Document:

EX-10.3

 

Exhibit 10.3

A. SCHULMAN, INC.

2006 INCENTIVE PLAN

INSTRUCTIONS FOR COMPLETING TIME-BASED RESTRICTED STOCK AWARD

AGREEMENT FOR EMPLOYEES

Code Sheet

The following codes are used in this Award Agreement and should be replaced using your computer’s
“Replace” function.

	 	 	 
	VTA
	 	Grantee’s name (all capital letters)

	 	 	 

	VTB
	 	Grant Date (all capital letters)

	 	 	 

	Vtb
	 	Grant Date (initial capital letters only)

	 	 	 

	Vtc
	 	Person to contact for more information

	 	 	 

	Vtd
	 	Contact’s telephone number, including area code

	 	 	 

	Vte
	 	Date that is 30 days after the Grant Date (initial capital letters only)

	 	 	 

	Vtf
	 	Number of Shares of Restricted Stock granted (insert only the number in Arabic
numerals)

	 	 	 

	Vtg
	 	Contact’s street address

	 	 	 

	Vth
	 	Contact’s city, state and zip code

	 	 	 

	Vti
	 	Calendar year in which grant is made (e.g., 2008)

	 	 	 

	Vtq
	 	Grantee’s name (initial capital letters only)

 

 

A. SCHULMAN, INC.

2006 INCENTIVE PLAN

TIME-BASED RESTRICTED STOCK AWARD AGREEMENT GRANTED TO

VTA on VTB

A. Schulman, Inc. (“Company”) believes that its business interests are best served by extending to
you an opportunity to earn additional compensation based on the growth of the Company’s business.
To this end, the Company adopted, and its stockholders approved, the A. Schulman, Inc. 2006
Incentive Plan (“Plan”) as a means through which employees like you may share in the Company’s
success. Capitalized terms that are not defined herein shall have the same meanings as in the
Plan.

This Award Agreement describes many features of your Award and the terms and conditions of your
Award. To ensure you fully understand these terms and conditions, you should:

	 	•	 	Read the Plan carefully to ensure you understand how the Plan works;
	 
	 	•	 	Read this Award Agreement carefully to ensure you understand the nature of your Award
and what you must do to earn it; and
	 
	 	•	 	Contact Vtc at Vtd if you have any questions about your Award.

Also, no later than Vte, you must return a signed copy of the Award Agreement to:

Vtc

A. Schulman, Inc.

Vtg

Vth

Nature of Your Award

You have been granted Shares of Restricted Stock. If you satisfy the terms and conditions
described in this Award Agreement, the restrictions imposed on your Restricted Stock will lapse and
you will own the Shares. These and other conditions affecting your Restricted Stock are described
in this Award Agreement and the Plan, both of which you should read carefully.

Grant Date: Vtb.

Number of Shares of Restricted Stock: You have been granted Vtf Shares of Restricted Stock,
subject to the terms and conditions of this Award Agreement and the Plan.

When Your Award Will Vest

Until the terms and conditions described in this Award Agreement and the Plan are met, your Shares
of Restricted Stock will be held in escrow. Your Shares of Restricted Stock will be either
released from escrow and distributed to you, free of any restrictions, or forfeited, depending on
whether or not you satisfy the terms and conditions described in this Award Agreement and in the
Plan.

1

 

Normal Settlement Date: Normally, subject to your continued employment with the Company or a
Related Entity, restrictions on 33 1/3 % of your Shares of Restricted Stock will lapse (i.e., your
Shares of Restricted Stock will vest) on each of the first, second and third anniversaries of the
Grant Date. For purposes of this Agreement, each 12-month period ending on an anniversary of the
Grant Date shall be referred to as a “Vesting Year.”

However, your Restricted Stock may vest earlier in the circumstances described below.

How Your Restricted Stock Might Vest Earlier Than the Normal Settlement Date: Your Restricted
Stock will immediately vest and all performance objectives will be deemed to have been met if there
is a Change in Control.

How Your Termination of Employment Will Affect Your Restricted Stock: You may forfeit your
Restricted Stock if you Terminate before the Normal Settlement Date, although this will depend on
why you Terminate.

	 	•	 	If you Terminate because of [1] death or [2] Disability, your Restricted Stock
will fully vest on your Termination date.
	 
	 	•	 	If you Terminate because of Retirement and if the Committee agrees to treat your
Termination as a Retirement, a prorata portion of your Restricted Stock will vest
on your Retirement date equal to: [1] the number of unvested Shares of Restricted
Stock that would have become vested if you had remained employed through the end of
the Vesting Year in which you Terminate, multiplied by [2] a fraction, the
numerator of which is the number of whole months you were employed during such
Vesting Year and the denominator of which is 12.
	 
	 	•	 	If you Terminate under any other circumstances, all of the Restricted Stock
granted through this Award Agreement will be forfeited on your Termination date.

Settling Your Award

If the restrictions on your Restricted Stock lapse, your Restricted Stock will be settled
automatically.

Other Rules Affecting Your Award

Rights During the Restriction Period: During the Restriction Period (and even though the Shares of
Restricted Stock are held in escrow until they are settled), you may exercise any voting rights
associated with your Shares of Restricted Stock. You also will be entitled to receive any
dividends or other distributions paid with respect to your Shares of Restricted Stock, although
such dividends and other distributions also will be held in escrow and subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid under this Award Agreement until the Restricted Stock is settled and
distributed to you (or forfeited), depending on whether or not you have met the conditions
described in this Award Agreement and in the Plan.

2

 

Beneficiary Designation: You may name a beneficiary or beneficiaries to receive any portion of
your Award and any other right under the Plan that is unexercised or unsettled at your death. To
do so, you must complete a new beneficiary designation form by contacting Vtc at Vtd or the address
below. If you die without completing a beneficiary designation form or if you do not complete that
form correctly, your beneficiary will be your surviving spouse or, if you do not have a surviving
spouse, your estate.

Tax Withholding: Certain taxes must be withheld when your Award vests and is settled. These taxes
may be paid in one of several ways. They are:

	 	•	 	By the Company withholding this amount from other amounts owed to you (e.g., from
your salary);
	 
	 	•	 	By the Company withholding all or a portion of any cash amount owed to you with
respect to dividends credited with respect to the Shares that are to be distributed to
you;
	 
	 	•	 	By giving the Company a check (payable to “A. Schulman, Inc.”) in an amount equal to
the taxes that must be withheld; or
	 
	 	•	 	By having the Company withhold a portion of the Shares that otherwise would be
distributed to you. The number of Shares withheld will have a fair market value equal
to the taxes that must be withheld.

You must choose the approach you prefer before the Shares are transferred to you, although the
Company may reject your preferred method for any reason (or for no reason). If this happens, the
Company will specify (from among the alternatives just listed) how these taxes are to be paid.

If you do not choose a method within 30 days of the applicable settlement date, the Company will
withhold either through payroll practices or a portion of the Shares that otherwise would be
distributed to you. The number of Shares withheld will have a fair market value equal to the taxes
that must be withheld and the balance of the Shares will be distributed to you.

Transferring Your Restricted Stock: Normally, your Restricted Stock may not be transferred to
another person. However, as described above, you may complete a Beneficiary Designation Form to
name the person to receive any Restricted Stock that is settled after you die. Also, the Committee
may allow you to transfer your Restricted Stock to certain Permissible Transferees, including a
trust established for your benefit or the benefit of your family. Contact Vtc at the address or
number given below if you are interested in doing this.

Governing Law: This Award Agreement will be construed in accordance with and governed by the laws
(other than laws governing conflicts of laws) of the State of Ohio, except to the extent that the
Delaware General Corporation Law is mandatorily applicable.

3

 

Other Agreements: Also, your Restricted Stock will be subject to the terms of any other written
agreements between you and the Company or a Related Entity to the extent that those other
agreements do not directly conflict with the terms of the Plan or this Award Agreement.

Adjustments to Your Restricted Stock: Subject to the terms of the Plan, your Award will be
adjusted, if appropriate, to reflect any change to the Company’s capital structure (e.g., the
number of Shares of Restricted Stock will be adjusted to reflect a stock split).

Other Rules: Your Restricted Stock also is subject to more rules described in the Plan. You
should read the Plan carefully to ensure you fully understand all the terms and conditions of this
Award.

*****

You may contact Vtc at the address or number given below if you have any questions about your Award
or this Award Agreement.

*****

4

 

Your Acknowledgment of Award Conditions

Note: You must sign and return a copy of this Award Agreement to Vtc at the address given below no
later than Vte.

By signing below, I acknowledge and agree that:

	 	•	 	A copy of the Plan has been made available to me;
	 
	 	•	 	I understand and accept the conditions placed on my Award and understand what I must
do to earn my Award;
	 
	 	•	 	I will consent (in my own behalf and in behalf of my beneficiaries and without any
further consideration) to any change to my Award or this Award Agreement to avoid
paying penalties under Section 409A of the Code, even if those changes affect the terms
of my Award and reduce its value or potential value; and
	 
	 	•	 	I must return a signed copy of this Award Agreement to the address shown below by
Vte.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	VTA	 	 	 	 	 	A. SCHULMAN, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	(signature)
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Date signed:	 	 	 	 	 	Date signed:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 	 	 	 

A signed copy of this Award Agreement must be sent to the following address no later than Vte:

Vtc

A. Schulman, Inc.

Vtg

Vth

Vtd

5

 

A. SCHULMAN, INC.

2006 INCENTIVE PLAN

INSTRUCTIONS FOR COMPLETING SECTION 83(b) ELECTION FORM

You may make a Section 83(b) Election by completing the Section 83(b) Election Form. To do this:

	 	•	 	You must make the election by completing the attached form;
	 
	 	•	 	Within 30 days of Vtb, you must send a copy of this form to the internal revenue
office at which you file your federal income tax return;
	 
	 	•	 	A copy of this form must be submitted with your income tax return for the taxable
year in which the property is transferred; and
	 
	 	•	 	You also must send a copy of this form to:

Vtc

A. Schulman, Inc.

Vtg

Vth

 

 

A. SCHULMAN, INC.

2006 INCENTIVE PLAN

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, to include in taxpayer’s gross income for the current taxable year, the amount of
any income that may be taxable to taxpayer in connection with taxpayer’s receipt of the property
described below:

	1.	 	The name, address, taxpayer identification number and taxable year of the undersigned
are as follows:
	 
	 	 	NAME OF TAXPAYER: Vtq
	 
	 	 	ADDRESS:                                                             
	 
	 	 	              
              
              
            
              
            
	 
	 	 	              
                
               
                                    

	 
	 	 	IDENTIFICATION NUMBER OF TAXPAYER:                                         
	 
	 	 	TAXABLE YEAR: Calendar year Vti
	 
	2.	 	The property with respect to which the election is made is:
	 
	 	 	Vtf shares of the common stock of A. Schulman, Inc., a Delaware corporation
(“Company”).
	 
	3.	 	The date on which the property was transferred is: Vtb.
	 
	4.	 	The property is subject to the following restrictions:
	 
	 	 	Forfeiture of:
	 
	 	 	                     shares in favor of the Company if employment terminates before
                                        .
	 
	 	 	                     shares in favor of the Company if employment terminates before
                                        .
	 
	 	 	                     shares in favor of the Company if employment terminates before
                                        .
	 
	 	 	Restrictions may lapse earlier upon the death or disability (as defined in the A.
Schulman, Inc. 2006 Incentive Plan (the “Plan”)) of the taxpayer or in the event of
a change in control (as defined in the Plan). In the event of the retirement (as

1

 

	 	 	defined in the Plan) of the taxpayer, a prorata portion of the Shares will be
forfeited in favor of the Company.
	 
	5.	 	The fair market value at the time of transfer, determined without regard to any
restriction other than a restriction which by its terms will never lapse, of such
property is: $                    .
	 
	6.	 	The amount (if any) paid for such property: $00.00.

The undersigned has submitted a copy of this statement to the Company. The transferee of such
property is the person performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked except with the consent
of the Commissioner.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

Vtq
	 	 

2EX-10.4

 

Exhibit 10.4

A. SCHULMAN, INC.

2006 INCENTIVE PLAN

INSTRUCTIONS FOR COMPLETING PERFORMANCE SHARE

AWARD AGREEMENT FOR EMPLOYEES

Code Sheet

The following codes are used in this Award Agreement and should be replaced using your computer’s
“Replace” function.

	 	 	 
	VTA

	 	Grantee’s name (all capital letters)
	 
	 	 
	VTB

	 	Grant Date (all capital letters)
	 
	 	 
	Vtb

	 	Grant Date (initial capital letters only)
	 
	 	 
	Vtc

	 	Person to contact for more information
	 
	 	 
	Vtd

	 	Contact’s telephone number, including area code
	 
	 	 
	Vte

	 	Date that is 30 days after the Grant Date (initial capital letters only)
	 
	 	 
	Vtf

	 	Number of Performance Shares granted (insert only the number in Arabic
numerals)
	 
	 	 
	Vtg

	 	Contact’s street address
	 
	 	 
	Vth

	 	Contact’s city, state and zip code

 

 

A. SCHULMAN, INC.

2006 INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT GRANTED TO

VTA on VTB

A. Schulman, Inc. (“Company”) believes that its business interests are best served by extending to
you an opportunity to earn additional compensation based on the growth of the Company’s business.
To this end, the Company adopted, and its stockholders approved, the A. Schulman, Inc. 2006
Incentive Plan (“Plan”) as a means through which employees like you may share in the Company’s
success. Capitalized terms that are not defined herein shall have the same meanings as in the Plan.

This Award Agreement describes many features of your Award and the terms and conditions of your
Award. To ensure you fully understand these terms and conditions, you should:

	 	•	 	Read the Plan carefully to ensure you understand how the Plan works;
	 
	 	•	 	Read this Award Agreement carefully to ensure you understand the nature of your Award
and what you must do to earn it; and
	 
	 	•	 	Contact Vtc at Vtd if you have any questions about your Award.

Also, no later than Vte, you must return a signed copy of the Award Agreement to:

Vtc

A. Schulman, Inc.

Vtg

Vth

Nature of Your Award

The terms and conditions affecting your Award are described in this Award Agreement and the Plan,
both of which you should read carefully. If the terms and conditions are satisfied, your
Performance Shares will be settled and you will receive the Shares underlying such Performance
Shares. For purposes of this Award Agreement, each Performance Share represents the right to
receive one full Share.

Grant Date: Vtb.

Number of Performance Shares: You have been granted Vtf Performance Shares (“Total Shares”),
subject to the terms and conditions of this Award Agreement and the Plan.

1

 

When Your Award Will Vest

Your Performance Shares will be settled or will be forfeited depending on whether or not the terms
and conditions described in this Award Agreement and in the Plan are satisfied. For purposes of
this Award Agreement, the Performance Period is the period beginning on the Grant Date and ending
on the third anniversary thereof.

Normal Settlement Date: Except as otherwise provided in this Award Agreement:

	 	•	 	If the Company’s total shareholder return (as described below) for the Performance
Period is below the 25th percentile (i.e., 75% of the companies perform better), all of
your Performance Shares will be forfeited.
	 
	 	•	 	If the Company’s total shareholder return for the Performance Period meets or exceeds
the 25th percentile, but is less than the 50th percentile, one-third of your Performance
Shares will vest.
	 
	 	•	 	If the Company’s total shareholder return for the Performance Period meets or exceeds
the 50th percentile, but is less than the 75th percentile, two-thirds of your Performance
Shares will vest.
	 
	 	•	 	If the Company’s total shareholder return for the Performance Period meets or exceeds
the 75th percentile, all of your Performance Shares will vest.

“Total shareholder return” for the Performance Period is calculated by first taking the theoretical
value of $100 invested in the Shares at the 30-day average price of the Shares as of the Grant Date
(i.e., the average daily closing price over the 30-day period preceding the Grant Date) and the
theoretical value of $100 invested with each of the peer group companies using the same 30-day
average methodology as of the Grant Date. On the third anniversary of the Grant Date (the “Normal
Settlement Date”), the value of the Shares (using the average daily closing price over the 30 days
preceding the Normal Settlement Date and assuming all dividends are reinvested) is compared with
the value of each of the peer group companies (using the same 30-day average methodology as of the
Normal Settlement Date and again assuming that all dividends are reinvested).

However, your Award may vest earlier in the circumstances described below.

How Your Award Might Vest Earlier Than the Normal Settlement Date: Your Award will immediately vest
if there is a Change in Control.

How Your Termination of Employment Will Affect Your Award: You may forfeit your Award if you
Terminate before the Normal Settlement Date, although this will depend on why you Terminate.

[1] If you Terminate because of [a] death, [b] Disability or [c] after qualifying for Retirement
if the Committee agrees to treat your Termination as a Retirement, you will receive a prorated
number of the Shares underlying your Performance Shares granted through this Award Agreement but
only if the performance criteria described above are actually met at the

2

 

Normal Settlement Date. If they are not, all of your Performance Shares will be forfeited. If
those performance criteria are met, you will receive a number of Shares equal to:

	 	 	 
	Number of Shares that would have been due to you
if you had not Terminated before the Normal Settlement Date
	X	the number of whole months between the Grant Date and your Termination date

	 
	36
	 

[2] If you Terminate under any other circumstances, all of the Performance Shares granted
through this Award Agreement will be forfeited.

Settling Your Award

If all applicable terms and conditions have been met, you will receive the Shares underlying your
vested Performance Shares as soon as administratively feasible, but no later than 60 days, after
the Normal Settlement Date.

Other Rules Affecting Your Award

Rights During the Performance Period:

[1] During the Performance Period, you will have no voting rights with respect to the Shares
underlying the Performance Shares and, except as provided in subsection [2] below, you will have
no dividend rights with respect to the Shares underlying the Performance Shares.

[2] You shall be entitled to receive any cash dividends that are declared and paid during the
Performance Period with respect to Shares underlying two-thirds of your Total Shares (the
“Target Shares”), subject to the terms and conditions of the Plan and this Award Agreement. If
a cash dividend is declared and paid during the Performance Period on the Shares underlying the
Target Shares, you will be deemed to have been credited with a cash amount equal to the product
of [a] the number of Target Shares that have not been settled or forfeited as of the dividend
payment date, multiplied by [b] the amount of the cash dividend paid per Share. Such amount
shall be subject to the same terms and conditions as the related Target Shares and shall vest
and be settled in cash if, when and to the extent the related Target Shares vest and are
settled. In the event a Target Share is forfeited under this Award Agreement, the related
dividends will also be forfeited.

Beneficiary Designation: You may name a beneficiary or beneficiaries to receive any portion of your
Award and any other right under the Plan that is unexercised or unsettled at your death. To do so,
you must complete a new beneficiary designation form by contacting Vtc at Vtd or the address below.
If you die without completing a beneficiary designation form or if you do not complete that form
correctly, your beneficiary will be your surviving spouse or, if you do not have a surviving
spouse, your estate.

3

 

Tax Withholding: Applicable withholding taxes must be withheld with respect to your Award. These
taxes may be paid in one (or a combination) of several ways. They are:

	 	•	 	By the Company withholding this amount from other amounts owed to you (e.g., from your
salary);
	 
	 	•	 	By the Company withholding all or a portion of any cash amount owed to you with respect
to dividends credited with respect to the Shares that are to be distributed to you;
	 
	 	•	 	By giving the Company a check (payable to “A. Schulman, Inc.”) in an amount equal to
the taxes that must be withheld; or
	 
	 	•	 	By having the Company withhold a portion of the Shares that otherwise would be
distributed to you. The number of Shares withheld will have a fair market value equal to
the taxes that must be withheld.

You must choose the approach you prefer before the Shares are transferred to you, although the
Company may reject your preferred method for any reason (or for no reason). If this happens, the
Company will specify (from among the alternatives just listed) how these taxes are to be paid.

If you do not choose a method within 30 days of the Normal Settlement Date, the Company will
withhold either through payroll practices or a portion of the Shares that otherwise would be
distributed to you. The number of Shares withheld will have a fair market value equal to the taxes
that must be withheld and the balance of the Shares will be distributed to you.

Transferring Your Award: Normally, your Award may not be transferred to another person. However, as
described above, you may complete a beneficiary designation form to name the person to receive any
portion of your Award that is settled after you die. Also, the Committee may allow you to transfer
your Restricted Stock to certain Permissible Transferees, including a trust established for your
benefit or the benefit of your family. Contact Vtc at the address or number given below if you are
interested in doing this.

Governing Law: This Award Agreement will be construed in accordance with and governed by the laws
(other than laws governing conflicts of laws) of the State of Ohio, except to the extent that the
Delaware General Corporation Law is mandatorily applicable.

Other Agreements: Also, your Award will be subject to the terms of any other written agreements
between you and the Company or a Related Entity to the extent that those other agreements do not
directly conflict with the terms of the Plan or this Award Agreement.

Adjustments to Your Award: Subject to the terms of the Plan, your Award will be adjusted, if
appropriate, to reflect any change to the Company’s capital structure (e.g., the number of your
Performance Shares will be adjusted to reflect a stock split).

Other Rules: Your Award also is subject to more rules described in the Plan. You should read the
Plan carefully to ensure you fully understand all the terms and conditions of this Award.

4

 

*****

You may contact Vtc at the address or number given below if you have any questions about your Award
or this Award Agreement.

*****

5

 

Your Acknowledgment of Award Conditions

Note: You must sign and return a copy of this Award Agreement to Vtc at the address given below no
later than Vte.

By signing below, I acknowledge and agree that:

	 	•	 	A copy of the Plan has been made available to me;
	 
	 	•	 	I understand and accept the conditions placed on my Award;
	 
	 	•	 	I will consent (in my own behalf and in behalf of my beneficiaries and without any
further consideration) to any change to my Award or this Award Agreement to avoid paying
penalties under Section 409A of the Code, even if those changes affect the terms of my
Award and reduce its value or potential value; and
	 
	 	•	 	I must return a signed copy of this Award Agreement to the address shown below by Vte.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	VTA	 	 	 	A. SCHULMAN, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By: 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	(signature)	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date signed:	 	 	 	 	 	Date signed:	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

A signed copy of this Award Agreement must be sent to the following address no later than Vte:

Vtc

A. Schulman, Inc.

Vtg

Vth

Vtd

6

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