Document:

EX-10.15

 

Exhibit 10.15

POLYONE SUPPLEMENTAL RETIREMENT BENEFIT PLAN

(As Amended and Restated Effective December 31, 2007)

PolyOne Corporation does hereby amend and completely restate the PolyOne Supplemental Retirement
Benefit Plan on the terms and conditions described herein. This restatement, to the extent it
accurately sets forth the intended provisions regarding deferral elections in the first sentence of
Section 4, is effective as of January 1, 2004, the original effective date of adoption of the Plan.
In all other respects, this restatement is effective as of December 31, 2007.

SECTION 1. PURPOSE OF PLAN

The purpose of the Plan is to provide for certain employees the benefits they would have received
under the Retirement Plan but for (i) the dollar limitation on Compensation taken into account
under the Retirement Plan as a result of Section 401(a)(17) of the Code, (ii) the limitations
imposed under Section 415 of the Code, and (iii) the limitations under Sections 402(g), 401(k)(3),
401(m) and 414(v) of the Code. The Plan is intended to qualify as an unfunded, deferred
compensation plan for a select group of management or highly compensated employees under ERISA.
This Plan is expected to encourage the continued employment of the participating employees whose
management and individual performance are largely responsible for the success of the Employer and
to facilitate the recruiting of key management and highly compensated employees required for the
continued growth and profitability of the Employer.

SECTION 2. DEFINITIONS

	2.1	 	“Administrator” means the Retirement Plan Committee appointed by the Board.
	 
	2.2	 	 “Beneficiary” means the person or entity determined to be a Participant’s beneficiary
pursuant to Section 13.
	 
	2.3	 	“Board” means the board of directors of PolyOne Corporation.
	 
	2.4	 	 “Code” means the Internal Revenue Code of 1986, as amended from time to time.
	 
	2.5	 	 “Compensation” shall have the meaning set forth in the Retirement Plan, without regard
to the limit contained in Section 401(a)(17) of the Code.
	 
	2.6	 	 “Employer” shall mean PolyOne Corporation and each other affiliate (within the meaning
of Sections 414(b), (c) and (m) of the Code), employees of which are selected to participate
in the Plan.
	 
	2.7	 	 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time.
	 
	2.8	 	“Participant” means an employee or former employee of the Employer who is eligible to

 

 

	 	 	participate in the Plan pursuant to Section 3.
	 
	2.9	 	“Plan” means the PolyOne Supplemental Retirement Benefit Plan, as set forth herein and
as amended from time to time.
	 
	2.10	 	“Plan Year” shall mean June 1, 2003 to December 31, 2003 and thereafter, the calendar
year.
	 
	2.11	 	 “Retirement Plan” means the PolyOne Retirement Savings Plan, as amended from time to
time.
	 
	2.12	 	 “Termination Date” means the date on which the Participant incurs a “separation from
service” from the Employer within the meaning of Section 409A of the Code.

SECTION 3. ELIGIBLE EMPLOYEES

For Plan Years commencing prior to January 1, 2005, the Board shall determine which management
employees and highly compensated employees of the Employer shall be eligible to participate in the
Plan. For Plan Years commencing on or after January 1, 2005, each management employee and highly
compensated employee of the Employer shall be eligible to participate in the Plan for any Plan Year
if such employee’s projected annual base compensation plus target incentive compensation for such
Plan Year exceeds the limitation on compensation under Section 401(a)(17) of the Code for the Plan
Year.

SECTION 4. ELECTION TO DEFER COMPENSATION

A Participant may elect, by filing an election with the Administrator (pursuant to Section 5) on or
prior to December 31 of the preceding Plan Year (or such earlier date as specified by the
Administrator), to direct the Employer to reduce his or her Compensation for a Plan Year by an
amount equal to the difference between (i) a specified percentage, in 1% increments, with a maximum
of 15%, of his or her Compensation for the Plan Year, and (ii) the maximum elective deferrals under
Section 4.1 of the Retirement Plan actually permitted to be contributed for him or her to the
Retirement Plan for such Plan Year by reason of the application of the limitations under Sections
402(g), 401(a)(17) and 401(k)(3) of the Code. Any election so made shall be binding for any
following Plan Year, unless revised on or before December 31 of the preceding Plan Year (or such
other earlier date specified by the Administrator). Provided, however, that with respect to the
first taxable year in which a person becomes a Participant, such Participant may, within 30 days of
becoming a Participant, make an election to defer Compensation earned subsequent to the date of the
election.

SECTION 5. MANNER OF ELECTION

Any election made by a Participant pursuant to this Plan shall be made in writing by executing such
form(s) as the Administrator shall from time to time prescribe or through any other method
designated by the Administrator.

2

 

SECTION 6. ACCOUNTS

PolyOne Corporation shall establish and maintain on its books with respect to each Participant two
accounts: (a) the “Grandfathered Account” for amounts that are “deferred” (as such term is defined
for purposes of Section 409A of 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). Each such Account shall be further sub-divided into sub-accounts which shall record (1)
any Compensation deferred by the Participant under the Plan pursuant to the Participant’s election,
(2) any Employer contributions made on behalf of the Participant pursuant to Section 7 and Section
8 below, and (3) the allocation of any hypothetical investment experience.

SECTION 7. EMPLOYER MATCHING CONTRIBUTIONS

As of each payroll period, the Employer shall allocate Employer Matching Contributions to the
account of each Participant who has a valid election to defer Compensation in effect for such
payroll period. The amount of Employer Matching Contributions allocated to the account of each
Participant shall be determined in accordance with Section 4.2(a) of the Retirement Plan.

SECTION 8. EMPLOYER CONTRIBUTIONS

As of each payroll period, the Employer shall allocate to the account of each Participant an amount
equal to the difference between, (a) effective prior to January 1, 2004, (i) the retirement
contributions that would otherwise be contributed on behalf of the Participant under Section 4.2(b)
of the Retirement Plan if the provisions of the Retirement Plan were administered without regard to
the limitations imposed by Sections 401(a)(17) and 415 of the Code and (ii) the retirement
contributions made on his or her behalf under the Retirement Plan for such payroll period and (b)
effective on and after January 1, 2004, (i) the retirement and transition contributions that would
otherwise be contributed on behalf of the Participant under Sections 4.2(b) and 4.2(c) of the
Retirement Plan if the provisions of the Retirement Plan were administered without regard to the
limitations imposed by Sections 401(a)(17) and 415 of the Code and (ii) the retirement and
transition contributions made on his or her behalf under the Retirement Plan for such payroll
period.

SECTION 9. CREDITS AND ADJUSTMENTS TO ACCOUNTS

Each Participant’s account shall be credited with any amounts deferred under the Plan and any
Employer contributions made on behalf of the Participant. Each Participant’s account shall be
reduced by the amount of any distributions to the Participant from the Plan. Pursuant to
procedures established by the Administrator, each Participant’s account shall be adjusted as of
each business day the New York Stock Exchange is open to reflect the earnings or losses of any
hypothetical investment media as may be designated by the Administrator pursuant to Section 10
below.

3

 

SECTION 10. INVESTMENT OF ACCOUNTS

For purposes of determining the amount of earnings and appreciation and losses and depreciation to
be credited to a Participant’s account, such account shall be deemed invested in the investment
options (designated by the Administrator as available under the Plan; provided that in no event
shall the Administrator designate PolyOne Corporation common stock as an investment option under
the Plan) as the Participant may elect, from time to time, in accordance with such rules and
procedures as the Administrator may establish. However, no provision of the Plan shall require the
Employer to actually invest any amounts in any fund or in any other investment vehicle.

SECTION 11. VESTING

A Participant shall be 100% vested in that portion of his or her account which is attributable to
elective deferrals made under Section 5, employer matching contributions made under Section 7 and
the employer contributions made under Section 8 that correspond to transition contributions under
Section 4.2(c) of the Retirement Plan. That portion of a Participant’s account attributable to
employer contributions under Section 8 of the Plan that correspond to retirement contributions
under Section 4.2(b) of the Retirement Plan shall vest in accordance with the following schedule:

	 	 	 	 	 
	Years of Service	 	Vested Percentage
	Less than 3 years
	 	 	0	%
	3 years and thereafter
	 	 	100	%

Notwithstanding the foregoing, for purposes of any Participant who was a Participant in the M.A.
Hanna Company Capital Accumulation Plan and/or the M.A. Hanna Company 401(k) and Retirement Plan as
of May 31, 2003, such Participant shall have a vested right to a portion of the Participant’s
account derived from any employer contributions under Section 8 of the Plan that correspond to
retirement contributions under Section 4.2(b) of the Retirement Plan as follows:

	 	 	 	 	 
	Years of Service	 	Vested Percentage
	Less than 1 year
	 	 	0	%
	1, but less than 2
	 	 	20	%
	2, but less than 3
	 	 	40	%
	3 or more
	 	 	100	%

For purposes of this Section 11, a Participant will be credited with the same number of Years of
Service under the Plan as he or she is credited with under the Retirement Plan.

SECTION 12. TIME AND MANNER OF DISTRIBUTION

12.1(a) Payment of Grandfathered Account.

(1) A Participant’s Grandfathered Account shall commence to be paid to such Participant within
thirty days of the date of the Participant’s termination of employment with the Employer or any
affiliate

4

 

(within the meaning of Sections 414(b), (c) and (m) of the Code) in the form of payment selected by
the Participant on an election form approved by and received by the Administrator or its designee.

(2) The following are the available choices for the form of payment of a Participant’s
Grandfathered Account:

	 	(A)	 	A single lump sum in cash; or
	 
	 	(B)	 	Substantially equal annual cash installments over a period not exceeding 10 years.

This Section 12.1 and all other provisions of this Plan notwithstanding, if a Participant fails to
elect a form of payment before payment is to commence pursuant to Section 12.1(a), the
Participant’s Grandfathered Account shall be paid in the form of a single lump sum payment in cash.
In addition, the Board, in its sole and absolute discretion, may direct that payment of any or all
of a Participant’s Grandfathered Account be accelerated and paid prior to the time the
Grandfathered Account would otherwise be payable in accordance with the Participant’s election, and
in that event the Administrator shall make payment to the Participant at the time and in the manner
directed by the Board. In no event, however, shall the Employer, the Administrator or any other
person or party have the power to delay payment of the account beyond the time elected by the
Participant.

12.1(b) Payment of Post-2004 Account

(1) A Participant’s vested Post-2004 Account shall commence to be paid to such Participant within
thirty days of the date of the Participant’s Termination Date in the form of payment selected by
the Participant on an election form approved by and received by the Administrator or its designee,
provided that the Participant shall not have the right to designate the taxable year of payment.
Notwithstanding the foregoing, the vested Post-2004 Account of a Specified Employee shall commence
to be distributed on the first day of the seventh month after the date of such Specified Employee’s
Termination Date (or, if earlier, his or her date of death). For purposes of the Plan, the term
“Specified Employee” shall mean a specified employee as determined by the Employer in its Specified
Employee Designation Procedure.

(2) The following are the available choices for the form of payment of a Participant’s vested
Post-2004 Account:

	 	(A)	 	A single lump sum in cash; or
	 
	 	(B)	 	Substantially equal annual cash installments over a period not exceeding 10 years.

The Participant shall elect, on the election form described in Section 5, the form in which his or
her Post-2004 Account shall be paid. Such election, once made, shall be binding with respect to
his or her entire Post-2004 Account, unless changed pursuant to the following paragraph. Each
installment payment shall be considered a separate payment and not one of a series of payments for
purposes of Section 409A of the Code.

A Participant may change the form of payment elected by a subsequent election form approved by and
received by the Administrator or its designee; provided, that unless otherwise permitted in
accordance with Section 409A of the Code, the election to change may not take effect until at least
12 months after the date the election to change is made and the first payment under such election
will be made no less

5

 

than 5 years from the original date on which payment of the amount credited to the Participant’s
vested account is to commence.

12.2 Death Before Payments Commence or are Completed. If a Participant dies while
employed by the Employer or while receiving installment payments, the value of his or her vested
account shall be paid to the Participant’s Beneficiary in a single lump sum cash payment, within 90
days after the Participant’s death, provided that the Participant’s Beneficiary shall not have the
right to designate the taxable year of payment.

12.3 Change of Control Provisions. In the event of a “Change of Control” of the Employer,
(a) the Participant’s Grandfathered Account shall be paid, as soon as reasonably practicable, to
the Participant in a lump sum cash payment, unless the Administrator otherwise determines and (b)
the Participant’s Post-2004 Account shall be paid, as soon as reasonably practicable, to the
Participant in a lump sum cash payment. To the extent the Participant has a right to receive a
lump sum cash payment, the payment is subject to Section 409A of the Code, and the event triggering
the right to payment does not constitute a permitted distribution event under Section 409A(a)(2) of
the Code, then notwithstanding anything to the contrary in this Plan, the payment of the lump sum
cash payment will be made, to the extent necessary to comply with Section 409A of the Code, to the
Participant on the earlier of (i) the Participant’s Termination Date; provided,
however, that if the Participant is a Specified Employee on the Termination Date, the
Participant’s date of payment of the lump sum cash payment shall be the first day of the seventh
month after the Participant’s Termination Date; (ii) the date distribution would otherwise occur
under this Plan, or (iii) the Participant’s death

For purposes of this Section 12.3, “Change of Control” means any of the following:

(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 PolyOne Corporation where such acquisition causes such Person to own 25% or
more of the combined voting power of the then outstanding voting securities of PolyOne Corporation
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 PolyOne Corporation that is approved by the Incumbent Board (as defined in subsection (b),
below), (ii) any acquisition by PolyOne Corporation, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained PolyOne Corporation or any corporation controlled
by PolyOne Corporation or (iv) any acquisition by any Person 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 25%
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 PolyOne Corporation, such
subsequent acquisition shall be treated as an acquisition that causes such Person to own 25% 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 25%
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 meanings of Rule 13d-3 promulgated under the Exchange Act) less than 25% of the Outstanding
Company Voting Securities, then no Change of Control shall have occurred as a result of such
Person’s acquisition; or

6

 

(b) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board” (as
modified by this clause (b)) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by PolyOne Corporation’s shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of PolyOne Corporation in which such person is named as
a nominee for director, without objection to such nomination) 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 PolyOne Corporation or the acquisition of assets of
another corporation, or other transaction (“Business Combination”) excluding, however, such a
Business Combination pursuant to which (i) 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 entity
resulting from such Business Combination (including, without limitation, an entity that as a result
of such transaction owns PolyOne Corporation or all or substantially all of PolyOne Corporation’s
assets either directly or through one or more subsidiaries) (ii) no Person (excluding any employee
benefit plan (or related trust) of PolyOne Corporation, PolyOne Corporation or such entity
resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of
the combined voting power of the then outstanding securities entitled to vote generally in the
election of directors of the entity resulting from such 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 PolyOne Corporation of a complete liquidation or dissolution of
PolyOne Corporation except pursuant to a Business Combination that complies with clauses (i), (ii)
and (iii) of subsection (c), above.

SECTION 13. BENEFICIARY DESIGNATION

A Participant may designate the person or persons to whom the Participant’s account under the Plan
shall be paid in the event of the Participant’s death. If no Beneficiary is designated, or no
designated Beneficiary survives the Participant, payment shall be made in a single lump-sum to the
Participant’s estate.

7

 

SECTION 14. PLAN ADMINISTRATION

14.1 Administration. The Plan shall be administered by the Administrator.

The Administrator is authorized to make findings (including factual findings) with respect to any
issue arising under the Plan, interpret and construe any provision of the Plan, to determine
eligibility and benefits under the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to adopt such forms as it may deem appropriate for the administration of the
Plan, to provide for conditions and assurances deemed necessary or advisable to protect the
interests of the Employer and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express provisions of the
Plan. The Administrator shall be responsible for the day-to-day administration of the Plan.
Determinations, interpretations or other actions made or taken by the Administrator under the Plan
shall be final and binding for all purposes and upon all persons.

14.2 Review Procedure. The purpose of the review procedure set forth in this Section 14.2
is to provide a procedure by which a Participant or Beneficiary (the “claimant”) under the Plan, or
the duly authorized representative of any such Participant or Beneficiary, may have a reasonable
opportunity to appeal a denied claim to the Administrator for a full and fair review.

If a claim for benefits is denied in whole or in part, the Administrator shall notify the claimant
within ninety (90) days after receipt of the claim (or within one hundred eighty (180) days if
special circumstances require an extension of time for processing the claim, and provided written
notice indicating the special circumstances and the date by which a final decision is expected to
be rendered is given to the claimant within the initial ninety (90) day period).

The notice of the denial of the claim shall be written in a manner calculated to be understood by
the claimant and shall set forth the following:

	(i)	 	the specific reason or reasons for the denial of the claim;
	 
	(ii)	 	the specific references to the pertinent Plan provisions on which the denial is based;
	 
	(iii)	 	a description of any additional material or information necessary to perfect the claim, and
an explanation of why such material or information is necessary;
	 
	(iv)	 	a statement that any appeal of the denial must be made by giving to the Administrator, within
sixty (60) days after receipt of the denial of the claim, written notice of such appeal, such
notice to include a full description of the pertinent issues and basis of the claim;
	 
	(v)	 	a description of the Plan’s review procedures 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 a denial of a claim on review; and
	 
	(vi)	 	if an internal rule, guideline, protocol, or other similar criterion was relied upon in
making the adverse determination, either the specific rule, guideline, protocol, or other
similar criterion, or a statement that such a rule, guideline, protocol, or other similar
criterion was relied upon in making the adverse determination and that a copy of such rule,
guideline, protocol, or other criterion will be provided free of charge to the claimant upon
request.

8

 

Upon denial of a claim in whole or in part, the claimant (or his or her duly authorized
representative) shall have the right to submit a written request to the Administrator for a full
and fair review of the denied claim, to be permitted, upon request and free of charge, to review
and receive copies of documents, records and other information pertinent to the denial, and to
submit issues and comments in writing, documents, records, and other information relating to the
claim for benefits. Any appeal of the denial must be given to the Administrator within the period
of time prescribed above. The full and fair review shall take into account all comments,
documents, records and other information submitted by the claimant relating to the claim, without
regard to whether such information was submitted or considered in the initial benefit
determination, and provide a review that does not afford deference to the initial benefit
determination. If the claimant (or the claimant’s duly authorized representative) fails to appeal
the denial to the Administrator within the prescribed time, the Administrator’s adverse
determination shall be final, binding and conclusive, to the extent permitted by law.

The Administrator may hold a hearing or otherwise ascertain such facts as it deems necessary and
shall render a decision which shall be binding upon both parties, to the extent permitted by law.
The Administrator shall advise the claimant of the results of the review within sixty (60) days
after receipt of the written request for the review, unless special circumstances require an
extension of time for processing, in which case a decision shall be rendered as soon as possible
but not later than one hundred twenty (120) days after receipt of the request for review. If such
extension of time is required, written notice of the extension shall be furnished to the claimant
prior to the commencement of the extension that indicates the special circumstances requiring the
extension of time and the date by which the Plan expects to render the determination on review. In
the event that a period of time is extended as permitted pursuant to this paragraph due to a
claimant’s failure to submit information necessary to decide a claim, the period for making the
benefit determination on review shall be tolled from the date on which the notification of the
extension is sent to the claimant until the date on which the claimant responds to the request for
additional information. The decision of the review shall be written in a manner calculated to be
understood by the claimant and shall include:

	(i)	 	specific reasons for the decision;
	 
	(ii)	 	specific references to the pertinent Plan provisions on which the decision is based;
	 
	(iii)	 	a statement that 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;
	 
	(iv)	 	a statement of the claimant’s right to bring an action under Section 502(a) of ERISA
following a denial of a claim on review; and
	 
	(v)	 	if an internal rule, guideline, protocol, or other similar criterion was relied upon in
making the adverse determination, either the specific rule, guideline, protocol, or other
similar criterion, or a statement that such rule, guideline, protocol, or other similar
criterion was relied upon in making the adverse determination and that a copy of the rule,
guideline, protocol, or other similar criterion will be provided free of charge to the
claimant upon request.

The decision of the Administrator shall be final, binding and conclusive to the extent permitted by
law.

9

 

SECTION 15. FUNDING

15.1 Plan Unfunded. The Plan is unfunded for tax purposes and for purposes of Title I of
ERISA. Accordingly, the obligation of the Employer to make payments under the Plan constitutes
solely an unsecured (but legally enforceable) promise of the Employer to make such payments, and no
person, including any Participant or Beneficiary, shall have any lien, prior claim or other
security interest in any property of the Employer as a result of this Plan. Any amounts payable
under the Plan shall be paid out of the general assets of the Employer and each Participant and
Beneficiary shall be deemed to be a general unsecured creditor of the Employer.

15.2 Rabbi Trust. The Employer may create a grantor trust to pay its obligations
hereunder (a so-called rabbi trust), the assets of which shall be treated, for all purposes, as the
assets of the Employer. In the event the trustee of such trust is unable or unwilling to make
payments directly to Participants and Beneficiaries and such trustee remits payments to the
Employer for delivery to Participants and Beneficiaries, the Employer shall promptly remit such
amount, less applicable income and other taxes required to be withheld, to the Participant or
Beneficiary.

SECTION 16. AMENDMENT AND TERMINATION

The Board may, in its sole discretion, amend, suspend or terminate, in whole or in part, the Plan,
except that no amendment, suspension, or termination shall retroactively impair or otherwise
adversely affect the rights of any Participant, Beneficiary, or other person to benefits under the
Plan which have accrued prior to the date of such action, as determined by the Administrator in its
sole discretion. Any termination of this Plan will be made only to the extent and in the
circumstances described in Treas. Reg. §1.409A-3(j)(4)(ix), or any successor provision.

The Administrator may adopt any amendment or take any other action which may be necessary or
appropriate to facilitate the administration, management, and interpretation of the Plan or to
conform the Plan thereto.

SECTION 17. NO ASSIGNMENT

A Participant’s right to the amount credited to his or her account under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment by creditors of the Participant or the Participant’s Beneficiary.

SECTION 18. SUCCESSORS AND ASSIGNS

The provisions of this Plan shall be binding upon and inure to the benefit of the Employer, its
successors and assigns, and the Participants, Beneficiaries, heirs, legal representatives and
assigns.

10

 

SECTION 19. NO CONTRACT OF EMPLOYMENT

Nothing contained herein shall be construed as a contract of employment between a Participant and
the Employer, or as a right of the Participant to continue in employment with the Employer, or as a
limitation of the right of the Employer to discharge the Participant at any time, with or without
cause.

SECTION 20. GOVERNING LAW

This Plan shall be subject to and construed in accordance with the provisions of ERISA, where
applicable, and otherwise by the laws of the State of Ohio.

SECTION 21. SECTION 409A OF THE CODE

It is intended that the Plan (including all amendments thereto) comply with the provisions of
Section 409A of the Code, so as to prevent the inclusion in gross income of any amount credited to
a Participant’s account hereunder in a 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 Participant. It
is intended that the Plan shall be administered in a manner that will comply with Section 409A of
the Code. Any reference in this Plan to Section 409A of the Code will also include any regulations
or any other formal guidance, promulgated with respect to such Section 409A by the U.S. Department
of Treasury or the Internal Revenue Service.

 

IN WITNESS WHEREOF, the Employer, 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
 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 

11EX-10.18

 

			
	February 21, 2008
	 	Exhibit 10.18

Mr. Stephen D. Newlin

355 Calamus Circle

Medina, MN 55340

Dear Steve:

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

	1.	 	Position and Duties.

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

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

	2.	 	Compensation.

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

	 	(i)	 	You will be entitled to a signing bonus of $600,000, payable
within 30 calendar days of the Effective Date.
	 
	 	(ii)	 	In addition, during the Employment Period, you will be eligible
for an annual incentive award based on achievement of specified performance
goals (as determined by the Committee). For 2006, you will be eligible to

 

 

Mr. Stephen D. Newlin

Page 2

	 	 	 	participate in the 2006 Senior Executive Annual Incentive Plan, with a
target attainment equal to 100% of your base salary.

	 	(c)	 	Equity/Long-Term Incentive Awards.

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

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

 

 

Mr. Stephen D. Newlin

Page 3

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

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

 

 

Mr. Stephen D. Newlin

Page 4

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

	 	(iv)	 	In future years, you will be eligible to receive long-term
incentive awards, together with PolyOne’s other executive officers, as approved
by the Committee.

	 	(d)	 	Expense Reimbursement. PolyOne will reimburse you for all reasonable business
expenses incurred by you during the Employment Period in the course of performing your
duties under this agreement that are consistent with PolyOne’s policies in effect from
time to time with respect to travel, entertainment and other business expenses, subject
to PolyOne’s requirements applicable generally with respect to reporting and
documentation of such expenses.
	 
	 	(e)	 	Standard Benefits. You will be entitled during the Employment Period to
participate, on the same basis as other salaried employees of PolyOne, in PolyOne’s
standard benefit programs (the “Standard Benefits Package”). The Standard Benefits
Package means those benefits (including the PolyOne Retirement Savings Plan, the
PolyOne Supplemental Retirement Savings Plan, the health care programs, short-term and
long-term disability benefits, life insurance, business travel accident coverage,
flexible spending accounts, and an employee assistance program) for which PolyOne
salaried employees are from time to time generally eligible, as determined from time to
time by the Committee or the Board. As part of the Standard Benefits Package, you will
also be entitled to reimbursement of relocation expenses under the PolyOne Plus
Relocation Program (the “Relocation Program”) (except that PolyOne will provide
reimbursement for up to 24 months). Notwithstanding anything to the contrary contained
in this agreement, the Standard Benefits Package will not include the right to
participate in the PolyOne Employee Transition Plan (the “ETP”) or the Executive
Severance Plan (“ESP”), both of which the parties agree do not apply to you.
	 
	 	(f)	 	Additional Relocation Benefits. As an additional benefit, PolyOne will
reimburse you for reasonable expenses relating to lodging, meals and travel between
your residence and work (Avon Lake, Ohio) during the 90-day period immediately
following the Effective Date, provided that, following such 90-day period and until
such time as you initiate your relocation under the Relocation Program, you will be
responsible for any and all expenses associated with commuting between your residence
and work (Avon Lake, Ohio) locations, together with your living expenses.
	 
	 	(g)	 	Other. You will also be entitled to the following: (i) five weeks of paid
vacation per year; (ii) a car allowance equal to $1200 per month; (iii) an annual
allowance for financial planning and tax preparation in an amount equal to up to
$13,000 per

 

 

Mr. Stephen D. Newlin

Page 5

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

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

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

	5.	 	Post-Employment Period Payments.

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

 

 

Mr. Stephen D. Newlin

Page 6

	 	 	 	your employment (but only to the extent provided in any such benefit plan in which
you have participated as an employee of PolyOne and excluding the ETP and the ESP);
and (iii) any benefits to which you are entitled under the Consolidated Omnibus
Budget Reconciliation Act of 1986, as amended (“COBRA”).
	 
	 	(b)	 	Severance Payments. Notwithstanding the foregoing, if (i) your Employment
Period ends early for any reason other than as set forth in subparagraphs 4(b)(i)
through 4(b)(iv) above and the end of your Employment Period constitutes a “separation
from service,” as defined for purposes of Section 409A (a “Separation From Service”),
(ii) such termination is not following a change in control of PolyOne entitling you to
benefits under your Management Continuity Agreement and (iii) on or before the 45th day
following such end of your Employment Period, you agree to standard non-compete and
non-solicitation covenants for a period of 36 months following the date of termination
and to other standard terms and conditions, including a full release of claims, you
will also be entitled to the following amounts and benefits, all payable in accordance
with the requirements of Section 409A:

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

 

 

Mr. Stephen D. Newlin

Page 7

	 	 	 	amount of the federal, state and local taxes imposed on you as a result of
your receipt of the Health Plans Premium Reimbursement, such reimbursement
to be made, subject to Paragraph 5(d), no later than December 31 of the year
following the year in which you remitted the applicable taxes. Your right
to continuation coverage under the Health Plans pursuant to this Paragraph
5(b)(C) shall satisfy the Health Plans’ obligation to provide you
continuation coverage pursuant to COBRA.

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

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

 

 

Mr. Stephen D. Newlin

Page 8

	 	 	 	the Effective Date, you will be entitled to a cash payment equal to the
amount determined by multiplying 166,667 by the fair market value of one
share of PolyOne common stock on the date of termination of your employment.
	 
	 	(v)	 	If your employment is terminated on or following the three year
anniversary of the Effective Date, you will not be entitled to any additional
cash payment under this Paragraph 5(c).

	 	(d)	 	Notwithstanding the foregoing, if you are a “specified employee,” as determined
by PolyOne in its Specified Employee Designation Procedure, on the date of your
Separation from Service and any payment under Paragraph 5(b)(A), 5(b)(C) or 5(c) would
be considered to be deferred compensation under Section 409A, then any such payment
that is considered to be deferred compensation that would otherwise be payable during
the six-month period following your Separation from Service will instead be paid on the
earlier of (1) the first business day of the seventh month following the date of your
Separation from Service, or (2) your death.

	6.	 	Miscellaneous.

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

     PolyOne may withhold from any amounts payable under this agreement all federal, state, city or
other taxes as PolyOne is required to withhold pursuant to any applicable law, regulation or
ruling.

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

     This agreement embodies the complete agreement and understanding between the parties with
respect to the subject matter hereof and effective as of its date supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written or oral, which may
have related to the subject matter hereof in any way.

 

 

Mr. Stephen D. Newlin

Page 9

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

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

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

     It is intended that this Agreement comply with the provisions of Section 409A of the Code, so
as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year
that is prior to the taxable year or years in which such amounts would otherwise actually be
distributed or made available to you or your beneficiaries. This Agreement shall be administered
in a manner consistent with such intent.

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

	 	 	 	 	 
	 	Sincerely,

POLYONE CORPORATION

 	 
	 	By:  	/s/ Gordon D. Harnett
 	 
	 	 	Name:  	Gordon D. Harnett 	 
	 	 	Title:  	Chairperson of the Compensation

and Governance Committee 	 
	 
	 	Date: 	February 21, 2008 	 
	 

	 	 	 	 	 
	I agree to the terms and conditions

in this letter agreement.

 	 	 
	/s/ Stephen D. Newlin
 	 	 
	Name:  	Stephen D. Newlin 	 	 
	Date: 	February 21, 2008

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"}]]