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.

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 Shares will be settled and you will receive the Shares underlying such Performance Shares. For purposes of this Award Agreement, each Performance Share represents the right to receive one full Share.

Number of Performance Shares: You have been granted Vtf Performance Shares (“Total Shares”), subject to the terms and conditions of this Award Agreement and the Plan.

When Your Award Will Vest. Your Performance Shares will be settled 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”).

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

The number of Total Shares 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 Shares that will vest on the Normal Vesting Date will equal the number of Total Shares, multiplied by the applicable percentage as set forth in the tables below.

Less than Peers’ 50^th Percentile

Equal to Peers’ 50^th Percentile

Equal to or Greater than Peers’ 75^th Percentile

Less than Peers’ 25^th Percentile

Equal to Peers’ 50^th Percentile

Equal to or Greater than Peers’ 75^th Percentile

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

“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).

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

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.

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 receive a prorated number of the Shares underlying your Performance Shares 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 Shares will be forfeited. If those performance criteria are met, you will receive a number of Shares equal to:

Number of Shares that would have been due to you if you had not Terminated before the Normal Vesting Date

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

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 Share will be forfeited.

Settling Your Award. If all applicable terms and conditions have been met, you will receive the Shares underlying your vested Performance Shares as soon as administratively feasible, but no later than 60 days, after the Normal Vesting Date.

During the Performance Period, you will have no voting rights with respect to the Shares underlying the Performance Shares and, except as provided in subsection (ii) below, you will have no dividend rights with respect to the Shares underlying the Performance Shares.

You shall be entitled to receive any cash dividends that are declared and paid during the Performance Period with respect to Shares underlying one-half of your Total Shares (the “Target Shares”), subject to the terms and conditions of the Plan and this Award Agreement. If a cash dividend is declared and paid during the Performance Period on the Shares underlying the Target Shares, you will be deemed to have been credited with a cash amount equal to the product of (A) the number of Target Shares that have not been settled or forfeited as of the dividend payment date, multiplied by (B) the amount of the cash dividend paid per Share. Such amount shall be subject to the same terms and conditions as the related Target Shares and shall vest and be settled in cash if, when and to the extent the related Target Shares vest and are settled. In the event a Target Share is forfeited under this Award Agreement, the related dividends will also be forfeited.

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.

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 dividends credited with respect to the Shares 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. 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 Shares are transferred to you, 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. 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.

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 Shares 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.

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.

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.

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 Shares 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).

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.

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 February 17, 2011.

 

 

 

Date signed: