall be in an amount equal to one-twelfth of the full annual
financial planning/tax preparation allowance to which you are entitled pursuant to
Paragraph 2(g)(iii) as of the end of your Employment Period (without the requirement
to submit itemized invoices).
	 
	 	 	 	Each cash payment made by PolyOne pursuant to this Paragraph 5(b) and Paragraph
5(c), including but not limited to reimbursement of financial planning/tax
preparation expenses, shall be considered a separate payment and not one of a series
of payments for purposes of Section 409A.
	 
	 	(c)	 	Possible Additional Severance Payment. Notwithstanding anything to the
contrary contained herein, in the event that your employment with PolyOne is
involuntarily terminated by PolyOne without Serious Cause (as defined in Paragraph 4(c)
above) prior to the three year anniversary of the Effective Date, you will be entitled
to the following cash payments, payable, except as provided in Paragraph 5(d), on the
Initial Payment Date:

	 	(i)	 	If your employment is terminated at any time before the one
year anniversary of the Effective Date, you will be entitled to a cash payment
equal to the amount determined by multiplying 66,667 by the fair market value
of one share of PolyOne common stock on the date of termination of your
employment.
	 
	 	(ii)	 	If your employment is terminated on or following the one year
anniversary of the Effective Date but before the 18 month anniversary of the
Effective Date, you will be entitled to a cash payment equal to the amount
determined by multiplying 100,000 by the fair market value of one share of
PolyOne common stock on the date of termination of your employment.
	 
	 	(iii)	 	If your employment is terminated on or following the 18 month
anniversary of the Effective Date but before the two year anniversary of the
Effective Date, you will be entitled to a cash payment equal to the amount
determined by multiplying 133,334 by the fair market value of one share of
PolyOne common stock on the date of termination of your employment.
	 
	 	(iv)	 	If your employment is terminated on or following the two year
anniversary of the Effective Date but before the three year anniversary of

 

 

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the
Effective Date, you will be entitled to a cash payment equal to the amount
determined by multiplying 166,667 by the fair market value of one share of
PolyOne common stock on the date of termination of your employment.

	 	(v)	 	If your employment is terminated on or following the three year
anniversary of the Effective Date, you will not be entitled to any additional
cash payment under this Paragraph 5(c).

	 	(d)	 	Delayed Payment for Specified Employee. Notwithstanding the foregoing, if you
are a “specified employee,” as determined by PolyOne in its Specified Employee
Designation Procedure, on the date of your Separation From Service and any payment
under Paragraph 5(b)(A), 5(b)(C) or 5(c) would be considered to be deferred
compensation under Section 409A, then any such payment that is considered to be
deferred compensation that would otherwise be payable during the six-month period
following your Separation From Service will instead be paid on the earlier of (1) the
first business day of the seventh month following the date of your Separation From
Service, or (2) your death.
	 
	 	(e)	 	Retirement Benefits. Upon your Qualifying Separation from Service, you will be
entitled to annual Supplemental Executive Retirement Plan payments (the “SERP
Payments”), payable in the form of a fifteen year certain and continuous life annuity.
The amount of each annual SERP Payment shall be determined as provided on Appendix A.

	 	(i)	 	The first SERP Payment will be made on the first business day
of the seventh month following the date of your Separation From Service (“First
Payment Date”). Each subsequent annual SERP Payment will be made on the
succeeding anniversaries of the First Payment Date.
	 
	 	(ii)	 	The fifteen year certain and continuous life annuity will
provide for annual payments to you for your entire life and if you die after
SERP Payments have commenced but before fifteen SERP Payments have been made to
you, annual payments will be made to your named beneficiary or beneficiaries on
the dates specified in subparagraph (i) above until fifteen SERP Payments have
been paid to you and your named beneficiary or beneficiaries. If all of you
and your named beneficiary or beneficiaries die before a total of fifteen SERP
Payments have been paid, the remaining SERP Payments will continue to be paid
on the dates specified in subparagraph (i) above to the estate of the last to
die of you and your named beneficiary or beneficiaries (for this purpose
looking through any trust designated as a beneficiary to its beneficiary or
beneficiaries).
	 
	 	(iii)	 	If your death occurs either before you have a Qualifying
Separation from Service or after you have a Qualifying Separation from Service
but before SERP Payments have commenced, your named beneficiary or beneficiaries will
be entitled to receive fifteen annual SERP Payments in

 

 

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Page 10

	 	 	 	the amount set forth
in Appendix A, commencing on the first business day of the month following
the date of your death. Each subsequent annual SERP Payment will be made on
the succeeding anniversaries of this date. If all of your named
beneficiaries die before fifteen SERP Payments have been paid, the remaining
SERP Payments shall continue to be paid on such anniversary date to the
estate of the last to die of your named beneficiaries (for this purpose
looking through any trust designated as a beneficiary to its beneficiary or
beneficiaries) until a total of fifteen SERP Payments have been paid under
this subparagraph (iii).
	 
	 	(iv)	 	If you incur a Disability before you have a Qualifying
Separation from Service, you will be entitled to SERP Payments in an amount
determined as provided on Appendix A, payable in the form of a fifteen year
certain and continuous life annuity. Such SERP Payments will commence to be
paid upon the earlier of (A) the date on which you are determined to be
“disabled” for purposes of Section 409A, or (B) the date of your Separation
From Service, provided that if commencement of payment is based on (y) the
determination that you are “disabled,” the initial SERP Payment will be made
sixty days after such determination, or (z) your Separation From Service, the
initial SERP Payment will be made on the first day of the seventh month
following your Separation From Service. Each subsequent annual SERP Payment
under this subparagraph (iv) will be made on the succeeding anniversaries of
the initial payment date.
	 
	 	(v)	 	The SERP Payments will be unsecured and unfunded obligations of
PolyOne.
	 
	 	(vi)	 	PolyOne’s obligation to pay you the SERP Payments will be
conditioned upon your execution of a release and waiver, which must be executed
no later than forty-five calendar days after your Separation From Service, or
the determination of your “disabled” status for purposes of Section 409A, if
payment commences upon such determination under subparagraph (iv) above.

	 	(f)	 	Retiree Medical Benefits. Upon your Qualifying Separation from Service, you and
your eligible dependents will have access to retiree medical benefits under PolyOne’s
standard retiree medical benefit program, to the extent PolyOne continues to maintain
such program for the benefit of its retirees and their eligible dependents. As
provided in the PolyOne retiree medical program, you and your dependents will be
responsible for payment of all premiums in connection with such retiree medical
coverage.
	 
	 	(g)	 	Forfeiture of Benefits. Your right to the SERP Payments and retiree medical
benefits will cease upon (i) your engaging in any acts which constitute fraud,
embezzlement, disclosure of confidential information or deliberate dishonesty or
(ii) your engaging in any of the acts or conduct prohibited by your Employee
Agreement dated April 10, 2007, as it may be amended from time to time,

 

 

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regardless
of whether such Employee Agreement remains in effect at the time of such acts or
conduct.

6. Miscellaneous.

     You represent and warrant to PolyOne that: (a) the execution, delivery and performance of
this agreement by you does not and will not conflict with, breach, violate or cause a default under
any contract, agreement, instrument, order, judgment or decree to which you are a party or by which
you are bound, (b) except as disclosed in writing to PolyOne, you are not a party to or bound by
any employment agreement, noncompete/non-solicitation agreement or confidentiality agreement with
any other person or entity and (c) upon the execution and delivery of this agreement by you, this
agreement will be a valid and binding obligation of you, enforceable in accordance with its terms.

     PolyOne may withhold from any amounts payable under this agreement, including, but not limited
to the SERP Payments, all federal, state, city or other taxes as PolyOne is required to withhold
pursuant to any applicable law, regulation or ruling.

     Whenever possible, each provision of this agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision
or any other jurisdiction, but this agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never been contained
herein.

     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.

     This agreement may be executed in separate counterparts, each of which shall be deemed to be
an original and both of which taken together shall constitute one and the same agreement.

     This Agreement shall be governed by the internal law, and not the laws of conflicts, of the
State of Ohio.

     The provisions of this agreement may be amended or waived only with the prior written consent
of PolyOne and you, and no course of conduct or failure or delay in enforcing the provisions of
this agreement shall affect the validity, binding effect or enforceability of this agreement.

     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.

 

 

Mr. Stephen D. Newlin

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     If you find this agreement acceptable, please sign and date the letter below and return it to
me. This agreement will become effective on the latest date set forth below.

	 	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	POLYONE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:

Title:
	 	Gordon D. Harnett 

Chairperson of the Compensation
and Governance Committee	 	 
	 
	 	 	 	 	 	 
	 	 	Date: July __, 2008	 	 

I agree to the terms and conditions

in this letter agreement.

                                                            

Name: Stephen D. Newlin

Date: July ___, 2008

 

 

APPENDIX A

	 	 	 
	Date of Separation	 	Amount of Annual SERP
	From Service*	 	Payment
	Prior to 2/21/2011 on account of death,      

Disability or involuntary termination
	 	$410,600,

Actuarially reduced for early commencement
	On or after 2/21/2011 but before 2/21/2012
	 	$410,600
	On or after 2/21/2012 but before 2/21/2013
	 	$460,500
	On or after 2/21/2013 but before 2/21/2014
	 	$512,900
	On or after 2/21/2014 but before 2/21/2015
	 	$568,600
	On or after 2/21/2015 but before 2/21/2016
	 	$626,000
	On or after 2/21/2016 but before 2/21/2017
	 	$685,700
	On or after 2/21/2017 but before 2/21/2018
	 	$747,200
	On or after 2/21/2018          
     
     
            
	 	$808,800

 

			
	*	 	Or date of the determination that you are “disabled,” within the meaning of Section 409A, if the
commencement of your SERP Payments is determined under Section 5(e)(iv)(y).EX-10.2

Exhibit 10.2

CONSULTING AGREEMENT

     This Consulting Agreement (this “Agreement”), dated as of September 9, 2008 (the
“Effective Date”), is entered into by and between PolyOne Corporation, an Ohio corporation
(the “Company”), and W. David Wilson (“Consultant”).

RECITALS

     WHEREAS, the Company believes that Consultant’s expertise and knowledge will enhance the
Company’s business;

     WHEREAS, the Company wishes to retain Consultant to perform consulting services and fulfill
certain related duties and obligations under the terms and conditions of this Agreement, commencing
on the Effective Date; and

     NOW, THEREFORE, in consideration of (a) the mutual covenants and agreements set forth in this
Agreement, and (b) other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

     1. Consulting Services.

          (a) Capacity. The Company hereby retains Consultant on a non-exclusive basis with
respect to the business of the Company and its subsidiaries for the purpose of providing consulting
services and deliverables related to such project or projects designated by the Compensation and
Governance Committee of the Board of Directors of the Company (the “C&G Committee”)
(collectively, the “Project”) at the request of the Company (the “Project Consulting
Services”). In addition to the Project Consulting Services, Consultant shall provide Company
with other consulting services at the request of the Company (the “Additional Consulting
Services”). Consultant hereby accepts such position upon the terms and the conditions set
forth herein, and shall perform such duties as may be mutually agreed upon by the Company and
Consultant.

          (b) Term and Operation. This Agreement will commence on the Effective Date and shall
continue until, and shall end upon, December 31, 2008. Notwithstanding the foregoing, this
Agreement may be terminated by either party in writing upon fifteen (15) days written notice to the
other party. This Agreement will terminate automatically on the death of Consultant.

          (c) Compensation.

     (i) In consideration of Consultant’s performance of the Project Consulting
Services, the Company shall make a lump sum payment to Consultant upon the
successful completion of the Project and no later than March 15, 2009, in an amount
determined by the C&G Committee, or its delegate, in its sole discretion;
provided however, notwithstanding any provision of this Agreement to
the contrary, the Company’s obligation to make such lump sum payment to

					
	 	 	 	 	 
	 
	 	 
	 	Wilson Consulting Agreement

 

 

Consultant is contingent upon Consultant’s reaffirmation of the release set
forth in the Severance Agreement and Release, dated as of August 18, 2008 by and
between the Company and Consultant (the “Release”).

     (ii) In consideration of Consultant’s performance of the Additional Consulting
Services, during the term of this Agreement the Company shall pay Consultant at a
rate of $190.00 per hour, such amount to be paid in installments based on the
Company’s practices as may be in effect from time to time.

          (d) Reimbursement of Expenses. In the event that the Company requests that Consultant
perform Project Consulting Services or Additional Consulting Services outside the area where
Consultant resides and travel is pre-approved, the Company shall compensate Consultant for
reasonable and documented travel expenses in accordance with and to the same extent employees of
the Company are reimbursed under the Company’s Travel and Expense Policy. Consultant shall make
and retain accurate records of disbursements and expenses and shall make the records available to
the Company for inspection upon request. Consultant shall invoice the Company every month for his
expenses. Invoices shall be submitted to Kenneth M. Smith, Senior Vice President and Chief Human
Resources Officer, for payment authorization.

     2. Confidentiality; Competitive Activity; Nonsolicitation. Consultant acknowledges
that Sections 8, 9 and 10 of the Release set forth certain restrictive covenants that prohibit
Consultant from disclosing confidential information, engaging in competitive activity and/or
soliciting employees of the Company (the “Restrictive Covenants”). Notwithstanding any
provision of this Agreement to the contrary, the Company shall not be obligated to make any payment
under subparagraphs 1(c) and 1(d) if Consultant breaches any of the Restrictive Covenants.

     3. Independent Contractor. During the term of this Agreement, Consultant will at all
times be and remain an independent contractor. Consultant shall be free to exercise Consultant’s
own judgment as to the manner and method of providing the consulting services to the Company,
subject to applicable laws and requirements reasonably imposed by the Company. Consultant
acknowledges and agrees that, during the term of this Agreement, Consultant will not be treated as
an employee of the Company or any of its affiliates for purposes of federal, state, local or
foreign income tax withholding, nor unless otherwise specifically provided by law, for purposes of
the Federal Insurance Contributions Act, the Social Security Act, the Federal Unemployment Tax Act
or any Worker’s Compensation law of any state or country and for purposes of benefits provided to
employees of the Company or any of its affiliates under any employee benefit plan. Consultant
acknowledges and agrees that as an independent contractor, Consultant will be required, during the
term of this Agreement, to pay any applicable taxes on the fees paid to Consultant. Consultant
shall indemnify, hold harmless and defend the Company for all tax and other liabilities (including,
without limitation, reasonable fees and expenses of attorneys and other professionals) arising out
of or relating to Consultant’s failure to report and pay all employment income taxes or other taxes
due on taxable amounts paid to or on behalf of Consultant by the Company.

					
	 	 	 	 	 
	 
	 	-2-
	 	Wilson Consulting Agreement

 

 

     4. Inventions and Works for Hire. Consultant acknowledges that all work created by
him in the performance of his services hereunder on behalf of the Company constitutes intellectual
property of the Company or its assignees. Consultant hereby grants to the Company or its assignees
full ownership to all work product created in performance of his consulting duties for the Company.
The work product shall become confidential information of the Company and protected accordingly.
Types of work product include without limitation: ideas, concepts, data, designs, and compilations,
authored or conceived by Consultant in the course of this Agreement. Consultant will cooperate
with the Company to review and sign such documents provided by the Company as are necessary for the
Company to seek copyright or patent protection relating to such work product.

     5. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid or unenforceable in any respect under any applicable law,
such invalidity or unenforceability shall not affect any other provision, but this Agreement shall
be reformed, construed and enforced as if such invalid or unenforceable provision had never been
contained herein.

     6. Complete 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.

     7. Counterparts. This Agreement may be executed in separate counterparts, each of
which shall be deemed to be an original and both of which taken together shall constitute one and
the same agreement.

     8. Successors and Assigns. This Agreement shall bind and inure to the benefit of and
be enforceable by Consultant, the Company and their respective heirs, executors, personal
representatives, successors and assigns, except that neither party may assign any rights or
delegate any obligations hereunder without the prior written consent of the other party. Consultant
hereby consents to the assignment by the Company of all of its rights and obligations hereunder to
any successor to the Company by merger or consolidation or purchase of all or substantially all of
the Company’s assets, provided such transferee or successor assumes the liabilities of the Company
hereunder.

     9. Choice of Law. This Agreement shall be governed by, and construed in accordance
with, the internal, substantive laws of the State of Ohio. Consultant agrees that the state and
federal courts located in the State of Ohio shall have jurisdiction in any action, suit or
proceeding against Consultant based on or arising out of this Agreement and Consultant hereby: (a)
submits to the personal jurisdiction of such courts; (b) consents to service of process in
connection with any action, suit or proceeding against Consultant; and (c) waives any other
requirement (whether imposed by statute, rule of court or otherwise) with respect to personal
jurisdiction, venue or service of process.

					
	 	 	 	 	 
	 
	 	-3-
	 	Wilson Consulting Agreement

 

 

     10. Amendment and Waiver. The provisions of this Agreement may be amended or waived
only with the prior written consent of the Company and Consultant, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.

[SIGNATURES ON FOLLOWING PAGE]

					
	 	 	 	 	 
	 
	 	-4-
	 	Wilson Consulting Agreement

 

 

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

	 	 	 	 	 
	 	POLYONE CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Kenneth M. Smith 	 
	 	 	Title:  	Senior Vice President, CIO & CHRO 	 
	 
	 	W. David Wilson	 

					
	 	 	 	 	 
	 
	 	-5-
	 	Wilson Consulting Agreement

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