Document:

Exhibit 10.9

Exhibit 10.9

A. SCHULMAN, INC.

AMENDED AND RESTATED

2006 INCENTIVE PLAN

INSTRUCTIONS FOR COMPLETING 2011 PERFORMANCE UNIT

AWARD AGREEMENT (TSR) FOR FOREIGN EMPLOYEES

Code Sheet

The following codes are used in this Award Agreement and should be replaced using your computer’s
“Replace” function.

VTA
Grantee’s name (all capital letters)

JANUARY 12, 2011 Grant Date (all capital letters)

January 12, 2011 Grant Date (initial capital letters only)

Rand
Torgler Person to contact for more information

(330) 668-7224 Contact’s telephone number, including area code

March 21, 2011 Date that is 30 days after the Grant Date (initial capital letters only)

Vtf Maximum Number of Performance Units granted (insert only the number in Arabic
numerals)

3550
West Market Street Contact’s street address

Akron OH 44333 Contact’s city, state and zip code

 

 

A. SCHULMAN, INC.

AMENDED AND RESTATED

2006 INCENTIVE PLAN

2011 PERFORMANCE UNIT AWARD AGREEMENT (TSR) GRANTED TO

VTA on JANUARY 12, 2011

A. Schulman, Inc. (“Company”) believes that its business interests are best served by extending to
you an opportunity to earn additional compensation based on the growth of the Company’s business.
To this end, the Company adopted, and its stockholders approved, the A. Schulman, Inc. Amended and
Restated 2006 Incentive Plan (“Plan”) as a means through which employees like you may share in the
Company’s success. Capitalized terms that are not defined herein shall have the same meanings as in
the Plan.

This Award Agreement describes many features of your Award and the terms and conditions of your
Award. To ensure you fully understand these terms and conditions, you should:

	 	•	 	Read the Plan carefully to ensure you understand how the Plan works;

	 	•	 	Read this Award Agreement carefully to ensure you understand the nature of your Award
and what you must do to earn it; and

	 
	 	•	 	Contact Rand Torgler at (330) 668-7224 if you have any questions about your Award.

Also, no later than March 21, 2011, you must return a signed copy of the Award Agreement to:

Rand Torgler

A. Schulman, Inc.

3550 West Market Street

Akron OH 44333

	1.	 	Nature of Your Award. The terms and conditions affecting your Award are described in this
Award Agreement and the Plan, both of which you should read carefully. If the terms and
conditions are satisfied, your Performance Units will vest and be settled in Shares as
described in this Award Agreement. For purposes of this Award Agreement, each whole
Performance Unit represents the right to receive one full Share.

	 	a.	 	Grant Date: January 12, 2011.

	 	b.	 	Number of Performance Units: You have been granted Vtf Performance Units, subject to
the terms and conditions of this Award Agreement and the Plan.

	2.	 	When Your Award Will Vest. Your Performance Units will vest or will be forfeited depending
on whether or not the terms and conditions described in this Award Agreement and in the Plan
are satisfied. For purposes of this Award Agreement, the “Performance
Period” is the period beginning on the Grant Date and ending on the third anniversary thereof
(the “Normal Vesting Date”).

 

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	 	a.	 	Normal Vesting Date: Except as otherwise provided in this Award Agreement, your
Performance Units normally will vest on the Normal Vesting Date and between 0% and 100% of
the number of your Performance Units may actually vest.

	 	 	 	The number of Performance Units that will vest on the Normal Vesting Date will be determined
by reference to both: (i) whether the Company’s Total Shareholder Return is positive or
negative during the Performance Period; and (ii) the relative performance of the Company’s
Total Shareholder Return as compared to the Peer Group Companies during the Performance
Period. The number of Performance Units that will vest on the Normal Vesting Date will
equal the number of Performance Units, multiplied by the applicable percentage as set forth
in the tables below.

	 	 	 	 	 
	Relative Performance of Total Shareholder	 	Negative Total Shareholder	 
	Return to Peer Group Companies	 	Return	 
	Less than Peers’ 50th Percentile
	 	 	0	%
	Equal to Peers’ 50th Percentile
	 	 	25	%
	Equal to or Greater than Peers’ 75th Percentile
	 	 	50	%

	 	 	 	 	 
	Relative Performance of Total Shareholder

Return to Peer Group Companies	 	Positive Total Shareholder 

Return	 
	Less than Peers’ 25th Percentile
	 	 	0	%
	Equal to Peers’ 50th Percentile
	 	 	50	%
	Equal to or Greater than Peers’ 75th Percentile
	 	 	100	%

	 	 	 	If the Company’s Total Shareholder Return is between two percentages, the number of
Performance Units that vest will be interpolated by the Company. Notwithstanding the
foregoing, any Performance Units that do not vest as of the Normal Vesting Date shall be
forfeited.

	 	 	 	As used in this Award Agreement:

	 	(A)	 	“Total Shareholder Return” for the Performance Period is calculated by first
taking the theoretical value of $100 invested in the Shares at the 30-day average price
of the Shares as of the Grant Date (i.e., the average daily closing price over the
30-day period preceding the Grant Date) and the theoretical value of $100 invested with
each of the Peer Group Companies using the same 30-day average methodology as of the
Grant Date. On the Normal Vesting Date, the value of the Shares (using the average
daily closing price over the 30 days preceding the Normal Vesting Date and assuming all
dividends are reinvested) is compared with the value of each of the Peer Group
Companies (using the same 30-day average methodology as of the Normal Vesting Date and
again assuming that all dividends are reinvested).

	 	(B)	 	“Peer Group Companies” means the peer group companies in the S&P Specialty
Chemicals Index.

 

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	 	b.	 	Change in Control. Notwithstanding the foregoing, your Award will immediately vest if
there is a Change in Control.

	3.	 	How Your Termination of Employment Will Affect Your Award: You may forfeit your Award if you
Terminate before the Normal Vesting Date, although this will depend on why you Terminate.

	 	a.	 	Termination Due to Death, Disability or Retirement. If you Terminate because of (i)
death, (ii) Disability or (iii) after qualifying for Retirement if the Committee agrees to
treat your Termination as a Retirement, you will vest in a prorated number of your
Performance Units granted through this Award Agreement but only if the performance criteria
described above are actually met at the Normal Vesting Date. If they are not, all of your
Performance Units will be forfeited. If those performance criteria are met, you will vest
in a number of Performance Units equal to:

	 	 	 	 	 

	Number of Performance 

Units that would have

 vested if you had not

 Terminated before the

 Normal Vesting Date

	 	

x
	 	the number of whole months between 
 the Grant Date and your Termination date 
 36

	 	 	 	If the performance criteria set forth in Section 2(a) are not satisfied at the Normal
Vesting Date, all of your Performance Units will be forfeited.

	 	b.	 	Termination for Any Reason Other Than Due to Death, Disability or Retirement. If you
Terminate for any reason other than specified in Section 3(a), all of the Performance Units
will be forfeited.

	4.	 	Settling Your Award. If all applicable terms and conditions have been met, you will receive
the one whole Share in settlement for each vested Performance Unit. Your vested Performance
Units will be settled as soon as administratively feasible, but no later than 60 days, after
the Normal Vesting Date. Any fractional Performance Units will be settled in cash based on
the Fair Market Value of a Share on the settlement date.

	5.	 	Other Rules Affecting Your Award

	 	a.	 	Rights During the Performance Period:

	 	(i)	 	Voting Rights. During the Performance Period, you will have no voting rights
with respect to the Performance Units.

	 	(ii)	 	Dividend Equivalent Rights. You shall be granted dividend equivalent rights
entitling you to a payment equal to the amount of any cash dividends that are declared
and paid during the Performance Period with respect to one-half of your Performance
Units (the “Target Award”), subject to the terms and conditions of the Plan and this
Award Agreement. Your dividend equivalent rights shall be subject to the same terms
and conditions as the related Performance Units and shall vest and be settled in cash
if, when and to the extent the related Performance
Units vest and are settled. In the event a Performance Units is forfeited under
this Award Agreement, the related dividend equivalent rights will also be forfeited.

 

3

 

	 	b.	 	Beneficiary Designation: You may name a beneficiary or beneficiaries to receive any
portion of your Award and any other right under the Plan that is unsettled at your death.
To do so, you must complete a beneficiary designation form by contacting Rand Torgler at
(330) 668-7224 or the address below. If you previously completed a valid beneficiary
designation form, such form shall apply to the Award until changed or revoked. If you die
without completing a beneficiary designation form or if you do not complete that form
correctly, your beneficiary will be your surviving spouse or, if you do not have a
surviving spouse, your estate.

	 	c.	 	Tax Withholding: Applicable withholding taxes must be withheld with respect to your
Award. These taxes may be paid in one (or a combination) of several ways. They are: (i) by
the Company withholding this amount from other amounts owed to you (e.g., from your
salary); (ii) by the Company withholding all or a portion of any cash amount owed to you
with respect to your vested dividend equivalent rights that are to be distributed to you;
(iii) by giving the Company a check (payable to “A. Schulman, Inc.”) in an amount equal to
the taxes that must be withheld; or (iv) by having the Company withhold a portion of the
Shares that otherwise would be distributed to you upon settlement of the Performance Units.
The number of Shares withheld will have a fair market value equal to the taxes that must
be withheld.

	 	 	 	You must choose the approach you prefer before the Performance Units are settled, although
the Company may reject your preferred method for any reason (or for no reason). If this
happens, the Company will specify (from among the alternatives just listed) how these taxes
are to be paid.

	 	 	 	If you do not choose a method within 30 days of the Normal Vesting Date, the Company will
withhold either through payroll practices or a portion of the Shares that otherwise would be
distributed to you upon settlement of the Performance Units. The number of Shares withheld
will have a fair market value equal to the taxes that must be withheld and the balance of
the Shares will be distributed to you.

	 	d.	 	Transferring Your Award: Normally, your Award may not be transferred to another person.
However, as described above, you may complete a beneficiary designation form to name the
person to receive any portion of your Award that is settled after you die. Also, the
Committee may allow you to transfer your Performance Units to certain Permissible
Transferees, including a trust established for your benefit or the benefit of your family.
Contact Rand Torgler at the address or number given below if you are interested in doing
this.

 

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	 	e.	 	Governing Law: This Award Agreement will be construed in accordance with and governed
by the laws (other than laws governing conflicts of laws) of the State of Ohio, except to
the extent that the Delaware General Corporation Law is mandatorily applicable.

	 	f.	 	Other Agreements: Also, your Award will be subject to the terms of any other written
agreements between you and the Company or a Related Entity to the extent that those other
agreements do not directly conflict with the terms of the Plan or this Award Agreement.

	 	g.	 	Adjustments to Your Award: Subject to the terms of the Plan, your Award will be
adjusted, if appropriate, to reflect any change to the Company’s capital structure (e.g.,
the number of your Performance Units will be adjusted to reflect a stock split, a stock
dividend, recapitalization, including an extraordinary dividend, merger consolidation
combination, spin-off, distribution of assets to stockholders, exchange of Shares or other
similar corporate change affecting Shares).

	 	h.	 	Other Rules: Your Award also is subject to more rules described in the Plan. You should
read the Plan carefully to ensure you fully understand all the terms and conditions of this
Award.

*****

You may contact Rand Torgler at the address or number given below if you have any questions about
your Award or this Award Agreement.

*****

Your Acknowledgment of Award Conditions

Note: You must sign and return a copy of this Award Agreement to Rand Torgler at the address given
below no later than March 21, 2011.

By signing below, I acknowledge and agree that:

	 	•	 	A copy of the Plan has been made available to me;

	 	•	 	I understand and accept the conditions placed on my Award;

 

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	 	•	 	I will consent (in my own behalf and in behalf of my beneficiaries and without any
further consideration) to any change to my Award or this Award Agreement to avoid paying
penalties under Section 409A of the Code, even if those changes affect the terms of my
Award and reduce its value or potential value; and

	 	•	 	I must return a signed copy of this Award Agreement to the address shown below by March 21,
2011.

 
	 	 	 	 	 	 	 	 	 	 	 
	VTA	 	 	 	A. SCHULMAN, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	(signature)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date signed:

	 	 	 	Date signed:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

A signed copy of this Award Agreement must be sent to the following address no later than March 21,
2011:

Rand Torgler

A. Schulman, Inc.

3550 West Market Street

Akron OH 44333

(330) 668-7224

 

6exv10w1

Exhibit 10.1

AMENDMENT NO. 1 TO GUARANTEE

          This Amendment No. 1 (this “Amendment No. 1”) to that certain Guarantee dated as of
January 18, 2011 (the “Guarantee”), dated April 3, 2011, is entered into by Vector Capital
IV, L.P. (“VCIV”) and Vector Capital III, L.P. (“VCIII,” and each of VCIII and
VCIV, a “Guarantor” and collectively VCIII and VCIV, the “Guarantors”) in favor of
RAE Systems Inc., a Delaware corporation (the “Company”). Capitalized terms used herein
and not otherwise defined shall have the respective meanings assigned to such terms in the Merger
Agreement (as defined below).

RECITAL

     Ray Holding Corporation, a Delaware corporation (“Parent”), Ray Merger Sub
Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”),
and the Company have entered into that certain Agreement and Plan of Merger, dated as of January
18, 2011 (as amended, modified or supplemented from time to time, the “Merger Agreement”),
and it was a requirement of the Merger Agreement that Parent deliver this Guarantee to the Company
concurrently with the execution and delivery thereof.

     On April 3, 2011, Parent offered to amend the Merger Agreement on the terms set forth in an
Amendment No. 1 to the Merger Agreement to provide for, among other things, an increase in the
Merger Consideration payable.

     The parties to this Amendment No. 1, intending to be legally bound, agree as follows:

     1. Cap. Section 1(b) of the Guarantee is amended by replacing, in the definition of
Cap set forth therein, the reference to “82,850,000” with “$89,280,000”.

     2. Guarantee References. The parties hereto hereby agree that all references to the
“Guarantee” set forth in the Guarantee shall be deemed to be references to the Guarantee as amended
by this Amendment No. 1.

     3. Full Force and Effect. Except as expressly amended or modified hereby, the
Guarantee shall remain in full force and effect without any amendment or other modification
thereto.

     4. Counterparts. This Amendment No. 1 may be executed in several counterparts, each
of which shall be deemed an original and all of which shall constitute one and the same instrument.
The exchange of a fully executed Amendment No. 1 (in counterparts or otherwise) by facsimile shall
be sufficient to bind the parties to the terms and conditions of this Amendment No. 1.

[Remainder of Page Intentionally Left Blank]

 

 

          IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 1 to be duly executed and
delivered as of the date first written above.

	 	 	 	 	 
	 	Vector Capital IV, L.P.

 	 
	 	By:  	Vector Capital Partners IV, L.P.,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	              Vector Capital, L.L.C.,
 	 
	 	 	its general partner 	 
	 
	 	 	 
	 	By:  	
/s/ Alexander R. Slusky  	 
	 	 	Name:  	Alexander R. Slusky 	 
	 	 	Title:  	Managing Member 	 
	 
	 	Vector Capital III, L.P.

 	 
	 	By:  	Vector Capital Partners III, L.P.,
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	              Vector Capital, L.L.C.,
 	 
	 	 	its general partner 	 
	 
	 	 	 
	 	By:  	
/s/ Alexander R. Slusky  	 
	 	 	Name:  	Alexander R. Slusky 	 
	 	 	Title:  	Managing Member 	 
	 

Signature Page to Amendment No. 1 to Guarantee

 

 

	 	 	 	 	 
	 	RAE Systems Inc.

 	 
	 	By:  	/s/
Randall Gausman 	 
	 	 	Name:  	Randall Gausman 	 
	 	 	Title:  	CFO 	 
	 

Signature Page to Amendment No. 1 to Guarantee

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