Document:

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                                                                        Exh 10.1
                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of this 9th day of December, 1999, by and between A. SCHULMAN,
INC., a Delaware corporation (the "Employer"), and ALAIN C. ADAM (the
"Employee").

                  WHEREAS, the Board of Directors of the Employer desires to
provide for the continued employment of the Employee as a member of the
Employer's management, in the best interest of the Employer and its
stockholders. The Employee is willing to commit himself continue to serve the
Employer, on the terms and conditions herein provided;
                  NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, the parties hereto agree as follows:

                  1.   DEFINED TERMS

                  The definitions of capitalized terms used in this Agreement
(unless stated where first used) are provided in the last Section hereof.

                  2.   EMPLOYMENT

                  The Employer hereby continues to employ the Employee as Vice
President-International Automotive Operations for the Employer, and the Employee
hereby accepts such continued employment upon the terms and conditions herein
contained.

                  3.   DUTIES AND CONDITIONS OF EMPLOYMENT

                  3.1  DUTIES. The Employee shall devote his entire business
time, attention and energies to the Employer and shall not engage in any conduct
which shall reflect adversely upon the Companies. The Employee shall perform
such duties for the Companies as may be assigned to one in his executive status
and capacity by the Board. The Employee shall serve diligently and to the best
of his ability.

                  During his employment by the Employer, the Employee shall not,
without the Employer's prior written consent, be

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engaged in any other business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage, except that
notwithstanding the foregoing, he may invest his personal funds for his own
account; provided that such investment shall be passive and not controlling in
any such investment and subject to the provisions of Section 13.2 hereof and
provided further that he will not be required to provide any substantial
services on behalf of such enterprise. Notwithstanding the foregoing, the
Employee may serve on the Boards of Directors of other corporations during the
Term as long as such service does not interfere with the performance of his
duties hereunder.

                  3.2 CONDITIONS. The Employee shall be provided with suitable
office space, furnishings, secretarial and administrative assistance. Without
the Employee's consent, the Employee shall not be required to report principally
to an office located more than five hundred (500) miles from his principal
office at the date of this Agreement.

                  4.   TERM OF AGREEMENT; TERMINATION OF EMPLOYMENT; ESCROW
DURING DISPUTE

                  4.1  TERM OF AGREEMENT. The Employer hereby employs the
Employee for a Term commencing as of the date hereof and ending December 9,
2002. At the end of January 2000 and at the end of each calendar month
thereafter up to and including the end of the calendar month in which the
Employee's 62nd birthday occurs, this Agreement shall automatically be extended
for one (1) month unless either party shall give notice to the other of
non-extension prior to the end of such calendar month; provided, however, if a
Change in Control shall have occurred during the Term of this Agreement,
Sections 7 and 8 and 10 through 20 of this Agreement shall continue in effect
until at least the end of the Change-in-Control Protective Period (whether or
not the Term of the Agreement shall have expired for other purposes).

                  4.2  TERMINATION OF EMPLOYMENT PRIOR TO A CHANGE IN CONTROL.
Prior to any Change in Control, the Employer may terminate the employment of the
Employee for Cause pursuant to this Agreement. Prior to any Change in Control,
the Employee may terminate his employment pursuant to this Agreement if the
Employer fails to make full and timely payments of all sums provided for in
Sections 5 and 6 hereof (subject to Section 7.2 hereof), or otherwise shall
breach its covenants hereunder in any material respect.

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                  4.3  ESCROW DURING A TERMINATION DISPUTE. Prior to any Change
in Control, if the Employee shall be terminated for Cause, and, within 30 days
of such termination, shall notify the Employer of his intention to adjudicate
such termination as improper, the Employer agrees that it will deposit with
KeyBank National Association, Cleveland, Ohio, as Escrow Agent the installments
of the Employee's Base Salary (as provided in Section 5 below) as the same would
have become payable but for such termination. In the event of a final
adjudication by a tribunal of competent jurisdiction that such termination was
not for Cause, then the amounts so deposited in escrow, plus any interest earned
by the Escrow Agent thereon, shall be delivered promptly to the Employee. If
such adjudication shall be in favor of the Employer, the Escrow Agent shall
return the sums so deposited, plus such interest, to the Employer.

                  The escrowed salary shall not be deemed to be liquidated
damages but the Employer shall be entitled to a credit against any such award to
the extent of the sums so delivered to the Employee.

                  5.   COMPENSATION

                  The Employer agrees to pay to the Employee as compensation for
his services hereunder a Base Salary initially equal to the fixed annual salary
currently being paid to the Employee as shown on the Employer's employment
records, payable in substantially equal weekly, biweekly, bimonthly or monthly
installments, as the case may be, in the manner currently being paid to the
Employee. The Base Salary may be discretionarily increased by the Board from
time to time as the Board deems appropriate in its reasonable business judgment.
The Base Salary in effect from time to time shall not be decreased during the
Term (except as provided in Section 7.2).

                  It is understood and agreed that the Employee's compensation
may not be limited to his Base Salary and that the Employee may receive an
annual bonus in the amount, if any, determined annually by the Employer.

                  The Employee shall also participate in employee compensation
and benefit plans available generally to executives of the Employer (including,
without limitation, any tax-qualified profit sharing plan, nonqualified profit
sharing plan, life insurance plan and health insurance plan) on a level
appropriate to his position and shall receive the employee fringe benefits
available generally to executives of the

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Employer (including, without limitation, the use of a company car).

                  6.   EXPENSES

                  The Employee is authorized to incur reasonable expenses for
promoting the business of the Employer, including expenses for entertainment,
travel and similar items. The Employer shall reimburse the Employee for all such
expenses upon the presentation by the Employee, from time to time, of an
itemized account of such expenditures.

                  7.   PRE-TERMINATION COMPENSATION; DISABILITY

                  7.1  NORMAL PRE-TERMINATION COMPENSATION. If the Employee's
employment shall be terminated for any reason during the Term (or, if later,
prior to the end of the Change-in-Control Protective Period), the Employer shall
pay the Employee's Base Salary to the Employee through the Date of Termination
at the rate in effect at the time the Notice of Termination is given (subject to
Section 7.2 hereof), together with all compensation and benefits payable to the
Employee through the Date of Termination under the terms of any compensation or
benefit plan, program or arrangement maintained by the Employer during such
period. Subject to Sections 8, 9, 10 and 11 hereof, after completing the expense
reimbursements required by Section 6 hereof and making the payments and
providing the benefits required by this Section 7, the Employer shall have no
further obligations to the Employee under this Agreement.

                  7.2  DISABILITY ADJUSTMENT TO BASE SALARY PAYMENTS. During the
Term (or, if later, at any time prior to the end of the Change-in-Control
Protective Period), during any period that the Employee fails to perform the
Employee's full-time duties with the Employer as a result of incapacity due to
physical or mental illness (but in no event for more than twenty-four (24)
months), the Employer shall pay only sixty percent (60%) of the Employee's Base
Salary to the Employee at the rate in effect at the commencement of any such
period (less amounts, if any, payable to the Employee at or prior to the time of
any such Base Salary payment under disability benefit plans of the Employer or
under the Social Security disability insurance program). After six (6) months of
Disability, the Employer shall have the right to terminate the Employee's
employment pursuant to this Agreement and all Base Salary payments (except the
sixty percent (60%) payments pursuant to the foregoing sentence) shall cease.
Except to the extent

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provided in this Section 7.2, all Base Salary payments to the Employee shall be
abated during the period of Disability. Subject to Sections 8, 9, 10 and 11
hereof, after completing the expense reimbursements required by Section 6 hereof
and making the payments and providing the benefits required by this Section 7,
the Employer shall have no further obligations to the Employee under this
Agreement.

                  8.   NORMAL POST-TERMINATION PAYMENTS; CONTINUATION PAY;
TERMINATION PAY; PROMPT PAYMENT

                  8.1  NORMAL POST-TERMINATION PAYMENTS. If the Employee's
employment shall be terminated for any reason during the Term of this Agreement
(or, if later, prior to the end of the Change-in-Control Protective Period), the
Employer shall pay the Employee's normal post-termination compensation and
benefits to the Employee as such payments become due. Subject to Section 10
hereof, such post-termination compensation and benefits shall be determined
under, and paid in accordance with, the Employer's retirement, insurance and
other compensation or benefit plans, programs and arrangements (other than this
Agreement).

                  8.2  CONTINUATION PAY; TERMINATION PAY. Notwithstanding
anything to the contrary in Section 7.2, 9.1 or 10.1(A) hereof, if the laws
governing this Agreement shall require that the Employer continue to pay or
otherwise compensate the Employee for any period of time following termination
of the Employee's employment ("Continuation Pay") or if such laws require
certain amounts of severance pay, termination compensation or the like
(collectively, "Termination Pay"), then to the fullest extent permitted by law
any payments to the Employee pursuant to Section 7.2, 9.1 or 10.1(A) hereof
shall be included in the calculation of Continuation Pay and Termination Pay and
such payments shall be deducted from the amount of Continuation Pay or
Termination Pay due the Employee.

                  8.3  PROMPT PAYMENT. Any payments due under Section 5, 6, 7 or
9 hereof or this Section 8 shall be made promptly after the event giving rise to
the obligation and shall be made to the Employee or in accordance with Section
14.2 hereof, as the case may be.

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                  9.   POST-TERMINATION PAYMENTS UPON TERMINATION (PRIOR TO A
CHANGE IN CONTROL) BY DEATH OR BY THE EMPLOYER WITHOUT CAUSE

                  9.1  DEATH BENEFIT. If the Employee's employment shall be
terminated by death during the Term (or, if later, prior to the end of the
Change-in-Control Protective Period), then, in addition to the compensation and
benefits provided by Sections 7.1 and 8 hereof, the Employer shall pay a lump
sum amount equal to sixty percent (60%) of the Base Salary for twenty-four (24)
months in accordance with Section 14.2.

                  9.2  TERMINATION BY THE EMPLOYER WITHOUT CAUSE. If the
Employer shall terminate the Employee's employment during the Term and prior to
a Change in Control, without Cause (and not for Disability or in connection with
the Employee's death), the Employer shall pay the Employee his Base Salary
throughout the remaining Term and annual bonuses during the remaining Term, each
of which bonuses shall be equal to one-half (1/2) times the average annual bonus
paid to the Employee during the most recent five (5) calendar years of the
Employee's employment by any of the Companies (prorated for any partial years in
the remaining Term).

                  10.  SEVERANCE PAYMENTS; DEDUCTIBILITY.

                  10.1 SEVERANCE PAYMENTS.

                  Subject to Section 10.2 hereof, the Employer shall pay the
Employee the payments described in this Section 10.1 (the "Severance Payments")
upon the termination of the Employee's employment following a Change in Control
and prior to the end of the Change-in-Control Protective Period, in addition to
any payments and benefits to which the Employee is entitled under Sections 5, 6,
7 and 8.1 hereof, unless such termination is (i) by the Employer for Cause, (ii)
by reason of death or Disability, or (iii) by the Employee without Good Reason.
For purposes of this Agreement, the Employee's employment shall be deemed to
have been terminated by the Employer without Cause following a Change in Control
or by the Employee with Good Reason following a Change in Control, as the case
may be, if (i) the Employee's employment is terminated without Cause prior to a
Change in Control and such termination was at the request or direction of a
Person who has entered into an agreement with the Employer the consummation of
which would constitute a Change in Control, (ii) the Employee terminates his
employment with Good Reason prior to a Change in Control and the circum-

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stance or event which constitutes Good Reason occurs at the request or direction
of such Person, or (iii) the Employee's employment is terminated by the Employer
without Cause prior to a Change in Control (but following a Potential Change in
Control) and such termination is otherwise in connection with or in anticipation
of a Change in Control which actually occurs. For purposes of any determination
regarding the applicability of the immediately preceding sentence, any position
taken by the Employee shall be presumed to be correct unless the Employer
establishes to the Committee by clear and convincing evidence that such position
is not correct.

                       (A) In lieu of any further salary payments to the
     Employee for periods subsequent to the Date of Termination and in lieu of
     any severance benefit otherwise payable to the Employee, the Employer shall
     pay to the Employee a lump sum severance payment, in cash, equal to three
     (3) times the sum of (i) the higher of the Employee's Base Salary in effect
     immediately prior to the occurrence of the event or circumstance upon which
     the Notice of Termination is based or the Employee's Base Salary in effect
     immediately prior to the Change in Control, and (ii) the higher of the
     annual bonus earned by the Employee in respect of the Employer's fiscal
     year immediately preceding that in which the Date of Termination occurs or
     the average annual bonus so earned in respect of the three fiscal years
     immediately preceding that in which the Change in Control occurs.

                       (B) Notwithstanding any provision of any annual incentive
     plan to the contrary, the Employer shall pay to the Employee a lump sum
     amount, in cash, equal to the sum of (i) any annual incentive compensation
     which has been allocated or awarded to the Employee for a completed fiscal
     year preceding the Date of Termination and which, as of the Date of
     Termination, is contingent only upon the continued employment of the
     Employee to a subsequent date, and (ii) a pro rata portion to the Date of
     Termination of a deemed annual bonus for the Employer's fiscal year in
     which the Date of Termination occurs, calculated by multiplying (i) the
     higher of the annual bonus earned by the Employee with respect to the
     immediately preceding fiscal year or the average annual bonus earned by the
     Employee with respect to the immediately preceding three fiscal years of
     the Employer by (ii) the fraction obtained by dividing the number of days
     in the fiscal year of the

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     Employer in which termination occurs up to and including the Date of
     Termination by 365.

                       (C) For the thirty-six (36) month period immediately
     following the Date of Termination, the Employer shall arrange to provide
     the Employee with life, disability, accident and health insurance benefits
     substantially similar to those which the Employee is receiving immediately
     prior to the Notice of Termination (without giving effect to any amendment
     to such benefits made subsequent to a Change in Control, which amendment
     adversely affects in any manner the Employee's entitlement to or the amount
     of such benefits); PROVIDED, HOWEVER, that, unless the Employee consents to
     a different method (after taking into account the effect of such method on
     the calculation of "parachute payments" pursuant to Section 10.2 hereof),
     such health insurance benefits shall be provided through a third-party
     insurer. Benefits otherwise receivable by the Employee pursuant to this
     Section 10.1(C) shall be reduced to the extent comparable benefits are
     actually received by or made available to the Employee without cost during
     the thirty-six (36) month period following the Employee's termination of
     employment (and any such benefits actually received by or made available to
     the Employee shall be reported to the Employer by the Employee). If the
     Severance Payments shall be decreased pursuant to Section 10.2 hereof, and
     the Section 10.1(C) benefits which remain payable after the application of
     Section 10.2 hereof are thereafter reduced pursuant to the immediately
     preceding sentence because of the receipt or availability of comparable
     benefits, the Employer shall, at the time of such reduction, pay to the
     Employee the least of (a) the amount of the decrease made in the Severance
     Payments pursuant to Section 10.2 hereof, (b) the amount of the subsequent
     reduction in these Section 10.1(C) benefits, or (c) the maximum amount
     which can be paid to the Employee without being, or causing any other
     payment to be, nondeductible by reason of section 280G of the Code.

                  10.2 DEDUCTIBILITY.

                  (A)  Notwithstanding any other provisions of this Agreement,
in the event that any payment or benefit received or to be received by the
Employee in connection with a Change in Control or the termination of the
Employee's employment (whether pursuant to the terms of this Agreement or any
other plan,

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arrangement or agreement with the Employer, any Person whose actions result in a
Change in Control or any Person affiliated with the Employer or such Person)
(all such payments and benefits, including the Severance Payments, being
hereinafter called "Total Payments") would not be deductible (in whole or part),
by the Employer, an affiliate or Person making such payment or providing such
benefit as a result of section 280G of the Code, then, to the extent necessary
to make such portion of the Total Payments deductible (and after taking into
account any reduction in the Total Payments provided by reason of section 280G
of the Code in such other plan, arrangement or agreement), the cash Severance
Payments shall first be reduced (if necessary, to zero), and the noncash
Severance Payments shall thereafter be reduced (if necessary, to zero);
PROVIDED, HOWEVER, that the Employee may elect (at any time prior to the
delivery of a Notice of Termination hereunder) to have the noncash Severance
Payments reduced (or eliminated) prior to any reduction of the cash Severance
Payments.

                  (B)  For purposes of this limitation, (i) no portion of the
Total Payments the receipt or enjoyment of which the Employee shall have
effectively waived in writing prior to the delivery of a Notice of Termination
shall be taken into account, (ii) no portion of the Total Payments shall be
taken into account which in the opinion of tax counsel (the "Tax Counsel")
reasonably acceptable to the Employee and selected by the accounting firm which
was, immediately prior to the Change in Control, the Employer's independent
auditor (the "Auditor") does not constitute a "parachute payment" within the
meaning of section 280G(b)(2) of the Code, including by reason of section
280G(b)(4)(A) of the Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than those referred to in
clauses (i) or (ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of section 280G(b)(4)(B) of the
Code or are otherwise not subject to disallowance as deductions by reason of
section 280G of the Code, in the opinion of the Tax Counsel, and (iv) the value
of any noncash benefit or any deferred payment or benefit included in the Total
Payments shall be determined by the Auditor in accordance with the principles of
sections 280G(d)(3) and (4) of the Code.

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                  (C)  If it is established pursuant to a final determination of
a court or an Internal Revenue Service proceeding that, notwithstanding the good
faith of the Employee and the Employer in applying the terms of this Section
10.2, the aggregate "parachute payments" paid to or for the Employee's benefit
are in an amount that would result in any portion of such "parachute payments"
not being deductible by reason of section 280G of the Code, then the Employee
shall have an obligation to pay the Employer upon demand an amount equal to the
sum of (i) the excess of the aggregate "parachute payments" paid to or for the
Employee's benefit over the aggregate "parachute payments" that could have been
paid to or for the Employee's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of the Code; and (ii)
interest on the amount set forth in clause (i) of this sentence at one hundred
twenty percent (120%) of the rate provided in section 1274(b)(2)(B) of the Code
from the date of the Employee's receipt of such excess until the date of such
payment.

                  10.3 The payments provided in Sections 10.1(A) and (B) hereof
shall be made not later than the fifth day following the Date of Termination;
PROVIDED, HOWEVER, that if the amounts of such payments, and the limitation on
such payments set forth in Section 10.2 hereof, cannot be finally determined on
or before such day, the Employer shall pay to the Employee on such day an
estimate, as determined in good faith by the Employer, in accordance with
Section 10.2 hereof, of the minimum amount of such payments to which the
Employee is clearly entitled and shall pay the remainder of such payments
(together with interest at one hundred twenty percent (120%) of the rate
provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth (30th) day after the Date
of Termination. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Employer to the Employee, payable on the fifth (5th)
business day after demand by the Employer (together with interest at one hundred
twenty percent (120%) of the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this Section, the Employer shall
provide the Employee with a written statement setting forth the manner in which
such payments were calculated and the basis for such calculations including,
without limitation, any opinions or other advice the Employer has received from
outside counsel, auditors or consultants (and any such opinions or advice which
are in writing shall be

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attached to the statement). In the event the Employer should fail to pay when
due the amounts described in Sections 10.1(A), (B) and (C) hereof or in Section
10.2 hereof, the Employee shall also be entitled to receive from the Employer an
amount representing interest on any such unpaid amounts from the due date, as
determined under this Section 10.3 (without regard to any extension of the Date
of Termination pursuant to Section 11.3 hereof), to the date of payment at one
hundred twenty percent (120%) of the rate provided in section 1274(b)(2)(B) of
the Code.

                  10.4 The Employer also shall pay to the Employee all legal
fees and expenses incurred by the Employee (i) in disputing in good faith any
issue relating to the termination of the Employee's employment following a
Change in Control and prior to the end of the Change-in-Control Protective
Period, (ii) in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement, or (iii) in connection with any tax audit or
proceeding to the extent attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such payments shall be made
within five (5) business days after delivery of the Employee's written requests
for payment accompanied with such evidence of fees and expenses incurred as the
Employer reasonably may require.

                  11.  TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE.

                  11.1 NOTICE OF TERMINATION. During the Term (and, if longer,
until the end of the Change-in-Control Protective Period), any purported
termination of the Employee's employment (other than by reason of death) shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 15 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision so
indicated. Further, with respect to any purported termination of the Employee's
employment after a Change in Control and prior to the end of the
Change-in-Control Protective Period, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted by the affirmative vote
of not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of considering
such termi-

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nation (after reasonable notice to the Employee and an opportunity for
the Employee, together with the Employee's counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Employee was
guilty of conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.

                  11.2 DATE OF TERMINATION. "Date of Termination," with respect
to any purported termination of the Employee's employment during the Term (and,
if longer, prior to the end of the Change-in-Control Protective Period), shall
mean (i) if the Employee's employment is terminated for Disability, thirty (30)
days after Notice of Termination is given (provided that the Employee shall not
have returned to the full-time performance of the Employee's duties during such
thirty (30) day period), and (ii) if the Employee's employment is terminated for
any other reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Employer, shall not be less than thirty (30) days
(except in the case of a termination for Cause) and, in the case of a
termination by the Employee, shall not be less than fifteen (15) days nor more
than sixty (60) days, respectively, from the date such Notice of Termination is
given).

                  11.3 DISPUTE CONCERNING TERMINATION. With respect to any
purported termination of the Employee's employment after a Change in Control and
prior to the end of the Change-in-Control Protective Period, if within fifteen
(15) days after any Notice of Termination is given, or, if later, prior to the
Date of Termination (as determined without regard to this Section 11.3), the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be
extended until the date on which the dispute is finally resolved, either by
mutual written agreement of the parties or by a final judgment, order or decree
of a court of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected); PROVIDED, HOWEVER, that the Date of Termination shall be extended by
a notice of dispute given by the Employee only if such notice is given in good
faith and the Employee pursues the resolution of such dispute with reasonable
diligence.

                  11.4 COMPENSATION DURING DISPUTE. If a purported termination
occurs following a Change in Control and prior to the end of the
Change-in-Control Protective Period and the Date of Termination is extended in
accordance with Section 11.3

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hereof, the Employer shall continue to pay the Employee the full compensation in
effect when the notice giving rise to the dispute was given (including, but not
limited to, salary) and continue the Employee as a participant in all
compensation, benefit and insurance plans in which the Employee was
participating when the notice giving rise to the dispute was given, until the
Date of Termination, as determined in accordance with Section 11.3 hereof.
Amounts paid under this Section 11.4 are in addition to all other amounts due
under this Agreement (other than those due under Section 7.1 hereof) and shall
not be offset against or reduce any other amounts due under this Agreement.

                  12.  NO MITIGATION

                  The Employer agrees that, if the Employee's employment with
the Employer terminates following a Change in Control and prior to the end of
the Change-in-Control Protective Period, the Employee is not required to seek
other employment or to attempt in any way to reduce any amounts payable to the
Employee by the Employer pursuant to Section 10 hereof or Section 11.4 hereof.
Further, the amount of any payment or benefit provided for in this Agreement
(other than Section 10.1(C) hereof) shall not be reduced by any compensation
earned by the Employee as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by the
Employee to the Employer, or otherwise.

                  13.  CONFIDENTIALITY; NON-COMPETITION AND NON-SOLICITATION

                  13.1 CONFIDENTIALITY. The Companies' methods, plans for doing
business, processes, pricing, compounds, customers and supplies are vital to the
Companies and, to the extent not made public by the Companies, constitute
confidential information subject to the Companies' proprietary rights therein.
The Employee covenants and agrees that during the Term and at all times
thereafter, the Employee will not, directly or indirectly, make known, divulge,
furnish, make available or use, otherwise than in the regular course of the
Employee's employment by the Employer, any invention, product, process,
apparatus or design of any of the Companies, or any knowledge or information in
respect thereof (including, but not limited to, business methods and
techniques), or any other confidential or so-called "insider" information of any
of the Companies. This

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covenant shall apply without regard to the time or circumstances of any
termination of the Employee's employment.

                  13.2 NON-COMPETITION AND NON-SOLICITATION. The Employee
covenants and agrees that during the period of one (1) year following any
termination of the Employee's employment which occurs prior to a Change in
Control, the Employee will not, directly or indirectly, either as an individual
for the Employee's own account or as an investor, or other participant in, or as
an employee, agent, or representative of, any other business enterprise:

                  (i)  solicit, employ, entice, take away or interfere with,
                       or attempt to solicit, employ, entice, take away or
                       interfere with, any employee of the Employer or the
                       Companies; or

                  (ii) engage or participate in or finance, aid or be
                       connected with any enterprise which competes with the
                       business of the Companies, or any of them.

The geographical limitations of the foregoing shall include any country in which
the Companies or any of them shall be doing business as of such date of such
termination. This covenant shall apply without regard to the circumstances of
any termination of the Employee's employment which occurs prior to a Change in
Control.

                  13.3 The Employee acknowledges that the covenants contained in
this Section 13 are of the essence of this Agreement and said covenants shall be
construed as independent of any other provisions of this Agreement. Recognizing
the irreparable nature of the injury that could result from the Employee's
violation of any of the covenants and agreement to be performed and/or observed
by the Employee pursuant to the provisions of this Section 13, and that damages
would be inadequate compensation, it is agreed that any violations by the
Employee of the provisions of this Section 13, shall be the proper subject for
immediate injunctive and other equitable relief to the Employer.

                  14.  SUCCESSORS; BINDING AGREEMENT

                  14.1 In addition to any obligations imposed by law upon any
successor to the Employer, the Employer will require any successor (whether
direct or indirect, by purchase, merger,

                                       14
<PAGE>

consolidation or otherwise) to all or substantially all of the business and/or
assets of the Employer to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Employer would be required to
perform it if no such succession had taken place. Failure of the Employer to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Employer in the same amount and on the same terms as the
Employee would be entitled to hereunder if the Employee were to terminate the
Employee's employment for Good Reason after a Change in Control, except that,
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. Except as
provided in this Section 14.1, this Agreement shall not be assignable by either
party without the written consent of the other party hereto.

                  14.2 This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Employee shall die while any amount would still be payable to the Employee
hereunder (other than amounts which, by their terms, terminate upon the death of
the Employee) if the Employee had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Employee's estate.

                  15.  NOTICES

                  For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Employee, to the address shown for the Employee in the personnel records of the
Employer and, if to the Employer, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon actual receipt:

                                       15
<PAGE>

                       To the Employer:

                          Robert A. Stefanko
                          Chief Financial Officer and Executive
                           Vice President-Finance and Administration
                          A. Schulman, Inc.
                          P. O. Box 1710
                          Akron, Ohio  44309-1710

                       With a copy to:

                           James H. Berick, Esq.
                           Berick, Pearlman & Mills Co., L.P.A.
                           1350 Eaton Center
                           1111 Superior Avenue
                           Cleveland, Ohio  44114-2569

                  16.  MISCELLANEOUS

                  No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Employee and such officer as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement supersedes the Employment Agreement between the
Employer and the Employee dated as of December 28, 1990 and any other agreements
or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either party, except as expressly
set forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Ohio. All references to sections of the Exchange Act or the Code shall be deemed
also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law and any additional withholding to which the
Employee has agreed. The obligations of the Employer and the Employee under this
Agreement which by their nature may require (partial or total) performance after
the expiration of the Term or the Change-in-Control Protective Period
(including, without limitation, those under Sections 5 through 11 and Section 13
hereof) shall survive such expiration.

                                       16
<PAGE>

                  17.  VALIDITY

                  The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

                  18.  COUNTERPARTS

                  This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

                  19.  SETTLEMENT OF DISPUTES AFTER CHANGE IN CONTROL;
ARBITRATION

                  After a Change in Control and prior to the end of the
Change-in-Control Protective Period, all claims by the Employee for benefits
under this Agreement shall be directed to and determined by the Committee and
shall be in writing. Any denial by the Committee of a claim for benefits under
this Agreement shall be delivered to the Employee in writing and shall set forth
the specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Committee shall afford a reasonable opportunity to
the Employee for a review of the decision denying a claim and shall further
allow the Employee to appeal to the Committee a decision of the Committee within
sixty (60) days after notification by the Committee that the Employee's claim
has been denied. Any further dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Akron, Ohio, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. Notwithstanding any provision of this Agreement
to the contrary, the Employee shall be entitled to seek specific performance of
the Employee's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.

                  20.  DEFINITIONS

                  For purposes of this Agreement, the following terms shall have
the meanings indicated below:

                  (A) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.

                                       17
<PAGE>

                  (B) "Board" shall mean the Board of Directors of the Employer.

                  (C) "Cause" for termination by the Employer of the Employee's
employment shall mean the following:

                                    (I) with respect to a termination as to
                  which the Notice of Termination is duly given prior to a
                  Change in Control, the Employee's breach of his covenants
                  herein contained, the Employee's gross neglect of his duties
                  hereunder, the Employee's knowingly committing misfeasance or
                  knowingly permitting nonfeasance of his duties in any material
                  respect, or the Employee's committing a felony; and

                                    (II) with respect to a termination as to
                  which the Notice of Termination is duly given following a
                  Change in Control, (i) the willful and continued failure by
                  the Employee to substantially perform the Employee's duties
                  with the Employer (other than any such failure resulting from
                  the Employee's incapacity due to physical or mental illness or
                  any such actual or anticipated failure after the issuance of a
                  Notice of Termination for Good Reason by the Employee pursuant
                  to Section 11.1 hereof) after a written demand for substantial
                  performance is delivered to the Employee by the Board, which
                  demand specifically identifies the manner in which the Board
                  believes that the Employee has not substantially performed the
                  Employee's duties, or (ii) the willful engaging by the
                  Employee in conduct which is demonstrably and materially
                  injurious to the Employer or its subsidiaries, monetarily or
                  otherwise. For purposes of clauses (i) and (ii) of this
                  definition, (x) no act, or failure to act, on the Employee's
                  part shall be deemed "willful" unless done, or omitted to be
                  done, by the Employee not in good faith and without reasonable
                  belief that the Employee's act, or failure to act, was in the
                  best interest of the Employer and (y) in the event of a
                  dispute concerning the application of this provision, no claim
                  by the Employer that Cause exists shall be given effect unless
                  the Employer establishes to the Committee by clear and
                  convincing evidence that Cause exists.

                                       18
<PAGE>

                  (D)  A "Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:

                                    (I) any Person is or becomes the Beneficial
                  Owner, directly or indirectly, of securities of the Employer
                  (not including in the securities beneficially owned by such
                  Person any securities acquired directly from the Employer or
                  its affiliates other than in connection with the acquisition
                  by the Employer or its affiliates of a business) representing
                  25% or more of either the then outstanding shares of common
                  stock of the Employer or the combined voting power of the
                  Employer's then outstanding securities; or

                                    (II) the following individuals cease for any
                  reason to constitute a majority of the number of directors
                  then serving: individuals who, on the date hereof, constitute
                  the Board and any new director (other than a director whose
                  initial assumption of office is in connection with an actual
                  or threatened election contest, including but not limited to a
                  consent solicitation, relating to the election of directors of
                  the Employer) whose appointment or election by the Board or
                  nomination for election by the Employer's stockholders was
                  approved by a vote of at least two-thirds (2/3) of the
                  directors then still in office who either were directors on
                  the date hereof or whose appointment, election or nomination
                  for election was previously so approved; or

                                    (III) the stockholders of the Employer
                  approve a merger or consolidation of the Employer with any
                  other corporation or approve the issuance of voting securities
                  of the Employer in connection with a merger or consolidation
                  of the Employer (or any direct or indirect subsidiary of the
                  Employer) pursuant to applicable stock exchange requirements,
                  other than (i) a merger or consolidation which would result in
                  the voting securities of the Employer outstanding immediately
                  prior to such merger or consolidation continuing to represent
                  (either by remaining outstanding or by being converted into
                  voting securities of the surviving entity or any parent
                  thereof), in combination with the ownership of any trustee or
                  other fiduciary holding securities under an employee

                                       19
<PAGE>

                  benefit plan of the Employer or any subsidiary of the
                  Employer, at least 75% of the combined voting power of the
                  voting securities of the Employer or such surviving entity or
                  any parent thereof outstanding immediately after such merger
                  or consolidation, or (ii) a merger or consolidation effected
                  to implement a recapitalization of the Employer (or similar
                  transaction) in which no Person is or becomes the Beneficial
                  Owner, directly or indirectly, of securities of the Employer
                  (not including in the securities Beneficially Owned by such
                  Person any securities acquired directly from the Employer or
                  its subsidiaries other than in connection with the acquisition
                  by the Employer or its subsidiaries of a business)
                  representing 25% or more of either the then outstanding shares
                  of common stock of the Employer or the combined voting power
                  of the Employer's then outstanding securities; or

                                    (IV) the stockholders of the Employer
                  approve a plan of complete liquidation or dissolution of the
                  Employer or an agreement for the sale or disposition by the
                  Employer of all or substantially all of the Employer's assets,
                  other than a sale or disposition by the Employer of all or
                  substantially all of the Employer's assets to an entity, at
                  least 75% of the combined voting power of the voting
                  securities of which are owned by stockholders in substantially
                  the same proportions as their ownership of the Employer
                  immediately prior to such sale.

                  Notwithstanding the foregoing, no "Change in Control" shall be
deemed to have occurred if there is consummated any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Employer immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Employer
immediately following such transaction or series of transactions.

                  Further, notwithstanding the foregoing, any event or
transaction which would otherwise constitute a Change in Control (a
"Transaction") shall not constitute a Change in Control for purposes of this
Agreement if, in connection with the Transaction, the Employee participates as
an equity investor in the acquiring entity or any of its affiliates (the

                                       20
<PAGE>

"Acquiror"). For purposes of the preceding sentence, the Employee shall not be
deemed to have participated as an equity investor in the Acquiror by virtue of
(i) obtaining beneficial ownership of any equity interest in the Acquiror as a
result of the grant to the Employee of an incentive compensation award under one
or more incentive plans of the Acquiror (including, but not limited to, the
conversion in connection with the Transaction of incentive compensation awards
of the Employer into incentive compensation awards of the Acquiror), on terms
and conditions substantially equivalent to those applicable to other executives
of the Employer immediately prior to the Transaction, after taking into account
normal differences attributable to job responsibilities, title and similar
matters, (ii) obtaining beneficial ownership of any equity interest in the
Acquiror on terms and conditions substantially equivalent to those obtained in
the Transaction by all other stockholders of the Employer, or (iii) passive
ownership of less than three percent (3%) of the stock of the Acquiror.

                  (E)  "Change-in-Control Protective Period" shall mean the
period from the occurrence of a Change in Control until the later of the second
anniversary of such Change in Control or, if such Change in Control shall be
caused by the stockholder approval of a merger or consolidation described in
Section 20(E)(III) hereof, the second anniversary of the consummation of such
merger or consolidation.

                  (F)  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

                  (G)  "Committee" shall mean (i) the individuals (not fewer
than three in number) who, immediately prior to a Potential Change in Control,
constitute the Compensation Committee of the Board, plus (ii) in the event that
fewer than three individuals are available from the group specified in clause
(i) above for any reason, such individuals as may be appointed by the individual
or individuals so available (including for this purpose any individual or
individuals previously so appointed under this clause (ii)); provided, however,
that the maximum number of individuals constituting the Committee shall not
exceed five.

                  (H)  "Companies" shall mean, collectively, the Employer and
each corporation which is now and hereafter shall become a subsidiary of, or a
parent of, the Employer, together with their respective successors and assigns.

                                       21
<PAGE>

                  (I)  "Continuation Pay" shall mean those payments so described
in Section 8.2 hereof.

                  (J)  "Date of Termination" shall have the meaning stated in
Section 11.2 hereof.

                  (K)  "Disability" shall be deemed the reason for the
termination by the Employer of the Employee's employment, if, as a result of the
Employee's incapacity due to physical or mental illness, the Employee shall have
been absent from the full-time performance of the Employee's duties with the
Employer for a period of six (6) consecutive months, the Employer shall have
given the Employee a Notice of Termination for Disability, and, within thirty
(30) days after such Notice of Termination is given, the Employee shall not have
returned to the full-time performance of the Employee's duties.

                  (L)  "Employee" shall mean the individual named in the first
paragraph of this Agreement.

                  (M)  "Employer" shall mean A. Schulman, Inc. and, except in
determining under Section 20(E) hereof whether or not any Change in Control of
the Employer has occurred, any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

                  (N)  "Exchange Act" shall mean the Securities Exchange Act of
          1934, as amended from time to time.

                  (O)  "Good Reason" for termination by the Employee of the
Employee's employment shall mean the occurrence (without the Employee's express
prior written consent) after any Change in Control, or after any Potential
Change in Control under the circumstances described in the second sentence of
Section 10.1 hereof (treating all references in paragraphs (I) through (VII)
below to a "Change in Control" as references to a "Potential Change in
Control"), of any one of the following acts by the Employer, or failures by the
Employer to act, unless, in the case of any act or failure to act described in
paragraph (I), (V), (VI) or (VII) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice of Termination given in
respect thereof:

                                    (I) the assignment to the Employee of any
                  duties inconsistent with the Employee's status as an executive
                  officer of the Employer or a substantial adverse alteration in
                  the nature or status of the

                                       22
<PAGE>

                  Employee's responsibilities from those in effect immediately
                  prior to the Change in Control (other than any such alteration
                  primarily attributable to the fact that the Employer may no
                  longer be a public company);

                                    (II) a reduction by the Employer in the
                  Employee's annual base salary as in effect on the date hereof
                  or as the same may be increased from time to time except for
                  across-the-board salary reductions similarly affecting all
                  executives of the Employer and all executives of any Person in
                  control of the Employer;

                                    (III) the relocation of the Employer's
                  principal executive offices to a location more than fifty (50)
                  miles from the location of such offices immediately prior to
                  the Change in Control or the Employer's requiring the Employee
                  to be based anywhere other than the Employer's principal
                  executive offices except for required travel on the Employer's
                  business to an extent substantially consistent with the
                  Employee's present business travel obligations;

                                    (IV) the failure by the Employer, without
                  the Employee's consent, to pay to the Employee any portion of
                  the Employee's current compensation, or to pay to the Employee
                  any portion of an installment of deferred compensation under
                  any deferred compensation program of the Employer, within
                  seven (7) days of the date such compensation is due;

                                    (V) the failure by the Employer to continue
                  in effect any compensation plan in which the Employee
                  participates immediately prior to the Change in Control which
                  is material to the Employee's total compensation, including
                  but not limited to the Employer's 1991 Stock Incentive Plan
                  and Nonqualified Profit Sharing Plan or any substitute plans
                  adopted prior to the Change in Control, unless an equitable
                  arrangement (embodied in an ongoing substitute or alternative
                  plan) has been made with respect to such plan, or the failure
                  by the Employer to continue the Employee's participation
                  therein (or in such substitute or alternative plan) on a basis
                  not materially less favorable, both in terms of the amount of
                  benefits provided and the level of the Employee's

                                       23
<PAGE>

                  participation relative to other participants, as existed at
                  the time of the Change in Control;

                                    (VI) the failure by the Employer to continue
                  to provide the Employee with benefits substantially similar to
                  those enjoyed by the Employee under any of the Employer's
                  pension, life insurance, medical, health and accident, or
                  disability plans in which the Employee was participating at
                  the time of the Change in Control, the taking of any action by
                  the Employer which would directly or indirectly materially
                  reduce any of such benefits or deprive the Employee of any
                  material fringe benefit enjoyed by the Employee at the time of
                  the Change in Control, or the failure by the Employer to
                  provide the Employee with the number of paid vacation days to
                  which the Employee is entitled on the basis of years of
                  service with the Employer in accordance with the Employer's
                  normal vacation policy in effect at the time of the Change in
                  Control; or

                                    (VII) any purported termination of the
                  Employee's employment which is not effected pursuant to a
                  Notice of Termination satisfying the requirements of Section
                  11.1 hereof; for purposes of this Agreement, no such purported
                  termination shall be effective.

                  The Employee's right to terminate the Employee's employment
for Good Reason shall not be affected by the Employee's incapacity due to
physical or mental illness. The Employee's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or failure
to act constituting Good Reason hereunder.

                  For purposes of any determination regarding the existence of
Good Reason, any claim by the Employee that Good Reason exists shall be presumed
to be correct unless the Employer establishes to the Committee by clear and
convincing evidence that Good Reason does not exist.

                  (P)  "Notice of Termination" shall have the meaning stated in
Section 11.1 hereof.

                  (Q)  "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not

                                       24
<PAGE>

include (i) the Employer or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Employer or
any of its subsidiaries, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Employer in substantially the
same proportions as their ownership of stock of the Employer.

                  (R) "Potential Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

                                    (1) the Employer enters into an agreement,
                  the consummation of which would result in the occurrence of a
                  Change in Control;

                                    (2) the Employer or any Person publicly
                  announces an intention to take or to consider taking actions
                  which, if consummated, would constitute a Change in Control;

                                    (3) any Person becomes the Beneficial Owner,
                  directly or indirectly, of securities of the Employer
                  representing 15% or more of either the then outstanding shares
                  of common stock of the Employer or the combined voting power
                  of the Employer's then outstanding securities; or

                                    (4) the Board adopts a resolution to the
                  effect that, for purposes of this Agreement, a Potential
                  Change in Control has occurred.

                  (S)  "Severance Payments" shall mean those payments described
in Section 10.1 hereof.

                  (T)  "Term" shall mean the period of time described in Section
4.1 hereof (including any extension or continuation described therein).

                                       25
<PAGE>

                  (U)  "Termination Pay" shall mean those payments so described
in Section 8.2 hereof.

                  (V)  "Total Payments" shall mean those payments described in
Section 10.2 hereof.

                  IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed (the corporate signatory by the respective officer
duly authorized) as of the day and year first above written.

                                    /s/ Alain C. Adam
                                    --------------------------------------
                                    Alain C. Adam

                                    A. SCHULMAN, INC.

                                    By /s/ James H. Berick
                                      ------------------------------------
                                      James H. Berick, Secretary

                                    By: /s/ R. A. Stefanko
                                       -----------------------------------------
                                        R. A. Stefanko, Executive Vice President

                                       26<PAGE>

                                                                   Exhibit 10(i)

                       Service Systems International, Ltd.
                      1999 Long-Term Equity Incentive Plan

Section 1. Purpose

Service Systems International, Ltd. (hereinafter referred to as the
"Company"), a Nevada corporation, hereby establishes the 1999 Long-Term
Equity Incentive Plan (the "Plan") to promote the interests of the Company
and its shareholders through the (i) attraction and retention of directors,
executive officers and other key employees essential to the success of the
Company; (ii) motivation of executive officers and other key employees using
performance related and stock based incentives linked to longer range
performance goals and the interests of Company shareholders; and (iii)
enabling of these directors and employees to share in the long term growth
and success of the Company. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options (intended to qualify under Section 422 of
the Internal Revenue Code of 1986, as amended), Restricted Stock, and
Performance Shares, subject to the provisions of this Plan document and
applicable law.

Section 2.  Effective Date and Duration

The Plan was approved by the Committee and the Board of Directors on December
17, 1999. The Plan shall be effective on December 17, 1999; however, any Award
granted under this Plan before the Plan is approved by shareholders, shall be
granted subject to shareholder approval of the Plan if that approval is, in the
sole determination of the Board of Directors, required for any reason. The Plan
shall expire on December 17, 2009; however, all Awards made before, and
outstanding on that date, shall remain valid in accordance with their terms and
conditions.

Section 3.  Definitions

Except as otherwise defined in the Plan, the following terms shall have the
meanings set forth below:

3.1 "Affiliate" shall have the meaning ascribed to such term in Rule 12b 2 under
the Exchange Act.

3.2 "Award" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, or
Performance Shares.

3.3 "Award Date" or "Grant Date" means the date on which an Award is made by the
Committee under this Plan.

<PAGE>

3.4 "Award Agreement" or "Agreement" means a written agreement implementing the
grant of each Award signed by an authorized officer of the Company and by the
Participant.

3.5 "Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d
3 under the Exchange Act.

3.6 "Board" or "Board of Directors" means the Board of Directors of the Company.

3.7 "Cashless Exercise" means the exercise of an Option by the Participant
through the use of a brokerage firm to make payment to the Company of the
exercise price either from the proceeds of a loan to the Participant from the
brokerage firm or from the proceeds of the sale of Stock issued pursuant to the
exercise of the Option, and upon receipt of such payment, the Company delivers
the exercised Shares to the brokerage firm. The date of exercise of a Cashless
Exercise shall be the date the broker executes the sale of exercised Shares, or
if no sale is made, the date the broker receives the exercise loan notice from
the Participant to pay the Company for the exercised Shares.

3.8 "Change in Control" means a change in control of the Company of a nature
that would be required to be reported in response to Item 1(a) of the Current
Report on Form 8 K, as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Exchange Act; provided, that without limitation, such a Change in
Control shall be deemed to have occurred at such time as a "person" (as used in
Section 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d 3 under the Exchange Act), directly or indirectly, of 15% or
more of the combined voting power of the Company's outstanding securities
ordinarily having the right to vote in elections of directors; or (b)
individuals who constitute the Board of Directors of the Company on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a Director subsequent to the
date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the Directors
comprising the Incumbent Board shall be, for purposes of this subsection (b),
considered as though such person were a member of the Incumbent Board.
Notwithstanding the foregoing definition, no Change in Control shall be deemed
to have occurred unless and until the Participant has actual knowledge from one
of the following sources: a report filed with the Securities and Exchange
Commission, a public statement issued by the Company, or a periodical of general
circulation, including but not limited to The New York Times or The Wall Street
Journal.

3.9 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

3.10 "Committee" means the Compensation Committee of the Board which will
administer the Plan pursuant to Section 4 herein.3.11 "Common Stock" or "Stock"
means the Common Stock of the Company, or such other security or right or
instrument into which such Common Stock may be changed or converted in the
future.

                                                                             2
<PAGE>

3.12 "Company" means Service Systems International, Ltd., including all
Affiliates and Subsidiaries, or any successor thereto.

3.13 "Covered Participant" means a Participant who is a "covered employee" as
defined in Section 162(m)(3) of the Code, and the regulations promulgated
thereunder.

3.14 "Department" means the Department of the Company responsible for Human
Resources.

3.15 "Designated Beneficiary" means the beneficiary designated by the
Participant, pursuant to procedures established by the Department, to receive
amounts due to the Participant in the event of the Participant's death. If the
Participant does not make an effective designation, then the Designated
Beneficiary will be deemed to be the Participant's estate.

3.16 "Director" shall mean a non-employee member of the Board of Directors as
defined in Rule 16b.

3.17 "Disability" means (i) the mental or physical disability, either
occupational or non-occupational in origin, of the Participant defined as "total
disability" in the Long term Disability Plan of the Company currently in effect
and as amended from time to time; or (ii) a determination by the Committee of
"Total Disability" based on medical evidence that precludes the Participant from
engaging in any occupation or employment for wage or profit for at least twelve
months and appears to be permanent.

3.18 "Divestiture" means the sale of, or closing by, the Company of the business
operations in which the Participant is employed.

3.19 "Early Retirement" means retirement of a Participant from employment with
the Company after age 55, but before the Company's normal retirement date as
stated in its employee policies.

3.20 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

3.21 "Executive Officer" means those individuals designated as "officers" for
purposes of Section 16 of the Securities Exchange Act of 1934 by the Board.

3.22 "Fair Market Value" means, on any given date, the closing price of the
Stock as reported on the NASDAQ on the immediately preceding trading day, all as
reported by such source as the Committee may select.

3.23 "Full time Employee" means an employee designated by the Company as being a
"regular, full time employee" who is eligible for all plans and programs of the
Company set forth for those employees. This designation includes all part time,
temporary, leased or contract employees who work for the Company more than 10
hours a week,

                                                                             3
<PAGE>

consultants and product sales agents and representatives to the Company, all of
whom would be eligible to be included in a registration statement with the
Securities and Exchange Commission on a Form S-8.

3.24 "Incentive Stock Option" or "ISO" means an option to purchase Stock,
granted under Section 7 herein, which is designated as an incentive stock option
and is intended to meet the requirements of Section 422 of the Code.

3.25 "Key Employee" means an officer or other employee of the Company, who, in
the opinion of the Committee, can contribute significantly to the growth and
profitability of, or perform services of major importance to, the Company.

3.26 "Nonqualified Stock Option" or "NQSO" means an Option to purchase Stock,
granted under Section 7 herein, which is not intended to be an Incentive Stock
Option.

3.27 "Normal Retirement" means the retirement of any Participant under the
Company's regular policies at age 65.

3.28 "Option" means an Incentive Stock Option or a Nonqualified Stock Option.

3.29 "Participant" means a Key Employee or Director who has been granted an
Award under the Plan.

3.30 "Performance Based Exception" means the performance based exception from
the tax deductibility limitations of Code Section 162(m).

3.31 "Performance Measures" mean, unless and until the Committee proposes for
shareholder approval and the Company's shareholders approve a change in the
general performance measures set forth in this article, the attainment of which
may determine the degree of payout and/or vesting with respect to Awards which
are designed to qualify for the Performance Based Exception, measure(s) chosen
from among the following alternatives:

(a)  Total shareholder return (absolute or peer group comparative)

(b) Stock price increase (absolute or peer group comparative)

(c) Dividend payout as a percentage of net income (absolute or peer group
comparative)

(d) Return on equity (absolute or peer group comparative)

(e) Return on capital employed (absolute or peer group comparative)

(f) Cash flow, including operating cash flow, free cash flow, discounted cash
flow return on investment, and cash flow in excess of cost of capital

                                                                             4
<PAGE>

(g) Economic value added (income in excess of capital costs)

(h) Market share

(i) Earnings Per Share (absolute or peer group performance)

(j) Growth in Earnings per share (absolute or peer group performance)

(k) Net income (either pre-tax or after tax and either absolute or peer group
performance)

(l) Operating earnings, earnings before interest and taxes ("EBIT") and earnings
before interest, taxes, depreciation and amortization ("EBITDA") (absolute or
peer group performance)

(m)  Annual revenues and growth in revenues (absolute or peer group performance)

(n)  Reduction of debt to asset ratio

(o)  Increase in number of marketing Agents/Representatives

(p)  Attainment of specific Standard approvals, including but not limited to,
     product acceptance for sale in the State of California under Title 22,
     International Standard Association Approval (ISO 9000 series and ISO 14000
     series), Canadian Standard Association Product Approval (CSA), Underwriters
     Laboratories Approval (UL)

(q)  Attainment of purchase order, task or project, on schedule, at contract or
     budgeted price, with required or targeted result achieved

(r)  Company implementation of a participant's recommendation or suggestion
     resulting in a reduction of product cost or substantial increase in product
     performance

(s)  Increase or realignment of marketing efforts resulting in an increase in
     product sales of more than 10% from the previous fiscal year or defined
     financial period.

3.32 "Performance Period" means the time period designated by the Committee
during which performance goals must be met.

3.33 "Performance Share" means an Award, designated as a Performance Share,
granted to a Participant pursuant to Section 9 herein, the value of which is
determined, in whole or in part, by the value of Stock in a manner deemed
appropriate by the Committee and described in the Agreement or Sub Plan.

3.34 "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is restricted, pursuant to Section 8 of the Plan.

                                                                             5
<PAGE>

3.35 "Person" shall have the meaning ascribed to such term in Section 3 (a) (9)
of the Exchange Act and used in Sections 13 (d) and 14 (d) thereof, including a
"group" as defined in Section 13 (d).

3.36 "Plan" means the Service Systems International, Ltd. 1999 Long-Term Equity
Incentive Plan as herein described and as hereafter from time to time amended.

3.37 "Restricted Stock" means an Award of Stock granted to a Participant
pursuant to Section 8 of the Plan.

3.38 "Rule 16b 3" means Rule 16b 3 under Section 16(b) of the Exchange Act as
adopted in Exchange Act Release No. 34 37260 (May 31, 1996, effective August 15,
1996), or any successor rule as amended from time to time.

3.39 "Section 162(m)" means Section 162(m) of the Code, or any successor section
under the Code, as amended from time to time and as interpreted by final or
proposed regulations promulgated thereunder from time to time.

3.40 "Securities Act" means the Securities Act of 1933 and the rules and
regulations promulgated thereunder, or any successor law, as amended from time
to time.

3.41 "Stock" or "Shares" means the Common Stock of the Company.

3.42 "Sub Plan" means a written document that permits the grant of Awards
consistent with the provisions of this Plan.

3.43 "Subsidiary" means a corporation in which the Company owns, either directly
or through one or more of its Subsidiaries, at least 50% of the total combined
voting power of all classes of stock.

Section 4.  Administration

4.1 The Committee. The Plan shall be administered and interpreted by the
Committee, which shall have full authority and all powers necessary or desirable
for such administration. The express grant in this Plan of any specific power to
the Committee shall not be construed as limiting any power or authority of the
Committee. In its sole and complete discretion the Committee may adopt, alter,
suspend and repeal any such administrative rules, regulations, guidelines, and
practices governing the operation of the Plan as it shall from time to time deem
advisable. In addition to any other powers and, subject to the provisions of the
Plan, the Committee shall have the following specific powers: (i) to determine
the terms and conditions upon which the Awards may be made and exercised; (ii)
to determine all terms and provisions of each Agreement and/or Sub Plan, which
need not be identical for types of Awards nor for the same type of Award to
different Participants; (iii) to construe and interpret the Agreements, Sub
Plans and the Plan; (iv) to establish, amend, or waive rules or regulations for
the Plan's administration; (v) to accelerate the exercisability of any Award,
the length of a Performance Period or

                                                                             6
<PAGE>

the termination of any Period of Restriction; and (vi) to make all other
determinations and take all other actions necessary or advisable for the
administration of the Plan. The Committee may take action by a meeting in
person, by unanimous written consent, or by meeting with the assistance of
communications equipment which allows all Committee members participating in the
meeting to communicate in oral or written form or as permitted by applicable
law. The Committee may seek the assistance or advice of any persons it deems
necessary to the proper administration of the Plan.

4.2 Selection of Participants. The Committee shall have sole and complete
discretion to determine those Key Employees and Directors who shall participate
in the Plan. The Committee may request recommendations for individual Awards
from the Chief Executive Officer of the Company and may delegate to the Chief
Executive Officer of the Company the authority to make Awards to Participants
who are not Executive Officers of the Company, subject to a fixed maximum Award
amount for such a group and a maximum Award amount for any one Participant, as
determined by the Committee. Awards made to the Executive Officers shall be
determined by the Committee.

4.3 Award Agreements and Sub Plans. Each Award granted under the Plan shall be
granted either under the terms of an Award Agreement and/or a Sub Plan. Award
Agreements and Sub Plans shall specify the terms, conditions and any rules
applicable to the Award, including but not limited to the effect of
transferability, a Change in Control, or death, Disability, Divestiture, Early
Retirement, Normal Retirement or other termination of employment of the
Participant of the Award. If the Award is granted under the terms of an Award
Agreement, the Award Agreement shall be signed by an authorized representative
of the Company and the Participant, and a copy of the signed Award Agreement
shall be provided to the Participant. If the Award is granted under the terms
and conditions of a Sub Plan, the Sub Plan shall be approved by the Committee as
an Exhibit to the Plan, and a copy of the Sub Plan or a summary description
thereof shall be provided to each Participant.

4.4 Committee Decisions. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan shall be final, conclusive, and binding
upon all persons, including the Company, its stockholders, employees,
Participants, and Designated Beneficiaries, except when the terms of any sale or
award of shares of Stock or any grant of rights or Options under the Plan are
required by law or by the Articles of Incorporation or Bylaws of the Company to
be approved by the Company's Board of Directors or shareholders before any such
sale, award or grant.

4.5 Rule 16b 3 and Section 162(m) Requirements. Notwithstanding any other
provision of the Plan, the Committee may impose such conditions on any Award,
and the Board may amend the Plan in any such respects, as may be required to
satisfy the requirements of Rule 16b 3 or Section 162(m).

4.6 Indemnification of Committee. In addition to such other rights of
indemnification as they may have as Directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against
reasonable expenses incurred

                                                                             7
<PAGE>

from their administration of the Plan. Such reasonable expenses include, but are
not limited to, attorneys' fees, actually and reasonably incurred in connection
with the defense of any action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or any Award
granted or made hereunder, and against all amounts reasonably paid by them in
settlement thereof or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, if such members acted in good faith and in a manner
which they believed to be in, and not opposed to, the best interests of the
Company.

Section 5.  Eligibility

The Committee in its sole and complete discretion shall determine the Key
Employees, including officers and Directors, who shall be eligible for
participation under the Plan, subject to the following limitations: (i) no
member of the Committee or Director shall be eligible to participate under the
Plan except with full Board approval; (ii) no person owning, directly or
indirectly, more than 20% of the total combined voting power of all classes of
Stock shall be eligible to participate under the Plan, and (iii) only Full time
Employees shall be eligible to participate under the Plan, except that Directors
may be granted Nonqualified Stock Options or Restricted Stock awards.

Section 6.  Shares Subject to the Plan

6.1 Number of Shares. Subject to adjustment as provided in Section 6.4 herein,
the maximum aggregate number of Shares that may be issued pursuant to Awards
made under the Plan shall not exceed 3,000,000 Shares of Common Stock, which may
be in any combination of Options, Restricted Stock, or any other rights or
Options. Shares of Common Stock may be available from the authorized but
unissued Shares of Common Stock, or any Shares of Common Stock acquired by the
Company, including Shares of Common Stock purchased in the open market. Except
as provided in Section 6.2 and 6.3 herein, the issuance of Shares in connection
with the exercise of, or as other payment for, Awards under the Plan shall
reduce the number of Shares available for future Awards under the Plan.

6.2 Lapsed Awards of Forfeited Shares. If (i) any Option or other Award granted
under the Plan terminates, expires, or lapses for any reason other than exercise
of the Award, or (ii) if Shares issued pursuant to the Awards are canceled or
forfeited for any reason, the Shares subject to that Award shall thereafter
again be available for grant of an Award under the Plan.

6.3 Delivery of Shares as Payment. If a Participant pays for any Option or other
Award granted under the Plan or for withholding taxes through the delivery of
previously acquired shares or withholding of shares of Common Stock, or
withholding of shares of common stock which otherwise would have been issued,
the number of shares of Common Stock available for Awards under the Plan shall
be increased by the number of

                                                                             8
<PAGE>

Shares surrendered by the Participant, or withheld, subject to Rule 16b 3 as
interpreted by the Securities and Exchange Commission or its staff.

6.4 Capital Adjustments. The number and class of Shares subject to each
outstanding Award, the Option Price and the aggregate number, type and class of
Shares for which Awards thereafter may be made shall be subject to adjustment,
if any, as the Committee deems appropriate, based on the occurrence of a number
of specified and non specified events. Such specified events include but are not
limited to the following:

(a) If the outstanding Shares of the Company are increased, decreased or
exchanged through merger, consolidation, sale of all or substantially all of the
property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split or other distribution in respect to such Shares, for
a different number or type of Shares, or if additional Shares or new or
different Shares are distributed with respect to such Shares, an appropriate and
proportionate adjustment shall be made in: (i) the maximum number of shares of
Stock available for the Plan as provided in Section 6.1 herein, (ii) the type of
Shares or others securities available for the Plan, (iii) the number of shares
of Stock subject to any then outstanding Awards under the Plan, and (iv) the
price (including exercise price) for each share of Stock (or other kind of
shares or securities) subject to then outstanding awards, but without change in
the aggregate purchase as to which such Options remain exercisable or Restricted
Stock releasable.

(b) If other events not specified above in this Section 6.4, such as any
extraordinary cash dividend, split up, spin off, combination, exchange of
shares, warrants or rights offering to purchase Common Stock, or other similar
corporate event affect the Common Stock such that an adjustment is necessary to
maintain the benefits or potential benefits intended to be provided under this
Plan, then the Committee in its discretion may make adjustments to any or all of
(i) the number and type of Shares which thereafter may be optioned and sold or
awarded, (ii) the grant, exercise or conversion price of any Award made under
the Plan thereafter, and (iii) the number and price (including Exercise Price)
of each share of Stock (or other kind of shares or securities) subject to then
outstanding Awards, but without change in the aggregate purchase price as to
which such Options remain exercisable or Restricted Stock releasable. Any
adjustment as provided above shall be subject to any applicable restrictions set
forth in Section 13 or in Section 162(m).

(c) Any adjustment made by the Committee pursuant to the provisions of this
Section 6.4, subject to approval by the Board of Directors, shall be final,
binding and conclusive. A notice of such adjustment, including identification of
the event causing such an adjustment, the calculation method of such adjustment,
and the change in price and the number of shares of Stock, or securities, cash
or property purchasable subject to each Award shall be sent to each Participant.
No fractional interests shall be issued under the Plan based on such
adjustments, and shall be forfeited.

Section 7.  Stock Options

                                                                             9
<PAGE>

7.1 Grant of Stock Options. Subject to the terms and provisions of the Plan and
applicable law, the Committee, at any time and from time to time, may grant
Options to Key Employees and Directors as it shall determine, provided however,
that Directors may only receive NQSO's. The Committee shall have sole and
complete discretion in determining the type of Option granted, the Option Price
(as hereinafter defined), the duration of the Option, the number of Shares to
which an Option pertains, any conditions imposed upon the exercisability or
transferability of the Options, the conditions under which the Option may be
terminated and any such other provisions as may be warranted to comply with the
law or rules of any securities trading system or stock exchange. Notwithstanding
the preceding, grants to Directors must be approved by the full Board. Each
Option grant shall have such specified terms and conditions detailed in an Award
Agreement. The Agreement shall specify whether the Option is intended to be an
Incentive Stock Option within the meaning of Section 422 of the Code, or a
Nonqualified Stock Option.

7.2 Option Price. The exercise price per share of Stock covered by an Option
("Option Price") shall be determined at the time of grant and by the Committee,
subject to the limitation that the Option Price shall not be less than 100% of
Fair Market Value of the Common Stock on the Grant Date.

7.3 Exercisability. Options granted under the Plan shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall
determine, which will be specified in the Award Agreement and need not be the
same for each Participant. However, no Option may be exercisable after the
expiration of ten years from the Grant Date.

7.4 Method of Exercise. Options shall be exercised by the delivery of a written
notice from the Participant to the Company in the form prescribed by the
Committee setting forth the number of Shares with respect to which the Option is
to be exercised, accompanied by full payment for the Shares. The Option Price
shall be payable to the Company in full in cash, or its equivalent, or by
delivery of Shares of Stock (not subject to any security interest or pledge) or
withholding (in the case of NQSO's) shares which would otherwise be acquired
upon exercise, valued at Fair Market Value at the time of exercise or by a
combination of the foregoing. In addition, at the request of the Participant,
and subject to applicable laws and regulations, the Company may (but shall not
be required to) cooperate in a Cashless Exercise of the Option. In addition, any
NQSO granted under the Plan may provide, at the committee's discretion, that
payment of the exercise price may also be made in whole or in part in the form
of shares of common stock subject to risk of forfeiture or other restrictions.
As soon as practicable, after receipt of written notice and payment, the Company
shall deliver to the Participant, Stock certificates in an appropriate amount
based upon the number of Shares with respect to which the option is exercised,
issued in the Participant's name.

7.5 Notice. Each Participant shall give prompt notice to the Company of any
disposition of Shares acquired upon exercise of an Incentive Stock Option if
that disposition occurs

                                                                            10
<PAGE>

within either two (2) years after the date of grant or one (1) year after the
date of transfer of those Shares to the Participant upon the exercise of the
Incentive Stock Option.

7.6 Maximum Award. Each Participant's Award shall be limited to the maximum
Award set out in Section 11 of this Plan.

Section 8.  Restricted Stock

8.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan
and applicable law, the Committee, at any time and from time to time, may grant
shares of Restricted Stock under the Plan to such Participants, and in such
amounts and for such duration and/or consideration as it shall determine.
Participants receiving Restricted Stock Awards are not required to pay the
Company therefor (except for applicable tax withholding) other than the
rendering of services and/or until other considerations are satisfied as
determined by the Committee at its sole discretion.

8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be evidenced
by an Agreement that shall specify the Period of Restriction; the conditions
which must be satisfied before removal of the restriction; the number of Shares
of Restricted Stock granted; and such other provisions as the Committee shall
determine. The Committee may specify, but is not limited to, the following types
of restrictions in the Award Agreement: (i) restrictions on acceleration or
achievement of terms or vesting based on any business or financial goals of the
Company, including, but not limited to the Performance Measures set out in
Section 3.33, and (ii) any other further restrictions that may be advisable
under the law, including requirements set forth by the Securities Act, any
securities trading system or stock exchange upon which such Shares under the
Plan are listed.

8.3 Removal of Restrictions. Except as otherwise noted in this Section 8,
Restricted Stock covered by each Award made under the Plan shall be provided and
become freely transferable by the Participant after the last day of the Period
of Restriction and/or upon the satisfaction of other conditions as determined by
the Committee. Except as specifically provided in this Section 8, the Committee
shall have no authority to reduce or remove the restrictions or to reduce or
remove the Period of Restriction without the express consent of the stockholders
of the Company. If the grant of Restricted Stock is performance based, the total
Restricted Period for any or all shares of Restricted Stock so granted shall be
no less than one (1) year. Any other shares of Restricted Stock issued pursuant
to this Section 8 shall provide that the minimum Period of Restrictions shall be
two (2) years, which Period of Restriction may permit the removal of
restrictions on no more than one half (1/2) of the shares of Restricted Stock at
the end of the first year following the Grant Date, and the removal of the
restrictions on an additional one half (1/2) of the Shares at the end of each
subsequent year. In no event shall any restrictions be removed from shares of
Restricted Stock during the first year following the Grant Date except if a
Change in Control occurs.

                                                                            11
<PAGE>

8.4 Voting Rights. During the Period of Restriction, Participants in whose name
Restricted Stock is granted under the Plan may exercise full voting rights with
respect to those Shares.

8.5 Dividends and Other Distributions. During the Period of Restriction,
Participants in whose name Restricted Stock is granted under the Plan shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares. If any such dividends or distributions are paid in Shares, the
Shares shall be subject to the same restrictions on transferability as the
Restricted Stock with respect to which they were distributed.

8.6 Maximum Award. Each Participant's Award shall be limited to the maximum
Award set out in Section 11 of this Plan.

Section 9.  Performance Based Awards

9.1 Grant of Performance Awards. Subject to the terms and provisions of the Plan
and applicable law, the Committee, at any time and from time to time, may issue
Performance Awards in the form of Performance Shares to Participants subject to
the Performance Measures and Performance Period as it shall determine. The
Committee shall have complete discretion in determining the number and value of
Performance Shares granted to each Participant. Participants receiving
Performance Awards are not required to pay the Company therefor (except for
applicable tax withholding) other than the rendering of services.

9.2 Value of Performance Awards. The Committee shall determine the number and
value of Performance Shares granted to each Participant as a Performance Award.
The Committee shall set Performance Measures in its discretion for each
Participant who is granted a Performance Award. The extent to which those
Performance Measures are met will determine the number of Performance Shares
earned by the Participant. Such Performance Measures may be particular to a
Participant, may relate to the performance of the Subsidiary or Affiliate which
employs him or her, may be based on the division which employs him or her, may
be based on the performance of the Company generally, or a combination of the
foregoing. The terms and conditions of each Performance Award will be set forth
in an Agreement and/or a Sub Plan.

9.3 Settlement of Performance Awards. After a Performance Period has ended, the
holder of a Performance Share shall be entitled to receive the value thereof
based on the degree to which the Performance Measures established by the
Committee and set forth in the Agreement and/or Sub Plan have been satisfied.

9.4 Form of Payment. Payment of the amount to which a Participant shall be
entitled upon the settlement of a Performance Award shall be made in cash,
Stock, or a combination thereof as determined by the Committee. Payment may be
made in a lump sum or installments as prescribed by the Committee.

                                                                            12
<PAGE>

9.5 Maximum Award. Each Participant's Award shall be limited to the maximum
Award set out in Section 11 of this Plan.

10. Election By Directors. For any service year as a Director of the Company, a
Director may elect to have up to 100% of the Director's cash compensation to be
payable by the Company during that year for the Director's services as a
Director applied to the purchase of shares of Common Stock ("Elected Amount"),
as provided in this Section. "Service year" means the period of a Director's
service beginning upon the Director's election or appointment (or, as to
Directors in office on the effective date of this Plan, the first day of the
then current fiscal year of the Company) and ending the earlier of one year from
its beginning or at the next meeting of shareholders of the Company at which
Directors are elected, but will never be less than three months. The Director
must notify the Board of Directors in writing of that election before the first
day of the service year for which the election is made, or as required by
Section 16(b), (or before such later date as may be approved by the Board of
Directors). Unless otherwise determined by the Board of Directors, a separate
election must be made for each service year. An election made pursuant to this
Section shall be irrevocable from and after the first day of that service year;
provided, however, that an election made during a service year for the remaining
portion of that service year shall be irrevocable from and after the date the
election is made. Elections shall be made on a form prescribed by the Board of
Directors.

10.2 Issuance Of Shares Pursuant To Election. Promptly following the end of each
year of a Director's service, the Company shall, subject to the provisions of
this Section, issue to each Director who elected to receive shares of Common
Stock, effective as of the last day of that service year, a number of whole
shares determined by the Board of Directors. This issuance shall be deemed to be
a separate Share Award made to the Director. No fractional shares of Common
Stock shall be issued to an electing Director by the Company under this Section,
and no cash payment or other adjustment shall be made in respect of any such
fractional share that would otherwise be issuable.

10.3 Eligibility Of Electing Director. A Director must be serving as a Director
on the last day of the service year in order to be eligible to receive shares of
Common Stock pursuant to this Section in respect of the Director's Elected
Amount, if any, for that service year. Any Director who becomes ineligible to
receive shares of Common Stock in respect of the Director's Elected Amount for a
service year because the Director's service as a Director terminated before the
last day of the service year shall be paid any earned amounts of the Elected
Amount in cash, without interest, as promptly as practicable following the date
of the termination of service, and the election made by that Director with
respect to the Elected Amount shall be null and void effective as of the date of
that termination of service.

10.4 Restriction On Transfer Of Shares. No shares issued to a Director in
respect of an Elected Amount shall be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of by the Director, other than by will or
pursuant to the laws of descent or distribution (unless otherwise permitted
under Section 16(b), as determined by the Board

                                                                            13
<PAGE>

of Directors in its sole discretion, and at the Board's sole option), until six
months have elapsed from the effective date of issuance of those shares. The
Company shall hold the certificates representing those shares (and any other
securities distributed in respect of them) for the Director's benefit until the
restrictions on transfer have lapsed. Subject to the restrictions of this
paragraph, a Director shall have all rights as a shareholder, including voting
rights and the right to receive dividends and distributions, with respect to the
Director's shares.

Section 11.  Special Provisions Applicable to Covered Participants

Unless the Committee in its sole discretion determines that any Award made to a
Covered Employee is not intended to qualify for the exemption for performance
based compensation under Section 162(m), Awards subject to Performance Measures
paid to Covered Participants under this Plan shall be governed by the conditions
of this Section 11 in addition to the requirements of Sections 7, 8 and 9 above.
Should conditions set forth under this Section 11 (when applicable) conflict
with the requirements of Sections 7, 8, and 9, the conditions of this Section 11
shall prevail.

(a) Performance Measures for Covered Participants shall be established by the
Committee in writing before the beginning of the Performance Period, or by such
other later date during the Performance Period as may be permitted under Section
162(m). Performance Measures for Covered Participants may include alternative
and multiple Performance Measures and may be based on one or more business
criteria.

(b) All Performance Measures must be objective and must satisfy third party
"objectivity" standards under Section 162(m).

(c) The Performance Measures shall not allow for any discretion by the Committee
as to an increase in any Award, but discretion to lower an Award is permissible.

(d) The Award and payment of any Award under this Plan to a Covered Participant
with respect to the relevant Performance Period shall be contingent upon the
attainment of the Performance Measures that are applicable to that Covered
Participant. The Committee shall certify in writing before payment of any such
Award that the applicable Performance Measures relating to the Award are
satisfied. Approved minutes of the Committee may be used for this purpose.

(e) The maximum Award that may be paid to any Covered Participant under the Plan
pursuant to Sections 7, 8, and 9 for any Performance Period is $1,500,000. The
maximum number of shares of Stock subject to Options, and/or Restricted Stock
granted to any Covered Participant for any Performance Period shall be 1,000,000
Shares.

(f) All Awards to Covered Participants under this Plan shall be further subject
to such other conditions, restrictions, and requirements as the Committee may
determine to be necessary to carry out the purpose of this Section 11.

                                                                            14
<PAGE>

Section 12.  General Provisions

12.1 Withholding. The Company shall have the right to deduct or withhold, or
require a Participant to remit to the Company, any taxes required by law to be
withheld with respect to the Awards made under this Plan. In the event an Award
is paid in the form of Common Stock, the Committee may require the Participant
to remit to the Company the amount of any taxes required to be withheld from
such payment in Common Stock, or, in lieu thereof the Company may withhold (or
the Participant may be provided the opportunity to elect to tender) the number
of shares of Common Stock equal in Fair Market Value to the amount required to
be withheld.

12.2 No Right to Employment. No granting of an Award shall be construed as a
right to employment with the Company.

12.3 Rights as Shareholder. Subject to the Award provisions, no Participant or
Designated Beneficiary shall be deemed a shareholder of the Company nor have any
rights as such with respect to any shares of Common Stock to be provided under
the Plan until he or she has become the holder of those Shares. Notwithstanding
the aforementioned with respect to Stock granted under a Restricted Stock
Agreement under this Plan, the Participant or Designated Beneficiary of such
Award shall be deemed the owner of such Shares. As such, unless contrary to the
provisions herein or in any such related Award Agreement, such stockholders
shall be entitled to full voting, dividend and distribution rights as provided
any other Company stockholder.

12.4 Construction of the Plan. The Plan, and its rules, rights, Agreements, Sub
Plans and regulations, shall be governed, construed, interpreted and
administered in accordance with applicable Federal laws, or to the extent that
Federal laws do not apply, the laws of the State of Nevada. In the event any
provision of the Plan shall be held invalid, illegal or unenforceable, in whole
or in part, for any reason, that determination shall not affect the validity,
legality or enforceability of any remaining provision, or portion of provision,
of the Plan overall, which shall remain in full force and effect.

12.5 Amendment of Plan. The Committee or Board of Directors may amend, suspend,
or terminate the Plan or any portion thereof at any time, provided the amendment
is made with shareholder approval if that approval is necessary to comply with
any tax or regulatory requirement, including for these purposes any approval
requirement for the performance based compensation exception under Section
162(m). The Committee in its discretion may amend the Plan so as to conform with
local rules and regulations subject to any provisions to the contrary specified
herein.

12.6 Amendment of Award. At any time and in its sole and complete discretion,
the Committee may amend any Award for the following reasons: (i) additions
and/or changes are made to the Code, any federal or state securities law, or
other law or regulations subsequent to the date of grant, and have an impact on
the Award; or (ii) for any other reason not described in clause (i) provided the
Participant gives his or her consent to such amendment.

                                                                            15
<PAGE>

12.7 Exemption from Computation of Compensation for Other Purposes. By accepting
an Award under this Plan, each Participant agrees that such Award shall be
considered special incentive compensation and will be exempt from inclusion as
"wages" or "salary" for purposes of calculating benefits under pension, profit
sharing, disability, severance, life insurance, and other employee benefit plans
of the Company, except as otherwise provided in those benefit plans.

12.8 Legend. In its sole and complete discretion, the Committee may elect to
legend certificates representing shares of Stock sold or awarded under the Plan,
to make appropriate references to the restrictions imposed on such Shares.

12.9 Executive Officers and Covered Participants. All Award Agreements and/or
Sub Plans for Participants subject to Section 16(b) shall be deemed to include
any such additional terms, conditions, limitations and provisions as Rule 16b 3
requires, unless the Committee in its discretion determines that any such Award
should not be governed by Rule 16b 3. All performance based Awards shall be
deemed to include any such additional terms, conditions, limitations and
provisions as are necessary to comply with the performance based compensation
exemption of Section 162(m), unless the Committee, in its sole discretion,
determines that an Award to a Covered Participant is not intended to qualify as
exempt performance based compensation

12.10 Change in Control. If a Change in Control occurs, the Committee may, in
its sole and complete discretion, accelerate the payment or vesting of any Award
and release any restrictions on any Awards.

12.11 Divestiture. In the event of a Divestiture, the Committee may, in its sole
and complete discretion, accelerate the payment or vesting of any Award and
release any restrictions on any Awards.

12.12 Unfunded Obligation. Nothing in this Plan shall be interpreted or
construed to require the Company in any manner to fund any obligation to the
Participants or any Designated Beneficiary. Nothing contained in this Plan nor
any action taken hereunder shall create, or be construed to create a trust of
any kind, or a fiduciary relationship between the Company and/or the Committee,
and the Participants and/or any Designated Beneficiary. To the extent that any
Participant or Designated beneficiary acquires a right to receive payments under
this Plan, such rights shall be no greater than the rights of any unsecured
general creditor of the Company.

12.13 Plan Expenses. All reasonable expenses of the Plan shall be paid by the
Company.

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