Document:

Starz_Exhibit_10.2_03.31.2014

Exhibit 10.2

Information for Recipients of
Starz Restricted Stock Award
2011 Incentive Plan
(Amended and Restated as of October 15, 2013)

Notice of Grant.  Congratulations! You have been granted a Restricted Stock Award for shares of Starz Series A Common Stock (“STRZA”) (the “Restricted Stock Award”). A Restricted Stock Award Agreement (the “Agreement”) setting forth the terms of the Restricted Stock Award follows this informational page.  The Restricted Stock Award was granted under the Starz 2011 Incentive Plan (Amended and Restated as of October 15, 2013) (the “2011 Incentive Plan”).  

Acknowledgment of Grant.  By your electronic acknowledgment of the Restricted Stock Award, you are acknowledging the terms and conditions of the award set forth in the Agreement that follows as though you and Starz (the “Company”) had signed an original copy of the Agreement.  The Restricted Stock Award was granted and became effective as of the Grant Date (as that term is defined in the Agreement) and was granted on the terms and conditions reflected in the Agreement.  The number of restricted shares granted to you was approved by the Compensation Committee of the Board of Directors of the Company, and was communicated to you via memo and the Company’s online grant and administration program.  

2011 Incentive Plan – Exhibit A. The 2011 Incentive Plan that governs the Restricted Stock Award is incorporated into the Agreement as Exhibit A.  You can access the 2011 Incentive Plan via the link at the end of the Agreement or in the UBS online library.

SEC Registration Statements.  The STRZA shares issuable as Restricted Stock Awards were registered with the Securities and Exchange Commission on a Form S-8 filed on November 9, 2011 (as amended by Post-Effective Amendment No. 1 filed on November 29, 2011) (Registration No. 333-177844); on a Form S-8 filed on January 20, 2012 (Registration No. 333-179112); on a Form S-8 filed on November 13, 2012 (Registration No. 333-184900); and on a Form S-8 filed on January 11, 2013 (Registration No. 333-185986). These statements can be found on the Company’s website at http://ir.starz.com/sec.cfm.  Also available on the Company’s website are the most recent annual, quarterly and current reports as filed with the Securities and Exchange Commission.  Please refer to these reports as well as the Company’s future filings with the Securities and Exchange Commission (also available on the Company’s website) for important information regarding the Company and its common stock.

Tax and Estate Advice.  We recommend that you consult with your personal tax and/or estate advisor regarding the effect of the Restricted Stock Award on your personal tax and estate situation. 

STARZ
2011 INCENTIVE PLAN
(Amended and Restated as of October 15, 2013)

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is made as of the date set forth on Schedule I hereto (the “Grant Date”), by and between STARZ, a Delaware corporation (the “Company”), and the recipient (the “Grantee”) of an Award of Restricted Shares granted by the Compensation Committee of the Board of Directors of the Company as set forth in this Agreement.  
The Company has adopted the incentive plan identified on Schedule I hereto (as has been or may hereafter be amended, the “Plan”), a copy of which is attached via a link at the end of this online Agreement as Exhibit A (and which can also be accessed in the UBS online library) and by this reference made a part hereof, for the benefit of eligible employees of the Company and its Subsidiaries.  Capitalized terms used and not otherwise defined in this Agreement will have the meanings ascribed to them in the Plan.  
Pursuant to the Plan, the Compensation Committee appointed by the Board of Directors of the Company pursuant to Section 3.1 of the Plan to administer the Plan (the “Committee”) has determined that it would be in the interest of the Company and its stockholders to award shares of common stock to the Grantee, subject to the conditions and restrictions set forth herein and in the Plan, in order to provide the Grantee with additional remuneration for services rendered, to encourage the Grantee to remain in the employ of the Company or its Subsidiaries and to increase the Grantee’s personal interest in the continued success and progress of the Company.
The Company and the Grantee therefore agree as follows:
1.Definitions.  The following terms, when used in this Agreement, have the following meanings:
“Cause” has the meaning specified as “cause” in Section 10.2(b) of the Plan.
“Committee” has the meaning specified in the recitals to this Agreement. 
“Common Stock” has the meaning specified in Section 2. 
“Company” has the meaning specified in the preamble to this Agreement.
“Forfeitable Benefits” has the meaning specified in Schedule I of this Agreement.
“Grant Date” has the meaning specified in the preamble to this Agreement.
“Grantee” has the meaning specified in the preamble to this Agreement.
“Misstatement Period” has the meaning specified in Schedule I of this Agreement.
“Plan” has the meaning specified in the recitals of this Agreement.
“Restricted Shares” has the meaning specified in Section 2.
“Retained Distributions” has the meaning specified in Section 4.
“Section 409(A)” has the meaning specified in Section 23.
“Unvested Fractional Restricted Share” has the meaning specified in Section 5.

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“Vesting Date” has the meaning specified in Section 5.
“Vesting Percentage” has the meaning specified in Section 5.
“Voluntary Termination for Good Reason” has the meaning specified in Section 6.B.
2.Award.  Pursuant to the terms of the Plan and in consideration of the covenants and promises of the Grantee herein contained, the Company hereby awards to the Grantee as of the Grant Date the number of shares of the Company’s Series A Common Stock (“Common Stock”) authorized by the Committee and set forth in the notice of online grant delivered to the Grantee pursuant to the Company’s online grant and administration program, subject to the conditions and restrictions set forth in this Agreement and in the Plan (the “Restricted Shares”).
3.Issuance of Restricted Shares at Beginning of the Restriction Period.  Upon issuance of the Restricted Shares, such Restricted Shares will be registered in a book entry account in the name of the Grantee. During the Restriction Period, any certificates representing the Restricted Shares that may be issued during the Restriction Period, and any securities constituting Retained Distributions will bear a restrictive legend to the effect that ownership of the Restricted Shares (and such Retained Distributions), and the enjoyment of all rights appurtenant thereto, are subject to the restrictions, terms and conditions provided in the Plan and this Agreement.  Any such certificates will remain in the custody of the Company, and upon their issuance the Grantee will deposit with the Company stock powers or other instruments of assignment, each endorsed in blank, so as to permit retransfer to the Company of all or any portion of the Restricted Shares and any securities constituting Retained Distributions that are forfeited or otherwise do not become vested in accordance with the Plan and this Agreement.
4.Restrictions.  The Restricted Shares will constitute issued and outstanding shares of Common Stock for all corporate purposes. The Grantee will have the right to vote such Restricted Shares, to receive and retain such dividends and distributions paid or distributed on such Restricted Shares as the Committee may in its sole discretion designate and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to such Restricted Shares, except that (a) the Grantee will not be entitled to delivery of the stock certificate or certificates representing such Restricted Shares until the Restriction Period shall have expired and unless all other vesting requirements with respect thereto shall have been fulfilled or waived, (b) the Company will retain custody of any stock certificate or certificates representing the Restricted Shares during the Restriction Period as provided in Section 8.2 of the Plan, (c) other than such dividends and distributions as the Committee may in its sole discretion designate, the Company or its designee will retain custody of all distributions (“Retained Distributions”) made or declared with respect to the Restricted Shares (and such Retained Distributions will be subject to the same restrictions, terms and vesting and other conditions as are applicable to the Restricted Shares) until such time, if ever, as the Restricted Shares with respect to which such Retained Distributions shall have been made, paid or declared shall have become vested, and such Retained Distributions will not bear interest or be segregated in a separate account, (d) except as may be permitted under Section 11, the Grantee may not sell, assign, transfer, pledge, exchange, encumber or dispose of the Restricted Shares or any Retained Distributions or the Grantee’s interest in any of them during the Restriction Period and (e) a breach of any restrictions, terms or conditions provided in the Plan or established by the Committee with respect to any Restricted Shares or Retained Distributions will cause a forfeiture of such Restricted Shares and any Retained Distributions with respect thereto.

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5.Vesting and Forfeiture of Restricted Shares.  Subject to earlier vesting in accordance with Section 6, the Grantee will become vested as to that number of Restricted Shares (if any) subject to this Agreement that is equal to the fraction or percentage set forth on Schedule I hereto (the “Vesting Percentage”) of the total number of Restricted Shares that are subject to this Agreement (in each case, rounded down to the nearest whole number of such Restricted Shares) on each of the dates indicated on Schedule I hereto (each such date, together with any other date on which Restricted Shares vest pursuant to this Agreement, a “Vesting Date”).  If rounding pursuant to the preceding sentence prevents any portion of a Restricted Share from becoming vested on a particular Vesting Date (any such portion, an “Unvested Fractional Restricted Share”), one additional Restricted Share will become vested on the earliest succeeding Vesting Date on which the cumulative fractional amount of all Unvested Fractional Restricted Shares (including any Unvested Fractional Restricted Share created on such succeeding Vesting Date) equals or exceeds one whole Restricted Share, with any excess treated as an Unvested Fractional Restricted Share thereafter subject to the application of this sentence and the following sentence. Any Unvested Fractional Restricted Share comprising part of a whole Restricted Share that vests pursuant to the preceding sentence will thereafter cease to be an Unvested Fractional Restricted Share. Notwithstanding the foregoing, (a) the Grantee will not vest, pursuant to this Section 5, in Restricted Shares as to which the Grantee would otherwise vest as of a given date if the Grantee has not been continuously employed by the Company or its Subsidiaries from the date of this Agreement through such date (the vesting or forfeiture of such shares to be governed instead by the provisions of Section 6), and (b) in the event that any date on which vesting would otherwise occur is a Saturday, Sunday or a holiday, such vesting will instead occur on the business day next following such date.  Unless otherwise determined by the Committee in its sole discretion, Retained Distributions will be subject to the same vesting and forfeiture conditions that are applicable to the Restricted Shares to which such Retained Distributions relate.
6.Early Termination or Vesting.  
A.    Unless otherwise determined by the Committee in its sole discretion:
(a)Except as provided in Section 6(d), if the Grantee’s employment with the Company or a Subsidiary terminates for any reason other than death or Disability, then the Award, to the extent not theretofore vested, will be forfeited immediately; 
(b)If the Grantee dies while employed by the Company or a Subsidiary, then the Award, to the extent not theretofore vested, will immediately become fully vested;
(c)If the Grantee’s employment with the Company or a Subsidiary terminates by reason of Disability, then the Award, to the extent not theretofore vested, will immediately become fully vested; and
(d)If the Grantee’s employment with the Company or a Subsidiary is terminated by the Company or such Subsidiary without Cause or if the Grantee voluntarily terminates the Grantee’s employment pursuant to a Voluntary Termination for Good Reason (either, a “Protected Termination”), and the Protected Termination occurs (A) within the 30-day period immediately preceding the closing date of an Approved Transaction in which any Restricted Shares that remain outstanding and unvested as of such closing date are not otherwise accelerated in connection with such Approved Transaction in accordance with the terms of the Plan or (B) prior to the first anniversary of the closing date of an Approved Transaction in which 

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any Restricted Shares that remain outstanding and unvested as of such closing date are not otherwise accelerated in connection with such Approved Transaction in accordance with the terms of the Plan, then, effective as of the date of such Protected Termination, the Award, to the extent not theretofore vested, will immediately become fully vested.

Unless the Committee otherwise determines, a change of the Grantee’s employment from the Company to a Subsidiary or from a Subsidiary to the Company or another Subsidiary will not be considered a termination of the Grantee’s employment for purposes of this Agreement if such change of employment is made at the request or with the express consent of the Company.  Unless the Committee otherwise determines, however, any such change of employment that is not made at the request or with the express consent of the Company will be a termination of the Grantee’s employment within the meaning of this Agreement.  
B.    For purposes of this Agreement, a “Voluntary Termination for Good Reason” means a voluntary termination by the Grantee of the Grantee’s employment with the Company and its Subsidiaries upon the occurrence of any of the following events without the Grantee’s prior consent:
(i)    a significant reduction in the Grantee’s then current base salary (defined as the Grantee’s weekly base pay in effect for the payroll period during which the Grantee’s employment is terminated or, if the Grantee is a part-time employee, the Grantee’s average weekly wages from the Company for the most recent 8 weeks during which the Grantee worked at least two days, but not including in either case, overtime, bonuses, commissions, piece rate, incentive pay or taxable or nontaxable fringe benefits or payments);
(ii)    a significant reduction in the Grantee’s title, duties or reporting relationship with the Grantee’s employer or the assignment to the Grantee of duties that are inconsistent with the Grantee’s position with the Grantee’s employer; or 
(iii)    the relocation of the Grantee’s primary place of employment to a location that is more than 50 miles from the Grantee’s primary place of employment as of the Grantee’s termination date. 
No termination shall constitute a Voluntary Termination for Good Reason unless all of the following provisions shall have been complied with: (i) the Grantee shall have given the Company written notice of the Grantee’s intention to effect a Voluntary Termination for Good Reason, such notice to state in detail the particular circumstances that constitute the grounds on which the proposed Voluntary Termination for Good Reason is based and to be given no later than 90 days after the initial occurrence of such circumstances; (ii) the Company shall have 30 days after receiving such notice in which to cure such grounds; and (iii) if the Company fails, within such 30-day period, to cure such grounds to the Grantee’s reasonable satisfaction, the Grantee terminates the Grantee’s employment with the Company and its Subsidiaries within 30 days following the last day of such 30-day period.  If the Company timely cures such grounds in accordance with the preceding sentence, the Grantee shall not be entitled to terminate the Grantee’s employment pursuant to a Voluntary Termination for Good Reason based on such grounds.
7.Completion of the Restriction Period.  On the Vesting Date with respect to each award of Restricted Shares, and the satisfaction of any other applicable restrictions, terms and 

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conditions (a) all or the applicable portion of such Restricted Shares will become vested and (b) any Retained Distributions with respect to such Restricted Shares will become vested to the extent that the Restricted Shares related thereto shall have become vested, all in accordance with the terms of this Agreement.  Any such Restricted Shares and Retained Distributions that shall not become vested will be forfeited to the Company, and the Grantee will not thereafter have any rights (including dividend and voting rights) with respect to such Restricted Shares or any Retained Distributions that are so forfeited.  
8.Adjustments; Early Vesting in Certain Events.
(a)The Restricted Shares will be subject to adjustment (including, without limitation, as to the number of Restricted Shares) in such manner as the Committee, in its sole discretion, deems equitable and appropriate in connection with the occurrence of any of the events described in Section 4.2 of the Plan following the Grant Date.
(b)In the event of any Approved Transaction, Board Change or Control Purchase following the Grant, Date, the restrictions in Sections 3 and 4 may lapse in accordance with Section 10.1(b) of the Plan.  
9.Mandatory Withholding for Taxes.  The Grantee acknowledges and agrees that, upon the expiration of the Restriction Period, the Company will deduct from the shares of Common Stock otherwise deliverable to the Grantee (or the Grantee’s beneficiary, if applicable) that number of shares of Common Stock (valued at the Fair Market Value on the applicable Vesting Date) that is equal to the amount, as determined by the Company, of all federal, state or other governmental taxes required to be withheld by the Company or any Subsidiary of the Company with respect to the vesting of Restricted Shares and any related Retained Distributions, unless other provisions to pay such withholding requirements have been made to the satisfaction of the Company.  Upon the payment of any cash dividends with respect to Restricted Shares during the Restriction Period, the amount of such dividends will be reduced to the extent necessary to satisfy any withholding tax requirements applicable thereto prior to payment to the Grantee.  
10.Delivery by the Company.  As soon as practicable after the vesting of Restricted Shares pursuant to Sections 5, 6 or 8, but no later than 30 days after such vesting occurs, and subject to the withholding referred to in Section 9, the Company will (a) cause to be removed from the Restricted Shares that have vested the restriction described in Section 3 or cause to be issued and delivered to the Grantee (in certificate or electronic form) shares of Common Stock equal to the number of Restricted Shares that have vested, and (b) shall cause to be delivered to the Grantee any Retained Distributions with respect to such vested shares.  If delivery of certificates is by mail, delivery of shares of Common Stock will be deemed effected for all purposes when a stock transfer agent of the Company has deposited the certificates in the United States mail, addressed to the Grantee.
11.Nontransferability of Restricted Shares Before Vesting.  Restricted Shares that have not vested are not transferable (either voluntarily or involuntarily), before or after the Grantee’s death, except as follows: (a) during the Grantee’s lifetime, pursuant to a domestic relations order, issued by a court of competent jurisdiction, that is not contrary to the terms and conditions of the Plan or this Agreement, and in a form acceptable to the Committee; or (b) after the Grantee’s death, by will or pursuant to the applicable laws of descent and distribution, as may be the case.  Any person to whom Restricted Shares are transferred in accordance with the 

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provisions of the preceding sentence shall take such Restricted Shares subject to all of the terms and conditions of the Plan and this Agreement, including that the vesting and termination provisions of this Agreement will continue to be applied with respect to the Grantee.  Certificates representing Restricted Shares that have vested may be delivered (or, in the case of book entry registration, registered) only to the Grantee (or during the Grantee’s lifetime, to the Grantee’ court appointed legal representative) or to a person to whom the Restricted Shares have been transferred in accordance with this Section.
12.Company’s Rights.  The existence of this Agreement will not affect in any way the right or power of the Company or its stockholders to accomplish any corporate act, including without limitation, the acts referred to in Section 10.16 of the Plan.
13.Restrictions Imposed by Law.  Without limiting the generality of Section 10.8 of the Plan, the Grantee will not require the Company to deliver any Restricted Shares and the Company will not be obligated to deliver any Restricted Shares if counsel to the Company determines that such exercise, delivery or payment would violate any applicable law or any rule or regulation of any governmental authority or any rule or regulation of, or agreement of the Company with, any securities exchange or association upon which shares of Common Stock are listed or quoted.  The Company will in no event be obligated to take any affirmative action in order to cause the delivery of any Restricted Shares to comply with any such law, rule, regulation or agreement.
14.Notice.  Unless the Company notifies the Grantee in writing of a different procedure or address, any notice or other communication to the Company with respect to this Agreement will be in writing and will be delivered personally or sent by first class mail, postage prepaid, to the following address:
Starz
8900 Liberty Circle
Englewood, Colorado 80112 
Attn:  General Counsel
Unless the Company elects to notify the Grantee electronically pursuant to the online grant and administration program or via email, any notice or other communication to the Grantee with respect to this Agreement will be in writing and will be delivered personally, or will be sent by first class mail, postage prepaid, to the Grantee’s address as listed in the records of the Company or any Subsidiary of the Company on the Grant Date, unless the Company has received written notification from the Grantee of a change of address.
15.Amendment.  Notwithstanding any other provision hereof, this Agreement may be supplemented or amended from time to time as approved by the Committee as contemplated by Section 10.7(b) of the Plan.  Without limiting the generality of the foregoing, without the consent of the Grantee:
(a)this Agreement may be amended or supplemented from time to time as approved by the Committee (i) to cure any ambiguity or to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, (ii) to add to the covenants and agreements of the Company for the benefit of the Grantee or surrender any right or power reserved to or conferred upon the Company in this Agreement, subject to any required approval of the Company’s stockholders, and provided, in each case, that such changes or corrections will not adversely affect the rights of the Grantee with respect to the Award 

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evidenced hereby or (iii) to make such other changes as the Company, upon advice of counsel, determines are necessary or advisable because of the adoption or promulgation of, or change in the interpretation of, any law or governmental rule or regulation, including any applicable federal or state securities laws; and
(b)subject to any required action by the Board of Directors or the stockholders of the Company, the Award evidenced by this Agreement may be canceled by the Committee and a new Award made in substitution therefor, provided that the Award so substituted will satisfy all of the requirements of the Plan as of the date such new Award is made and no such action will adversely affect the Restricted Shares to the extent then vested.
16.Grantee Employment.  Nothing contained in this Agreement, and no action of the Company or the Committee with respect hereto, will confer or be construed to confer on the Grantee any right to continue in the employ of the Company or any Subsidiary or interfere in any way with the right of the Company or any employing Subsidiary to terminate the Grantee’s employment at any time, with or without Cause, subject to the provisions of any employment agreement between the Grantee and the Company or any Subsidiary.
17.Nonalienation of Benefits.  Except as provided in Section 11 and prior to the vesting of any Restricted Share with respect to such vested Restricted Share, (a) no right or benefit under this Agreement will be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same will be void, and (b) no right or benefit hereunder will in any manner be subjected to or liable for the debts, contracts, liabilities or torts of the Grantee or other person entitled to such benefits.
18.Governing Law.  This Agreement will be governed by, and construed in accordance with, the internal laws of the State of Colorado.  Each party irrevocably submits to the general jurisdiction of the state and federal courts located in the State of Colorado in any action to interpret or enforce this Agreement and irrevocably waives any objection to jurisdiction that such party may have based on inconvenience of forum.
19.Construction.  References in this Agreement to “this Agreement” and the words “herein,” “hereof,” “hereunder” and similar terms include all Exhibits and Schedules appended hereto, including the Plan.  All references to “Sections” in this Agreement shall be to Sections of this Agreement unless explicitly stated otherwise.  The word “include” and all variations thereof are used in an illustrative sense and not in a limiting sense.  All decisions of the Committee upon questions regarding the Plan or this Agreement will be conclusive.  Unless otherwise expressly stated herein, in the event of any inconsistency between the terms of the Plan and this Agreement, the terms of the Plan will control.  The headings of the sections of this Agreement have been included for convenience of reference only, are not to be considered a part hereof and will in no way modify or restrict any of the terms or provisions hereof.
20.Rules by Committee.  The rights of the Grantee and the obligations of the Company hereunder will be subject to such reasonable rules and regulations as the Committee may adopt from time to time.
21.Entire Agreement.  This Agreement is in satisfaction of and in lieu of all prior discussions and agreements, oral or written, between the Company and the Grantee regarding the subject matter hereof.  The Grantee and the Company hereby declare and represent that no promise or agreement not herein expressed has been made and that this Agreement contains the 

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entire agreement between the parties hereto with respect to the Restricted Shares and replaces and makes null and void any prior agreements between the Grantee and the Company regarding the Restricted Shares.  Subject to the restrictions set forth in Sections 11 and 17, this Agreement will be binding upon and inure to the benefit of the parties and their respective heirs, successors and assigns.  
22.Grantee Acknowledgment.  The Grantee will signify acceptance of the terms and conditions of this Agreement by acknowledging the acceptance of this Agreement via the procedures described in the online grant and administration program utilized by the Company.

23.Code Section 409A Compliance.  If any provision of this Agreement would result in the imposition of an excise tax under Section 409A of the Code or the related regulations and Treasury pronouncements (“Section 409A”), that provision will be reformed to avoid imposition of the excise tax and no action taken to comply with Section 409A shall be deemed to impair a benefit under this Agreement.
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Schedule I
to
Starz Restricted Stock Award Agreement
SRA____

	
			
	Grant Date:
	December 13, 2013

	Plan:
	Starz 2011 Incentive Plan (Amended and Restated as of October 15, 2013)

	Restricted Stock Grant:
	Series A Common Stock (“STRZA”)

	Vesting Percentage:
	25%

	Vesting Dates:
	December 13, 2014; December 13, 2015; December 13, 2016; December 13, 2017

	Vesting Terms:
	Annually in equal amounts over four years with vesting period beginning on December 13, 2013.
	 

	Additional Provisions Applicable to Grantee who holds the office of Vice President or above as of the Grant Date:
	Forfeiture for Misconduct and Repayment of Certain Amounts.  If the Grantee holds the office of Vice President or above as of the Grant Date, and if (i) a material restatement of any financial statement of the Company (including any consolidated financial statement of the Company and its consolidated Subsidiaries) is required and (ii) in the reasonable judgment of the Committee, (A) such restatement is due to material noncompliance with any financial reporting requirement under applicable securities laws and (B) such noncompliance is a result of misconduct on the part of the Grantee, the Grantee will repay to the Company Forfeitable Benefits received by the Grantee during the Misstatement Period in such amount as the Committee may reasonably determine, taking into account, in addition to any other factors deemed relevant by the Committee, the extent to which the market value of Common Stock during the Misstatement Period was affected by the error(s) giving rise to the need for such restatement.  “Forfeitable Benefits” means (i) any and all cash and/or shares of Common Stock received by the Grantee (A) upon the exercise during the Misstatement Period of any SARs held by the Grantee or (B) upon the payment during the Misstatement Period of any Cash Award or Performance Award held by the Grantee, the value of which is determined in whole or in part with reference to the value of Common Stock and (ii) any proceeds received by the Grantee from the sale, exchange, transfer or other disposition during the Misstatement Period of any shares of Common Stock received by the Grantee upon the exercise, vesting or payment during the Misstatement Period of any Award held by the Grantee.  By way of clarification, “Forfeitable Benefits” will not include any shares of Common Stock received upon vesting of any Restricted Shares during the Misstatement Period that are not sold, exchanged, transferred or otherwise disposed of during the Misstatement Period.  “Misstatement Period” means the 12-month period beginning on the date of the first public issuance or the filing with the Securities and Exchange Commission, whichever occurs earlier, of the financial statement requiring restatement.
	 

1POL-EX10.1_2014.3.31

Exhibit 10.1

March 6, 2014
Mr. Stephen D. Newlin
Dear Steve:
The terms and conditions of your employment by PolyOne Corporation (“PolyOne”) are set forth in a letter agreement dated January 30, 2006, which was accepted by you on February 6, 2006, and amended and restated on February 21, 2008 and on July 16, 2008 (the January 30, 2006 letter agreement, as it has been amended and restated is referred to herein as the “Letter Agreement”).  In connection with your relinquishment of the titles of President and Chief Executive Officer, and your continued employment as the Executive Chairman, of PolyOne, PolyOne desires to further amend and restate the Letter Agreement effective May 15, 2014 (the “Effective Date”).
		
	1.
	Position and Duties.

You will have the title of Executive Chairman of the Board, 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, with the objective of successfully transitioning your duties as President and Chief Executive Officer to the successor President and Chief Executive Officer.   You will perform your duties and responsibilities to the best of your abilities in a diligent, trustworthy, businesslike and efficient manner.  While serving in this role, you will remain an employee of PolyOne and both PolyOne and you anticipate that the level of bona fide services that you will perform in the role of Executive Chairman will be more than 20% of the average level of bona fide services that you performed over the 36-month period immediately preceding the Effective Date.
You will remain a member the Board and so long as you serve as Executive Chairman, the Board will nominate you to stand for election as a member of the Board at PolyOne’s annual meeting of shareholders.
You agree that the Management Continuity Agreement that you entered into with PolyOne on February 26, 2006, as it was most recently restated on March 21, 2008, is hereby amended to remove as “good reason” your election to terminate your employment for any reason during the 30-day period immediately following the first anniversary of a change of control.  
		
	2.
	Compensation.

		
	(a)
	Base Salary.  Your base salary for the one-year period beginning on the Effective Date will be equal to $1,050,000.  Effective May 15, 2015, your annual base salary will be adjusted to $655,850.

		
	(b)
	Bonus/Annual Incentive.

		
	(i)
	You will remain eligible to receive an annual incentive award based on achievement of specified performance goals (as determined by the Compensation Committee), with a target attainment equal to 110% of your base salary for 2014.  You will not be eligible to receive any further annual incentive awards for periods after 2014.

		
	(c)
	Outstanding Long-Term Incentive Awards.

		
	(i)
	If you have a Qualifying Separation from Service, as defined below, your outstanding Stock Appreciation Rights (“SARs”), Restricted Stock Units (“RSUs”) and Performance Units (“PUs”) awarded to you as long-term incentive awards under PolyOne’s 2010 Equity and Performance Incentive Plan or any prior PolyOne long-term incentive plan will be subject to the rules of this Paragraph 2(c).  The award agreements applicable to such long-term incentive awards are hereby amended to reflect the following if your termination of employment occurs as a result of your Qualifying Separation from Service:

		
	(A)
	The SARs shall continue to vest and become exercisable upon their terms as if such Qualifying Separation from Service had not occurred (with no pro-ration as may be provided in any award agreement).

		
	(B)
	All outstanding vested SARs held by you may be exercised in whole or in part for the remainder of their term, but in no event beyond the termination of such SARs as provided in the applicable award agreement.

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	(C)
	PolyOne shall waive:  (I) any requirement that you have been in the continuous employ of PolyOne or any PolyOne subsidiary during a specified period or through a specified date in order for the RSUs and the PUs (collectively, the “LTIP Rights”) to become nonforfeitable, provided such waiver will not affect the date on which such LTIP Rights become nonforfeitable nor affect the timing of payment of any LTIP Rights; (II) any term providing for pro-ration of vesting and/or payment of the LTIP Rights upon termination of employment due to retirement; and (III) any provision that the LTIP Rights will be forfeited if your employment terminates before a specified date.

		
	(ii)
	You will be considered to have a Qualifying Separation from Service if your employment terminates for any reason after the Effective Date other than if it 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.  Reasonable expenses relating to lodging, meals and travel between your state of residence and PolyOne facilities and any other business-related travel expenses during the Employment Period will be considered business expenses for purposes of this Paragraph 2(d).  PolyOne will reimburse the amount of federal, including Medicare, Social Security and FICA/FUTA, state and local taxes imposed on you as a result of such expense reimbursement being considered taxable income, such reimbursement to be made, subject to Paragraph 5(c), no later than December 31 of the year following the year in which you remitted the applicable taxes.

		
	(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.  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)
	Other.  You will also be entitled to the following:  (i) five weeks of paid vacation per year; (ii) an annual benefit allowance equal to $2,000 per month; (iii) an annual allowance for financial planning and tax preparation in an amount equal to up to $13,000, payable upon submission of itemized invoices; and (iv) an annual executive physical.

		
	(g)
	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 that your continued employment with PolyOne is subject to 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) Employee Agreement; (c) Confidential Information, Invention and Non-Solicitation Agreement; (d) Code of Conduct; and (e) 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 at least until the first to occur of:  (i) February 21, 2016; provided, however, that the Board, in its discretion but subject to your approval, may extend this date until a later mutually agreed-upon date; (ii) your death; (iii) PolyOne’s termination of your employment on account of your Disability; (iv) a voluntary termination of your employment by you (including your retirement); (v) an involuntary termination of your employment by PolyOne for Serious Cause (as defined below); (vi) an 

2

involuntary termination of your employment by PolyOne without Serious Cause (as defined below); or (vii) you terminate for “Good Reason” (as defined below) (the “Employment Period”).
		
	(b)
	Serious Cause.  For purposes of this agreement, “Serious Cause” shall mean conduct set forth in Paragraph 5(g)(i)(a) or (b) below, and will also include any material breach of a provision of this Agreement or of any of the Other Agreements; provided, however, that you shall have 30 days from the date of notice to cure such breach.  

		
	(c)
	Good Reason.  For purposes of the agreement, “Good Reason” means a material diminution in your authority, duties or responsibilities or any action or inaction by PolyOne that constitutes a material breach of this agreement; provided, however, you must give notice of Good Reason within 90 days of the condition first occurring.  PolyOne shall have 30 days to cure such condition.

		
	5.
	Post-Employment Period Payments.

		
	(a)
	Accrued Compensation/Benefits.  Except as provided in Paragraphs 5(b), 5(d), 5(e) and 5(f) below, at the end of the Employment Period for any reason, you will no longer have any rights to compensation or benefits except as provided herein 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 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 prior to February 21, 2016 (or such later date that may be established as the end of the Employment Period pursuant to Paragraph 4(a)(i)) for any reason other than as set forth in Paragraph 4(a)(ii) through 4(a)(v) 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, benefit allowance and financial planning/tax preparation allowance, with monthly payments to commence, except as provided in Paragraph 5(c), 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 amount of the federal, including Medicare, Social Security and FICA/FUTA, 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(c), no later than December 31 of the year 

3

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(f)(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), 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)
	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 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 (i) the first business day of the seventh month following the date of your Separation From Service, or (ii) your death.  

		
	(d)
	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 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.

4

		
	(v)
	The SERP Payments will be unsecured and unfunded obligations of PolyOne, provided, however, that PolyOne has established a grantor trust in part to fund PolyOne’s obligation under this Paragraph 5(d) and may, in its sole discretion fund such grantor trust; provided further, however, that under the terms of the Non-Qualified Deferred Compensation Trust Agreement that PolyOne entered into with Wells Fargo Bank, National Association, no later than five days following the occurrence of a Change in Control, as defined therein, PolyOne is required to contribute to the trust established thereunder no less than 100% and no more than 125% of the amount sufficient to provide for the payment of the SERP Payments; and provided further, however, that any funds contained therein will remain subject to the claims of PolyOne’s general creditors.

		
	(vi)
	PolyOne’s obligation to pay you the SERP Payments or the COBRA Medical Plan Premium Reimbursement described in Paragraph 5(e) or to provide the office space and administrative support described in Paragraph 5(f) 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.

		
	(e)
	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.  PolyOne will make available to you, for a period of 24 months following your Qualifying Separation from Service, COBRA continuation coverage under PolyOne’s medical plan for you and your eligible dependents.  You will be eligible to elect coverage under PolyOne’s standard retiree medical benefit program either immediately following your Qualifying Separation from Service or following the termination of such COBRA continuation coverage.  On the second anniversary of the date of your Qualifying Separation from Service, PolyOne will make a payment to you (the “COBRA Medical Plan Premium Reimbursement”) equal to the difference between (A) the amount you were required to pay as premiums for such COBRA continuation medical coverage for yourself and your eligible dependents for the two-year period following your Qualifying Separation from Service, and (B) the amount you would have been required to pay for coverage of yourself and your eligible dependents during such two-year period for comparable active employee medical benefit coverage.  PolyOne will reimburse the amount of the federal, including Medicare, Social Security and FICA/FUTA, state and local taxes imposed on you as a result of your receipt of the COBRA Medical Plan Premium Reimbursement, such reimbursement to be made, subject to Paragraph 5(c), no later than December 31 of the year following the year in which you remitted the applicable taxes.

		
	(f)
	Office Space; Administrative Support.  For the five-year period following your termination of employment as described in Paragraph 4(a)(iv), PolyOne shall provide you with suitable furnished office space and an administrative assistant in the Phoenix, Arizona geographic area.  In no event will the amount of in-kind benefits provided under this Paragraph 5(f) in one taxable year affect the amount of in-kind benefits provided to you under this Paragraph 5(f) in any other taxable year.

		
	(g)
	Forfeiture of Benefits.  

		
	(i)
	Your right to the SERP Payments and retiree medical benefits will cease upon (a) your engaging in any acts which constitute fraud or embezzlement that cause material harm against PolyOne or disclosure of confidential information, or (b) your engaging in any of the acts or conduct prohibited by your Employee Agreement executed most recently prior to your Qualifying Separation from Service, regardless of whether such Employee Agreement remains in effect at the time of such acts or conduct, that causes material harm to the Company. 

		
	(ii)
	Confidential Information.  For purposes of this agreement, “confidential information” means 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) 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 shall not apply (i) during the Employment Period, in the 

5

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.
		
	(iii)
	Prior to any forfeiture of benefits, PolyOne shall provide you a written notice of its intentions to exercise any forfeiture of benefits at least 60 days in advance.  You have the right to contest the forfeiture of benefits by filing a written response within 30 days from the date of PolyOne’s notice of intention to contest PolyOne’s decision or cure the improper 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, including Medicare, Social Security and FICA/FUTA, 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.  In the event any term of this agreement conflicts with any plan, program, award or policy, this agreement shall control, and such conflicting term shall be deemed amended by this agreement.
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.
PolyOne shall pay your reasonable legal fees and costs associated with entering into this Agreement.  All payments by PolyOne of your legal fees and costs hereunder shall be for expenses incurred during 2014 and shall be made within ninety days following the date you submit evidence of the incurrence of such expenses, and in all events prior to December 31, 2015.  In no event will the amount of expenses reimbursed or paid in one year affect the amount of expenses eligible for reimbursement, or payment to, or for you in any other taxable year.  
PolyOne shall pay and be solely responsible for:
		
	(i)
	100% of the first $100,000; and

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

any and all attorneys’ and related fees and expenses incurred by you to successfully (in whole or in part, and whether by modification of PolyOne’s position, agreement, compromise, settlement or administrative or judicial determination) enforce PolyOne’s agreement or any provision hereof as a result of PolyOne or any shareholder contesting the validity or enforceability 

6

of this agreement or any provision hereof.  To secure the foregoing obligation, PolyOne 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.  
It is intended that this Agreement comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), 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 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.  PolyOne will reimburse the amount of the federal, including Medicare, Social Security and FICA/FUTA, state and local taxes imposed on you, and any penalties, interest or other liability, including reasonable attorneys’ fees, that you incur, as a result of a Section 409A violation related to any benefits provided under this agreement.
All reimbursements under the two immediately preceding paragraphs 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 Qualifying Separation from Service 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 or remitted the taxes, as the case may be.  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.  Each provision of reimbursement pursuant to this paragraph shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code.
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:    /s/ Gordon D. Harnett    
Name:    Gordon D. Harnett
Title:    Chairperson of the Compensation
Committee and Lead Director
Date:  March 6, 2014
I agree to the terms and conditions
in this letter agreement.
/s/ Stephen D. Newlin    
Name:    Stephen D. Newlin
Date:    March 6, 2014

7

APPENDIX A

	
		
	Date of Separation From Service*
	Amount of Annual SERP Payment

	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 the date of the May 2016 annual meeting of shareholders
	$685,000**

*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 Paragraph 5(d)(iv)(y).
**Beginning on 3/21/15 and continuing until 2/21/16, this amount will be increased monthly on a pro-rata basis of $59,700, and beginning on 3/21/16, this amount will be increased monthly on a pro-rata basis of $61,500. 

8

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