Document:

EX-10.8

 

EXHBIT 10.8

THE GEON COMPANY

SECTION 401(A)(17)

BENEFIT RESTORATION PLAN

(December 31, 2007 Restatement)

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	SECTION I
	 	DEFINITIONS	 	 	2	 
	SECTION II
	 	ELIGIBILITY TO PARTICIPATE	 	 	7	 
	SECTION III
	 	BENEFIT RESTORATION UNDER THE PENSION PLAN	 	 	8	 
	SECTION IV
	 	BENEFIT RESTORATION UNDER THE SAVINGS PLAN	 	 	10	 
	SECTION V
	 	PAYMENT OF BENEFITS	 	 	13	 
	SECTION VI
	 	LIMITATIONS ON BOTH PENSION AND SAVINGS PLANS	 	 	18	 
	SECTION VII
	 	MISCELLANEOUS	 	 	19	 
	SECTION VIII
	 	EFFECTIVE DATE	 	 	26	 

-i-

 

PREAMBLE

The primary purpose of this Plan is to provide deferred compensation to employees who are
determined by the Company to be management or highly compensated employees. This Plan should be
read and construed so as to accomplish the foregoing objective. This Plan is intended to meet the
requirements of Section 201(2) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).

Pursuant to the Third Amendment to the Plan, credits to Plan Accounts under Sections 4.1 and 4.2 of
the Plan were permanently frozen effective May 31, 2003. Effective December 31, 2004, Supplemental
Restoration Benefits and Supplemental Preretirement Surviving Spouse Death Benefits were
temporarily frozen under the Plan, with the intent being that the Company would rescind the freeze
upon the finalization of the Section 409A Guidance. The Company now desires to unfreeze such
benefits.

The Plan is amended and restated effective December 31, 2007 to retroactively unfreeze the
Supplemental Restoration Benefits and Supplemental Preretirement Surviving Spouse Death Benefits as
described above and otherwise make amendments to the Plan to comply with the Section 409A Guidance.

 

 

SECTION I

DEFINITIONS

	1.1	 	Affiliate means any corporation, partnership or other organization which, during any
period of employment of a Participant, was at least 50% controlled by the Company or an
affiliate of the Company.
	 
	1.2	 	Basic Pension Plan Benefit means the pension benefit that would be payable from the
Pension Plan to a Participant, computed without regard to the benefit limitations imposed on
the Pension Plan by Sections 415 and 401(a)(17) of the Code, and, in the case of an MIP/SIP
Limited Participant, computed taking into account the MIP/SIP Limited Participant’s MIP/SIP
Limited Compensation as eligible earnings under the Pension Plan.
	 
	1.3	 	Committee means the Compensation Committee of the Board of Directors of the Company,
or any person or entity to whom the Compensation Committee of the Board of Directors of the
Company has delegated any authority or responsibility under the Plan.
	 
	1.4	 	Code means the Internal Revenue Code of 1986, as amended.
	 
	1.5	 	Company means (i) for periods prior to the Effective Time, The Geon Company, a
Delaware corporation, and (ii) for periods from and after the Effective Time, PolyOne
Corporation, an Ohio corporation.
	 
	1.6	 	Effective Time means the Effective Time as defined in the Agreement and Plan of
Consolidation, dated as of May 7, 2000, by and between M.A. Hanna Company and The Geon
Company.

-2-

 

	1.7	 	Excess Earnings means the amount of the Participant’s compensation that would be
taken into account as Earnings under the Savings Plan but for the limitations under the
Savings Plan in respect of Section 401(a)(17) of the Code.
	 
	1.8	 	MIP/SIP Limited Compensation means the portion of an award under the Company’s
Management Incentive Program and/or Sales Incentive Program, as applicable, of an MIP/SIP
Limited Participant that, after January 31, 1995, would have been paid in cash if the
Company’s Management Incentive Program and/or Sales Incentive Program, as applicable, did not
provide for payment of all or a portion of the awards thereunder in a form other than cash and
any portion of an MIP/SIP Limited Participant’s award payable in cash under the Company’s
Management Incentive Plan and/or Sales Incentive Program, as applicable, the receipt of which
is deferred at the election of the MIP/SIP Limited Participant; provided, however, that in no
event shall MIP/SIP Limited Compensation include any premium related to payment of an award in
a form other than cash under the Company’s Management Incentive Plan and/or Sales Incentive
Program nor any amount that is eligible earnings under the Pension Plan and/or Savings Plan;
and, provided, however, that any portion of an MIP/SIP Limited Participant’s award payable in
cash under the Company’s Management Incentive Plan and/or Sales Incentive Program, as
applicable, that is deferred at the election of the Participant shall be MIP/SIP Limited
Compensation only for the period in which it would have been received but for the deferral.
	 
	1.9	 	MIP/SIP Limited Participant means a Participant whose award under the Company’s
Management Incentive Program and/or Sales Incentive Program, as applicable, is

-3-

 

	 	 	mandatorily paid in a form other than cash at a percentage that exceeds twenty percent (20%)
of the award (excluding any premium).
	 
	1.10	 	Participant means any employee or former employee who is receiving any of the
benefits provided by this Plan.
	 
	1.11	 	Plan means The Geon Company Section 401(a)(17) Benefit Restoration Plan.
	 
	1.12	 	Plan Account means a book reserve account maintained under the Plan on behalf of a
Participant, to which the amounts to which such Participant is entitled under Articles 4.1,
4.2, and 4.3 are credited.
	 
	1.13	 	Pension Plan means the portion of the PolyOne Merged Pension Plan comprised of The
Geon Pension Plan.
	 
	1.14	 	Pension Plan Benefit means the pension benefit payable from the Pension Plan to a
Participant (taking into account and including the limitations contained in Sections 415 and
401(a)(17) of the Code).
	 
	1.15	 	Savings Plan means for the period prior to January 1, 2004, The Geon Retirement
Savings Plan, which was renamed the PolyOne Retirement Savings Plan A (the “Geon Savings
Plan”), and for the period after that date, means the PolyOne Retirement Savings Plan, into
which the Geon Savings Plan was merged.
	 
	1.16	 	Section 409A means Section 409A of the Code, as the same may be amended from time to
time.

-4-

 

	1.17	 	Section 409A Guidance means Section 409A, together with proposed, temporary or final
regulations or any other guidance issued by the Secretary of the Treasury or the Internal
Revenue Service with respect thereto.
	 
	1.18	 	Separation From Service means termination of employment (within the meaning of
Treasury Regulation Section 1.409A-1(h)(1)(ii)).
	 
	1.19	 	Specified Employee means a specified employee as determined by the Company in its
Specified Employee Designation Procedures.
	 
	1.20	 	Supplemental Restoration Benefit means an amount which is determined by subtracting
the Participant’s Pension Plan Benefit from the Participant’s Basic Pension Plan Benefit.
	 
	1.21	 	Supplemental Preretirement Surviving Spouse Death Benefit means the amount of
Qualified Preretirement Survivor Annuity that would be payable from the Pension Plan to the
surviving spouse of a Participant, computed without regard to the benefit limitations imposed
on the Pension Plan by Sections 415 and 401(a)(17) of the Code and, in the case of an MIP/SIP
Limited Participant, computed taking in to account the MIP/SIP Limited Participant’s MIP/SIP
Limited Compensation as eligible earnings under the Pension Plan, minus the amount of
Qualified Preretirement Survivor Annuity payable to such surviving spouse from the Pension
Plan.
	 
	1.22	 	Valuation Date means the last day on which the New York Stock Exchange is open for
trading occurring in the calendar month immediately preceding the calendar month in which the
Participant’s employment covered under the Plan terminates.

-5-

 

	1.23	 	Words and phrases used herein with initial capital letters which are defined in the Savings
Plan or the Pension Plan shall have the definitions given to them in such Plans.

-6-

 

SECTION II

ELIGIBILITY TO PARTICIPATE

	2.1	 	Each participant in the Pension Plan shall participate in this Plan with respect to the
Pension Plan if such participant’s Basic Pension Plan Benefit exceeds the amount of such
participant’s Pension Plan Benefit. Effective May 31, 2003, no additional employees are
eligible to participate in this Plan with respect to the Savings Plan. However, the Company
shall continue to maintain Plan Accounts for Participants who had amounts credited to Plan
Accounts prior to such date until such Plan Accounts are completely distributed pursuant to
Section 5.2.

-7-

 

SECTION III

BENEFIT RESTORATION UNDER THE PENSION PLAN

	3.1	 	(a) The Company shall pay to a Participant who is participating in this Plan with respect to
the Pension Plan a Supplemental Restoration Benefit. Such Supplemental Restoration Benefit
shall be paid in accordance with Article 5.1. The Company shall pay to the surviving spouse
of a Participant who is participating in this Plan with respect to the Pension Plan and who
dies under circumstances entitling such surviving spouse to a Qualified Preretirement Survivor
Annuity under the Pension Plan a Supplemental Preretirement Surviving Spouse Death Benefit.
Such Supplemental Preretirement Surviving Spouse Death Benefit shall be paid in accordance
with Article 5.1.

	 	 	(b) Effective as of December 31, 2004, all Supplemental Restoration Benefits and
Supplemental Preretirement Surviving Spouse Death Benefits under the Plan were temporarily
frozen. In furtherance of, but without limiting the foregoing, for the period from January
1, 2005 through December 31, 2007, Participants did not receive credit under this Plan for
any eligible earnings that were earned after December 31, 2004 (even if such eligible
earnings are taken into account for purposes of determining Pension Plan Benefits under the
Pension Plan). Effective December 31, 2007, all Supplemental Restoration Benefits and
Supplemental Preretirement Surviving Spouse Death Benefits are retroactively unfrozen to
January 1, 2005. As a result, Participants shall receive credit under the Plan for eligible
earnings that are earned after December 31, 2004 to the extent that such eligible earnings
would be taken into account for purposes of determining Supplemental Restoration Benefits
and Supplemental Preretirement Surviving Spouse Death Benefits hereunder.

-8-

 

	 	 	(c) Supplemental Restoration Benefits and Supplemental Preretirement Surviving Spouse Death
Benefits that are accrued and vested on or before December 31, 2004, as determined under the
Section 409A Guidance, including without limitation, the early retirement subsidy under the
Pension Plan for Participants who, as of December 31, 2004, had met the requirements for an
early retirement pension under the Pension Plan, will qualify for “grandfathered” status
under Section 409A and will continue to be governed by the law applicable to nonqualified
deferred compensation prior to the addition of Section 409A to the Code.

-9-

 

SECTION IV

BENEFIT RESTORATION UNDER THE SAVINGS PLAN

	4.1	 	The Company shall maintain a Plan Account for each Participant who is participating in this
Plan with respect to the Savings Plan.

       The Company shall credit the Plan Account of each such Participant with an amount or
amounts, determined as follows:

	 	(1)	 	for each Plan Year in which the Participant has Excess Earnings, an amount
equal to the matching Company Contributions that would have been made to the Savings
Plan with respect to such Excess Earnings if such Excess Earnings had been Earnings at
the relevant time under the Savings Plan and the Participant had elected the maximum
employee pre-tax contribution with respect to such Excess Earnings;
	 
	 	(2)	 	for each Plan Year beginning after December 31, 1999 in which the Participant
has Excess Earnings and receives a 2% Nonelective Contribution under the Savings Plan,
an amount equal to 2% of the Participant’s Excess Earnings for such Plan Year;
	 
	 	(3)	 	for periods after the first date on which the Participant has Excess Earnings,
an amount equal to the matching Company Contributions that would have been made to the
Savings Plan with respect to a MIP/SIP Limited Participant’s MIP/SIP Limited
Compensation if such MIP/SIP Limited Compensation had been Earnings at the relevant
time under the Savings Plan and the Participant had elected the

-10-

 

	 	 	 	maximum employee pre-tax contribution with respect to such MIP/SIP Limited
Compensation; and

	 	(4)	 	for periods after December 31, 1999 and after the first date on which the
Participant has Excess Earnings, for each Plan Year in which the Participant receives a
2% Nonelective Contribution under the Savings Plan and has MIP/SIP Limited
Compensation, an amount equal to 2% of the MIP/SIP Limited Participant’s MIP/SIP
Limited Compensation for such Plan Year.

	 	 	Such credits to the Participant’s Plan Account shall occur at such time or times as the
Company shall determine, but such credits shall be made not later than September
15th of the calendar year following the calendar year to which the Excess
Earnings or MIP/SIP Limited Compensation, as the case may be, relates. After being credited
to the Participant’s Plan Account, the time as of which the credit occurred shall not be
changed by the Company.
	 
	 	 	Notwithstanding the foregoing provisions of this Section 4.1, no Participant’s Plan Account
shall be credited with an amount or amounts applicable to Excess Earnings attributable to
any period after May 31, 2003.

	4.2	 	A Participant with Excess Earnings during any Plan Year commencing prior to December 31, 2002
and during the partial Plan Year of January 1, 2003 to May 31, 2003 may elect to reduce his or
her compensation that would be Excess Earnings for such Plan Year at a percentage rate of
Excess Earnings not in excess of 6% as elected by the Participant on a form provided by the
Company and have the amount by which the Participant’s compensation is reduced credited to the
Participant’s Plan Account. Such election shall

-11-

 

	 	 	be made at such time and in such manner as the Company shall require, but such election
shall be made prior to the date on which the compensation to which it relates is earned and
shall be irrevocable for the period to which it relates.

	4.3	 	The Plan Accounts hereunder will be credited on a monthly basis with earnings: (1) for
periods prior to January 1, 1995, and for periods after February 28, 1997, at a rate equal to
the monthly rate of earnings paid under the Fixed Income Fund of the Savings Plan; and (2) for
periods after December 31, 1994 but prior to March 1, 1997, at a rate equal to the monthly
rate of earnings paid under the Fixed Income Fund of the Savings Plan, rounded up to the next
whole percent (if applicable), for the last full calendar month of the Plan Year ending most
recently prior to the month for which the crediting is being done. In the event that the
Fixed Income Fund of the Savings Plan no longer exists, the Company shall, in its sole
discretion, establish an alternate rate of return for the immediately preceding sentence,
which alternate rate of return shall be intended by the Company to provide a rate of return
comparable to that of the Fixed Income Fund. Notwithstanding the foregoing provisions of this
Article 4.3: the Committee may establish rules and procedures whereunder a Participant may
elect that the Participant’s Account be credited or debited with earnings and losses equal to
the earnings and losses on a specified investment or specified investments other than the
Fixed Income Fund of the Savings Plan (or alternative rate of return, if applicable),
provided, however, that PolyOne Corporation common stock may not be a specified investment for
purposes of the Plan. Such election shall be made at such time(s) and in such manner as the
Committee’s rules and procedures shall require, shall be prospective only, and shall be
irrevocable with respect to the period to which it relates.

-12-

 

SECTION V

PAYMENT OF BENEFITS

	5.1	 	Pension.

	 	 	(a) Any Supplemental Restoration Benefit or Supplemental Preretirement Surviving Spouse
Death Benefit that, under the Section 409A Guidance, is deemed to have been deferred prior
to January 1, 2005 and that qualifies for “grandfathered” status under the Section 409A
Guidance, including without limitation, the early retirement subsidy under the Pension Plan
for Participants who, as of December 31, 2004, had met the requirements for an early
retirement pension under the Pension Plan, shall continue to be governed by the law
applicable to nonqualified deferred compensation prior to the addition of Section 409A to
the Code and shall be subject to the terms and conditions specified in the Plan, including
particularly, but not limited to, those respecting time and form of payment, as in effect
prior to January 1, 2005. In furtherance of, but without limiting the foregoing, (1) the
“grandfathered” Supplemental Restoration Benefit shall be payable in the same form as
elected under the Pension Plan and in accordance with and subject to all of the terms and
conditions applicable to the Participant’s benefits under the Pension Plan including the
actuarial equivalents of, as provided in the Pension Plan, the optional benefits he or she
has elected or is deemed to have elected, and (2) the “grandfathered” Supplemental
Preretirement Surviving Spouse Death Benefit shall be payable in the same form as elected
under the Pension Plan and in accordance with and subject to all of the terms and conditions
applicable to the Surviving Spouse’s benefits under the Pension Plan including the actuarial
equivalents of, as provided in the Pension Plan, the optional benefits he or she has elected
or is deemed to have elected.

-13-

 

	 	 	(b) The remaining subsections of this Section 5.1 are applicable to the portion of a
Participant’s Supplemental Restoration Benefit and the Participant’s Supplemental
Preretirement Surviving Spouse Death Benefit that, under the Section 409A Guidance, are
deemed to have been deferred on or after January 1, 2005 (the “non-grandfathered” benefit).
	 
	 	 	(c) Except as provided in Section 5.1(d), the Supplemental Restoration Benefit of a
Participant who incurs a Separation from Service and commences payment of his or her
Supplemental Restoration Benefit on or before December 31, 2008 shall be payable in the same
form as elected under the Pension Plan and in accordance with and subject to all of the
terms and conditions applicable to the Participant’s benefits under the Pension Plan,
including the actuarial equivalents, as provided in the Pension Plan, of the optional
Pension Plan benefits he or she has elected or is deemed to have elected. The Supplemental
Preretirement Surviving Spouse Death Benefit payable with respect to a Participant who dies
and with respect to whom the preretirement surviving spouse benefit under the Pension Plan
commences to be paid on or before December 31, 2008 shall be payable in the same form as
elected under the Pension Plan and in accordance with and subject to all of the terms and
conditions applicable to the Surviving Spouse’s benefits under the Pension Plan, including
the actuarial equivalents, as provided in the Pension Plan, of the optional benefits he or
she has elected or is deemed to have elected.
	 
	 	 	(d) The non-grandfathered Supplemental Restoration Benefit of a Participant who commenced
payment of his or her grandfathered Supplemental Restoration Benefit after December 31,
2004 but prior to December 31, 2007 shall commence to be paid on March 1, 2008 and shall be
payable in the same form as elected under the Pension Plan and in

-14-

 

	 	 	accordance with and subject to all of the terms and conditions applicable to the
Participant’s benefits under the Pension Plan, including the actuarial equivalents, as
provided in the Pension Plan, of the optional Pension Plan benefits he or she has elected or
is deemed to have elected. The initial annuity payment shall include a one-time payment of
the Participant’s non-grandfathered Supplemental Restoration Benefit that was retroactively
unfrozen.
	 
	 	 	(e) The Supplemental Restoration Benefit of a Participant that does not commence to be paid
pursuant to Section 5.1(c) or Section 5.1(d) shall be paid in the form of an annuity payable
monthly for the entire life of the Participant but in no event for a period less than 60
months (the “5-Year Certain Annuity”), commencing, subject to Section 5.1(g), on the later
of (1) January 1, 2009, or (2) the first of the month following the later of the date the
Participant (A) incurs a Separation from Service or (B) attains age 55. In lieu of
receiving his or her benefit in the form of a 5-Year Certain Annuity, at any time prior to
the date benefit payments commence, a Participant may elect, on a written form acceptable to
the Company, to receive his or her benefit in one of the optional forms of benefit payment
specified in the Pension Plan (the “Optional Forms”). The Optional Forms shall be subject
to all of the terms and conditions applicable to such optional forms of benefit under the
Pension Plan, including the actuarial equivalents set forth in the Pension Plan that are
used to calculate the Optional Forms, but excluding the requirement to obtain spouse consent
for particular forms of payment.
	 
	 	 	If a Participant elects an Optional Form that provides for a benefit to a joint pensioner or
beneficiary, the Participant shall designate such joint pensioner or beneficiary at the time
the Participant elects such Optional Form.

-15-

 

	 	 	(f) The Supplemental Preretirement Surviving Spouse Death Benefit payable to a Participant’s
surviving spouse that does not commence to be paid pursuant to Section 5.1(c) or Section
5.1(d) shall be paid in the form of an annuity payable monthly for the entire life of the
surviving spouse, commencing on the first of the month following the later of the date of
the Participant’s death or the date on which the Participant would have attained age 55.
	 
	 	 	(g) Notwithstanding the foregoing, the Supplemental Restoration Benefit of a Participant who
is a Specified Employee at the time of his or her Separation from Service shall commence to
be paid no earlier than the earlier of (i) the first day of the seventh month following his
or her Separation from Service with the Company or (ii) his or her death. The initial
payment for such a Specified Employee shall include a one-time payment of the annuity
payments that would have been paid absent the six-month delay required by the Section 409A
Guidance.

	5.2	 	Savings.
	 
	 	 	(a) All credits to Plan Accounts under Sections 4.1 and 4.2 of the Plan were deferred and
vested prior to January 1, 2005 and therefore qualify for “grandfathered” status under the
Section 409A Guidance. As such, they shall continue to be governed by the law applicable to
nonqualified deferred compensation prior to the addition of Section 409A to the Code and
shall be subject to the terms and conditions specified in the Plan as in effect prior to
January 1, 2005. In particular, all credits to Plan Accounts under Sections 4.1 and 4.2 of
the Plan and earnings thereon credited to Plan Accounts under Section 4.3 of

-16-

 

	 	 	the Plan shall be considered “grandfathered” under Section 409A and shall be paid under the
terms of the Plan as in effect prior to January 1, 2005, which are set forth in Sections
5.2(b) and 5.2(c).
	 
	 	 	(b) The Company shall distribute in a lump sum to each Participant in this Plan or his or
her designated beneficiary under the Savings Plan, upon the termination of employment of
such Participant under circumstances entitling him or her or such beneficiary to a
distribution of the Participant’s interest in the Savings Plan, except as provided below, an
amount in cash equal to (i) the value of his or her Plan Account attributable to the deemed
matching contribution of the Company, as provided in paragraph 4.1 herein, to the extent
vested determined in accordance with the terms of the Savings Plan, at the time of
termination of employment, valued as of the close of business on the Valuation Date, and
(ii) the value of his or her Plan Account attributable to contributions made pursuant to an
election under Article 4.2, as of the close of business on the Valuation Date. A
Participant employed by a Successor Company may, subject to Committee approval, be
considered to have terminated employment with the Company for purposes of this Article 5.2
only.
	 
	 	 	(c) Notwithstanding Article 5.2(a) hereof, with respect to employment terminations occurring
on and after November 1, 1996 and prior to February 6, 1997, a Participant who is subject to
the provisions of Section 16 of the Securities Exchange Act of 1934, as amended (a “Section
16 Insider”) at the time of employment termination, and who with respect to any portion of
his or her Plan Account which, if not held for six months, would subject the Participant to
short-swing liability under Section 16 of such Act, shall not be entitled to a distribution
under the Plan of any portion of such Participant’s Plan Account

-17-

 

	 	 	as to which the Participant has elected to be credited or debited with earnings and losses
equal to the earnings and losses on a specified investment which derives its return from the
value of the equity securities of the Company (a “Company Equity Fund”) until such date that
is six months and one day following the termination of such Participant’s employment under
circumstances entitling him or her or his or her designated beneficiary to a distribution of
the Participant’s interest in the Savings Plan. Any amounts distributed in accordance with
this Article 5.2(b) shall be valued as of the close of business on the last day on which the
New York Stock Exchange is open for trading occurring in the calendar month immediately
preceding the calendar month in which the Participant is entitled to a distribution under
this Article 5.2(b), rather than as of the Valuation Date.

-18-

 

SECTION VI

LIMITATIONS ON BOTH PENSION AND SAVINGS PLANS

	6.1	 	Where Section 415 of the Code places combined limits on both the Pension Plan and the Savings
Plan, the Savings Plan will be the primary qualified plan.

-19-

 

SECTION VII

MISCELLANEOUS

	7.1	 	Administration. The Committee shall have full discretionary authority to administer
the Plan, determine all questions arising in connection with the Plan, interpret the
provisions of the Plan, adopt procedural rules, and employ and rely on such legal counsel,
actuaries, accountants and agents as it may deem advisable to assist in the administration of
the Plan. Decisions of the Committee shall be conclusive and binding on all persons.
	 
	7.2	 	Termination. This Plan may be terminated at any time by the Board of Directors of
the Company, in which event the rights of Participants to their accrued and vested
Supplemental Restoration Benefits and to the balances in their Plan Accounts established under
this Plan (if any) shall become nonforfeitable. Subject to the Section 409A Guidance, if the
Company shall terminate the Pension Plan or the Savings Plan, any Supplemental Restoration
Benefits or Plan Accounts payable to the Participants in accordance with this Plan shall be
payable to them in accordance with all of the terms and conditions applicable to employee
benefits under the Pension Plan in the event of its termination, as applicable, and, if
applicable, the amounts to the credit of Participants in their Plan Accounts shall be
distributed to such Participants as provided herein, but in accordance with any of the terms
and conditions of the Savings Plan then applicable providing for earlier distribution, as
applicable. Notwithstanding the immediately preceding sentence, a Participant who is subject
to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended shall not
be entitled to a distribution under the Plan of any portion of such Participant’s Plan Account
as to which the Participant has elected to be credited or debited with earnings and losses
equal to the earnings and losses

-20-

 

		 	on a specified investment which derives its return from the value of the equity securities
of the Company until such time as is provided in Article 5.2.
	 
	7.3	 	No Assignability. The right of an employee or any other person to a benefit payment
pursuant to this Plan shall not be assigned, transferred, pledged or encumbered except by will
or the laws of descent and distribution.
	 
	7.4	 	Rights. Nothing in this Plan shall be construed as giving any employee the right to
be retained in the employ of the Company as an executive or in any other capacity. The
Company expressly reserves the right to dismiss any employee at any time without regard to the
effect which such dismissal might have upon him or her under the Plan.
	 
	7.5	 	Amendment. This Plan may be amended at any time by or pursuant to action of the
Committee, except that no such amendment shall: (1) deprive any Participant of his or her
Supplemental Restoration Benefit accrued at the time of such amendment; (2) reduce the amount
then credited to a Participant’s Plan Account (if any); (3) if approved or adopted after
August 1, 1996, amend the Plan in any other manner that would not be permitted under Section
411(d)(6) of the Code, as in effect on August 1, 1996 (“1996 Section 411(d)(6)”), or the
regulations thereunder as in effect on August 1, 1996, but not including any regulation in
respect of Section 204(h) of ERISA (if the Plan were a plan subject to 1996 Section
411(d)(6)), except to the extent that a Participant who would be affected by the amendment
consents in writing thereto; or (4) if approved or adopted after August 1, 1996, change the
method of crediting hypothetical earnings (or losses) under Article 4.3 of the Plan to a
method that would not be permissible under a plan qualified under Section 401 (a) of the Code,
as in effect on August 1, 1996 (“1996 Section 401(a)”)

-21-

 

	 	 	except that the provisions of Article 4.3 of the Plan as in effect prior to August 1, 1996
and any provisions substantially similar to the provisions of Article 4.3 of the Plan as in
effect on August 1, 1996 shall be deemed a method or methods permissible under 1996 Section
401(a), and that a provision shall not be deemed impermissible under a plan qualified under
1996 Section 401(a), because the provision credits hypothetical (as opposed to actual)
earnings (or losses), and except to the extent that a Participant who would be affected by
the amendment consents in writing thereto.

	7.6	 	Funding. Benefits payable under this Plan shall not be funded and shall be paid out
of the general funds of the Company. The Company shall not be required to segregate any
assets with respect to this Plan. Nothing contained in this Plan shall create or be construed
to create a trust of any kind, or a fiduciary relationship between the Company and any
employee, former employee or any designated beneficiary of any Participant or any other
person. Any amounts credited to a Participant under the provisions of this Plan shall
continue for all purposes to be part of the general funds of the Company, and no person other
than the Company shall by virtue of the provisions of this Plan have any interest in such
funds. No person shall have any property interest whatsoever in any specific assets of the
Company by reason of the Plan. Any right to receive payments pursuant to the Plan shall be no
greater than the right of any unsecured creditor of the Company.
	 
	7.7	 	Benefit Claims and Appeal Procedure.
	 
	 	 	(a) Any Participant or beneficiary who believes that he is entitled to receive a benefit
under the Plan which he has not received may file with the Committee a written claim

-22-

 

	 	 	specifying the basis for his claim and the facts upon which he relies in making such a
claim. Such a claim must be signed by the claimant or his duly authorized representative
(the “Claimant”).

	 	 	(b) Whenever the Committee denies (in whole or in part), a claim for benefits filed by a
Claimant, the Committee shall transmit a written notice of such decision to the Claimant,
within 90 days after such claim was filed (plus an additional period of 90 days if required
for processing, provided that notice of the extension of time is given to the Claimant
within the first 90 day period). Such notice shall be written in a manner calculated to be
understood by the Claimant and shall state (1) the specific reason(s) for the denial of the
claim, (2) specific reference(s) to pertinent provisions of the Plan on which the denial of
the claim was based, (3) a description of any additional material or information necessary
for the Claimant to perfect the claim and an explanation of why such material or information
is necessary, and (4) an explanation of the Plan’s review procedures under Subsection (c)
below and the time limits applicable to such procedures, including a statement of the
Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse
benefit determination on review.
	 
	 	 	(c) Within 60 days after the denial of his claim, the Claimant may request that the claim
denial be reviewed by filing with the Committee a written request therefore. If such an
appeal is not filed within this 60-day limit, the Claimant shall be deemed to have agreed
with the Committee’s denial of the claim. If such an appeal is so filed within such
60-days, a named fiduciary designated by the Committee shall (1) conduct a full and fair
review of such claim and (2) mail or deliver to the Claimant a written decision on the
matter based on the facts and pertinent provisions of the Plan within a period of 60 days

-23-

 

	 	 	after the receipt of the request for review unless special circumstances require an
extension of time, in which case such decision shall be rendered not later than 120 days
after receipt of such request. If an extension of time for review is required, written
notice of the extension shall be furnished to the Claimant prior to the commencement of the
extension. Such decision shall (1) be written in a manner calculated to be understood by
the Claimant, (2) state the specific reason(s) for the decision, (3) make specific
reference(s) to pertinent provisions of the Plan on which the decision is based and (4) to
the extent permitted by applicable law, be final and binding on all interested persons.
During such full review, the Claimant shall be given an opportunity to review documents that
are pertinent to the Claimant’s claim and to submit issues and comments in writing. In
addition, the notice of adverse determination shall also include statements that (1) the
Claimant is entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the Claimant’s claim for
benefits and (2) a statement of the Claimant’s right to bring an action under Section 502(a)
of ERISA.
	 
	7.8	 	Continuation of Portion of Goodrich Plan. The Plan shall provide all payments in
respect of similar benefits provided for under a similar plan (the “Goodrich Plan”) of The
B.P. Goodrich Company (“Goodrich”) owed after April 29, 1993 to those persons who were last
employed by Goodrich in the Geon Vinyl Division and those employees who were last employed by
Goodrich in a department which became a part of the Geon Vinyl Division when the Geon Vinyl
Division was formed, who were receiving such benefits under the Goodrich Plan as of April 29,
1993 or who would have commenced receiving such benefits under the Goodrich Plan on or after
April 29, 1993 because of events

-24-

 

		 	occurring prior to April 29, 1993, all in
accordance with the provisions of the Goodrich
Plan (as in effect on April 28, 1993 or such
prior date(s) as applicable to the time(s) at
which such person accrued such benefits), if any.
The Plan is a continuation of the Goodrich Plan
with respect to those employees of the Company
who were participants in the Goodrich Plan
immediately prior to April 29, 1993. Whenever in
this Plan it is necessary to calculate any
compensation or earnings of any such Participant
for any period prior to April 29, 1993, or to use
any period of service prior to that date for any
purpose in the Plan, such Participant’s period of
service, compensation, and/or earnings taken into
account under the Goodrich Plan prior to April
29, 1993 shall be taken into account under the
Plan.
	 
	7.9	 	Section 409A of the Code
	 
	 	 	(a) To the extent applicable, it is intended that the Plan (including all Amendments
thereto) comply with the provisions of Section 409A so as to prevent the inclusion in gross
income of any amount deferred hereunder in any taxable year that is prior to the taxable
year or years in which such amount would otherwise be actually distributed or made available
to the Participants. The Plan shall be administered in a manner that will comply with the
Section 409A Guidance. Any Plan provisions that would cause the Plan to fail to satisfy
Section 409A shall have no force and effect until amended to comply with Section 409A (which
amendment may be retroactive to the extent permitted by the Section 409A Guidance).
	 
	 	 	(b) The Committee shall not take any action that would violate any provision of the Section
409A Guidance. The Committee is authorized to adopt rules or regulations

-25-

 

	 	 	deemed necessary or appropriate in connection with the Section 409A Guidance to anticipate
and/or comply with the requirements thereof (including any transition or grandfather rules
thereunder).

-26-

 

SECTION VIII

EFFECTIVE DATE

	8.1	 	This Plan shall be construed, administered and enforced according to applicable federal law,
and to the extent not preempted thereby, the laws of the state in which the Company is
incorporated.

	8.2	 	This Plan was established and became effective April 29, 1993. Except as otherwise provided
herein, this amendment and restatement of the Plan shall be effective as of December 31, 2007
except that accruals described in Section 3.1(b) are unfrozen retroactively to January 1,
2005.

IN WITNESS WHEREOF, the undersigned has executed this document February 19, 2008.

	 	 	 	 	 
	 	POLYONE CORPORATION

 	 
	 	By:  	/s/ Kenneth M. Smith
 	 
	 	 	Name:  	Kenneth M. Smith                                                          	 
	 	 	Title:  	Senior Vice President and

Chief Information Officer and
Human Resources Officer 	 
	 

-27-EX-10.12

 

Exhibit 10.12 

POLYONE CORPORATION

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

(As Amended and Restated Effective December 31, 2007)

ARTICLE I

PURPOSE OF THE PLAN

     The purpose of the PolyOne Corporation (the “Company”) Deferred Compensation Plan for
Non-Employee Directors is to provide any Non-Employee Director of the Company the option to defer
receipt of the compensation payable for services as a Director and to build loyalty to the Company
through increased ownership in the Company’s Common Stock.

ARTICLE II

DEFINITIONS

     As used herein, the following words shall have the meaning stated after them unless otherwise
specifically provided:

     2.1 “Calendar Year” shall mean the twelve month period January 1 through December 31.

     2.2 “Change in Control” shall mean any of the following events:

(a) The acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of voting securities of the Company where such acquisition causes
such Person to own 20% or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not be deemed to result in a Change of
Control: (i) any acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction that complies with clauses (i),
(ii) and (iii) of subsection (c) below; provided, further, that if any Person’s beneficial
ownership of the Outstanding Company Voting Securities reaches or exceeds 20% as a result of
a transaction described in clause (i) or (ii) above, and such Person subsequently acquires
beneficial ownership of additional voting securities of the Company, such subsequent
acquisition shall be treated as an acquisition that causes such Person to own 20% or more of
the Outstanding Company Voting Securities; and provided, further, that if at least a
majority of the members of the Incumbent Board determines in good faith that a Person has
acquired beneficial

 

 

ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of the Outstanding Company Voting Securities inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares so that such Person beneficially owns
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) less than 20% of the
Outstanding Company Voting Securities, then no Change of Control shall have occurred as a
result of such Person’s acquisition; or

(b) Individuals who, as of November 6, 1996, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to November 6, 1996 whose election, or
nomination for election by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or

(c) The consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of
assets of another corporation (“Business Combination”); excluding, however, such a Business
Combination pursuant to which (i) all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly, more than 60%
of, respectively, the then outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation that as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Voting Securities, (ii) no
Person (excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

     2.3 “Committee” shall mean the Compensation and Governance Committee described in Section 8.1
hereof.

-2-

 

     2.4 “Common Stock” or “stock” means common shares, par value $.01 per share, of the Company,
including authorized and unissued shares and treasury shares.

     2.5 “Company” means PolyOne Corporation, an Ohio corporation.

     2.6 “Director” shall mean any non-employee director of the Company.

ARTICLE III

ELECTIONS BY DIRECTORS

     3.1 Election to Defer. At any time designated by the Company before the beginning of
a taxable year (the “Election Period”), a Director may elect to defer receipt of the compensation
payable to him or her for services as a Director during the taxable year. Such election shall be
made on an election form specified by the Company (the “Election Form”). A Director’s initial
Election Form will, subject to the following sentence, include an election as to the time of
payment or the commencement of payment and the manner of payment of all amounts in his or her
Account. In addition, if a Director has elected to receive or commence payment in a specified
year, the Election Form for the Election Period immediately prior to such specified year shall
contain the Director’s election regarding the time and manner of payment of amounts in his or her
Account for that and all future Election Periods. Notwithstanding the foregoing, with respect to
the first taxable year in which a person becomes a Director, such Director may, within 30 days of
becoming a Director, make an election to defer compensation payable to him or her in such taxable
year for services as a Director subsequent to the election. Each Director’s Election Form shall
indicate the portion of the Director’s compensation to be invested in an interest-bearing account
and the portion of such compensation to be invested in Common Stock.

     3.2 Effectiveness of Elections. Elections shall be effective and, except as set forth
in Section 3.3, irrevocable upon the delivery of an Election Form to the Committee. Subject to the
provisions of Article VI, amounts deferred pursuant to such elections shall be distributed at the
time and in the manner set forth in such election.

     3.3 Amendment and Termination of Elections. A Director may terminate or amend his or
her election to defer receipt of compensation by written notice delivered to the Committee during
the Election Period prior to the commencement of the taxable year with respect to which such
compensation will be earned. Amendments which serve only to change the beneficiary designation
shall be permitted at any time and as often as necessary.

ARTICLE IV

COMMON STOCK AVAILABLE UNDER THE PLAN

     4.1 Common Stock. The aggregate number of shares of Common Stock that may be granted
under this Plan in any fiscal year of the Company during the term of this Plan will be equal to one
tenth of one percent (0.1 %) of the number of shares of Common Stock outstanding as of the first
day of that fiscal year. Shares of Common Stock awarded to a Director as compensation pursuant to
any other plan or arrangement of the Company, the receipt of which the Director defers pursuant to
this Plan, shall not reduce the number of shares of Common Stock that may be granted under this
Plan in accordance with the immediately preceding sentence.

-3-

 

     4.2 Adjustment. In the event of any change in the Common Stock of the Company by
reason of a merger, consolidation, reorganization, or similar transaction, or in the event of a
stock dividend, stock split, or distribution to shareholders (other than normal cash dividends),
the Committee will adjust the number and class of shares that may be issued under this Plan, the
number and class of shares subject to outstanding deferrals, and the fair market value of the
Common Stock, and other determinations applicable to outstanding awards.

ARTICLE V

ACCOUNTS

     5.1 Accounts. The Company shall establish and maintain two separate Deferred
Compensation Accounts (each an “Account”) for each Director who elects to defer compensation under
the Plan: (a) the “Grandfathered Account” for amounts that are “deferred” (as such term is defined
in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) as of December 31,
2004 (and earnings thereon) and (b) the “Post-2004 Account” for amounts that are deferred after
December 31, 2004 (and earnings thereon). If the Director elects to have deferred compensation
invested in an interest-bearing account, the Company shall credit the Account of the Director with
an amount equal to one hundred percent (100%) of the compensation deferred pursuant to this Plan.
Subject to the limitation stated in the last sentence of this Section 5.1, in the event that a
Director elects to have some or all of his or her compensation invested in Common Stock, then the
Company shall credit the Account of the Director with an amount equal to one hundred twenty-five
percent (125%) of such compensation, in the form of a number of shares of Common Stock, valued at
its Fair Market Value. As used herein, the Fair Market Value of Common Stock shall be the average
of the high and low prices of the Company’s Common Stock as reported on the composite tape for
securities listed on the New York Stock Exchange for the date immediately preceding the date of
crediting the Account, provided that if no sales of Common Stock were made on said Exchange on that
date, the Fair Market Value shall be the average of the high and low prices of Common Stock as
reported on said composite tape for the preceding day on which sales of Common Stock were made on
said Exchange. The Accounts shall be credited as of the date on which the compensation would
otherwise have been paid to the Director, if not deferred under the Plan. Notwithstanding the
foregoing, in the event that a Director elects to defer compensation that, but for the Director’s
election to defer, the Director would have received in the form of Common Stock (rather than cash
or some other non-stock form of compensation), then the Company shall credit the Account of the
Director with an amount equal to one hundred percent (100%) of such compensation, in the form of
the number of shares of Common Stock otherwise payable to the Director under the plan or
arrangement of the Company providing for the payment of such compensation, valued as provided in
the plan or arrangement of the Company providing for the payment of such compensation or, if no
such provision is made, at its Fair Market Value.

     5.2 Adjustment of Accounts. As of December 31 of each Calendar Year and on such other
dates as the Committee directs, the fair market value of the Account of each Director shall be
determined by crediting to the Account an amount equal to the income earned during the Calendar
Year, or other appropriate period, the number of shares of Common Stock credited to the Account,
and then determining the fair market value of the shares and other amounts credited to the Account.

-4-

 

ARTICLE VI

PAYMENT OF ACCOUNTS

     6.1 Time of Payment. Payment of the amount credited to a Director’s Grandfathered
Account shall commence upon a date which is not more than thirty days after the earlier of (i) the
attainment of the date specified (not younger than age 55) in his Election Form or (ii) upon a
Change in Control. Payment of the amount credited to a Director’s Post-2004 Account shall commence
upon a date which is not more than thirty days after the earliest of (i) as elected by the Director
in his Election Form, upon a specified date or the date of the Director’s separation from service
with the Company, as determined in accordance with Section 409A of the Code (the “Separation from
Service Date”); provided, however, that the Director shall not have the right to
designate the taxable year of payment and further provided that if the payment is
to commence upon the Director’s Separation from Service Date and the Director is a “specified
employee,” as determined by the Company in its Specified Employee Designation Procedure (a
“Specified Employee”), at the Separation from Service Date, the payment shall commence on the first
day of the seventh month following the Director’s Separation from Service Date, (ii) the death of
the Director or (iii) upon a Change in Control. To the extent a Director would be entitled to
payment upon the occurrence of a Change in Control pursuant to the preceding sentence and such
Change in Control does not constitute a permitted distribution event under Section 409A(a)(2) of
the Code, then payment will be made, to the extent necessary to comply with the provisions of
Section 409A of the Code, to the Director on the earliest of (A) the Director’s Separation from
Service Date, provided, further, that if the Director is a Specified Employee at
the time of the Separation from Service Date, the payment to the Director shall be made on the
first day of the seventh month following such Separation from Service Date or (B) the Director’s
death.

     6.2 Method of Payment.

	 	(a)	 	Grandfathered Account.

(1) Amounts Deferred Prior to January 1, 1996. The amount credited to a
Director’s Grandfathered Account prior to January 1, 1996 shall be paid, in
whole or in part, to the Director in a lump sum and/or in annual
installments over a period of not more than ten years as specified in each
Director’s Election Form. Grandfathered Accounts shall be paid in kind, in
cash, or shares of Common Stock, as credited to the Grandfathered Account.

(2) Amounts Deferred From and After January 1, 1996. The amount credited to
a Director’s Grandfathered Account on and after January 1, 1996 shall be
paid, in whole or in part, to the Director in a lump sum and/or in annual
installments over a period of not more than ten years as specified in each
Director’s Election Form. A Director may elect to change his or her
original payment period election, as specified in such Director’s Election
Form; provided, that (i) such change is approved by the Committee, and (ii)
the election to change is made at least 18 months prior to the date
specified in the electing Director’s Election Form on which payment of the
amount credited to the Director’s Grandfathered

-5-

 

Account is to commence, and such election to change shall apply to all of
the Director’s entire Grandfathered Account. In the event that a Director
who makes an election to change is a member of the Committee, such Director
shall abstain from the Committee’s determination of whether or not to
approve the change. Grandfathered Accounts shall be paid in kind, in cash,
or shares of Common Stock, as credited to the Grandfathered Account.

     (b) Post-2004 Account. The amount credited to a Director’s Post-2004 Account shall be
paid, in whole or in part, to the Director in a lump sum and/or in annual installments over
a period of not more than ten years as specified in each Director’s Election Form. Payments
to be paid in annual installments shall be paid in a series of substantially equal annual
installments commencing on the initial date of payment set forth in Section 6.1 and on each
anniversary of such date thereafter. Each installment payment shall be treated as a
separate payment and not as part of a series of payments for purposes of Section 409A of the
Code. Post-2004 Accounts shall be paid in kind, in cash, or shares of Common Stock, as
credited to the Post-2004 Account.

     6.3 Subsequent Payment Elections. A Director may elect to change his or her election
with respect to time of commencement or method of payment, or both, with respect to an amount
credited to the Director’s Post-2004 Account, provided that the following requirements are met: (i)
the election to change does not take effect until at least 12 months after the date on which the
election is made, (ii) with respect to an election related to a payment that is to be made at a
specified time or pursuant to a fixed schedule, the election to change is made at least 12 months
prior to the date on which that payment is scheduled to be made and (iii) in the case of an
election related to a distribution not described in Section 6.4(b) or 6.5, the payment under such
election will be made no less than 5 years from the original date on which such payment would be
made. If an election to change an original payment election is not timely made, or for any reason
is not effective, amounts credited to the Director’s Post-2004 Account will automatically be paid
to the Director in the form(s) elected on the Director’s Election Form(s).

     6.4 Other Payments.

     (a) Hardship Distribution. Prior to the time a Director’s Grandfathered Account
becomes payable, the Committee, in its sole discretion, may elect to distribute all or a
portion of the Director’s Grandfathered Account in the event that such Director requests a
distribution on account of severe financial hardship. For purposes of this Plan, severe
financial hardship shall be deemed to exist in the event the Committee determines that a
Director needs a distribution to meet immediate and heavy financial needs resulting from a
sudden or unexpected illness or accident of the Director or a member of his or her family,
loss of the Director’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the
Director. A distribution based on financial hardship shall not exceed the amount required
to meet the immediate financial need created by the hardship. The amount of a Director’s
Grandfathered Account shall be reduced by the amount of any hardship distribution to the
Director.

-6-

 

     (b) Unforeseeable Emergency Distribution. The Committee may at any time, upon written
request of a Director, cause to be paid to such Director, an amount equal to all or any part
of the Director’s Post-2004 Account if the Committee determines, based on such reasonable
evidence that it shall require, that such a payment is necessary for the purpose of
alleviating the consequences of an Unforeseeable Emergency. Payments of amounts because of
an Unforeseeable Emergency may not exceed the amount necessary to satisfy the Unforeseeable
Emergency plus amounts necessary to pay taxes or penalties reasonably anticipated as a
result of the distribution after taking into account the extent to which the Unforeseeable
Emergency is or may be relieved through reimbursement or compensation from insurance or
otherwise, by liquidation of the Director’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship), or by cessation of deferrals under
the Plan. For purposes of this Plan, Unforeseeable Emergency shall mean an event which
results in a severe financial hardship to the Director resulting from (a) an illness or
accident of the Director, the Director’s spouse, the Director’s beneficiary or a dependent
of the Director, (b) loss of the Director’s property due to casualty or (c) other similar
extraordinary and unforeseeable circumstances as a result of events beyond the control of
the Director. The amount of a Director’s Post-2004 Account shall be reduced by the amount
of any Unforeseeable Emergency distribution to the Director.

     6.5 Designation of Beneficiary/Payment upon Death. Notwithstanding the time and
manner of payment elected by a Director on his or her Election Form, upon the death of a Director,
the amount credited to his or her Account (including any amount remaining in such Director’s
Account after commencement of installment payments to the Director) shall be paid in a single lump
sum to the beneficiary or beneficiaries designated by him or her within thirty days after the date
of the death of the Director, provided that no beneficiary will have the right to designate the
taxable year of payment. If there is no designated beneficiary, or no designated beneficiary
surviving at a Director’s death, payment of a Director’s Account shall be made to his or her
estate. Beneficiary designations shall be made in writing. A Director may designate a new
beneficiary or beneficiaries at any time by notifying the Company.

     6.6 Taxes. In the event any taxes are required by law to be withheld or paid from any
payments made pursuant to the Plan, the appropriate amounts shall be deducted from such payments
and transmitted to the appropriate taxing authority.

ARTICLE VII

CREDITORS

     7.1 Claims of the Company’s Creditors. The rights of a Director or his or her
beneficiaries to any payment under the Plan shall be no greater than the rights of an unsecured
creditor of the Company.

-7-

 

ARTICLE VIII

ADMINISTRATION

     8.1 Appointment of Committee. The Board of Directors of the Company shall appoint a
Committee consisting of not less than three persons to administer the Plan. Members of the
Committee shall hold office at the pleasure of the Board of Directors and may be dismissed at any
time with or without cause. Such persons serving on the Committee need not be members of the Board
of Directors of the Company.

     8.2 Powers of the Committee. The Committee shall administer the Plan and resolve all
questions of interpretation arising under the Plan with the help of legal counsel, if necessary.

     Whenever directions, designations, applications, requests or other notices are to be given by
a Director under the Plan, they shall be filed with the Committee. Except as provided in Section
6.2(a)(2) and Section 6.4(a), the Committee shall have no discretion with respect to Plan
contributions or distributions but shall act in an administrative capacity only. Except as
provided in the immediately following sentence, all decisions by the Committee will be made with
the approval of not less than a majority of its members. Any interpretation by a majority of the
Incumbent Directors then serving on the Committee as to whether a sale or other disposition of
assets by the Company or an acquisition of assets of another corporation constitutes a “sale or
other disposition of all or substantially all of the assets of the Company or the acquisition of
assets of another corporation” for purposes of clause (iii) of the definition of “Change of
Control” in Section 2.2 hereof shall be final and binding for all purposes of this Plan and any
Accounts hereunder, notwithstanding that the transaction in question was, or is contemplated to be,
submitted to stockholders of the Company for their approval and notwithstanding such approval.

          It is intended that the Plan 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 Directors or beneficiaries. This Plan shall be administered in a manner that
effects such intent. Any reference in this Plan to Section 409A of the Code will also include any
proposed, temporary or final regulations, or any other guidance, promulgated with respect to such
Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

ARTICLE IX

MISCELLANEOUS

     9.1 Term of Plan. The Plan shall terminate on the tenth anniversary of the approval
of the Plan, as amended, by the shareholders at the 2004 Annual Meeting of Shareholders. Once the
Plan has terminated, no further shares of Common Stock shall be granted; provided, however, that
any Accounts then existing shall continue in accordance with the provisions of the Plan until the
Accounts are paid out in accordance with the provisions of Article VI. The Company reserves the
right to amend or terminate the Plan at any time; provided, however, that no amendment or
termination shall affect the rights of Directors to amounts previously credited to their Accounts
pursuant to Section 5.1 or to future income to be credited to their Accounts

-8-

 

pursuant to Section 5.2, except to the extent that such amendment or termination is deemed
necessary by the Company to ensure compliance with Section 409A of the Code.

     9.2 Assignment. No right or interest of any Director (or any person claiming through
or under such Director) in any benefit or payment herefrom other than the surviving spouse of such
Director after he or she is deceased, shall be assignable or transferable in any manner or be
subject to alienation, anticipation, sale, pledge, encumbrance, or other legal process or in any
manner be liable for or subject to the debts or liabilities of such Director. Any attempt to
transfer, assign, alienate, anticipate, sell, pledge, or otherwise encumber benefits hereunder or
any part thereof shall be void.

     9.3 Effective Date of Plan. The Plan’s original effective date was December 9, 1993,
and it is hereby amended and restated effective as of December 31, 2007.

 

IN WITNESS WHEREOF, the Company, by its duly authorized officer, has caused this Plan to be
executed as of the 18th day of February, 2008.

	 	 	 	 	 
	 	POLYONE CORPORATION

 	 
	 	By:  	/s/ Kenneth M. Smith
 	 
	 	 	 	 
	 	 	 	 
	 

-9-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]