Exhibit 10.10b
AMENDMENT NO. 7 TO THE
POLYONE CORPORATION
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(Effective December 9, 1993)
(Amended February 1, 1996, November 6, 1996, November 4, 1998,
August 2, 2000, September 6, 2000 and February 26, 2004)
PolyOne Corporation hereby adopts this Amendment No. 7 to the PolyOne
Corporation Deferred Compensation Plan for Non-Employee Directors (Effective
December 9, 1993) (Amended February 1, 1996, November 6, 1996, November 4, 1998,
August 2, 2000, September 6, 2000 and February 26, 2004) (the "Plan") effective
January 1, 2005. Words and phrases used herein with initial capital letters that
are defined in the Plan are used herein as so defined.
I.
The Plan is hereby amended by the addition of the following new
Article I-A, immediately following Article I thereof to read as follows:
"ARTICLE I-A
AMERICAN JOBS CREATION ACT
1-A.1 To the extent applicable, it is intended that the Plan
(including all Amendments thereto) comply with the provisions of Section
409A of the Code, as enacted by the American Jobs Creation Act of 2004,
P.L. 108-357 (the "AJCA"), so as to prevent the inclusion in gross income
of any amount deferred hereunder in a taxable year that is prior to the
taxable year or years in which such amount would otherwise be actually
distributed or made available to the Directors. The Plan shall be
administered in a manner that will comply with Section 409A of the Code
including proposed, temporary or final regulations or any other guidance
issued by the Secretary of the Treasury and the Internal Revenue Service
with respect thereto (collectively with the AJCA, the "AJCA Guidance"). Any
Plan provisions (including, without limitation, those added or amended by
Amendment No. 7) that would cause the Plan to fail to satisfy Section 409A
of the Code shall have no force and effect until amended to comply with
Section 409A of the Code (which amendment may be retroactive to the extent
permitted by the AJCA Guidance).
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1-A.2 The Committee shall not take any action that would violate any
provision of Section 409A of the Code. The Committee is authorized to adopt
rules or regulations deemed necessary or appropriate in connection with the
AJCA Guidance to anticipate and/or comply with the requirements thereof
(including any transition or grandfather rules thereunder)."
II.
That portion of Section 2.2 of the Plan that precedes the colon (:) is
hereby amended to read as follows:
""Change in Control" for purposes of Post-2004 Accounts shall mean any of
the following events that constitute a Change in Control Event within the
meaning of the AJCA Guidance and for purposes of Grandfathered Accounts
shall mean any of the following events"
III.
Section 3.1 of the Plan is hereby amended in its entirety to read as
follows:
"3.1 Election to Defer. At any time designated by the Committee
before the beginning of a taxable year (the "Election Period"), a Director
may elect to defer receipt of the compensation payable to him or her for
services as a Director during the taxable year. Such election shall be made
on an election form specified by the Committee (the "Election Form").
Notwithstanding the foregoing, with respect to the first taxable year in
which a person becomes a Director, such Director may, within 30 days of
becoming a Director, make an election to defer compensation payable to him
or her in such taxable year for services as a Director subsequent to the
election. Each Director's election to defer receipt of compensation shall
indicate the portion of the Director's compensation to be invested in an
interest-bearing account and the portion of such compensation to be
invested in Common Stock."
IV.
The first sentence of Section 3.3 of the Plan is hereby amended to
read as follows:
"A Director may terminate or amend his or her election to defer receipt of
compensation by written notice delivered to the Committee during the
Election Period prior to the commencement of the taxable year with respect
to which such compensation will be earned."
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V.
The first sentence of Section 5.1 of the Plan is hereby amended to
read as follows:
"The Company shall establish and maintain two separate Deferred
Compensation Accounts (each an "Account") for each Director who elects to
defer compensation under the Plan: (a) the "Grandfathered Account" for
amounts that are "deferred" (as such term is defined in the AJCA Guidance)
as of December 31, 2004 (and earnings thereon) and (b) the "Post-2004
Account" for amounts that are deferred after December 31, 2004 (and
earnings thereon)."
VI.
Section 6.1 of the Plan is hereby amended in its entirety to read as
follows:
"6.1 Time of Payment. Payment of the amount credited to a Director's
Grandfathered Account shall commence upon a date which is not more than
thirty days after the earlier of (i) the attainment of the date specified
(not younger than age 55) in his Election Form or (ii) upon a Change in
Control. Payment of the amount credited to a Director's Post-2004 Account
shall commence upon a date which is not more than thirty days after the
earlier of (i) as elected by the Director in his Election Form, the
attainment of a specified age (not younger than age 55), the date of
separation from service as such term is defined in AJCA Guidance, or a
specified date, (ii) the death of the Director or (iii) upon a Change in
Control."
VII.
Section 6.2 of the Plan is hereby amended in its entirety to read as
follows:
"6.2 Method of Payment.
(a) Grandfathered Account.
(1) Amounts Deferred Prior to January 1, 1996. The amount
credited to a Director's Grandfathered Account shall be paid, in whole or
in part, to the Director in a lump sum and/or in annual installments over a
period of not more than ten years as specified in each Director's Election
Form. Grandfathered Accounts shall be paid in kind, in cash, or shares of
Common Stock, as credited to the Grandfathered Account.
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(2) Amounts Deferred From and After January 1, 1996. The
amount credited to a Director's Grandfathered Account shall be paid, in
whole or in part, to the Director in a lump sum and/or in annual
installments over a period of not more than ten years as specified in each
Director's Election Form. A Director may elect to change his or her
original payment period election, as specified in such Director's Election
Form; provided, that (i) such change is approved by the Committee, and (ii)
the election to change is made at least 18 months prior to the date
specified in the electing Director's Election Form on which payment of the
amount credited to the Director's Grandfathered Account is to commence, and
such election to change shall apply to all of the Director's entire
Grandfathered Account. In the event that a Director who makes an election
to change is a member of the Committee, such Director shall abstain from
the Committee's determination of whether or not to approve the change.
Grandfathered Accounts shall be paid in kind, in cash, or shares of Common
Stock, as credited to the Grandfathered Account.
(b) Post-2004 Account. The amount credited to a Director's
Post-2004 Account shall be paid, in whole or in part, to the Director in a
lump sum and/or in annual installments over a period of not more than ten
years as specified in each Director's Election Form. A Director who has
elected to receive a lump sum payment of his Post-2004 Account may elect to
change his or her payment election to annual installments, as specified in
such Director's Election Form; provided, that, unless otherwise permitted
in accordance with Section 409A of the Code, (i) the election to change is
made at least 12 months prior to the date on which payment of the amount
credited to the Director's Post-2004 Account is to commence, (ii) the first
payment under such election will be made no less than 5 years from the
original date on which payment of the amount credited to the Director's
Post-2004 Account is to commence and (iii) such election to change shall
apply to the Director's entire Post-2004 Account. If an election to change
an original payment election is not timely made, or for any reason is not
effective, amounts credited to the Director's Post-2004 Account will
automatically be paid to the Director in the form(s) elected on the last
effective Election Form(s) or, if none, in the form of a lump sum payment.
Post-2004 Accounts shall be paid in kind, in cash, or shares of Common
Stock, as credited to the Post-2004 Account."
VIII.
Section 6.3 of the Plan is hereby amended in its entirety to read as
follows:
"6.3 Other Payments.
(a) Hardship Distribution. Prior to the time a Director's
Grandfathered Account becomes payable, the Committee, in its sole
discretion, may elect to distribute all or a portion of the Director's
Grandfathered Account in the event the such Director requests a
distribution on account of severe financial hardship. For purposes of this
Plan, severe financial hardship shall be deemed to exist in the event the
Committee determines that a Director needs a distribution to meet immediate
and heavy financial needs resulting from
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a sudden or unexpected illness or accident of the Director or a member of
his or her family, loss of the Director's property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Director. A distribution based
on financial hardship shall not exceed the amount required to meet the
immediate financial need created by the hardship. The amount of a
Director's Grandfathered Account shall be reduced by the amount of any
hardship distribution to the Director.
(b) Unforeseeable Emergency Distribution. Notwithstanding the
foregoing provisions of this Article VI, the Committee may at any time,
upon written request of a Director, cause to be paid to such Director, an
amount equal to all or any part of the Director's Post-2004 Account if the
Committee determines, based on such reasonable evidence that it shall
require, that such a payment is necessary for the purpose of alleviating
the consequences of an Unforeseeable Emergency. Payments of amounts because
of an Unforeseeable Emergency may not exceed the amount necessary to
satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution after taking into
account the extent to which the Unforeseeable Emergency is or may be
relieved through reimbursement or compensation by insurance or otherwise by
liquidation of the Director's assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship). For purposes of
this Plan, Unforeseeable Emergency shall mean an event which results in a
severe financial hardship to the Director resulting from (a) an illness or
accident of the Director, the Director's spouse or a dependent of the
Director, (b) loss of the Director's property due to casualty or (c) other
similar extraordinary and unforeseeable circumstances as a result of events
beyond the control of the Director. The amount of a Director's Post-2004
Account shall be reduced by the amount of any unforeseeable emergency
distribution to the Director."
IX.
The first sentence of Section 6.4 of the Plan is hereby amended to
read as follows:
"Upon the death of a Director, the amount credited to his or her
Account shall be paid to the beneficiary or beneficiaries designated by him
or her. For purposes of a Director's Post-2004 Account, upon the death of a
Director, distribution shall be made in a manner that does not violate
Section 409A of the Code."
EXECUTED this 1st day of March, 2005.
POLYONE CORPORATION
By: /s/ Kenneth M. Smith
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Kenneth M. Smith
Vice President and
Chief Human Resources Officer
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