Document:

EX-10(FF)

Exhibit 10(ff)

AGREEMENT

     This Agreement (this “Agreement”) is made and entered into as of this 30 day of November,
2005, by and between A. SCHULMAN, INC., a Delaware corporation (the “Company”) and Walter
Belderbos (“Belderbos”).

     WHEREAS, Belderbos is employed by A. Schulman International Services N.V., [a wholly-owned
subsidiary of the Company] (the “A. Schulman Sub”); and

     WHEREAS, the Board of Directors of the Company believes it is in the best interests of the
Company, the A. Schulman Sub and Belderbos to provide Belderbos with certain payments and benefits
in the event that a Change in Control (as defined below) occurs and Belderbos’ employment with the
A. Schulman Sub is terminated for specific reasons as provided below.

     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. OPERATION OF AGREEMENT

     This Agreement will be effective and binding immediately upon its execution, but,
anything in this Agreement to the contrary notwithstanding, except as provided in the second
sentence of Section 3.1, this Agreement will not be operative unless and until a Change in
Control occurs. Upon the occurrence of a Change in Control at any time during the Term,
without further action, this Agreement will become immediately operative.

     3. CHANGE
IN CONTROL PAYMENT; EXCISE TAX

     3.1 Change in Control Payment

     Subject to Section 3.2 hereof, the Company will pay to Belderbos the payments described in
this Section 3.1 (the “CIC Payment”) upon the termination of Belderbos’ employment with the A.
Schulman Sub 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 Belderbos is otherwise entitled, unless
such termination is (i) by the A. Schulman Sub for Cause, (ii) by reason of death or disability, or
(iii) by Belderbos without Good Reason. For purposes of this Agreement, Belderbos’ employment shall
be deemed to have been terminated by the A. Schulman Sub without Cause following a Change in
Control or by Belderbos with Good Reason following a Change in Control, as the case may be, if (i)
Belderbos’ 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 Company the
consummation of which would constitute a

 

 

Change in Control, (ii) Belderbos terminates his employment with Good Reason prior to a Change in
Control and the circumstance or event which constitutes Good Reason occurs at the request or
direction of such Person, or (iii) Belderbos’ employment is terminated by the A. Schulman Sub
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 Belderbos shall be presumed to be correct unless the A.
Schulman Sub establishes to the Committee by clear and convincing evidence that such position is
not correct.

          (A) The Company shall pay to Belderbos a lump sum payment, in cash, equal
to three (3) times the sum of (i) the higher of Belderbos’ annual base salary in effect
immediately
prior to the occurrence of the event or circumstance upon which the termination of employment
is based or Belderbos’ annual base salary in effect immediately prior to the Change in
Control,
and (ii) the higher of the annual bonus earned by Belderbos in respect of the A. Schulman
Sub’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 Company shall pay to Belderbos a lump sum amount, in cash, equal to the sum of
(i) any annual incentive compensation which has been allocated or awarded to Belderbos for a
completed fiscal year preceding the date of termination and which, as of the date of
termination,
is contingent only upon Belderbos’ continued employment to a subsequent date, and (ii) a pro
rata portion to the date of termination of a deemed annual bonus for the A. Schulman Sub’s fiscal
year in which the date of termination occurs, calculated by multiplying (i) the higher of the
annual bonus earned by Belderbos with respect to the immediately preceding fiscal year or the
average annual bonus earned by Belderbos with respect to the immediately preceding three
fiscal
years of the A. Schulman Sub by (ii) the fraction obtained by dividing the number of days in
the
fiscal year of the A. Schulman Sub 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 Company shall arrange to provide Belderbos with life, disability, accident
and
health insurance benefits substantially similar to those which Belderbos 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
Belderbos’ entitlement to or the amount of such benefits); provided, however, that,
unless
Belderbos consents to a different method (after taking into account the effect of such method
on the calculation of “parachute payments” pursuant to Section 3.2 hereof), such health insurance
benefits shall be provided through a third-party insurer. Benefits otherwise receivable by
Belderbos pursuant to this Section 3.1(C) shall be reduced to the extent comparable benefits
are
actually received by or made available to Belderbos without cost during the thirty-six (36)
month
period following Belderbos’ termination of employment (and any such benefits actually received
by or made available to Belderbos shall be reported to the Company by Belderbos). If the CIC
Payment shall be decreased pursuant to Section 3.2 hereof, and the Section 3.1(C) benefits
which
remain payable after the application of Section 3.2 hereof are thereafter reduced pursuant to
the

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immediately preceding sentence because of the receipt or availability of comparable benefits, the
Company shall, at the time of such reduction, pay to Belderbos the least of (a) the amount of the
decrease made in the CIC Payment pursuant to Section 3.2 hereof, (b) the amount of the subsequent
reduction in these Section 3.1(C) benefits, or (c) the maximum amount which can be paid to
Belderbos without being, or causing any other payment to be, nondeductible by reason of section
280G of the Code.

     3.2 Excise Tax

          (A) Notwithstanding any other provisions of this Agreement, in the event that
any payment or benefit received or to be received by Belderbos in connection with a Change in
Control or the termination of Belderbos’ employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the Company or such
Person)
(all such payments and benefits, including the CIC Payment, being hereinafter called “Total
Payments”) would (in whole or in part) subject Belderbos to an excise tax as a result of
sections
280G and 4999 of the Code, then, to the extent necessary to make no portion of the Total
Payments subject to the excise tax (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 CIC Payment shall first be reduced (if necessary, to zero), and the
noncash
CIC Payment shall thereafter be reduced (if necessary, to zero); provided, however,
that
Belderbos may elect (at any time prior to the delivery of a notice of termination) to have the
non
cash CIC Payment reduced (or eliminated) prior to any reduction of the cash CIC Payment.

          (B) For purposes of this limitation, (i) no portion of the Total Payments the
receipt or enjoyment of which Belderbos 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 Belderbos and selected by the accounting firm which was, immediately
prior to the Change in Control, the Company’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 CIC Payment 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.

          (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 Belderbos and the
Company in applying the terms of this Section 3.2, the aggregate “parachute payments” paid to
or for Belderbos’ benefit are in an amount that would result in any portion of such “parachute
payments” being subject to an excise tax by reason of sections 280G and 4999 of the Code, then
Belderbos shall have an obligation to pay the Company upon demand an amount equal to the
sum of (i) the excess of the aggregate “parachute payments” paid to or for Belderbos’ benefit

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over the aggregate “parachute payments” that could have been paid to or for Belderbos’ benefit
without any portion of such “parachute payments” being subject to an excise tax by reason of
sections 280G and 4999 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 Belderbos’ receipt of such excess until the date of such payment.

     The amounts payable and benefits granted under this Agreement during and after the term of
this Agreement, in whatever form or for whatever purpose, are subject to and will be made after
deduction of the appropriate income tax withholdings and to Belderbos’ share of social security
obligations in accordance with applicable laws and regulations. To the extent that there would be
no statutory obligation for the A. Schulman Sub to withhold such tax and employee social security
contributions, the amounts payable and benefits granted under this Agreement, in whatever form or
for whatever purpose, shall be deemed received gross and Belderbos will itself have to declare the
amounts in its tax return and make the necessary social security contributions thereon.

     3.3 The payments provided in Sections 3.1(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 3.2 hereof, cannot be
finally determined on or before such day, the Company shall pay to Belderbos on such day an
estimate, as determined in good faith by the Company, in accordance with Section 3.2 hereof, of
the minimum amount of such payments to which Belderbos 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 Company to Belderbos, payable on the
fifth (5th) business day after demand by the Company (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 Company shall provide Belderbos 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 Company has
received from outside counsel, auditors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement). In the event the Company should fail to pay
when due the amounts described in Sections 3.1(A), (B) and (C) hereof or in Section 3.2 hereof,
Belderbos shall also be entitled to receive from the Company an amount representing interest on
any such unpaid amounts from the due date, as determined under this Section 3.3, to the date of
payment at one hundred twenty percent (120%) of the rate provided in section 1274(b) (2) (B) of
the Code.

     3.4 The Company also shall pay to Belderbos all legal fees and expenses incurred by
Belderbos (i) in seeking in good faith to obtain or enforce any benefit or right provided by
this
Agreement, or (ii) 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 Belderbos’ written
requests for payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.

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     4. NO MITIGATION

     The Company agrees that, if Belderbos’ employment with the A. Schulman Sub terminates
following a Change in Control and prior to the end of the Change-in-Control Protective Period,
Belderbos is not required to seek other employment or to attempt in any way to reduce any amounts
payable to Belderbos by the Company pursuant to Section 3 hereof. Further, the amount of any
payment or benefit provided for in this Agreement (other than Section 3.1(C) hereof) shall not be
reduced by any compensation earned by Belderbos as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by Belderbos to the A.
Schulman Sub, or otherwise.

     5. SUCCESSORS; BINDING AGREEMENT

     In
addition to any obligations imposed by law upon any successor to the Company, the Company
will require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle Belderbos to compensation from the Company in
the same amount and on the same terms as Belderbos would be entitled to hereunder if Belderbos were
to terminate Belderbos’ 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 5, this Agreement shall
not be assignable by either party without the written consent of the other party hereto. This
Agreement shall inure to the benefit of and be enforceable by Belderbos’ personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
If Belderbos shall die while any amount would still be payable to Belderbos hereunder (other than
amounts which, by their terms, terminate upon Belderbos’ death) if Belderbos 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 Belderbos’ estate.

     6. 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 Belderbos and such officer as may
be specifically designated by the Board of Directors of the Company. 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. 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 Belderbos has agreed. The obligations of the A. Schulman Sub and Belderbos under this
Agreement which by their nature may require (partial or total)

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performance after the expiration of the Term or the Change-in-Control Protective Period shall
survive such expiration.

     7. 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.

     8. 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.

     9. 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 Belderbos 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 Belderbos 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 Belderbos for a review of the decision denying a claim and shall further
allow Belderbos to appeal to the Committee a decision of the Committee within sixty (60) days after
notification by the Committee that Belderbos’ claim has been denied. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. Notwithstanding any provision of this
Agreement to the contrary, Belderbos shall be entitled to seek specific performance of Belderbos’
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.

     10. OTHER RIGHTS AND OBLIGATIONS

     The benefits and payments to which Belderbos may be entitled under this Agreement are not
intended to be in substitution for, or to alter, any other rights or obligations under any
applicable law.

     11. 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.

          (B) “Cause” for termination by the A. Schulman Sub of Belderbos’
employment shall mean the following:

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     (I) Belderbos’ breach of any covenants contained in any employment agreement
between Belderbos and the A. Schulman Sub or Belderbos’ gross neglect of his duties
thereunder, Belderbos’ knowingly committing misfeasance or knowingly permitting
nonfeasance of his duties in any material respect, or Belderbos’ committing a
felony; and

     (II) (i) the willful and continued failure by Belderbos to substantially
perform his duties with the A. Schulman Sub (other than any such failure resulting
from Belderbos’ 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
Belderbos) after a written demand for substantial performance is delivered to
Belderbos by the Board of Directors of the Company or by the A. Schulman Sub, which
demand specifically identifies the manner in which the Board of Directors of the
Company or the A. Schulman Sub, as the case may be, believes that Belderbos has not
substantially performed his duties, or (ii) the willful engaging by Belderbos in
conduct which is demonstrably and materially injurious to the Company, the A.
Schulman Sub or any of their subsidiaries, monetarily or otherwise. For purposes of
clauses (i) and (ii) of this definition, (x) no act, or failure to act, on
Belderbos’ part shall be deemed “willful” unless done, or omitted to be done, by
Belderbos not in good faith and without reasonable belief that Belderbos’ act, or
failure to act, was in the best interest of the A. Schulman Sub and the Company and
(y) in the event of a dispute concerning the application of this provision, no claim
by the A. Schulman Sub that Cause exists shall be given effect unless the A.
Schulman Sub establishes to the Committee by clear and convincing evidence that
Cause exists.

          (C) 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 during the Term:

     (I) any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its affiliates
other than in connection with the acquisition by the Company or its affiliates of a
business) representing 25% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company’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 of Directors of the Company 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 Company) whose appointment or election
by the Board of Directors of the Company or nomination for election by the Company’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

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the date hereof or whose appointment, election or nomination for election was
previously so approved; or

     (III) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation or approve the issuance of voting securities
of the Company in connection with a merger or consolidation of the Company (or any
direct or indirect subsidiary of the Company) pursuant to applicable stock exchange
requirements, other than (i) a merger or consolidation which would result in the
voting securities of the Company 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 benefit plan of the Company or any subsidiary of the Company, at
least 75% of the combined voting power of the voting securities of the Company 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 Company (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly, of securities of the Company
(not including in the securities Beneficially Owned by such Person any securities
acquired directly from the Company or its subsidiaries other than in connection with
the acquisition by the Company or its subsidiaries of a business) representing 25%
or more of either the then outstanding shares of common stock of the Company or the
combined voting power of the Company’s then outstanding securities; or

     (IV) the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets, other than a sale or
disposition by the Company of all or substantially all of the Company’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 Company 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 Company 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 Company 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 Company participates as an
equity investor in the acquiring entity or any of its affiliates (the “Acquiror”). For purposes of
the preceding sentence, the Company 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 Belderbos of an incentive compensation award under one

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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 Company into incentive
compensation awards of the Acquiror), on terms and conditions substantially equivalent to those
applicable to other executives of the Company 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
Company, or (iii) passive ownership of less than three percent (3%) of the stock of the Acquiror.

          (D) “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 11(C) (III) hereof, the second anniversary of the
consummation of such merger or consolidation.

          (E) “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.

          (F) “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 of Directors of the Company, 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.

          (G) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.

          (H) “Good Reason” for termination by Belderbos of Belderbos’ employment shall mean the
occurrence (without Belderbos’ 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
3.1 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 A.
Schulman Sub, or failures by the A. Schulman Sub to act, unless, in the case of any act or failure
to act described in paragraph (I), (V) or (VI) 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 Belderbos of any duties inconsistent with
Belderbos’ current status with the A. Schulman Sub or a substantial adverse
alteration in the nature or status of Belderbos’ responsibilities from those in
effect immediately prior to the Change in Control (other than any such alteration
primarily attributable to the fact that the Company may no longer be a public
company);

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     (II) a reduction by the A. Schulman Sub in Belderbos’ 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 A. Schulman Sub and all executives of any Person in control
of
the A. Schulman Sub;

     (III) the relocation of the A. Schulman Sub’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 A. Schulman Sub’s requiring
Belderbos to be based anywhere other than the A. Schulman Sub’s principal
executive offices except for required travel on the A. Schulman Sub’s business
to
an extent substantially consistent with Belderbos’ present business travel
obligations;

     (IV) the failure by the A. Schulman Sub, without Belderbos’
consent, to pay to Belderbos any portion of Belderbos’ current compensation,
or
to pay to Belderbos any portion of an installment of deferred compensation
under
any deferred compensation program of the A. Schulman Sub, within seven (7)
days of the date such compensation is due;

     (V) the failure by the A. Schulman Sub to continue in effect
any compensation plan in which Belderbos participates immediately prior to the
Change in Control which is material to Belderbos’ total compensation, including
but not limited to the Company’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 A.
Schulman
Sub to continue Belderbos’ 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 Belderbos’ participation relative
to
other participants, as existed at the time of the Change in Control; or

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

     Belderbos’ right to terminate Belderbos’ employment for Good Reason shall not be
affected by Belderbos’ incapacity due to physical or mental illness. Belderbos’ continued

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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
Belderbos that Good Reason exists shall be presumed to be correct unless the A. Schulman Sub
establishes to the Committee by clear and convincing evidence that Good Reason does not exist.

          (I) “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 include (i)
the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company 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 Company in substantially the same
proportions as their ownership of stock of the Company.

          (J) “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 during the Term:

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

     (2) the Company 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 Company representing 15% or more of either the
then outstanding shares of common stock of the Company or the combined voting
power of the Company’s then outstanding securities; or

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

          (K) “Term” shall mean the period commencing as of the date hereof and ending December 31,
2008; provided, however, that (i) commencing on January 1, 2006 and each January 1
thereafter, the term of this Agreement will automatically be extended for an additional year
unless, not later than September 30 of the immediately preceding year, the Company or Belderbos
shall have given notice that it or Belderbos, as the case may be, does not wish to have the Term
extended; (ii) if a Change in Control occurs during the Term, the Term will expire on the last day
of the Change-in-Control Protective Period; and (iii) subject to the second sentence of Section
3.1, if, prior to a Change in Control, Belderbos ceases for any reason to be employed in his
current position with the A. Schulman Sub, thereupon without further action the Term shall be
deemed to have expired and this Agreement will immediately terminate and be of no further effect.
For purposes of this Section 11(K), Belderbos shall not be deemed to have ceased to be employed
with the A. Schulman Sub by reason of the transfer of Belderbos’ employment between the A. Schulman
Sub and any other subsidiary of the Company, or among any subsidiaries of the Company.

11

 

     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/ Walter Belderbos
 	 
	 	Walter Belderbos 	 
	 	 	 	 
					
	 	A. SCHULMAN, INC.

 	 
	 	By:  	/s/ Terry L. Haines
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

12EX-10(HH)

Exhibit 10(hh)

AGREEMENT

     This Agreement (this “Agreement”) is made and entered into as of this       day of
               , 2005, by and between A. SCHULMAN, INC., a Delaware corporation (the
“Company”) and Bernard Rzepka (“Rzepka”).

     WHEREAS, Rzepka is employed by A. Schulman GmbH, [a wholly-owned subsidiary of
the Company] (the “A. Schulman Sub”); and

     WHEREAS, the Board of Directors of the Company believes it is in the best interests of the
Company, the A. Schulman Sub and Rzepka to provide Rzepka with certain payments and benefits in the
event that a Change in Control (as defined below) occurs and Rzepka’s employment with the A.
Schulman Sub is terminated for specific reasons as provided below.

     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. OPERATION OF AGREEMENT

     This Agreement will be effective and binding immediately upon its execution, but,
anything in this Agreement to the contrary notwithstanding, except as provided in the second
sentence of Section 3.1, this Agreement will not be operative unless and until a Change in
Control occurs. Upon the occurrence of a Change in Control at any time during the Term,
without further action, this Agreement will become immediately operative.

     3. CHANGE
IN CONTROL PAYMENT; EXCISE TAX

     3.1 Change in Control Payment

     Subject to Section 3.2 hereof, the Company will pay to Rzepka the payments described in
this Section 3.1 (the “CIC Payment”) upon the termination of Rzepka’s employment with
the A.
Schulman Sub 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 Rzepka is otherwise
entitled, unless such termination is (i) by the A. Schulman Sub for Cause, (ii) by reason of death
or disability, or (iii) by Rzepka without Good Reason. For purposes of this Agreement, Rzepka’s
employment shall be deemed to have been terminated by the A. Schulman Sub without Cause following a
Change in Control or by Rzepka with Good Reason following a Change in Control, as the case may be,
if (i) Rzepka’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
Company the consummation of which would constitute a Change in Control,

 

 

(ii) Rzepka terminates his employment with Good Reason prior to a Change in Control and the
circumstance or event which constitutes Good Reason occurs at the request or direction of such
Person, or (iii) Rzepka’s employment is terminated by the A. Schulman Sub 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 Rzepka shall be presumed to be correct unless the A. Schulman Sub
establishes to the Committee by clear and convincing evidence that such position is not correct.

          (A) The Company shall pay to Rzepka a lump sum payment, in cash, equal to
three (3) times the sum of (i) the higher of Rzepka’s annual base salary in effect immediately
prior to the occurrence of the event or circumstance upon which the termination of employment
is based or Rzepka’s annual base salary in effect immediately prior to the Change in Control,
and (ii) the higher of the annual bonus earned by Rzepka in respect of the A. Schulman Sub’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
Company shall pay to Rzepka a lump sum amount, in cash, equal to the sum of (i)
any annual incentive compensation which has been allocated or awarded to Rzepka for a completed
fiscal year preceding the date of termination and which, as of the date of termination, is
contingent only upon Rzepka’s continued employment to a subsequent date, and (ii) a pro rata
portion to the date of termination of a deemed annual bonus for the A. Schulman Sub’s fiscal year
in which the date of termination occurs, calculated by multiplying (i) the higher of the
annual bonus earned by Rzepka with respect to the immediately preceding fiscal year or the
average annual bonus earned by Rzepka with respect to the immediately preceding three fiscal
years of the A. Schulman Sub by (ii) the fraction obtained by dividing the number of days in
the fiscal year of the A. Schulman Sub 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 Company shall arrange to provide Rzepka with life, disability, accident and health
insurance benefits substantially similar to those which Rzepka 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
Rzepka’s entitlement to or the amount of such benefits); provided, however, that,
unless Rzepka consents to a different method (after taking into account the effect of such method
on the calculation of “parachute payments” pursuant to Section 3.2 hereof), such health insurance
benefits shall be provided through a third-party insurer. Benefits otherwise receivable by Rzepka
pursuant to this Section 3.1(C) shall be reduced to the extent comparable benefits are actually
received by or made available to Rzepka without cost during the thirty-six (36) month period
following Rzepka’s termination of employment (and any such benefits actually received by or made
available to Rzepka shall be reported to the Company by Rzepka). If the CIC Payment shall be
decreased pursuant to Section 3.2 hereof, and the Section 3.1(C) benefits which remain payable
after the application of Section 3.2 hereof are thereafter reduced pursuant to the immediately

2

 

preceding sentence because of the receipt or availability of comparable benefits, the Company
shall, at the time of such reduction, pay to Rzepka the least of (a) the amount of the decrease
made in the CIC Payment pursuant to Section 3.2 hereof, (b) the amount of the subsequent reduction
in these Section 3.1(C) benefits, or (c) the maximum amount which can be paid to Rzepka without
being, or causing any other payment to be, nondeductible by reason of section 280G of the Code.

     3.2 Excise Tax

          (A) Notwithstanding any other provisions of this Agreement, in the event that any payment or
benefit received or to be received by Rzepka in connection with a Change in Control or the
termination of Rzepka’s employment (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (all such payments and benefits,
including the CIC Payment, being hereinafter called “Total Payments”) would (in whole or in part)
subject Rzepka to an excise tax as a result of sections 280G and 4999 of the Code, then,
to the extent necessary to make no portion of the Total Payments subject to the excise tax
(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 CIC Payment shall first be
reduced (if necessary, to zero), and the noncash CIC Payment shall thereafter be reduced
(if necessary, to zero); provided, however, that Rzepka may elect (at any time prior to the
delivery of a notice of termination) to have the non-cash CIC Payment reduced (or eliminated) prior
to any reduction of the cash CIC Payment.

          (B) For purposes of this limitation, (i) no portion of the Total Payments the receipt or
enjoyment of which Rzepka 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
Rzepka and selected by the accounting firm which was, immediately prior to the Change in Control,
the Company’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 CIC Payment 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.

          (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 Rzepka and the Company in applying the
terms of this Section 3.2, the aggregate “parachute payments” paid to or for Rzepka’s benefit are
in an amount that would result in any portion of such “parachute payments” being subject to an
excise tax by reason of sections 280G and 4999 of the Code, then Rzepka shall have an
obligation to pay the Company upon demand an amount equal to the sum of (i) the excess of
the aggregate “parachute payments” paid to or for Rzepka’s benefit over the

3

 

aggregate “parachute payments” that could have been paid to or for Rzepka’s benefit without any
portion of such “parachute payments” being subject to an excise tax by reason of sections 280G and
4999 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 Rzepka’s receipt of such excess until the date of such payment.

     The amounts payable and benefits granted under this Agreement during and after the term of
this Agreement, in whatever form or for whatever purpose, are subject to and will be made after
deduction of the appropriate income tax withholdings and to Rzepka’s share of social security
obligations in accordance with applicable laws and regulations. To the extent that there would be
no statutory obligation for the A. Schulman Sub to withhold such tax and employee social security
contributions, the amounts payable and benefits granted under this Agreement, in whatever form or
for whatever purpose, shall be deemed received gross and Rzepka will itself have to declare the
amounts in its tax return and make the necessary social security contributions thereon.

     3.3 The payments provided in Sections 3.1(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 3.2 hereof, cannot be
finally determined on or before such day, the Company shall pay to Rzepka on such day an
estimate, as determined in good faith by the Company, in accordance with Section 3.2 hereof,
of
the minimum amount of such payments to which Rzepka 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 Company to Rzepka, payable on the
fifth (5th) business day after demand by the Company (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 Company shall provide Rzepka 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 Company has
received from outside counsel, auditors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement). In the event the Company should
fail to pay
when due the amounts described in Sections 3.1(A), (B) and (C) hereof or in Section
3.2 hereof,
Rzepka shall also be entitled to receive from the Company an amount
representing interest on
any such unpaid amounts from the due date, as determined under this Section 3.3, to the date
of
payment at one hundred twenty percent (120%) of the rate provided in section 1274(b)
(2) (B) of
the Code.

     3.4 The Company also shall pay to Rzepka all legal fees and expenses incurred by Rzepka
(i) in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement,
or (ii) 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 Rzepka’s written requests for payment
accompanied with such evidence of fees and expenses incurred as the Company reasonably may require.

4

 

     4. NO MITIGATION

     The Company agrees that, if Rzepka’s employment with the A. Schulman Sub terminates
following a Change in Control and prior to the end of the Change-in-Control Protective Period,
Rzepka is not required to seek other employment or to attempt in any way to reduce any amounts
payable to Rzepka by the Company pursuant to Section 3 hereof. Further, the amount of any
payment or benefit provided for in this Agreement (other than Section 3.1(C) hereof) shall not be
reduced by any compensation earned by Rzepka as the result of employment by another ‘
employer, by retirement benefits, by offset against any amount claimed to be owed by Rzepka to the
A. Schulman Sub, or otherwise.

     5. SUCCESSORS; BINDING AGREEMENT

     In addition to any obligations imposed by law upon any successor to the Company, the Company
will require any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle Rzepka to compensation from the Company in
the same amount and on the same terms as Rzepka would be entitled to hereunder if Rzepka were to
terminate Rzepka’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 5, this Agreement shall not be
assignable by either party without the written consent of the other party hereto. This Agreement
shall inure to the benefit of and be enforceable by Rzepka’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees. If Rzepka shall
die while any amount would still be payable to Rzepka hereunder (other than amounts which, by their
terms, terminate upon Rzepka’s death) if Rzepka 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 Rzepka’s estate.

     6. 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 Rzepka and such officer as may be
specifically designated by the Board of Directors of the Company. 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. 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 Rzepka has agreed. The obligations of the A. Schulman Sub and Rzepka under this Agreement
which by their nature may require (partial or total)

5

 

performance after the expiration of the Term or the Change-in-Control Protective Period shall
survive such expiration.

     7. 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.

     8. 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.

     9. 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 Rzepka 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 Rzepka 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 Rzepka for a review of the decision denying a claim and shall further
allow Rzepka to appeal to the Committee a decision of the Committee within sixty (60) days after
notification by the Committee that Rzepka’s claim has been denied. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. Notwithstanding any provision of this
Agreement to the contrary, Rzepka shall be entitled to seek specific performance of Rzepka’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.

     10. OTHER RIGHTS AND OBLIGATIONS

     The benefits and payments to which Rzepka may be entitled under this Agreement are not
intended to be in substitution for, or to alter, any other rights or obligations under any
applicable law.

     11. 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.

          (B) “Cause” for termination by the A. Schulman Sub of Rzepka’s employment shall mean the
following:

6

 

     (I) Rzepka’s breach of any covenants contained in any employment agreement
between Rzepka and the A. Schulman Sub or Rzepka’s gross neglect of his duties
thereunder, Rzepka’s knowingly committing misfeasance or knowingly permitting
nonfeasance of his duties in any material respect, or Rzepka’s committing a felony;
and

     (II) (i) the willful and continued failure by Rzepka to substantially perform
his duties with the A. Schulman Sub (other than any such failure resulting from
Rzepka’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 Rzepka) after a written demand for substantial performance is delivered to
Rzepka by the Board of Directors of the Company or by the A. Schulman Sub, which
demand specifically identifies the manner in which the Board of Directors of the
Company or the A. Schulman Sub, as the case may be, believes that Rzepka has not
substantially performed his duties, or (ii) the willful engaging by Rzepka in
conduct which is demonstrably and materially injurious to the Company, the A.
Schulman Sub or any of their subsidiaries, monetarily or otherwise. For purposes of
clauses (i) and (ii) of this definition, (x) no act, or failure to act, on Rzepka’s
part shall be deemed “willful” unless done, or omitted to be done, by Rzepka not in
good faith and without reasonable belief that Rzepka’s act, or failure to act, was
in the best interest of the A. Schulman Sub and the Company and (y) in the event of
a dispute concerning the application of this provision, no claim by the A. Schulman
Sub that Cause exists shall be given effect unless the A. Schulman Sub establishes
to the Committee by clear and convincing evidence that Cause exists.

          (C) 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 during the Term:

     (I) any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its affiliates
other than in connection with the acquisition by the Company or its affiliates of a
business) representing 25% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company’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 of Directors of the Company 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 Company) whose appointment or election
by the Board of Directors of the Company or nomination for election by the Company’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

7

 

the date hereof or whose appointment, election or nomination for election was
previously so approved; or

     (III) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation or approve the issuance of voting securities of
the Company in connection with a merger or consolidation of the Company (or any
direct or indirect subsidiary of the Company) pursuant to applicable stock exchange
requirements, other than (i) a merger or consolidation which would result in the
voting securities of the Company 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 benefit plan of the Company or any subsidiary of the Company, at
least 75% of the combined voting power of the voting securities of the Company 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 Company (or similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or indirectly, of securities of the Company
(not including in the securities Beneficially Owned by such Person any securities
acquired directly from the Company or its subsidiaries other than in connection with
the acquisition by the Company or its subsidiaries of a business) representing 25%
or more of either the then outstanding shares of common stock of the Company or the
combined voting power of the Company’s then outstanding securities; or

     (IV) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets, other than a sale or
disposition by the Company of all or substantially all of the Company’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 Company 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 Company 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 Company 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 Company participates as an
equity investor in the acquiring entity or any of its affiliates (the “Acquiror”). For purposes of
the preceding sentence, the Company 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 Rzepka of an incentive compensation award under one or

8

 

more incentive plans of the Acquiror (including, but not limited to, the conversion in connection
with the Transaction of incentive compensation awards of the Company into incentive compensation
awards of the Acquiror), on terms and conditions substantially equivalent to those applicable to
other executives of the Company 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 Company, or (iii)
passive ownership of less than three percent (3%) of the stock of the Acquiror.

          (D) “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 11(C) (III) hereof, the second anniversary of the
consummation of such merger or consolidation.

          (E) “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.

          (F) “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 of Directors of the Company, 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.

          (G) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.

          (H) “Good Reason” for termination by Rzepka of Rzepka’s employment shall mean the
occurrence (without Rzepka’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
3.1 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 A.
Schulman Sub, or failures by the A. Schulman Sub to act, unless, in the case of any act or failure
to act described in paragraph (I), (V) or (VI) 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 Rzepka of any duties inconsistent with Rzepka’s
current status with the A. Schulman Sub or a substantial adverse alteration in the
nature or status of Rzepka’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 Company may no longer be a public company);

9

 

     (II) a reduction by the A. Schulman Sub in Rzepka’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 A. Schulman Sub and all executives of any Person in control
of
the A. Schulman Sub;

     (III) the relocation of the A. Schulman Sub’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 A. Schulman Sub’s requiring
Rzepka to be based anywhere other than the A. Schulman Sub’s principal
executive offices except for required travel on the A. Schulman Sub’s business
to
an extent substantially consistent with Rzepka’s present business travel
obligations;

     (IV) the failure by the A. Schulman Sub, without Rzepka’s
consent, to pay to Rzepka any portion of Rzepka’s current compensation, or to
pay to Rzepka any portion of an installment of deferred compensation under any
deferred compensation program of the A. Schulman Sub, within seven (7) days of
the date such compensation is due;

     (V) the failure by the A. Schulman Sub to continue in effect
any compensation plan in which Rzepka participates immediately prior to the
Change in Control which is material to Rzepka’s total compensation, including
but not limited to the Company’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 A.
Schulman
Sub to continue Rzepka’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 Rzepka’s participation relative to other
participants, as existed at the time of the Change in Control; or

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

     Rzepka’s right to terminate Rzepka’s employment for Good Reason shall not be affected by
Rzepka’s incapacity due to physical or mental illness. Rzepka’s continued employment shall

10

 

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
Rzepka that Good Reason exists shall be presumed to be correct unless the A. Schulman Sub
establishes to the Committee by clear and convincing evidence that Good Reason does not exist.

          (I) “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
include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company 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 Company in
substantially the same proportions as their ownership of stock of the Company.

          (J) “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 during the Term:

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

     (2) the Company 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 Company representing 15% or more of either the then
outstanding shares of common stock of the Company or the combined voting power
of the Company’s then outstanding securities; or

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

          (K) “Term” shall mean the period commencing as of the date hereof and expiring on
the close of business on December 31, 2008; provided, however, that (i) commencing
on January 1, 2006 and each January 1 thereafter, the term of this Agreement
will automatically be extended for an additional year unless, not later than September 30
of the immediately preceding year, the Company or Rzepka shall have given notice that it or Rzepka,
as the case may be, does not wish to have the Term extended; (ii) if a Change in Control occurs
during the Term, the Term will expire on the last day of the Change-in-Control Protective Period;
and (iii) subject to the second sentence of Section 3.1, if, prior to a Change in Control, Rzepka
ceases for any reason to be employed in his current position with the A. Schulman Sub, thereupon
without further action the Term shall be deemed to have expired and this Agreement will immediately
terminate and be of no further effect. For purposes of this Section 11(K), Rzepka shall not be
deemed to have ceased to be employed with the A. Schulman Sub by reason of the transfer of Rzepka’s
employment between the A. Schulman Sub and any other subsidiary of the Company, or among any
subsidiaries of the Company.

11

 

     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/ Bernard Rzepka
 	 
	 	Bernard Rzepka 	 
	 	 	 	 
	 	A. SCHULMAN, INC.

 	 
	 	By:  	
/s/ Terry L. Haines
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

12

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