Document:

EX-10.1

 

Exhibit 10.1

NYMAGIC, INC.

AMENDED AND RESTATED VOTING AGREEMENT

AMENDED AND RESTATED VOTING AGREEMENT (this “Agreement”) dated as of            October 12, 2005 by and
among (i) MARK W. BLACKMAN, (ii) LIONSHEAD INVESTMENTS, LLC (“Lionshead Investments”), ROBERT G.
SIMSES (formerly the “Tollefson Trustee” and hereinafter, the “Louise Blackman Trustee”) as trustee
of the Louise B. Tollefson 2000 Florida Intangible Tax Trust and as trustee of the Louise B.
Blackman Tollefson Family Foundation, (the “Participating Shareholders”); and (iv) MARINER
PARTNERS, INC. (“Mariner”).

WHEREAS, the Participating Shareholders (including Lionshead Investments, which was then known as
Blackman Investments, LLC) and Mariner, together with John N. Blackman, Jr. (the “Blackman
Trustee”) as trustee of the Blackman Charitable Remainder Trust (the “Blackman Co-Trust”), Kathleen
Blackman as co-trustee with the Blackman Trustee of the Blackman Co-Trust, and Robert G. Simses and
First Union National Bank (now Wachovia Bank, N.A.) as co-trustees of the Louise B. Tollefson
Charitable Lead Annuity Trust (the “CLAT”) and the Bennett L. Tollefson Charitable Lead Unitrust
(the “CLUT”) entered into a certain voting agreement dated February 20, 2002, which voting
agreement was amended on March 1, 2002 and further amended by Amendment No. 2 on January 27, 2003,
Amendment No. 3 on March 12, 2003 and Amendment No. 4 on February 24, 2004 (the “Voting
Agreement”);

WHEREAS, the CLAT and the CLUT, with the approval of, and waivers granted by, Mariner pursuant to
the Voting Agreement transferred all of their respective shares of NYMAGIC, INC. (the
“Corporation”) so that they are no longer subject to the Voting Agreement;

WHEREAS, the parties do not deem it necessary to include the Blackman Co-Trust as a party to this
Agreement;

WHEREAS, notwithstanding that the CLAT and the CLUT are no longer subject to the Voting Agreement
and that the parties no longer deem it necessary to include the Blackman Co-Trust as a party to
this Agreement, the Participating Shareholders continue to believe that it is advisable and in the
best interests of the Corporation and the shareholders thereof to have a voting agreement in order
to (i) secure continuity and stability of policy and management of the Corporation with the advice
and assistance of Mariner, and (ii) induce Mariner to enter into an advisory relationship with the
Corporation, by acting together with respect to the voting on or consenting to certain matters that
may be acted upon by the holders of common stock of the Corporation; and,

WHEREAS the parties hereto desire to amend and restate the Voting Agreement as provided for herein.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

 

ARTICLE I. PARTICIPATING SHAREHOLDERS; REPRESENTATIONS; ETC:

	(A)	 	The Participating Shareholders are:

	 	(i)	 	Mark W. Blackman;
	 
	 	(ii)	 	Lionshead Investments; and
	 
	 	(iii)	 	The Louise Blackman Trustee as sole trustee of the Louise B. Tollefson 2000 Florida
Intangible Tax Trust dated December 12, 2000 and the Louise B. Blackman Tollefson Family
Foundation dated March 24, 1998 (such trusts being collectively, the “Louise Blackman
Trusts”).

	(B)	 	Voting. With regard to any provision of this Agreement
allowing for, or requiring, the vote of the Participating Shareholders, each Participating
Shareholder shall have one vote.

	(C)	 	Representations. Each Participating Shareholder represents and warrants to Mariner as
follows, but only as to himself or itself, as applicable:

	 	(i)	 	Ownership of Shares. Each of Mark W. Blackman and Lionshead Investments
is the record holder and beneficial owner and the Louise Blackman Trustee is the record
and legal holder of that number of Voting Shares (as hereinafter defined) listed
opposite each such Participating Shareholder’s name in Article II hereof which at the
date hereof, and at all times up until the Termination Date (as hereinafter defined)
will be free and clear of any liens, claims, options, charges or other encumbrances,
except as permitted herein.
	 
	 	(ii)	 	Authorization. The execution, delivery and performance by each
Participating Shareholder of this Agreement and the consummation by each Participating
Shareholder of the transactions contemplated hereby are within the powers of each
Participating Shareholder. This Agreement constitutes a legal, valid and binding
Agreement of each Participating Shareholder.
	 
	 	(iii)	 	No Other Voting Agreement. Other than as set forth herein, none of the
Voting Shares is subject to any voting trust or other agreement, document or
arrangement with respect to the voting of such Voting Shares and no Participating
Shareholder shall enter into any such trust, agreement or arrangement during the term
of this Agreement.

	(D)	 	Dividends. Dividends and the proceeds from any sale or other distribution of any
Voting Shares shall be paid or distributed to the applicable Participating Shareholder as if
this Agreement did not exist.

ARTICLE II. SHARES SUBJECT TO THIS AGREEMENT:

               The following are shares of common stock of the Corporation are subject to the
terms of this Agreement (collectively, the “Voting Shares”):

	(A)	 	225,000 Shares of NYMAGIC, INC. for which Mark W. Blackman has sole voting power;

	(B)	 	225,000 Shares of NYMAGIC, INC. for which Lionshead Investments has sole voting power; and

2

 

	(C)	 	861,409 Shares of NYMAGIC, INC. held by the Florida
Intangible Tax Trust and 38,591 shares
held by the Louise B. Blackman Tollefson Family Foundation (the “Louise Blackman Shares”).

ARTICLE III. RIGHTS AND POWERS OF MARINER:

	(A)	 	Except as provided in clause (B) below and Article IV, the Participating Shareholders hereby
irrevocably authorize Mariner, with (and only with) the written approval of two of the three
Participating Shareholders, to exercise all of the rights of a shareholder of the Corporation
and to vote the Voting Shares at all meetings of shareholders, including all adjournments
thereof and on every action or approval by written consent of the shareholders of the
Corporation in the manner contemplated herein. Subject to clause (B) below, in the event that
two of the three Participating Shareholders fail to approve any vote by Mariner on any matter,
Mariner shall not vote on such matter, and Mariner’s non-voting will not entitle any
Participating Shareholder to instead vote his or its Voting Shares on that matter.
	 
	(B)	 	Notwithstanding the provisions of clause (A) above or any other provision of this Agreement,
Mariner shall have no right to vote on or consent to (a) the merger or consolidation of the
Corporation into or with another corporation, (b) the sale of all or substantially all of its
assets, (c) its dissolution and/or liquidation, or (d) any recapitalization or stock offering
of the Corporation, unless two of the three Participating Shareholders shall have consented
thereto in writing. In the event that two of the three Participating Shareholders fail to
approve any vote by Mariner on any matter referred to in this clause (B), Mariner shall not
vote on such matter and instead each Participating Shareholder may vote his or its Voting
Shares on that matter.
	 
	(C)	 	Notices. Mariner shall have the right to receive notices of all meetings of the
board of directors of the Corporation (the “Board”) and of the shareholders of the
Corporation.
	 
	(D)	 	Irrevocable Proxy. By entering into this Agreement and subject to the terms hereof
each Participating Shareholder hereby grants, subject to the provisions of (A) and (B) above,
an irrevocable proxy and power of attorney appointing Mariner as such Participating
Shareholder’s attorney-in-fact and proxy, with full power of substitution, for and in such
Participating Shareholder’s name, to vote, express, consent or dissent, or otherwise to
utilize such voting power in the manner contemplated by the parties to this Agreement and to
carry out the intent of such parties as Mariner deems proper with respect to the Voting Shares
and the operation of the Corporation. The proxy granted by each Participating Shareholder
pursuant to this Article III is irrevocable and is granted in consideration of Mariner
entering into this Agreement and becoming an advisor to the Corporation. The proxy granted by
each Participating Shareholder shall be revoked on the Termination Date.
	 
	(E)	 	No Revocation . The voting agreements contained herein are coupled with an
interest and may not be revoked, except by an amendment, modification or termination effected
in accordance with Articles VII or VIII herein.
	 
	(F)	 	Limitation of Liability. Mariner will exercise its best judgment in exercising the
rights and powers and in performing the duties and obligations of a shareholder of the
Corporation as set forth in this Agreement. Mariner shall have no liability hereunder except
for its gross negligence and/or willful misconduct, which shall have caused direct,
substantial and provable damage to the Corporation.

3

 

ARTICLE IV. NOMINATION OF DIRECTORS:

	(A)	 	The Participating Shareholders and Mariner acknowledge the benefits of a Board nominated with
the knowledge, experience and talents of both the Participating Shareholders and Mariner.
	 
	(B)	 	Mariner shall be entitled to nominate four (4) candidates for election to the
Board; Robert G. Simses shall be entitled to nominate two (2) candidates for election to
the Board, including himself; Mark W. Blackman shall be entitled to nominate one (1)
candidate for election to the Board and Lionshead Investments shall be entitled to nominate
one (1) candidate for election to the Board, provided that one of the candidates nominated
to the Board by Robert G. Simses and each of the candidates nominated to the Board by Mark
W. Blackman and Lionshead Investments shall qualify as Independent Directors in accordance
with the Rules of the New York Stock Exchange and all other applicable laws and regulations
that may be enacted from time to time; and, the Chief Executive Officer of NYMAGIC, INC.
shall be entitled to nominate three (3) directors for election to the Board, all of whom
shall be Independent Directors, as described in this Article IV(B), for a total of eleven
directors.
	 
	 	 	The Participating Shareholders shall, consistent with director fiduciary duties, cause their
nominees to vote for one of the Mariner nominated members of the Board, as designated by
Mariner as Chairman of each meeting. If any of Robert G. Simses, Mark W. Blackman, or
Lionshead Investments does not nominate a candidate for the Board as authorized under this
Article IV (B), Mariner may instead nominate a number of candidates equal to the number not
nominated by these individuals.
	 
	(C)	 	Provided that the candidates of the Participating Shareholders would not be
legally disqualified from serving as directors of the Corporation, Mariner agrees to vote the
Voting Shares in favor of the election of such candidates or any successor or replacement
candidates nominated by the Participating Shareholders.
	 
	(D)	 	Subject to the provisions of the Corporation’s By-laws, any Participating Shareholder entitled under this
Article IV to designate any director or successor director may, acting reasonably, replace any
director nominated by him at any time and from time to time with or without cause, provided
that any replacement director complies with the provisions of Article IV (B).

ARTICLE V. COMPENSATION:

Members of the Board nominated by Mariner shall have the right to receive compensation paid by the
Corporation at any time or from time to time to members of the Board, including without limitation,
any salary, fees, expenses, pension or other benefits or emoluments and any amounts due under any
directors’ liability policy held by Mariner or the Corporation on behalf of the members of the
Board.

ARTICLE VI. PURCHASE OPTION AGREEMENT:

	(A)	 	Mariner shall have the right to purchase at any time and from time to time up to 1,350,000
shares of the Corporation from the Participating Shareholders in the amounts set forth below
opposite each

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	 	 	such Participating Shareholder’s name (that right, the “Option”; those shares, the “Option
Shares”), at the option price set forth in (B) below (the “Option Price”):

	 	(1)	 	Mark W. Blackman -225,000 Shares;

	 
	 	(2)	 	Lionshead Investments — 225,000 Shares;
	 
	 	(3)	 	the Louise Blackman Trustee — 900,000 Louise Blackman Shares,
provided that the Louise Blackman Trustee shall have the sole power to determine the
number of shares to be provided by either of the Louise Blackman Trusts.

	(B)	 	The Option Price shall be as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	From
	 	September 12, 2005	 	to	 	November 14, 2005	 	$	22.50	 	 	 	 	 
	From
	 	November 15, 2005	 	to	 	February 14, 2006	 	$	22.75	 	 	 	 	 
	From
	 	February 15, 2006	 	to	 	May 14, 2006	 	$	23.00	 	 	 	 	 
	From
	 	May 15, 2006	 	to	 	August 14, 2006	 	$	23.25	 	 	 	 	 
	From
	 	August 15, 2006	 	to	 	November 14, 2006	 	$	23.50	 	 	 	 	 
	From
	 	November 15, 2006	 	to	 	February 14, 2007	 	$	23.75	 	 	 	—	 
	From
	 	February 15, 2007	 	to	 	May 14, 2007	 	$	24.00	 	 	 	 	 
	From
	 	May 15, 2007	 	to	 	August 14, 2007	 	$	24.25	 	 	 	—	 
	From
	 	August 15, 2007	 	to	 	November 14, 2007	 	$	24.50	 	 	 	 	 
	From
	 	November 15, 2007	 	to	 	February 14, 2008	 	$	24.75	 	 	 	—	 
	From
	 	February 15, 2008	 	to	 	May 14, 2008	 	$	25.00	 	 	 	 	 
	From
	 	May 15, 2008	 	to	 	August 14, 2008	 	$	25.25	 	 	 	 	 
	From
	 	August 15, 2008	 	to	 	November 14, 2008	 	$	25.50	 	 	 	 	 
	From
	 	November 15, 2008	 	to	 	February 14, 2009	 	$	25.75	 	 	 	 	 
	From
	 	February 15, 2009	 	to	 	May 14, 2009	 	$	26.00	 	 	 	 	 
	From
	 	May 15, 2009	 	to	 	August 14, 2009	 	$	26.25	 	 	 	 	 
	From
	 	August 15, 2009	 	to	 	November 14, 2009	 	$	26.50	 	 	 	 	 
	From
	 	November 15, 2009	 	to	 	February 14, 2010	 	$	26.75	 	 	 	 	 
	From
	 	February 15, 2010	 	to	 	May 14, 2010	 	$	27.00	 	 	 	 	 
	From
	 	May 15, 2010	 	to	 	August 14, 2010	 	$	27.25	 	 	 	 	 
	From
	 	August 15, 2010	 	to	 	November 14, 2010	 	$	27.50	 	 	 	 	 
	From
	 	November 15, 2010	 	to	 	December 31, 2010	 	$	27.75	 	 	 	 	 

Less the cumulative amount of dividends paid by the Corporation in respect of
each share of its common stock from January 31, 2003 through to the date Mariner purchases such
Option Shares.

	(C)	 	Except as set forth in ARTICLE VII (iv) below, the right to purchase the Option Shares
under this Purchase Option Agreement Clause shall cease 30 days after the Termination Date.
	 
	(D)	 	The consideration for such Option Shares shall be paid in United States Dollars,
unless specifically agreed to the contrary in writing by the Participating Shareholders.
	 
	(F)	 	Notwithstanding ARTICLE X (E) herein, (1) Mariner is permitted to assign, in whole or in
part, the Option (including any economic benefit thereof) to any one or more of William J.
Michaelcheck,

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	 	 	William D. Shaw, Jr., George R. Trumbull and A. George Kallop or any other individual
employed by or acting as consultant for Mariner in connection with the Corporation; and (2)
Mariner and any assignee of the Option or any part thereof is permitted to assign, in whole
or in part, the Option (including any economic benefit thereof) to any one or more other
persons or entities, on condition that the assignment is approved in writing by at least two
Participating Shareholders; provided, however, that any assignment of the Option by any such
assignee to a spouse or a child, or to a trust for the benefit of a spouse or a child, shall
not require the approval of any Participating Shareholders. It is a condition to a valid
assignment under this clause (F) that the assignee acknowledges that it is bound by the
terms of this Agreement.

ARTICLE VII. DURATION OF THIS AGREEMENT:

This Agreement shall terminate upon the earliest to occur of the following dates (the “Termination

Date”):

	 	(i)	 	December 31, 2010;
	 
	 	(ii)	 	the merger or consolidation of the Corporation into another corporation, the
sale of all or substantially all its assets or its dissolution and/or its liquidation;
	 
	 	(iii)	 	immediately upon the resignation of Mariner as an advisor to the Corporation; or
	 
	 	(iv)	 	upon written notice of such termination to Mariner from all of the
Participating Shareholders, provided, that the Purchase Option Agreement Clause
set forth in Article VI above shall continue in full force and effect until the close
of business on December 31, 2010.

ARTICLE VIII. AMENDMENT OF THIS AGREEMENT:

This Agreement may be amended or extended (i) by the unanimous written consent of the Participating
Shareholders and (ii) with the written agreement of Mariner.

ARTICLE IX. TRANSFER OF SHARES:

	(A)	 	The Participating Shareholders retain the right to sell, gift, bequest, pledge or hypothecate
(each a “Transfer”) the Voting Shares (the “Transferred Shares”) provided, that the
recipient of any Transferred Shares shall be subject to the terms of this Agreement as if a
signatory hereto and no such Transfer shall take place unless the transferee agrees in writing
to be bound by this Agreement. Each Participating Shareholder effecting a Transfer must
promptly notify Mariner and the other Participating Shareholders of that Transfer. All
Transferred Shares shall contain a legend in the following form or otherwise satisfactory to
Mariner:

“The shares represented by this certificate are subject to certain voting
agreements as set forth in that certain Amended and Restated Voting Agreement dated
October 12, 2005, as amended from time to time, by and among the owner of this
certificate, Mariner Partners, Inc. and certain shareholders of NYMAGIC, INC., a
copy of which is available for inspection at the offices of the Secretary of
NYMAGIC, INC.”

	(B)	 	Other than as permitted by clauses (A), no Participating Shareholder shall have the right
to Transfer or sell the Voting Shares.

6

 

ARTICLE X. MISCELLANEOUS:

	(A)	 	Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to principles of conflicts of law.
	 
	(B)	 	Jurisdiction. Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement must be brought against any of the parties in the
courts of the State of New York, County of New York, or, if it has or can acquire
jurisdiction, in the United States District Court for the Southern District of New York, and
each of the parties consents to the jurisdiction of those courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to venue laid
therein.
	 
	(C)	 	Severability. Any provision of this Agreement, which is prohibited or unenforceable
in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof.
	 
	(D)	 	Notices. All notices, consents, requests, instructions and other communications
provided for herein shall be in writing and shall be deemed to have been sufficiently given or
served, for all purposes, if given to or served on the Participating Shareholders, at their
respective addresses as set forth on the signature page of this Agreement and Mariner, c/o
Mariner Partners, Inc., 500 Mamaroneck Avenue, Harrison, NY 10528.
	 
	(E)	 	Binding Effect and Assignment. This Agreement and all of the provisions shall be
binding upon and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, but, except as otherwise specifically provided herein, neither this
Agreement nor any of the rights, interests or obligations of the parties hereto may be
assigned without the prior written consent of each other party hereto.
	 
	(F)	 	Specific Performance, Injunctive Relief. The parties hereto acknowledge that if any
party hereto breaches any of its obligations under this Agreement, the other parties
hereto will be irreparably harmed and will have no adequate remedy at law for any such breach.
Therefore, it is agreed that, in addition to any other remedies that may be available to any
non-breaching party, upon any such breach any non-breaching party may enforce the breaching
party’s obligations under this Agreement by specific performance, injunctive relief or by any
other means available to that non-breaching party at law or in equity.
	 
	(G)	 	Further Assurances. The parties hereto will each execute and deliver, or cause to be
executed and delivered, all further documents and instruments and use its best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations, to consummate and make effective
the transactions contemplated by this Agreement.
	 
	(H)	 	Expenses. All costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such costs and expenses.
	 
	(I)	 	Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original of this Agreement and all of which together shall
constitute one and the same instrument.

7

 

	 	 	 	 	 	 	 
	MARINER PARTNERS, INC.	 	PARTICIPATING SHAREHOLDERS	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ William J. Michaelcheck
	 	/s/ Mark W. Blackman	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name: William J. Michaelcheck
	 	Mark W. Blackman	 	 
	 

	 	Title: Chairman
	 	Address:	 	 
	 

	 	 	 	80 Deepwood Road	 	 
	 

	 	 	 	Darien, CT 06820	 	 

	 	 	 	 	 	 	 
	 	 	LIONSHEAD INVESTMENTS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John N. Blackman, Jr.	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	John N. Blackman, Jr.	 	 
	 

	 	 	 	Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kathleen Blackman	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Kathleen Blackman

Member	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 	 	41 Wee Burn Lane	 	 
	 	 	Darien, CT 06820	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Robert G. Simses	 	 
	 	 	 	 	 
	 	 	Robert G. Simses	 	 
	 	 	(as trustee of the Louise Blackman Trusts)	 	 
	 	 	Address:	 	 
	 	 	Simses & Associates, P.A.	 	 
	 	 	400 Royal Palm Way, Suite 304	 	 
	 	 	Palm Beach, FL 33480	 	 

8<PAGE>
                                                                    EXHIBIT 10.1

                                    AGREEMENT

         This Agreement (this "Agreement") is effective as of October 6, 2005
(the "Effective Date") between POLYONE CORPORATION, an Ohio corporation (the
"Company"), and WILLIAM F. PATIENT ("Patient").

         WHEREAS, prior to the Effective Date, Patient served as a member of the
Board of Directors of the Company (the "Board") and as the non-executive
Chairman of the Board;

         WHEREAS, the Company desires that, as of the Effective Date, Patient
will serve as the non-employee Chairman of the Board, President and Chief
Executive Officer of the Company and will be compensated therefor as an
independent contractor, with compensation determined as set forth in this
Agreement; and

         WHEREAS, the Company agrees to compensate Patient and Patient agrees to
serve the Company as provided herein.

         NOW, THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound, the
parties hereby agree as follows:

         1. Term. Patient shall serve as Chairman of the Board, President and
Chief Executive Officer for the period beginning on the Effective Date and
ending on the date that a successor Chairman of the Board, President and Chief
Executive Officer is appointed (the "Term").

         2. Position. During the Term, Patient shall continue to serve as
Chairman of the Board and shall participate actively in the management of the
Company as its President and Chief Executive Officer.

         3. Status. Patient's status during the Term shall not, for any purpose,
be that of an employee of the Company and Patient will remain an independent
contractor for all purposes. Patient shall not be entitled to participate in any
employee benefit plans of the Company or receive other benefits of employment
available to employees of the Company. The parties acknowledge that any
remuneration provided by this Agreement represents non-employee revenue to
Patient for services rendered by Patient as a non-employee and, to the extent
consistent with applicable law, the Company shall not withhold any amounts from
such remuneration as federal income tax withholding from wages or as employee
contributions under the Federal Insurance Contributions Act or any other
federal, state or local laws. Patient acknowledges that Patient shall be
responsible for the payment of any federal, state or local taxes resulting from
such remuneration.

         4. Remuneration.

              (a) Compensation. During the Term and in connection with the
services contemplated by this Agreement, Patient shall be compensated as
follows: (i) for his continuing service as a director of the Company, Patient
shall continue to receive the compensation payable generally to non-employee
directors of the Company, including the annual retainer (currently

<PAGE>

$100,000) and any meeting fees, upon the terms applicable to such other
non-employee directors; and (ii) for his services as Chairman of the Board,
President and Chief Executive Officer, Patient shall receive an annual fee of
$300,000 in cash, payable quarterly in arrears and pro-rated for any period
served that is less than a full calendar quarter.

              (b) Expense Reimbursement. The Company will reimburse Patient for
all reasonable expenses incurred by Patient in the course of performing his
duties under this Agreement with respect to travel, entertainment and other
business expenses, consistent with the Company's reimbursement policies
generally and subject to the Company's requirements applicable generally with
respect to reporting and documentation of such expenses. In addition, the
Company will provide Patient with transportation between Patient's residence in
Arizona and the Company's headquarters in Ohio for business purposes.

         5. Choice of Law. This Agreement is to be governed by the internal law,
and not the laws of conflicts, of the State of Ohio.

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

         7. Complete Agreement. This Agreement, together with the agreements and
arrangements referred to herein, embody the complete agreement and understanding
between the parties with respect to the subject matter hereof and, effective as
of the Effective Date, this Agreement supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written
or oral, that may have related to the subject matter hereof in any way,
including, without limitation, any prior agreements relating to Patient's
service as a director or as Chairman of the Board.

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

         The parties are signing this Agreement on October 14, 2005, effective
as of the date stated in the introductory clause.

                               POLYONE CORPORATION

                               By:   /s/ Kenneth M. Smith
                                  ------------------------------------
                                  Name:    Kenneth M. Smith
                                  Title:   Vice President and Chief Human
                                           Resources Officer

                                     /s/ William F. Patient
                               ---------------------------------------
                               William F. Patient

                                       2

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