All financial measures (targets and results) reported in the above tables were calculated with adjustments for acquisitions, divestitures and special items pursuant to the terms of the Annual Plan and 2013 - 2015 Amended Long-Term Incentive Plan and as approved by the Board. For information on the terms and conditions of these incentive plans, see the “What We Pay and Why: Elements of Compensation” section of this proxy statement (beginning on Page 32).

		4

PROXY STATEMENT

POLYONE CORPORATION

PolyOne Center

33587 Walker Road

Avon Lake, Ohio 44012

PROXY STATEMENT

Dated April 1, 2016

Our Board respectfully requests your proxy for use at the Annual Meeting to be held at PolyOne’s corporate headquarters located at PolyOne Center, 33587 Walker Road, Avon Lake, Ohio 44012 at 9:00 a.m. on Wednesday,Thursday, May 15, 2013. The purposes of the meeting are to:

Shareholders of record at the close of business on March 18, 2013 are entitled to notice of and to vote at the meeting.

For the Board of Directors

LISA K. KUNKLE

Vice President, General Counsel and Secretary

April 2, 2013

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Shareholders to be held on May 15, 2013:

The proxy statement, proxy card and annual report to shareholders for the fiscal year ended December 31, 2012 are available at our internet website, www.polyone.com, on the “Investors Relations” page.

1

POLYONE CORPORATION

PolyOne Center

33587 Walker Road

Avon Lake, Ohio 44012

PROXY STATEMENT

Dated April 2, 2013

Our Board of Directors respectfully requests your proxy for use at the Annual Meeting of Shareholders to be held at PolyOne Corporation’s corporate headquarters located at PolyOne Center, 33587 Walker Road, Avon Lake, Ohio 44012 at 9:00 a.m. on Wednesday, May 15, 2013,12, 2016, and at any adjournments of that meeting. This proxy statement is to inform you about the matters to be acted upon at the meeting.

If you attend the meeting, you may vote your shares by ballot. If you do not attend, your shares may still be voted at the meeting if you sign and return the enclosed proxy card.card or vote by telephone or over the Internet as described below. Common shares represented by a properly signed proxy card will be voted in accordance with the choices marked on the card. If no choices are marked, the shares will be votedvoted: (1) to elect the nominees listed on pages 47 through 811 of this proxy statement,statement; (2) to approve, by non-binding vote,on an advisory basis, our named executive officers’Named Executive Officer compensation for the fiscal year ended December 31, 20122015; and (3) to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2013. 2016.

You may revoke your proxy before it is voted by giving notice to us in writing or orally at the meeting. Persons entitled to direct the vote of shares held by the following plans will receive a separate voting instruction card: The PolyOne Retirement Savings Plan and the PolyOne Canada Inc. Retirement Savings Program. If you receive a separate voting instruction card for one of these plans, you must sign and return the card as indicated on the card in order to instruct the trustee on how to vote the shares held under the respective plan. You may revoke your voting instruction card before the trustee votes the shares held by it by giving notice in writing to the trustee.

ShareholdersYou may also submit their proxiesyour proxy by telephone or over the Internet. The telephone and Internet voting procedures are designed to authenticate votes cast by use of a personal identification number. These procedures allow shareholders to appoint a proxy to vote their shares and to confirm that their instructions have been properly recorded. Instructions for voting by telephone and over the Internet are printed on the proxy cards.

We are mailing this proxy statement and the enclosed proxy card and, if applicable, the voting instruction card, to shareholders on or about April 2, 2013. Our headquarters are located at PolyOne Center, 33587 Walker Road, Avon Lake, Ohio 44012 and our telephone number is (440) 930-1000.

		5

ELECTION OF BOARD OF DIRECTORS

2

PROPOSAL 1 — ELECTION OF BOARD OF DIRECTORS

Our Board of Directors currently consists of nine11 Directors. On March 9, 2016, Stephen D. Newlin notified the Board that he intended to retire as a Director, effective as of the Company’s Annual Meeting of Shareholders on May 12, 2016. Thus, following the Annual Meeting and, assuming the election of all of the Board nominees, our Board will consist of 10 Directors.

Each Director serves for a one-year term and until a successor is duly elected and qualified, subject to the Director’s earlier death, retirement or resignation. Our Corporate Governance Guidelines provide that all non-employee Directors will retire from the Board not later than the annual meeting of shareholdersAnnual Meeting immediately following the Director’s 72^nd birthday, although the Board may waive this limitation if it determines that such a waiver is in PolyOne Corporation’s (“PolyOne” or the “Company”)PolyOne’s best interests.

A shareholder who wishes to nominate a person for election as a Director must provide written notice to our Secretary in accordance with the procedures specified in Regulation 12 of our Code of Regulations (“Regulations”). Generally, the Secretary must not receive the notice not less than 60 nor more than 90 days prior to the first anniversary of the date on which we first mailed our proxy materials for the preceding year’s annual meeting.Annual Meeting. The notice must set forth, as to each nominee, the name, age, principal occupation and employment during the past five years, name and principal business of any corporation or other organization in which such occupation and employment were carried on and a brief description of any arrangement or understanding between such person and any others pursuant to which such person was selected as a nominee. The notice must include the nominee’s signed consent to serve as a Director if elected. The notice must set forth the name and address of, and the number of our common shares owned by, the shareholder giving the notice and the beneficial owner on whose behalf the nomination is made and any other shareholders believed to be supporting such nominee.

Following are the nominees for election as Directors for terms expiring in 2014,2017, a description of the business experience of each nominee and the names of other publicly-held companies for which he or she currently serves as a director or has served as a director during the past five years. Each nominee for election as Director was previously elected by our shareholders, with the exception of Sandra Beach Lin. Ms. Beach Linother than William R. Jellison. Mr. Jellison was recommended to our Nominating and Governance Committee for election to the Board by a third-party search firm, Nosal Partners LLC. Ms. Beach LinKorn Ferry. Mr. Jellison was subsequently recommended by our Nominating and Governance Committee to the Board and nominated for election as a Director, byand the Board at the 2013 Annual Meeting of Shareholders. If Ms. Beach Lin is elected Mr. Jellison as a Director by our shareholders, the size of the Board will increase to ten members.on October 7, 2015. The composition of the Board is intended to reflect an appropriate mix of skill sets, experience and qualifications that are relevant to PolyOne Corporation’s business and governance over time.

In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that the nominee should serve as a Director, the Board also believes that all of our Director nominees are individuals of substantial accomplishment with demonstrated leadership capabilities. Each of our Director nominees also has the following personal characteristics, which are required attributes for all Board nominees: high ethical standards, integrity, judgment and an ability to devote sufficient time to the affairs of our Company. With the exception of Ms. Beach Lin, each of the nominees is a current member of the Board. The reference below each Director’sFarah Walter’s name to the term of service as a Director includes the period during which the Directorshe served as a Director of The Geon Company (“Geon”) or M.A. Hanna Company (“M.A. Hanna”), each one of our predecessors. The information is current as of March 18, 2013.15, 2016.

3

		6

Our Board of Directors recommends a vote FOR the election to the Board of each of the following nominees:ELECTION OF BOARD OF DIRECTORS

4

		7

ELECTION OF BOARD OF DIRECTORS

5

		international issues, as he previously resided in Canada and Japan while actively involved in the international operations of his former employers. Mr. Harnett, Chair of our Compensation Committee, is especially knowledgeable in the area of executive compensation, due to his experience serving on the compensation committees of other public companies.8

ELECTION OF BOARD OF DIRECTORS

		9

ELECTION OF BOARD OF DIRECTORS

6

		10

ELECTION OF BOARD OF DIRECTORS

7

		11

ADVISORY VOTE

PROPOSAL 2 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange Act, our Board is submitting a “Say on Pay” proposal for shareholder consideration. While the vote on Named Executive Officer compensation is non-binding and solely advisory in nature, our Board and the Compensation Committee will review the voting results. If there are a significant number of negative votes, we will seek to understand the concerns that influenced the vote and expect to address them in making future decisions about our executive compensation programs.

Currently, advisory “Say on Pay” votes are scheduled to be held once every year. The next advisory vote on Named Executive Officer compensation is expected to occur at our 2017 Annual Meeting.

As described more fully in the “Compensation Discussion and Analysis” section of this proxy statement, the Compensation Committee of our Board has structured our executive compensation program to achieve the following key objectives:

We urge shareholders to read the “Compensation Discussion and Analysis” section of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives. We also encourage you to review the 2015 Summary Compensation Table and other related compensation tables and narratives in the “Executive Compensation” section of this proxy statement, which provide detailed information regarding the compensation of our Named Executive Officers. The Board and the Compensation Committee believe that the policies and procedures described and explained in the “Compensation Discussion and Analysis” section of this proxy statement are effective in achieving our business goals and the compensation of our Named Executive Officers reported in the “Executive Compensation” section of this proxy statement has supported and contributed to the Company’s recent and long-term success.

We believe you should vote “FOR” our Named Executive Officer compensation program and approve the following resolution because the compensation actually earned by our Named Executive Officers for our 2015 performance was aligned with our pay-for-performance objectives, our Company’s performance and shareholder interests.

“RESOLVED, that the compensation paid to PolyOne’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

		12

AUDIT

PROPOSAL 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2016. The Board recommends ratification of the Audit Committee’s appointment of Ernst & Young LLP.

The selection of Ernst & Young LLP as our independent registered public accounting firm is not required to be submitted to a vote of our shareholders for ratification. The Sarbanes-Oxley Act of 2002 requires that the Audit Committee be directly responsible for the appointment, compensation and oversight of our independent auditor. The Board is submitting the appointment to our shareholders for ratification as a matter of good corporate practice. If our shareholders fail to vote on an advisory basis in favor of the selection, the Audit Committee will reconsider whether to retain Ernst & Young LLP and may retain that firm or another firm without re-submitting the matter to our shareholders. Even if our shareholders ratify the appointment, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interests and the best interests of our shareholders. The affirmative vote of a majority of the shares voting on this proposal is required for ratification.

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting. The representative will be given an opportunity to make a statement if desired and to respond to questions regarding Ernst & Young LLP’s examination of our consolidated financial statements and records for the year ended December 31, 2015.

Independent Registered Public Accountant Services and Related Fee Arrangements

Services provided by Ernst & Young LLP, our independent registered public accounting firm, and related fees in each of the last two fiscal years were as follows:

Audit Fees. Audit services include the annual audit of the consolidated financial statements, the audit of internal controls over financial reporting, the reviews of our quarterly reports on Form 10-Q, the issuance of comfort letters and consents, review of registration statements filed with the SEC, accounting and financial reporting consultations and international statutory audits. Fees for audit services totaled $3.7 million in 2015 and $3.4 million in 2014. The full Audit Committee or the Chair of the Audit Committee pre-approved all audit services and related fee arrangements for 2015 in accordance with the Audit Committee Pre-Approval Policy for all Audit and Non-Audit Services and Related Fee Arrangements.

Audit-Related Fees. Audit-related services principally include employee benefit plan audits, accounting consultations, attest services that are not required by statute or regulation and other international attest services not classified as audit fees. Fees for audit-related services totaled $0.1 million in 2015 and $0.1 million in 2014. The Audit Committee pre-approved all audit-related fee arrangements billed for 2015.

Tax Fees. Tax services include tax compliance, tax advice and tax planning. Fees for tax services totaled $1.7 million in 2015 and $1.3 million in 2014. The Audit Committee pre-approved all tax fee arrangements billed in 2015.

All Other Fees. No fees for other services were billed in 2015 and 2014.

Our Audit Committee Pre-Approval Policy for all Audit and Non-Audit Services and Related Fee Arrangements (the “Pre-Approval Policy”) requires our Audit Committee to pre-approve all audit and non-audit services performed by Ernst & Young LLP in order to assure that the provision of such services and related fee arrangements do not impair Ernst & Young LLP’s independence. Under the Pre-Approval Policy, the Audit Committee may delegate pre-

		13

AUDIT

approval authority to one or more of its members, and the member or members to whom the Audit Committee delegates such authority must report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee has formally delegated this pre-approval authority to its Chair. Management has no authority to approve services performed by Ernst & Young LLP that have not been pre-approved by the Audit Committee. The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period.

Ernst & Young LLP will provide us a description of work scope and supporting back-up documentation regarding the specific services they will provide. At each meeting of the Audit Committee, the current year’s previously pre-approved independent auditor fees along with any proposed revisions will be presented for approval. Any interim requests between Audit Committee meetings to provide services that require separate pre-approval will be submitted to the Audit Committee or the Audit Committee Chair by Ernst & Young LLP and our Chief Financial Officer, or Controller, and must include a statement as to whether, in each of their respective views, the request is consistent with the Commission’s rules on auditor independence.

Report of the Audit Committee

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities to shareholders relating to the integrity of the Company’s consolidated financial statements, the Company’s compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence and the performance of the Company’s internal and independent auditors. Management has the primary responsibility for the completeness and accuracy of the Company’s consolidated financial statements and disclosures, the financial reporting process and the effectiveness of the Company’s internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited consolidated financial statements in the Annual Report with management and the independent auditor including any significant changes in the Company’s selection or application of accounting principles. The Committee also reviewed and discussed with management and the independent auditor management’s report on internal control over financial reporting, including the significance and status of control deficiencies identified and the results of remediation efforts undertaken, to determine the effectiveness of internal control over financial reporting at December 31, 2015.

The Committee reviewed with the independent auditor, which has the responsibility for expressing an opinion on the conformity of the consolidated financial statements with generally accepted accounting principles and applicable rules and regulations, their judgments as to the quality, not just the acceptability, of PolyOne’s critical accounting principles and estimates and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards. The Committee also reviewed with the independent auditor its report on the Company’s internal control over financial reporting at December 31, 2015, including the basis for its conclusions. The Audit Committee reviewed and discussed with the independent registered public accounting firm all communications required by applicable auditing standards. In addition, Ernst & Young LLP has provided the Committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Committee concerning independence and the Committee has discussed with Ernst & Young LLP their firm’s independence from management and PolyOne. The Committee has pre-approved all audit, audit-related and non-audit services and fees provided to the Company by the independent auditor. Based upon the Committee’s considerations, the Committee has concluded that Ernst & Young LLP is independent. The Committee discussed with PolyOne’s internal and independent auditors the overall scope and audit plans and evaluated their performance. The Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of PolyOne’s internal control over financial reporting, and the overall quality of PolyOne’s financial reporting.

		14

AUDIT

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors (and the Board has approved) that the audited consolidated financial statements and management’s assessment of the effectiveness of the Company’s internal control over financial reporting be included in the Annual Report on Form 10-K for the year ended December 31, 2015, for filing with the Securities and Exchange Commission.

The Committee has re-appointed Ernst & Young as independent auditor for the year 2016.

All members of the Audit Committee concur in this report.

The Audit Committee of

the Board of Directors

Richard H. Fearon

William R. Jellison

Sandra B. Lin

Richard A. Lorraine, Chairperson

William A. Wulfsohn

February 10, 2016

		15

CORPORATE GOVERNANCE AND BOARD MATTERS

CORPORATE GOVERNANCE

Director Independence

Our Corporate Governance Guidelines requireprovide that a substantial majority of the members of our Board of Directorsshould be “independent” under the listing standards of the New York Stock Exchange (“NYSE”).“independent.” To be considered “independent,”independent, the Board, of Directorswith input and a recommendation from the Nominating and Governance Committee, must make an affirmative determinationaffirmatively determine that the Director has no material relationship with us other than as a Director, either directly or indirectly (such as an officer, partner or shareholder of another entity that has a relationship with us or any of our subsidiaries), and that the Directorgiven director is free from any business, family or other relationship that would reasonably be expected to interfere with the exercise of independent judgment as a Director. In each case,Under categorical independence standards adopted by our Board, the Board must determine that a Director is not independent if he or she fails to meet the independence standards under the listing standards of Directors considers all relevant factsthe New York Stock Exchange (“NYSE”).

In addition, our categorical independence standards provide that the following categories of relationships between an outside Director and circumstances in makingthe Company will be treated as immaterial for purposes of determining a Director’s independence.

Our categorical independence determination.standards and the material relationship considerations set forth above are found within our Corporate Governance Guidelines, which are available on our website at www.polyone.com, under “Corporate Governance” on our investor relations page.

TheOur Board performed its independence review for 2015 earlier this year. In applying the categorical standards set forth above and assessing the materiality of Directorsany relationships, the Board affirmatively determined that Sandra Beach Lin, Dr. Carol A. Cartwright,each of Richard H. Fearon, Gregory J. Goff, Gordon D. Harnett,William R. Jellison, Sandra B. Lin, Richard A. Lorraine, William H. Powell, Kerry J. Preete, Farah M. Walters and William A. Wulfsohn areis independent and meets the categorical independence standards described above, has no material relationship with the Company other than that J. Douglas Campbellarising solely from the capacity as a Director and, Edward J. Mooney were independent during their tenure onin addition, satisfies the Board underindependence requirements of the NYSE, “independent director” listing standards. In making this determination,including the Board reviewed significant transactions, arrangements or relationships that a Director might have with our customers or suppliers. In making this determination with respectNYSE independence standards applicable to Mr. Fearon, the Board determined that the sales of products by the Company to Eaton Corporation, ofcommittees on which Mr. Fearon serves as an executive officer, did not create a material relationship or impair the independence of Mr. Fearon because Mr. Fearon receives no material direct or indirect benefit fromeach such transactions, which were undertaken in the ordinary course of business. For 2012, the amount paid to PolyOne from sales to Eaton Corporation was less than 0.3% of the Company’s consolidated revenues.director serves.

Lead Director

Our independent Directors meet regularly in executive sessions. Our Corporate Governance Guidelines provide that the independent Directors are to select a Lead Director to preside at executive sessions. The Lead Director acts as the key liaison between the independent Directors and the Chief Executive Officer (“CEO”), and also has served as the key liaison between the independent Directors and Mr. Newlin as Executive Chairman. Following Mr. Newlin’s retirement as Executive Chairman, the Lead Director will continue to facilitate communications between Mr. Patterson, as Chairman and CEO, and the other members of the Board. The Lead Director is also responsible for coordinating the activities of the other independent Directors and for performing various other duties as may from time to time be determined by the independent Directors. Mr. HarnettFearon has served as our Lead Director since July 2007.May 2015.

		16

CORPORATE GOVERNANCE

Board Leadership Structure

Mr. Newlin ishas been the Executive Chairman since May 2014. On March 9, 2016, Mr. Newlin notified the Board that he intended to retire as a Director, effective as of ourthe Company’s Annual Meeting of Shareholders on May 12, 2016. The Board of Directorsnamed Mr. Patterson as Chairman, effective upon Mr. Newlin’s retirement from the Board. Mr. Newlin served as Chairman, President and our Chief Executive Officer (“CEO”).of PolyOne from February 2006 until May 2014. Mr. Patterson, also a Director, has been President and Chief Executive Officer since May 2014. The Board of Directors believes that this leadership structure is appropriate for our Company given the

8

experience and active involvement of our independent Directors, our corporate governance practices and our Lead Director’s role. Having a Lead Director role helps to ensure greater communication between management and the independent Directors, increases the independent Directors’ understanding of management decisions and Company operations and provides an additional layer of independent oversight of the Company.PolyOne. The Board of Directors believes that this approach serves to strike an effective balance between management and independent Director participation in the board process. Combining the Chairman and Chief Executive Officer position gives the Company a clear leader and improves efficiencies in the decision-making process.

Board Attendance

The Board met seven times during 2012, the calendar year being our fiscal year. Each member of our Board attended at least 75% of the meetings held by our Board and the meetings held by the committees of our Board on which such member served during the period for which he served as a Director. Each Director is expected to attend the Annual Meeting of Shareholders. In 2012, all of our Directors serving at that time attended the Annual Meeting of Shareholders.

Committees of the Board of Directors

As of the date of this proxy statement, our Board has nine Directors and the following four committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee and the Environmental, Health and Safety Committee.

The following table sets forth the membership of the standing committees of our Board of Directors as of the date of this proxy statement, and the number of times each committee met in 2012. The current function of each committee is described below.

X — Member

* — Chairperson

If Ms. Beach Lin is elected as a Director, she is expected to serve on the Audit Committee and on the Environmental, Health and Safety Committee.

The Audit Committee meets with appropriate financial and legal personnel and independent auditors to review our corporate accounting, internal controls, financial reporting and compliance with legal and regulatory requirements. The Audit Committee exercises oversight of our independent

9

auditors, internal auditors and financial management. The Audit Committee appoints the independent auditors to serve as auditors in examining our corporate accounts. Our common shares are listed on the NYSE and are governed by its listing standards. All members of the Audit Committee meet the financial literacy and independence requirements as set forth in the NYSE listing standards. The Board of Directors has determined that Mr. Fearon meets the requirements of an “audit committee financial expert” as defined by the Securities and Exchange Commission (referred to as “SEC”).

The Compensation Committee reviews and approves the compensation, benefits and other benefits afforded our executive officers and other highly-compensated personnel. The Compensation Committee has similar responsibilities with respect to non-employee Directors, except that the Compensation Committee’s actions and determinations are subject to the approval of the Board of Directors. The Compensation Committee also has oversight responsibilities for all of our broad-based compensation and benefit programs and provides policy guidance and oversight on selected human resource policies and practices. To help it perform its responsibilities, the Compensation Committee makes use of PolyOne resources, including members of senior management in our human resources, legal and finance departments. In addition, the Compensation Committee directly engages the resources of Towers Watson (the “Consultant”) as an independent outside compensation consultant to assist the Compensation Committee in assessing the competitiveness and overall appropriateness of our executive compensation programs. In 2012, the Compensation Committee, assisted by the Consultant, analyzed competitive market compensation data relating to salary, annual incentives and long-term incentives. In analyzing competitive market data, the Compensation Committee reviewed data from a peer group of similarly-sized United States chemical companies and reviewed data from the Consultant’s Compensation Data Bank and other published surveys. The Consultant then assisted the Compensation Committee in benchmarking base salaries and annual and long-term incentive targets. More detailed information about the compensation awarded to our executive officers in 2012 is provided in the “Compensation Discussion and Analysis” section of this proxy statement. The Consultant maintains regular contact with the Compensation Committee and interacts with management to gather the data needed to prepare reports for Compensation Committee review.

The Compensation Committee periodically reviews the relationship with the Consultant including the level and quality of services provided, as well as fees for those services. In addition, expenses for other consulting services provided to the Company by the Consultant that are not related to executive compensation are monitored to ensure that executive compensation consultant independence is maintained. The Consultant did not provide us with services in excess of $120,000 that were in addition to the services provided in connection with its advice and recommendations on the amount or form of executive and director compensation.

The Compensation Committee considered all relevant factors, specifically including six consultant independence factors under Rule 10C-1(b)(4)(i) through (vi) under the Securities Exchange Act of 1934, (referred to as the “Exchange Act”) in evaluating the independence of the Consultant. The Compensation Committee reviewed each factor in depth, as well as information provided by the Consultant that related to and was responsive to each factor, which assisted in the assessment. Upon completing this assessment, the Compensation Committee determined that the Consultant serves as an independent advisor and that no “conflicts of interest have been raised by the work performed by the Consultant.”

The Compensation Committee also oversees the process by which the Board annually evaluates the performance of the CEO. All members of the Compensation Committee have been determined to be independent as defined by the NYSE listing standards.

10

The Nominating and Governance Committee recommends to the Board of Directors candidates for nomination as Director and advises the Board with respect to governance issues and directorship practices. All members of the Nominating and Governance Committee have been determined to be independent as defined by the NYSE listing standards.

The Nominating and Governance Committee will consider shareholder suggestions for nominees for election to our Board of Directors. A shareholder that wishes to suggest a Director candidate for consideration by the Nominating and Governance Committee should follow the same procedures described for shareholder nominations for Director on page 3. The Nominating and Governance Committee uses a variety of methods for identifying and evaluating nominees for Directors, including third-party search firms, recommendations from current Board members and recommendations from shareholders. Nominees for election to the Board of Directors are selected on the basis of the following criteria:

While neither the Nominating and Governance Committee nor the Board has a formal policy with respect to the consideration of diversity in identifying director nominees, they do consider diversity when evaluating potential Board nominees. We consider diversity to include race, gender and national origin, as well as differences in viewpoint, background, experience and skills. The Nominating and Governance Committee believes that having a diverse Board leads to more innovation, unique thinking and better governance. At the end of 2012, approximately 22% of our Board members were female. If Ms. Beach Lin is elected as a Director along with all other Director nominees presented in this proxy statement, 30% of our Board members will be female. Diversity is a key characteristic that we will consider, and instruct any third-party search firm we use to consider, in searches for future Board members.

The Nominating and Governance Committee also considers such other relevant factors as it deems appropriate, including the current composition of the Board, the balance of management and independent Directors, the need for Audit Committee expertise and the evaluations of other prospective nominees. The Nominating and Governance Committee has established these criteria that any Director nominee, whether suggested by a shareholder or otherwise, should satisfy. A nominee for election to the Board who is suggested by a shareholder will be evaluated by the Nominating and Governance Committee in the same manner as any other nominee for election to the Board. Finally, if the Nominating and Governance Committee determines that a candidate should be nominated for election to the Board, the Nominating and Governance Committee will present its findings and recommendation to the full Board for approval.

11

In 2012, the Nominating and Governance Committee used a third-party search firm, Nosal Partners LLC, to identify possible candidates who meet the minimum and desired qualifications, to interview and screen such candidates, to act as a liaison among the Board, the Nominating and Governance Committee and each candidate during the screening and evaluation process, and thereafter to be available for consultation as needed by the Nominating and Governance Committee.

The Environmental, Health and Safety Committee exercises oversight with respect to our environmental, health, safety, security and product stewardship policies and practices and our compliance with related laws and regulations.

The Board of Directors has adopted a written charter for each of the standing committees of the Board of Directors. These charters are posted and available on our website at www.polyone.com under “Corporate Governance” on our investor relations page. The Board and each committee conduct an annual self-evaluation.

Board’s Oversight of Risk

Our Board of Directors oversees a company-wide approach to risk management that is designed to support the achievement of our strategic objectives and improve long-term organizational performance, which we believe will ultimately enhance shareholder value. The Board of Directors believes that risk management is not only understanding the risks we face and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for us as an organization.PolyOne overall.

Our Board of Directors administers its risk oversight function directly and through its Audit Committee and Environmental, Health and Safety Committee. The Audit Committee discusses with management our major financial risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. The Audit Committee also receives an annual risk assessment report from our internal auditors. The Environmental, Health and Safety Committee periodically reviews with management the significant risks or exposures faced by the CompanyPolyOne relating to safety, health, environmental, security and product stewardship standards and practices. Our Board oversees and monitors these committees in exercising their responsibilities relating to risk. Our Board also provides direct oversight on risk management as it relates to our capital structure, our borrowing and repayment of funds, financial policies, management of foreign exchange risk and other matters of financial risk management, including the utilization of financial derivative products, insurance coverage strategies, banking relationships and other financial matters.

Our Board of Directors sets the appropriate “tone at the top” when it comes to risk tolerance and management by fostering a culture of risk-adjusted decision-making throughout the Company.PolyOne. Our Board ensures that the risk management processes designed and implemented by our management team are adapted to the Board’s corporate strategy and are functioning as directed. The Board of Directors also participates in an ongoing effort to assess and analyze the most likely areas of future risk for the Company by asking our management team to discuss the most likely sources of material future risks and how we are addressing any significant potential vulnerability.

The Board of Directors believes that its leadership structure as discussed on pages 8 and 9, supports the risk oversight function of the Board, of Directors, but that the risk oversight function otherwise has no effect on the Board’s leadership structure.

12

Code of Ethics, Code of Conduct and Corporate Governance Guidelines

In accordance with applicable NYSE listing standards and SECSecurities and Exchange (“SEC”) regulations, the Board of Directors has adopted a Code of Ethics, Code of Conduct and Corporate Governance Guidelines. These are also posted and available on our website at www.polyone.com, under “Corporate Governance” on our investor relations page.

Our Corporate Governance Guidelines contain a policy relating to majority voting. Pursuant to the policy, any nominee for election as a Director of the Board who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election in an election of Directors that is not a contested election is expected to tender his or her resignation as a Director to the Board promptly following the certification of the election results. Neither abstentions nor broker non-votes will be deemed to be votes for or withheld from a Director’s election for purposes of the policy, regardless of the rules treating broker non-votes as withheld in uncontested elections of Directors. The Nominating and Governance Committee (without the participation of the affected Director) will consider each resignation tendered under the policy and recommend to the Board whether to accept or reject it. The Board will then take appropriate action on each tendered resignation, taking into account the Nominating and

		17

CORPORATE GOVERNANCE

Governance Committee’s recommendation. The Nominating and Governance Committee, in making its recommendation, and the Board, in making its decision, may consider any factors or other information that it considers appropriate, including the reasons (if any) given by shareholders as to why they withheld their votes, the qualifications of the tendering Director and his or her contributions to the Board and to PolyOne, and the results of the most recent evaluation of the tendering Director’s performance by the other members of the Board. The Board will promptly disclose its decision whether to accept or reject the Director’s tendered resignation and, if applicable, the reasons for rejecting the tendered resignation.

Communication with Board of Directors

Shareholders and other interested parties who wish to communicate directly with the Board of Directors as a group, the non-management or independent Directors as a group, or with any individual Director may do so by writing to the Secretary, PolyOne Corporation, 33587 Walker Road, Avon Lake, Ohio 44012. The mailing envelope and letter must contain a clear notation indicating that the enclosed letter is either a “Shareholder-Board of Directors Communication” or an “Interested Party-Board of Directors Communication,” as appropriate.

The Secretary will review all such correspondence and regularly forward to the Board of Directors a log and summary of all such correspondence and copies of all correspondence that, in the opinion of the Secretary, deals with the functions of the Board or committees of the Board or that she otherwise determines requires their attention. Directors may at any time review a log of all correspondence we receive that is addressed to members of the Board and request copies of any such correspondence. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of our internal audit department and handled in accordance with procedures established by the Audit Committee for such matters.

Board and Committees

Board Attendance

The Board met six times during 2015, the calendar year being our fiscal year. Each member of our Board attended at least 75% of the meetings held by our Board and the meetings held by the committees of our Board on which such member served during the period for which he or she served as a Director. Each Director is expected to attend the Annual Meeting. In 2015, all of our Directors serving at that time attended the Annual Meeting.

Board Committees

As of the date of this proxy statement, our Board has 11 Directors and the following four committees: Audit, Compensation, Nominating and Governance and Environmental, Health and Safety. Each committee meets periodically throughout the year, reports its actions and recommendations to the Board, receives reports from senior management, annually evaluates its performance and has the authority to retain outside advisors in its discretion. The primary responsibilities of each committee are summarized below and set forth in detail in each committee’s written charter, which is located on our website at www.polyone.com under “Corporate Governance” on our investor relations page.

		18

CORPORATE GOVERNANCE

C Chair of the Committee

C Chair of the Committee

* In 2015, the Compensation Committee, assisted by Towers Watson (the “Consultant”), analyzed competitive market compensation data relating to salary, annual incentives and long-term incentives for our executive officers. In analyzing competitive market data, the Compensation Committee reviewed data from a peer group of similarly-sized United States chemical companies and reviewed data from the Consultant’s Compensation Data Bank and other published surveys. The Consultant then assisted the Compensation Committee in benchmarking base salaries and annual and long-term incentive targets. More detailed information about the compensation awarded to our executive officers in 2015 is provided in the “Compensation Discussion and Analysis” section of this proxy statement. The Consultant maintains regular contact with the Compensation Committee and interacts with management to gather the data needed to prepare reports for Compensation Committee review.

**The Compensation Committee periodically reviews the relationship with the Consultant including the level and quality of services provided, as well as fees for those services. In addition, expenses for other consulting services provided to PolyOne by the Consultant that are not related to executive compensation are monitored to ensure that executive compensation consultant independence is maintained. The Consultant provided us with services under $120,000 that were in addition to the services provided in connection with its advice and recommendations on the amount or form of executive and Director compensation.

		19

CORPORATE GOVERNANCE

The Compensation Committee considered all relevant factors, specifically including six consultant independence factors under Rule 10C-1(b)(4)(i) through (vi) under the Securities Exchange Act of 1934 (referred to as the “Exchange Act”), in assessing the independence of the Consultant. The Compensation Committee reviewed each factor as well as information provided by the Consultant that related to and was responsive to each factor, which assisted in the assessment. Upon completing this assessment, the Compensation Committee also determined that no “conflicts of interest have been raised by the work performed by the Consultant.”

C Chair of the Committee

* The Nominating and Governance Committee will consider shareholder suggestions for nominees for election to our Board. A shareholder that wishes to suggest a Director candidate for consideration by the Nominating and Governance Committee should follow the same procedures described for shareholder nominations for Director on page 6. The Nominating and Governance Committee uses a variety of methods for identifying and evaluating nominees for Directors, including third-party search firms, recommendations from current Board members and recommendations from shareholders. Nominees for election to the Board are selected on the basis of the following criteria:

The Nominating and Governance Committee believes that having a diverse Board leads to more innovation, unique thinking and better governance. We consider diversity to include differences in race, gender and national origin, as well as differences in viewpoint, background, experience and skills. Diversity is a key characteristic that we will consider, and instruct any third-party search firm we use to consider, in searches for future Board members.

The Nominating and Governance Committee also considers such other relevant factors as it deems appropriate, including the current composition of the Board, the balance of management and independent Directors, the need for Audit Committee expertise and the evaluations of other prospective nominees. The Nominating and Governance Committee has established these criteria that any Director nominee, whether suggested by a shareholder or otherwise, should satisfy. A nominee for election to the Board who is suggested by a shareholder will be evaluated by the Nominating and Governance Committee in the same manner as any other nominee for election to the Board. Finally, if the Nominating and Governance Committee determines that a candidate should be nominated for election to the Board, the Nominating and Governance Committee will present its findings and recommendation to the full Board for approval.

		20

CORPORATE GOVERNANCE

The Nominating and Governance Committee is responsible for ensuring that the Board evaluates its performance on an annual basis. The director evaluation process includes self-evaluation of the Board as a whole and of each Board committee, as well as a peer evaluation. In addition, the Lead Director discusses overall Board effectiveness with each individual Director on an annual basis.

C Chair of the Committee

		21

NON-EMPLOYEE DIRECTOR COMPENSATION

2015 NON-EMPLOYEE DIRECTOR COMPENSATION

In 2012,2015, we paid our non-employee Directors an annual retainer of $165,000,$200,000 (payable in quarterly installments (inin arrears), consisting of a$90,000 in cash retainer of $75,000 and an award of $90,000$110,000 in value of fully vested common shares. In 2015, the Compensation Committee analyzed competitive market data provided by the Consultant relating to both the cash retainer and the equity award value. These compensation elements were benchmarked against PolyOne’s peer group as well as other applicable general industries. This analysis demonstrated that the Directors’ compensation approximated the median of our peer group. As a result, no changes were made to the Directors’ cash retainer and equity award value for the balance of 2015.

We pay individual meeting fees only as follows: $2,000 for each

13

unscheduled Board and committee meeting attendedattended; and $1,000 for participation in each unscheduled significant telephonic Board and committee meeting. In addition, the Lead Director and chairpersons of the following committees receive the additional fixed annual cash retainers (payable on ain quarterly basisinstallments in arrears) listed below:below, which were not increased in 2015. We reimburse Directors for expenses associated with each meeting attended.

We reimburseNon-employee Directors for their expenses associated with each meeting attended.

Directors who are not our employees may defer payment of all or a portion of their annual cash retainer under our Deferred Compensation Plan for Non-Employee Directors.Directors (“Deferred Compensation Plan”), which was amended and restated effective May 20, 2014. Directors may also elect to have their cash retainer converted into our common shares. These shares, as well as the annual retainer consisting of fully vested common shares, may also be deferred under the Deferred Compensation Plan. In 2012,2015, we awarded shares to Directors under our 2010 Equity and PerformanceLong-Term Incentive Plan which shares may also be deferred under our Deferred Compensation Plan for Non Employee Directors.(as defined herein). Deferred compensation, whether in the form of cash or common shares, is held in trust for the participating Directors. Interest is earned on the cash amounts and dividends, if any, on the deferred common shares accrueaccrued for the benefit of the participating Directors.

20122015 Director Compensation Table

Name		Fees Earned or Paid in Cash   (a) ($)		Stock Awards       (b) ($)		Total                    (c) ($)
R.H. Fearon		118,006		110,000		228,006
G.J. Goff		100,000		110,000		210,000
G.D. Harnett		46,263		40,743		87,006
W.R. Jellison		21,033		25,692		46,725
S.B. Lin		90,000		110,000		200,000
R.A. Lorraine		100,110		110,000		210,110
W.H. Powell		102,500		110,000		212,500
K.J. Preete		90,000		110,000		200,000
F.M. Walters		90,000		110,000		200,000
W.A. Wulfsohn		90,000		110,000		200,000

		22

---

NON-EMPLOYEE DIRECTOR COMPENSATION

 

Name          (a)							Fees Earned or Paid in Cash (b) ($)															Stock Awards (c) ($)															Option Awards (d) ($)															Total (e) ($)
J.D. Campbell									58,492															70,190													—																	128,682
C.A. Cartwright									82,500															90,000													—																	172,500
R.H. Fearon									90,000															90,000													—																	180,000
G.J. Goff									75,000															90,000													—																	165,000
G.D. Harnett									110,000															90,000													—																	200,000
R.A. Lorraine									75,000															90,000													—																	165,000
E.J. Mooney									29,464															32,143													—																	61,607
W.H. Powell									78,750															90,000													—																	168,750
F.M. Walters									75,000															90,000													—																	165,000
W.A. Wulfsohn									75,000															90,000													—																	165,000

Fees Earned or Paid in Cash (column (b)(a))

Non-employee Directors may defer payment of all or a portion of their $75,000$90,000 annual cash retainer (payable on ain quarterly basisinstallments in arrears), as well as meeting and committee chairperson fees.fees into the Deferred Compensation Plan. Fees are prorated based upon time served as a Director or committee chairperson in any applicable quarter.

Stock Awards (column (c)(b))

Our non-employee Directors’ stock compensation consisted of an annual award (payable on ain quarterly basisinstallments in arrears) of $90,000$110,000 in value of fully vested common shares, which the Directors maycould elect to defer. We determined the number of shares to be granted each quarter by dividing the dollar value by the arithmetic

14

---

average of the high and low stock price on the last trading day of each quarter.quarter and rounding to a whole share as partial shares are not issued. We used the following quarterly per share fair market values, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), in calculating the number of shares: March 30, 201231, 2015 — $14.48 (1,553$37.275 (737 shares); June 30, 20122015 — $13.515 (1,664$38.92 (706 shares); September 28, 201230, 2015 — $16.52 (1,361$29.54 (930 shares); and December 31, 20122015 — $20.175 (1,115$31.995 (859 shares). The value of the stock award is prorated based upon time served as a Director in any applicable quarter.

Option Awards (column (d))Outstanding and Fully-Vested Deferred Shares

We did not grant stock options to our non-employee Directors in 2012.

The numberAs of December 31, 2015, there were no outstanding stock options held by each non-employee Director at the end of the fiscal year is set forthDirectors and no stock option exercises were conducted by our Directors in the following table. All of these options are fully exercisable. In addition, the2015. The number of fully-vested deferred shares held in an account for each Director at the end of the fiscal year is set forth below. Stock option exercises conducted by our Directors in 2012 are set forth in the next following table below.

 

Name		Option Awards: Number of Securities Underlying Unexercised Options (#)										Deferred Stock Awards: Number of Deferred Shares(1) (#)
J.D. Campbell(2)				0										244
C.A. Cartwright				6,000										30,263
R.H. Fearon				0										0
G.J. Goff				0										0
G.D. Harnett				6,000										95,361
R.A. Lorraine				0										46,241
E.J. Mooney(2)				0										0
W.H. Powell				0										46,028
F.M. Walters				6,000										19,551
W.A. Wulfsohn				0										7,458

Name		Deferred Stock Awards: Number of Deferred Shares(1) (#)
R.H. Fearon		-
G.J. Goff		-
G.D. Harnett(2)		-
W.R. Jellison		1,460
S.B. Lin		11,014
R.A. Lorraine		57,164
W.H. Powell		50,695
K.J. Preete		6,159
F.M. Walters		13,352
W.A. Wulfsohn		17,175

 

(1)

Dividends paid on shares held in the Deferred Compensation Plan for Non-Employee Directors are reinvested in shares of PolyOne stock through a dividend reinvestment feature of suchthe Plan. The number of deferred shares reflects shares acquired through dividend reinvestment infrom 2011 and 2012through 2015 (including the fourth quarter dividend declared on October 11, 20128, 2015 to shareholders of record on December 12, 2012,18, 2015, which was paid on January 7, 2013)2016).

 

(2)

Messrs. Campbell and MooneyMr. Harnett retired from service on the Board in 2012.2015. A lump sum retirement distribution of 89,415104,283 shares was made from the Deferred Compensation Plan for Non-Employee Directors to Mr. Mooney on May 15, 2012. A retirement distribution14, 2015. Residual second quarter dividends reinvested in PolyOne stock of 140,688341 shares was madewere distributed from the Deferred Compensation Plan for Non-Employee Directors to Mr. Campbell on October 12, 2012. Mr. Campbell’s remaining 244 shares were deferred into the Deferred Compensation Plan for Non-Employee Directors on December 31, 2012 as part of his fourth quarter 2012 compensation, and were distributed to him as part of his retirement distribution on January 11, 2013.July 7, 2015.

 

15

---

2012 Option Exercises

Name		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)
J.D. Campbell			12,000			$	164,370
C.A. Cartwright			12,000			$	88,020
R.H. Fearon			15,000			$	135,750
G.J. Goff			0			$	0
G.D. Harnett			12,000			$	92,220
R.A. Lorraine			0			$	0
E.J. Mooney			0			$	0
W.H. Powell			0			$	0
F.M. Walters			6,000			$	78,210
W.A. Wulfsohn			0			$	0

 

16

		23

---

BENEFICIAL OWNERSHIP OF COMMONPOLYONE SHARES

OWNERSHIP OF POLYONE SHARES

Beneficial Ownership of Our Common Shares

The following table shows the number of our common shares beneficially owned on March 1, 20132016 (including shares the individuals have a right to acquire within 60 days of that date) by each of our Directors, and nominees, each of the executive officers named in the 2015 Summary Compensation Table on page 40 (the “Named Executive Officers”)42 and by all Directors and executive officers as a group.

 

Name		Number of Shares Owned(1)				Right to Acquire Shares				Total Beneficial Ownership				Number of Shares         Owned(1)					Right to Acquire         Shares					Total Beneficial         Ownership
Sandra Beach Lin			0				—				0
Carol A. Cartwright			151,628	(2)			6,000	(3)			157,628
Richard H. Fearon			73,510				—				73,510					82,862					-					82,862
Gregory J. Goff			7,420				—				7,420					16,772					-					16,772
Gordon D. Harnett			162,547	(2)			6,000	(3)			168,547
William R. Jellison																8,460	(3)				-					8,460
Sandra B. Lin																13,018	(3)				-					13,018
Richard A. Lorraine			46,241	(2)			—				46,241					57,164	(3)				-					57,164
William H. Powell			111,945	(2)			—				111,945					82,583	(3)				-					82,583
Kerry J. Preete																12,847	(3)				-					12,847
Farah M. Walters			146,998	(2)			6,000	(3)			152,998					161,796	(3)				-					161,796
William A. Wulfsohn			7,458	(2)			—				7,458					17,175	(3)				-					17,175
Robert M. Patterson																213,790					67,655	(4)				281,445
Bradley C. Richardson																9,472					-					9,472
Stephen D. Newlin			324,103				110,300	(4)			434,403					195,348					124,980	(4)				320,328
Robert M. Patterson			205,483				53,622	(4)			259,105
Richard J. Diemer, Jr.			50,000				4,230	(4)			54,230
Robert M. Rosenau			147,029				44,520	(4)			191,549
Kenneth M. Smith			114,020				11,625	(4)			125,645
Thomas J. Kedrowski			199,908				9,783	(4)			209,691
18 Directors and executive officers as a group			2,016,417				315,100				2,331,517
John V. Van Hulle																45,898					2,210	(4)				48,108
Craig M. Nikrant																53,641					13,140	(4)				66,781
Julie A. McAlindon(2)																22,109					-					22,109
23 Directors and executive officers as a group																1,110,196					271,492	(4)				1,381,688

 

(1)

Except as otherwise stated in the following notes, beneficial ownership of the shares held by each individual consists of sole voting power and sole investment power, or of voting power and investment power that is shared with the spouse or other immediate family member of the individual.individual or with certain trusts. It includes an approximate number of shares credited to the Named Executive Officers’ accounts in our Retirement Savings Plan (as defined herein), a tax-qualified defined contribution plan. The number of common shares allocated to these individuals from the Retirement Savings Plan is provided by the administrator in a statement for the period ending March 1, 2013,2016, based on the market value of the applicable units held by the individual. Additional common shares may have been allocated to the accounts of participants in the Retirement Savings Plan since the date that the last statement was received from the administrator. No Director nominee or executive officer beneficially owned, on March 1, 2013,2016, more than 1% of our outstanding common shares. As of that date, the Directors and executive officers as a group beneficially owned approximately 2.6%1.6% of the outstanding common shares.

 

(2)

Ms. McAlindon served as PolyOne’s Senior Vice President, President of Designed Structures and Solutions. Beneficial ownership information for the number of shares owned for Ms. McAlindon is based on information contained in the last Form 4 with respect to PolyOne filed by her. Ms. McAlindon had no outstanding and exercisable stock-settled stock appreciation rights (“SARs”) as of March 1, 2016.

(3)

With respect to the Directors, beneficial ownership includes shares held under the Deferred Compensation Plan for Non-Employee Directors as follows: C.A. Cartwright, 30,263W.R. Jellison, 1,460 shares; R.H. Fearon, 0 shares; G.J. Goff, 0 shares; G.D. Harnett, 95,361S.B. Lin, 11,014 shares; R.A. Lorraine, 46,24157,164 shares; W.H. Powell, 46,02850,695 shares; K.J. Preete, 6,159 shares; F.M. Walters, 19,55113,352 shares; and W.A. Wulfsohn, 7,45817,175 shares.

17

---

(3)	Includes shares the individuals have a right to acquire upon the exercise of options on or before April 30, 2013.

 

(4)

Includes the number of shares that would be acquired if the individuals’ outstanding and exercisable stock-settled stock appreciation rights were exercised within 60 days of March 1, 2016 at $22.55,$27.52, the closing market price of PolyOne’s common shares on March 1, 2013.2016. For Messrs. Patterson and Newlin and certain other executive officers, this amount also includes the number of restricted stock units scheduled to vest within 60 days of March 1, 2016.

		24

---

OWNERSHIP OF POLYONE SHARES

The following table shows information relating to all persons who, as of March 1, 2013,2016, were known by us to beneficially own more than five percent of our outstanding common shares based on information provided in Schedule 13Gs and 13Ds filed with the SEC:

 

Name and Address		Number of Shares				% of Shares
FMR LLC 82 Devonshire Street, Boston, Massachusetts 02109(1)			9,434,511				10.592
BlackRock, Inc. 40 East 52nd Street, New York, New York 10022(2)			6,765,834				7.60
The Vanguard Group, Inc. 100 Vanguard Boulevard, Malvern, Pennsylvania 19355(3)			5,197,224				5.83

Name and Address		Number of         Shares					%     of Shares
BlackRock, Inc.     55 East 52nd Street     New York, New York 10022(1)				7,508,703					8.7
The Vanguard Group, Inc.     100 Vanguard Boulevard     Malvern, Pennsylvania 19355(2)				6,031,995					7.0

 

(1)

As of JanuaryDecember 31, 2013,2015, based upon information contained in aan amendment to the Report on Schedule 13G/A13G filed with the SEC. FMR LLC hasSEC by BlackRock, Inc., which reported that BlackRock, Inc., together with certain of its affiliates, had sole voting power with respect to 7,307,362 of these shares and sole dispositive power with respect to all of these shares.

 

(2)	As of December 31, 2012,2015, based upon information contained in aan amendment to the Report on Schedule 13G/A13G filed with the SEC. BlackRock, Inc. has sole voting power and sole dispositive power with respect to all of these shares.

(3)

As of December 31, 2012, based upon information contained in a Schedule 13G/A filed with the SEC.SEC by The Vanguard Group, Inc. has, which reported that The Vanguard Group, Inc., together with certain of its affiliates, had sole voting power with respect to 127,236194,520 of these shares, shared voting power with respect to 5,000 of these shares, sole dispositive power with respect to 5,073,3885,837,875 of these shares and shared dispositive power with respect to 123,836194,120 of these shares.

Stock Ownership Guidelines for Non-Employee Directors

The purpose of our stock ownership guidelines (referred to as the “Guidelines”) is to better align our Directors’ financial interests with those of our shareholders by requiring themour Directors to own a minimum level of our shares. In December 2012, we amended our Guidelines to more accurately reflect the market median multiple of retainer. This change was necessary due to significant stock price appreciation that had occurred since the prior adoption of the Guidelines. In order to reflect the Board’s commitment to share ownership, and align the interests of our Board members with our shareholders, the required share ownership level for non-employee Directors is a minimum of 22,00012,500 shares.

The Directors are expected to make continuing progress towards compliance with the Guidelines and to comply fully within five years of becoming subject to the Guidelines. For purposes of our Guidelines, the following types of share ownership and equity awards are included as shares owned: shares directly held,held; shares and phantom shares held in our retirement plans and deferral plansplans; and restricted stock units. As of the date of this proxy statement, all Directors are either meeting, or are on track to meet, the Guidelines. All Directors are required to retain 100% of all shares obtained through us, as compensation for services provided to us, with such percentage to be calculated after any reduction in the number of shares to be delivered as a result of any taxes and exercise costs relating to the shares (if

18

---

applicable). This requirement to retain 100% of all shares obtained from us ceases once the Director has met the Guidelines, as long as the Guidelines continue to be met. These policies, as they relate to our Named Executive Officers, are discussedset forth in the “Compensation Discussion and Analysis”“Other Aspects of Our Compensation Programs” section of this proxy statement.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires that certain of our officers, our Directors and persons who own more than 10% of a registered class of our equity securities file reports of ownership and changes in ownership with the SEC. These officers, Directors and greater than 10% shareholders are required by SEC rules to furnish us with copies of all forms they file. Based solely on our review of the copies of such forms received by us and written representation from certain reporting persons, we believe that, during 20122015 and until the date of this proxy statement, all Section 16(a) filing requirements applicable to those officers, Directors and 10% shareholders were satisfied except that a miscommunication regarding the timing of stock sales over a several day period led to the late filing of afor one Form 4 to reportregarding one transaction for William H. Powell and a misunderstanding regarding how to report transactions made with respect to a Grantor Retained Annuity Trust led to a late filing of a Form 4 to reportMichael E. Kahler, which was filed one transaction for J. Douglas Campbell.day late.

 

19

---

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

This Compensation Discussion and Analysis (“CD&A”) describes the principles underlying our executive compensation policies as well as our most important executive compensation decisions and practices for 2012. The following disclosure also gives context for the data we present in the compensation tables below and the narratives that accompany the compensation tables.

The following six individuals are our Named Executive Officers for 2012, as that term is defined by the SEC:

 

Name		Title25

---

COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

This section highlights significant Compensation Committee and Company actions that occurred in 2015. In addition, it illustrates the relationship between the compensation of our Named Executive Officers and how we measure Company performance. Our Named Executive Officers for 2015 were:

Stephen D. NewlinName		Chairman, Title
Robert M. Patterson		President and Chief Executive Officer
Robert M. Patterson(1) Bradley C. Richardson		Executive Vice President, and Chief OperatingFinancial Officer
Richard J. Diemer, Jr.(2) Stephen D. Newlin		Executive Chairman
John V. Van Hulle		Senior Vice President, President of Global Color, Additives and Chief Financial OfficerInks
Robert Craig M. RosenauNikrant		Senior Vice President, and President Performance Products and Solutionsof Global Specialty Engineered Materials
Kenneth M. Smith Julie A. McAlindon(1)		Former Senior Vice President, President of Designed Structures and Chief Information and Human Resources Officer
Thomas J. Kedrowski		Executive Vice President, Global Operations and Process ImprovementSolutions

 

(1)	Mr. PattersonMs. McAlindon served as our Executive Vice President and Chief Financial Officer until he was promoted to serve as our Executive Vice President and Chief Operating Officer on March 7, 2012.

(2)

Mr. Diemer was hired to serve as our Senior Vice President, President of Designed Structures and Chief Financial Officer effective March 7, 2012.Solutions until her separation from service on May 15, 2015. Please see the “Potential Payments Upon Termination or Change of Control” section of this proxy statement for a discussion of the terms and conditions of her separation from service.

Executive Summary

How Pay is tiedTied to Company Performance

Performance.Our compensation programs are designed to: (1) attract and help retain talented executives; (2) reward employees for generating consistent improvement in Company performance; (2) attract and retain talented executives; and (3) align compensation with the long-term interests of our shareholders;shareholders with the ultimate goal of improving long-term shareholder value. We also believe that as an employee’s level of responsibility and performance increase, so should the proportion of performance-based compensation. As a result, and as described in greater detail throughout the CD&A, our executive compensation, programsboth pay opportunities and practices are appropriately aligned withpay actually earned, should be tied to Company performance, and link a significant portion ofwhich we view in two primary ways:

·

The Company’s operating performance, including results against both our long-term and short-term growth targets; and

·

Return to shareholders over time.

How our Named Executive Officers’ paycompensation programs contribute to sustained business performance over a multi-year period without encouraging excessive risk-taking.our Company’s success is described below.

2012 Business Highlights

In 2012,Key 2015 Company Performance Results.⁽¹⁾ PolyOne delivered strong operating results. Although 2012 wasperformance results in 2015. The Compensation Committee believes that Mr. Patterson and our other Named Executive Officers have performed well in a challenging global environment and that their compensation is commensurate with this performance. The chart below sets forth key Company results over the previous calendar year for both the domestic and global economies, as a result of the leadership of our Board of Directors and executive officers, and the dedication and hard work of our employees, we continued our trend of improving financial performance. During 2012, our significant accomplishments included:(dollar amounts below are in millions, except per share amounts).

 

Measure		2014					2015					Change
Stock Price Per Share(2)				$37.91					$31.76					-16%
Adjusted Earnings Per Share				$1.80					$1.96					9%
Adjusted Operating Income(3)				$320					$322					1%
Revenue				$3,836					$3,378					-12%
Working Capital as a Percentage of Sales				9.9%					9.7%					-20 bps

Stock price increased from an $11.55 closing price on December 30, 2011 to a $20.42 closing price on December 31, 2012, which represents a 77% increase;

(1)	Adjusted Earnings Per Share and Adjusted Operating Income for consolidated PolyOne reported in this proxy statement differ from what is reported under United States GAAP. See Appendix A for a reconciliation of non-GAAP financial measures to our results as reported under GAAP.

(2)	Represents our closing stock price on the last trading day of the applicable fiscal year.

(3)	Our specialty platform Adjusted Operating Income represents 65% of our segment Adjusted Operating Income, up from 2% in 2005.

 

20

		26

---

RecordCOMPENSATION DISCUSSION AND ANALYSIS

In addition, we have achieved 25 consecutive quarters of Adjusted Earnings Per Share growth. Since our transformation began in 2006, our earnings per share has grown at a compounded annual growth rate of $1.20, which represents an 18% increase from 2011;36%. We delivered record Adjusted Earnings Per Share in 2015 of $1.96.

 

Return to Shareholders. Delivering 25 consecutive quarters of Adjusted Operating MarginEarnings Per Share expansion, driven by record levels of 7.4%, which represents a 22% increase from 2011;

Revenue increased to $3.0 billion, which represents a 4.5% increase from 2011;

Working Capital as a Percentageprofit and profitability, has created shareholder value. This accomplishment was the result of Sales of 9.9%, which we consider to be world class performance; and

2012 merger and acquisition activity included integrating ColorMatrix into the PolyOne organization, acquiring Glasforms, Inc., and announcing an agreement to acquire Spartech Corporation.

All of this was made possible by our aggressive goal setting and our relentless efforts to execute our well-definedproven four-pillar strategy of specialization, globalization, commercial excellence and operational excellence. We are pleased

Pay-for-Performance: 2015 Compensation Outcomes. Our 2015 compensation results continued to reflect our objective pay-for-performance philosophy of aligning executive compensation directly with our financial performance.

·

2015 Annual Incentive Program:The 2015 Annual Incentive Program uses Adjusted Operating Income, Working Capital as a Percentage of Sales and Revenue to drive desired behavior that impacts shareholder value. We increased the goals for each of the objective financial performance measures in our annual incentive program from 2014 to 2015. Our 2015 financial performance resulted in achievement above target level for our exceptional Working Capital as a Percentage of Sales performance on a consolidated basis and for all business units; above threshold levels for our Color and Engineered Materials business units’ Adjusted Operating Income performance and at zero for all others and on a consolidated basis; and at zero for Revenue performance. As a result, the Named Executive Officers participating in the corporate 2015 Annual Incentive Program received a payout based on 44.9% attainment. Mr. Van Hulle received a payout based on 80.0% attainment resulting from our Color, Additives and Inks business performance. Mr. Nikrant received a payout based on 70.1% attainment resulting from our Specialty Engineered Materials business performance. Ms. McAlindon did not receive a payment under the 2015 Annual Incentive Program for 2015 due to her separation from service, but as part of her severance compensation, she received a pro-rata portion of what she would have received under the 2015 Annual Incentive Program based on the amount of time during 2015 that she was with the Company. The description set forth on pages 33-35 highlights the key financial results that were used in determining payouts to our Named Executive Officers under our 2015 Annual Incentive Program.

·

Amended Long-Term Incentive Plan:We used Adjusted Earnings Per Share as the performance measure for our 2013 – 2015 Amended Long-Term Incentive Plan cash-settled performance units in order to drive improvements in shareholder value. Due to strong performance over the past three years, the Named Executive Officers received a payout under this award based on 200% attainment. The description set forth on pages 37-38 highlights the key financial results that were used in determining payouts to our Named Executive Officers for 2015.

Listening to Shareholders. At the accomplishments2015 Annual Meeting, we held our fifth annual advisory vote on Named Executive Officer compensation. 86% of the votes cast were in 2012, which strengthen our positionfavor of this advisory proposal. The Compensation Committee considered the voting results as well as other input from conversations held with investors and continue our progress on executing this strategy. Our settingviewed them as continued support of well-defined, strategic goals and our pursuit of achievement of these goals is working, and we believe we are well-positioned to continue our transformation into a high performing global specialty company.

We believe our executive compensation programs described below andprograms. As a result, the Compensation Committee made no material changes in the accompanying tables played a vital role in drivingstructure of our compensation programs or pay-for-performance philosophy based on the strong financial

		27

---

COMPENSATION DISCUSSION AND ANALYSIS

voting results noted above, and appropriately align pay and performance.for the proposal. At the beginning of 2012,2016 Annual Meeting, we set goals for our annual incentive plan that drove the 2012 increases in Adjusted Operating Income noted above, as well as our impressive Working Capital as a Percentage of Sales results. Duewill again hold an advisory vote to these outstanding performance results for 2012, our Named Executive Officers (except Mr. Rosenau) earned 187.4% of their target 2012 Annual Plan opportunities based on surpassing our target performance goal. Mr. Rosenau is the onlyapprove Named Executive Officer with responsibility for business unit specific results, and his Annual Plan opportunity and goal attainment of 200% is based directly on his business unit’s performance against specific performance goals set for 2012.

Our 2010 long-term performance unit award had a one-year performance period (ending on December 31, 2010) based upon Working Capital as a Percentage of Sales. By achieving a 2010 Working Capital as a Percentage of Sales result of 9.6%, in 2012, we paid out cash-settled performance units originally granted in 2010 based on attainment of 200% of target level performance.

In 2011, we changed the performance measure for our long-term performance unit awards from Working Capital as a Percentage of Sales to Adjusted Earnings Per Share in order to drive improvements in shareholder value, and moved to a three-year performance period. In 2012, we maintained Adjusted Earnings Per Share as the performance measure for our cash settled performance units, as well as a three-year performance period. Ourcompensation. The Compensation Committee believed that these goals would position us for continued growth. Achieving these measures will allow usexpects to fund operating expensesconsider the results from this year’s and pursue acquisition opportunities that we believe will further strengthen our earnings potential and growth. Even with the difficult global economy in 2012, we were able to achieve our pre-set goals and reward our employees for achieving those goals.

We believe the 2012 incentive plan design worked to fully link pay with performance and to drive a stock price increase of 77%, bringing significant value to our shareholders.

Note: Adjusted Earnings Per Share and Adjusted Operating Income for consolidated PolyOne differ from what is reported under United States generally accepted accounting principles (“GAAP”). See Appendix A for a reconciliation of non-GAAP financial measures to our results as reported under GAAP.

future advisory votes on Named Executive Officer compensation.

 

We align shareholder interests with our executive compensation		ü     Ensure that the majority of executive pay is based on objective, challenging financial goals and Company performance.
We avoid excessive risk while fostering sustainable Company growth		ü     Utilize maximums on potential payments, include retention vehicles in our compensation programs, provide multiple performance targets and maintain robust Board and management processes to identify risk, which include a risk assessment of executive compensation programs that is performed each year.
		ü     Stock ownership guidelines required for all Named Executive Officers.
		ü     Evaluate annual and aggregate dilution from stock awards prior to our annual equity award grants.
We adhere to executive compensation best practices		ü     No excise tax gross-up for “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (“Code”) in any new management continuity agreements or for financial planning benefits.
		ü     In 2015, we adopted a clawback policy applicable to all executive officers.
		ü     Prohibit Named Executive Officers from hedging or pledging our securities.
		ü     The Compensation Committee uses an independent consultant to help assess compensation practices that impact Named Executive Officer compensation.

21

---

Executive Compensation Practices and Programs

Programs.The executive compensation practices and programs described below and in the accompanying tables played a vital role in driving our strong financial results and aligning pay with performance for 2015 and are designedintended to attract and help retain a highly experienced, successful team to manage our Company.PolyOne. Our practices and programs are directly linked to our key business objectives and are designed to create value for our shareholders.

Highlights of our practices and programs include:

ü

Pay-for-Performance – The majority of executive pay is performance-driven and must be earned every year based on objective, challenging financial goals and individual performance.

Ø

Adjusted Operating Income improvement and Working Capital as a Percentage of Sales were the performance measures for our Senior Executive Annual Incentive Plan (referred to as the “Annual Plan”), which was our short-term cash incentive program for 2012.

Ø

Adjusted Earnings Per Share was the performance measure for our long-term performance unit cash awards granted in 2012 in order to drive improvements in shareholder value.

Ø

We incorporated stock price performance hurdle vesting requirements to the stock appreciation right (or “SAR”) awards granted in 2012 to further align executive compensation with shareholder interests. The hurdles were met in 2012.

ü

Shareholders Approve our Executive Compensation – In May, 2012, 96% of our shareholders approved our Named Executive Officer compensation pursuant to our second advisory “say-on-pay” vote.

ü

Mitigate Undue Risk – We mitigate undue risk associated with compensation, by utilizing maximums on potential payments, including retention provisions in our compensation programs, providing multiple performance targets and maintaining robust Board and management processes to identify risk. We do not believe any of our compensation programs create risks that are reasonably likely to have a material adverse impact on the Company, which we validate through a risk assessment of executive compensation that is performed each year.

ü

Meaningful Stock Ownership Guidelines – All Named Executive Officers are subject to stock ownership guidelines, and are either exceeding, or, for our newly-hired Named Executive Officers, are on target to achieve the Guidelines within five years of being subject to such Guidelines.

ü

Annual Review of Share Utilization – Prior to the annual equity award grants to Named Executive Officers, we evaluate annual and aggregate dilution from stock awards.

ü

No Tax Gross-Ups – We do not provide excise tax gross-up benefits for so-called “excess parachute payments” under Section 280G of the Internal Revenue Code in any new management continuity agreements. We also do not provide tax gross-up benefits for financial planning.

ü

No Excessive Executive Benefits – We provide limited executive benefits to our Named Executive Officers that have a sound benefit to the Company’s business. We revised our relocation policy as it relates to the loss on the sale of an executive’s residence. We limit the amount of the reimbursable loss provided to the Named Executive Officers to 80% of the loss, with a maximum total reimbursement of $85,000. In addition, no tax gross-ups on reimbursed losses are provided for this group.

ü

Good Corporate Governance – In addition to our existing policy prohibiting our Named Executive Officers from engaging in speculative transactions involving our securities, in 2013, we also instituted a policy that prohibits the pledging of Company stock.

22

---

2015 Pay-for-Performance Analysis

Analysis.As described more fully below, we believe that the majority of each Named Executive Officer’s compensation should be linked directly to our performance and the creation of shareholder value. The following chart compares cumulative total shareholder return (“TSR”)TSR on our common shares against the cumulative total return of the S&P 500 Index and the S&P Mid Cap Chemicals Index for the five-year period December 31, 20072010 to December 31, 2012,2015, assuming in each case a fixed investment of $100 and reinvestment of all dividends. Starting in 2009, ourOur performance has exceeded the S&P 500 Index as well as the S&P Mid Cap Chemicals Index.

 

		28

---

COMPENSATION DISCUSSION AND ANALYSIS

We believe that the returns to shareholders shown in the graph above graph indicate that our pay-for-performance philosophy, compensation plan design and selected metricsperformance measures are working, and have resulted in performance that has provided increased value to our shareholders over both the short and long-term.

23

---

We also believe that the compensation of our Named Executive Officers has been commensurate with our performance results. The Company has been highly effective at driving margin growth in the transformation of PolyOne to a high performing global specialty company. By refocusing the sales force on value and profits versus volumes, and emphasizing specialty businesses versus those more commodity in nature, Mr. Patterson and our senior management team have driven substantial earnings growth.

The following graph provides a historical perspective, comparing our CEO’s earned compensationMr. Patterson’s pay (as disclosed in the Summary Compensation Table for 2014 and 2015) and our performance to the pay-for-performance of our peer group from 2009-2011 (datafor 2014-2015 (for TSR) and timing limitations prohibit us from providing a 2012 analysis at this time)2013-2014 (for pay). Our CEO’s earnedMr. Patterson’s Summary Compensation Table compensation has been aligned withis low compared to our recent performance, with his earned compensationpay approximating the 75thfifth percentile of our peers while our performance as defined below, was inat the 100th50^th percentile.

 

		29

---

COMPENSATION DISCUSSION AND ANALYSIS

For purposes of this graph, pay is defined as the three-year (2009-2011)two-year sum of Summary Compensation Table pay for all applicable elements including base salary, earned annual incentives, thestock and option awards at grant value, of stock upon vesting, the value of option/SAR exercises,non-equity incentive plan compensation and earned long-term cash incentives. Three-yearall other compensation. Two-year performance is based on three-yeartwo-year TSR (2009 – 2011)(2014-2015). The peers used in this chart are the same asgraph include those listed on page 2631 of this proxy statement, except for Ecolab, Inc., which was added to our peer group in December, 2012, and is not reflected in this graph.statement.

Listening to Shareholders and Implementing Shareholder-Friendly Pay Practices

At the 2012 Annual Meeting of Shareholders, we held our second advisory vote on Named Executive Officer compensation. Over 96% of the votes cast were in favor of this advisory proposal. We considered this favorable outcome and believe it conveyed our shareholder’s strong support for the Compensation Committee’s decisions and the existing executive compensation programs and practices. As a result, the Compensation Committee made no material changes in the structure of our compensation programs or pay-for-performance philosophy based on the voting results for the proposal. At the 2013 Annual Meeting of Shareholders, we will again hold an advisory vote to approve the Named Executive Officer compensation. The Compensation Committee will continue to consider the results from this year’s and future advisory votes on Named Executive Officer compensation.

24

---

Compensation Philosophy and Objectives

Our executive compensation programs pay for and reward our officers’ performance, are specifically linked to our achievement of strategic operating and financial goals, and are designed to be competitive in the marketplace. OurWe reward our executives are rewarded for performance that meets or exceeds our strategic goals, without encouraging excessive risk-taking that could have a detrimental impact on our long-term results and the interests of our shareholders. We believe the design of our compensation plans and the relative mix of compensation elements successfully motivate our executives to improve our overall corporate performance and the profitability of the specific business unit(s) for which they are responsible, thus maximizing shareholder value. The main objectives of our executive compensation programs are to:

 

Attract, motivate and retain a highly qualified and successful management team to lead PolyOne in setting and effectively executing upon our strategic goals and objectives;

·

Attract, motivate and help retain a highly qualified and successful management team to lead PolyOne in setting and effectively executing upon our strategic goals and objectives;

 

Foster a pay-for-performance culture by rewarding the achievement of specified strategic operating and financial objectives that maximize shareholder value; and

·

Foster a pay-for-performance culture by rewarding the achievement of specified strategic operating and financial objectives that maximize shareholder value; and

 

·

Help ensure our goals and objectives are aligned with the interests of our shareholders by recognizing and rewarding business results and the growth of our stock price through incentive programs.

Ensure our goals and objectives are aligned with the interests of our shareholders by recognizing and rewarding business results and the growth of our share price through incentive programs.

Setting 2012 Executive Compensation Levels

Compensation Consultant

Consultant.Our executive compensation programs are approved and overseen by the Compensation Committee, which is composed entirely of independent Directors. For 2012, theThe Compensation Committee retained an independent compensation consultant, Towers Watson (also referred to as the “Consultant”),Consultant in 2015 to assist the Compensation Committee inwith assessing the competitiveness and overall appropriateness of our executive compensation programs. The Compensation Committee worked in conjunction with the Consultant and withconsidered input from members of senior management.management to help ensure that our executives, including our Named Executive Officers, receive market competitive compensation programs that reward business results.

As described below, the Consultant (1) assisted the Compensation Committee by (1) benchmarking compensation and aligningso we could align base salaries, and annual incentive targets and long-term incentive targets consistent with our competitive market pay philosophy discussed below, (2) providedproviding guidance on incentive plan design, (3) monitoredmonitoring and communicatedcommunicating trends in executive compensation to the Compensation Committee, trends in executive compensation,(4) assisting with our proxy statement disclosures and (4) reviewed and provided guidance on the competitive market data on stock ownership guidelines.(5) assessing our Board’s compensation.

Competitive Market Pay Information and Benchmarking

Benchmarking.We designed our compensation programs to be competitive with companies of comparable size and industry with whom we compete for executive talent. We analyze competitive market compensation data annually relating to salary, annual incentives and long-term incentives annually.incentives. The Compensation Committee generally manages individual components of compensation and initially targets total direct compensation relative to the median (50th percentile) of the competitive market data. However, the Compensation Committee considers other factors consisting ofas well, such as the responsibilities, performance, contributions and experience of each Named Executive Officer and compensation in relation to other employees, to determine final total compensation amounts. As a result, we do not set total direct compensation or the component parts at levels to achieve a mathematically precise market position. For 2012, Mr. Newlin’s compensation was set above the market median, which is aligned

25

---

with Company performance. We also periodically analyze competitive market compensation data relating to retirement benefits and other benefits. The Compensation Committee obtains advice and recommendations from the Consultant in these and other areas of total compensation.

In analyzing competitive market data for the purpose of determining the market median for 2012,2015, we drew from threetwo independent sources. We first reviewed proxy statement disclosures of a peer group of similarly-sized United States chemical companies to establish an estimate of market compensation for our senior executives. This approach provided insight into specific practices at business competitors or companies facing similar operating challenges.

In recent years we refinedWe annually evaluate the composition of our compensation peer group, to reflect our progress toward becoming a global specialty company. In 2012, we evaluated our current peers and other potential peers, giving specific consideration to the following factors:

Factor		Peer Group Comparator				PolyOne 2012 Results
Company Revenue		1.8 billion to 10.6 billion				3.0 billion
Total Asset Size		1.3 billion to 16.7 billion				2.1 billion
Employee Numbers		3,000 to 40,000				5,000

company size, global presence, and specialty chemical focus. We also lookedlook at the frequency with which these companies were used as peers by other companies in our industry and which companies had identified PolyOne as a peer, and whether each potential peer company had a global presence and a specialty chemical focus. In addition, we considered whether each company was in the same Standard Industrial Classification code as PolyOne and whether we compete with them for talent.

		30

---

COMPENSATION DISCUSSION AND ANALYSIS

peer. Each of the companies recommended forconstituting our peer group met a majority of the primary criteria that were established. Based on this review, we determined that the following companies were removed due to corporate acquisitions: Lubrizol Corporationexisting compensation peer group was removed due to its acquisition by Berkshire Hathaway in 2011; Solutia,appropriate for 2015 and thus remained unchanged from the previous year other than the elimination of Rockwood Holdings, Inc., which was acquired by Eastman Chemical Company in 2012; Arch Chemicals, Inc. was acquired by Lonza Group Ltd in 2011; and Nalco Holding Company acquired by Ecolab, Inc. in 2011. Effective January 2013, Georgia Gulf Corporation merged with PPG Industries to form Axiall Corporation, which we will evaluate in 2013 for continued inclusion in our peer group. In addition, we included Ecolab, Inc. in our peer group as this company is frequently cited as a premier specialty chemical company, is often used for comparison purposes by investors and others, and is a company with which we compete for resources. As a result, PolyOne’s new peer2015. The group consists of the following 1617 companies:

 

PolyOne Peer Group
Albemarle Corporation		Ferro CorporationCytec Industries Inc.*		RPM International Flavors & Fragrances Inc.
A. Schulman, Inc.		FMCEastman Chemical Company		RPM International Inc.
Ashland, Inc.		Ecolab, Inc.		Sigma-Aldrich Corporation*
Axiall Corporation		Ferro Corporation		The Scotts Miracle-Gro Company
Cabot Corporation		Georgia GulfFMC Corporation (now known as Axiall Corporation)		Sigma-AldrichThe Valspar Corporation
Cytec Industries Inc.Celanese Corporation		H.B. Fuller Company		The Valspar Corporation
Eastman Chemical Company		International Flavors & Fragrances Inc.
Ecolab, Inc.		Rockwood Holdings, Inc.

* Cytec Industries Inc. and Sigma Aldrich Corporation were acquired during 2015 and will subsequently be removed from the peer group going forward.

Financial and operating statistics for our 2015 peer group are summarized below:

Factor		Median Peer Group Comparator 2014 Financials		2015 PolyOne Results
Company Revenue		$3.6 billion		$3.4 billion
Total Asset Size		$4.2 billion		$2.6 billion
Employee Numbers		6,200		6,900

The second and third independent sourcessource of data that we used to augment the peer proxy analysis and provide a better sense of market practices was anthe Consultant’s analysis performed by the Consultant of competitive market data relating to (1) the chemical industry and (2) other applicable general industries usingindustries. The Consultant specifically used the following surveys: Thethe Consultant’s Executive Compensation Database,executive compensation database; the Consultant’s Top Management Compensation Survey and Mercer’s Executive Compensation Survey. To obtain

26

---

comparability based on company size, the Consultant’s analysis either referenced a specific sample of comparably-sized companies or calibrated the pay of a broad sample of companies against company size. The specific identity ofPolyOne did not select the companies that comprise any of these survey groups, and the component companies’ identities were not a material factor in these surveys was not material to our use of the comparability data based on this process used by the Consultant.analysis.

Review of 2015 Named Executive Officer Compensation

. Management and the Compensation Committee annually review the specific pay disclosures of our peer group and the broad-based survey data provided by the Consultant. Management uses this data to develop recommendations for the Compensation Committee’s review regarding eligibility and award opportunities as well as performance measures and goals for the plan periodsour long-term and short-term incentive plans commencing in the following year. The Compensation Committee discusses andalso considers this information when making compensation decisions and aligning each of the pay elements with our compensation objectives and relative market practices.

The Compensation Committee and management annually review and consider tally sheets, which are developed by our Human Resources department to determine the reasonableness ofprovide greater context for the compensation of our Named Executive Officers. The tally sheets provide information regarding each Named Executive Officer’s base salary, annual incentives, and long-term incentives, other benefits, retirement benefits and wealth accumulation.are reviewed by the Consultant.

Annually, the CEO recommends, for the Compensation Committee’s review and approval, specific base salary and incentive target incentiveopportunity adjustments for each of the other Named Executive Officers.Officers, if an adjustment is warranted. The CEO makes his recommendations in conjunction with the marketplace data and input provided by the Consultant.data. He diddoes not participate in any discussions with the Compensation Committee involving his own compensation. With guidance from the Consultant regarding market pay levels and based on a rigorous review of 20112014 performance and our compensation philosophy, the Compensation Committee determined the appropriate pay levels for the CEOMr. Patterson for 2012.2015.

		31

---

COMPENSATION DISCUSSION AND ANALYSIS

What We Pay Mixand Why: Elements of Compensation

Our executive compensation programs are also designed to recognize an executive’s scope of responsibilities, leadership ability and effectiveness in achieving key performance goals and objectives. As an executive’s level of responsibility within PolyOne increases, so does the percentage of total compensation that is linked to performance in the form of variable compensation.

27

---

Thus, the majority of the total direct compensation is performance-based and not guaranteed. We also provide threevarious retirement and benefit programs and modest, business-related benefits. The chart below provides a picture of all elements of the total direct compensation that are discussed in detail below: base salary, annual incentive and long-term incentive compensation. The following table summarizes the allocation of the compensation opportunity at target, or “pay mix,” that was granted in 2012provided to theour Named Executive Officers based upon the primary elements of compensation. Both the(referred to as NEOs), except for Mr. Newlin as he was not eligible for either an annual incentive andor long-term incentive opportunity representin 2015 per the variableterms of his Letter Agreement. Detailed information follows the chart below.

While the Compensation Committee does consider compensation portionrelative to market medians, it does not target a specific percentile or data point in assessing competitiveness for base pay or our incentive programs. Individual opportunities vary based on length of each Named Executive Officer’s total compensation opportunity,time with PolyOne, individual performance and level of leadership responsibility within the Company. This strategy is consistent with our overall pay-for-performance philosophy.competitive market pay philosophy discussed in the “Executive Compensation Philosophy and Objectives” section of this proxy statement.

		Target Pay Mix Allocation
Named Executive Officer		Base Salary %				Annual Incentive %				Long-Term   Incentive %
S.D. Newlin		18%				20%				62%
R.M. Patterson		32%				23%				45%
R.J. Diemer, Jr.		38%				23%				39%
R.M. Rosenau		39%				22%				39%
K.M. Smith		39%				22%				39%
T.J. Kedrowski		39%				22%				39%

Analysis of 2012 Compensation Decisions and Actions

Base Salary

We pay base salaries to attract talented executives and to provide a fixed base of cash compensation.. Base salaries for theour Named Executive Officers in 2015 were individually determined by the Compensation Committee after consideration of:

Breadth, scope and complexity of (1) the executive’s role;

•

Internal equity (i.e., employees with similar responsibilities, experience and historical performance are rewarded comparably);

Current compensation;

Tenure in position;

Market pay levels and trends around merit increases;

Relative position of their salary to the market median for their role;

The CEO’s recommendations (for all Named Executive Officers other than the CEO); (2) breadth, scope and

Individual performance.

There are three situations that may warrant an adjustment to base salary:

Annual Merit Increase. All employees’ base salaries are reviewed annually for possible merit increases taking into account the above listed factors, but merit increases are not automatic or guaranteed. In recognition complexity of the significant role Mr. Newlin continues to playexecutive’s role; (3) internal equity; (4) current compensation; (5) tenure in transforming PolyOne into a high-performing organization, as well as his strong leadership, and a review of competitive market data, the Compensation Committee approved a three percent adjustment to his annual base salary, as outlined in the below table. In the Compensation Committee’s judgment, this

28

---

base salary is appropriate in order to fairly compensate and retain Mr. Newlin. The Compensation Committee also increased the annual base salaries of each of the other Named Executive Officers by three percent (excluding Mr. Patterson) in accordance withposition; (6) market pay levels and trends around merit increases, as outlinedincreases; (7) relative position of the Named Executive Officer’s salary to the market median for the executive’s role; and (8) individual performance.

The Compensation Committee made the following decisions related to base salaries for our Named Executive Officers in 2015: Mr. Patterson’s base salary was increased from $800,000 to $900,000 to closer align his salary with that of the market median for CEOs and his tenure in the below table.

Promotion or Change in Role. Baseposition; Mr. Richardson’s base salary may bewas increased from $540,000 to recognize additional responsibilities resulting$557,000; Mr. Van Hulle’s base salary was increased from a change in an employee’s role or a promotion$435,000 to a new position however, increases are not guaranteed. In March 2012,$449,000; and Mr. PattersonNikrant’s base salary was promotedincreased from $364,000 to Executive Vice President$405,000 due to his strong business performance and Chief Operating Officer, taking on responsibility for all four business segments at PolyOne, and providing strategic direction across all areasto align his salary with that of the Company. To ensure hismarket median. Mr. Newlin’s base salary would be alignedwas reduced from $1,050,000 to $655,850 in accordance with the terms of his Letter Agreement, as that term is defined herein. Ms. McAlindon did not receive a salary increase in 2015 and her salary at the time of her separation from service was $315,000.

The amounts listed above were base salaries in effect on December 31 of each applicable year. For Messrs. Patterson, Richardson, Newlin, Van Hulle and Nikrant, actual salary received as shown in the 2015 Summary Compensation Table of this proxy statement was prorated based on base salary rates in effect before and after the effective dates of the changes. Based on the competitive market data for similar positions,provided by the Compensation Committee approved an eight percent increase to his annual base salary, to recognize his increased responsibilities.Consultant, we determined that

Market Adjustment. A market adjustment may be awarded to an individual who is performing successfully when we recognize a significant gap between

		32

---

COMPENSATION DISCUSSION AND ANALYSIS

the market data and2015 salaries of the individual’s base salary. No Named Executive Officer receivedOfficers were within a range of 11% above to 6% below the 2015 market adjustmentmedians for comparable positions (Mr. Newlin was excluded from this analysis as his salary is determined by the terms of his Letter Agreement and Ms. McAlindon was excluded from this analysis as she was no longer with the Company at the time this analysis was performed).

Annual Incentive.We pay an annual incentive in 2012.

accordance with our Annual Plan to (1) reward our Named Executive Officers for achieving specific performance goals that would advance our profitability, (2) drive key business results, and (3) recognize individuals based on their contributions to those results. The below table lists the 2012Named Executive Officers’ 2015 individual annual incentive opportunities (expressed as a percentage of base salariespay) that were approved by the Compensation Committee forand as in effect as of December 31, 2015 are: Mr. Patterson – 100%; Mr. Richardson – 65%; Messrs. Van Hulle and Nikrant and Ms. McAlindon – 55%. Mr. Newlin did not receive a 2015 annual incentive award. None of the Named Executive Officers.Officers received an increase in annual incentive opportunity in 2015 as all were determined to be at or near market median with respect to this component.

Named Executive Officer		2011 Base Salary										2012 Base Salary										2012 Base Pay   Adjustment %
S.D. Newlin			$	950,000									$	980,000										3%
R.M. Patterson			$	475,000									$	515,000										8%
R.J. Diemer, Jr.(1)				N/A									$	435,000										N/A
R.M. Rosenau			$	355,000									$	365,000										3%
K.M. Smith			$	355,000									$	365,000										3%
T.J. Kedrowski			$	346,000									$	356,000										3%

(1)	Mr. Diemer was hired in March, 2012 and did not have a PolyOne base salary in 2011. Mr. Diemer’s original base salary was benchmarked against competitive market data for similar roles.

Based on the competitive market data provided by the Consultant, we determined that the 2012 salaries of2015 Annual Incentive Program target opportunities for the Named Executive Officers were within a range of 10% above and 10%at market to 15% below the 2012 market medians for comparable positions, which is consistent with our competitive market pay philosophy discussed in the “Competitive Market Pay Information and Benchmarking” section above.

29

---

Annual Incentive

To reward our Named Executive Officers for achieving specific performance objectives that would advance our profitability, 2012 target annual incentive opportunities for the Named Executive Officers (as a percentage of base salary) were established as follows:

Named Executive Officer		2012 Annual Incentive Target
S.D. Newlin				110	%
R.M. Patterson				70	%
R.J. Diemer, Jr.				60	%
R.M. Rosenau				55	%
K.M. Smith				55	%
T.J. Kedrowski				55	%

Based on the competitive market data provided by the Consultant, we determined that these Annual Plan opportunities for the Named Executive Officers were again within a range of 10% below to 10% above the 20122015 market median for comparable positions, whichpositions. Mr. Patterson’s target opportunity for this component is consistent15% below the 2015 market median. This reflects the Compensation Committee’s intention to move Mr. Patterson’s pay toward the market median over time as he becomes a longer-tenured CEO. Mr. Newlin was excluded from this analysis as he did not receive a 2015 annual incentive award and Ms. McAlindon was excluded from this analysis as she was no longer with our competitive market pay philosophy discussed in the “Competitive Market Pay Information and Benchmarking” section above.Company at the time this analysis was performed.

The Compensation Committee determined, after a thorough evaluation of possible plan designs and performance measures (described below), that we would fundamentally maintain the same Annual Planfundamental annual incentive design in 2012 as2015 that we used in 2011, including2014. The Compensation Committee’s evaluation demonstrated that the same performance measures listed below:utilized for this program are the most critical elements of PolyOne’s performance for both 2014 and 2015 and, when combined, contribute to sustainable growth.

The 2015 Annual Incentive Program performance measures are described below.

 

•·

Adjusted Operating Income. Adjusted Operating Income is defined as business unit and/or total Company Operating Income less anyexcluding special items (which consist of non-recurring items as set forth inapproved by our quarterly earnings releases) and Sunbelt equity earnings. Compensation Committee).

 

•·

Operating IncomeRevenue. Operating Income refersRevenue represents business unit sales or total Company net trade sales to operating income in accordance with GAAP. third parties.

 

•·

Working Capital as a Percentage of Sales. Working Capital as a Percentage of Sales is calculated by taking the average 13 months of business segment or total Company working capital divided by the sum of 12 months of 20122015 business segment sales or total Company sales (where applicable), where working capital equals (1) trade accounts receivable (2) plus (2) inventory (3) minus (3) trade accounts payable. The calculation excludes Magenta, which was acquired in December 2015.

The Compensation Committee’s review indicated that, givenpayouts under the successful alignment between pay and2015 Annual Incentive Program are based on attainment with respect to target goals set for each individual performance in 2011, we would utilize the same performance measures in 2012 as used in 2011. We maintainedmeasure. Rewardable attainment with respect to these performance measures ranges from 50% (threshold) to 200% (maximum) of goal. If achievement with respect to any performance measure falls between the threshold and target, or between the target and maximum, earned award amounts for that particular performance measure will be interpolated on a straight-line mathematical basis. If achievement with respect to any performance measure does not reach threshold, then that measure will be deemed to have 0% attainment. The performance measures for the 2015 Annual Incentive Program were weighted as they wereoutlined in the most critical elements of PolyOne’s performance for both 2011 and 2012.charts below.

		33

---

COMPENSATION DISCUSSION AND ANALYSIS

 

30

---

The weightings of the performance measures used for all the Named Executive Officers in the 2012 Annual Plan were as follows:

 

(1)

Mr. Rosenau has responsibility for business unit specific results (namely our Performance ProductsVan Hulle and Solutions business unit), and his Annual Plan opportunity is based on 65% Operating Income for such business unit and 35% Working Capital as a Percentage of Sales for such business unit. For all other Named Executive Officers, the measure is CompanyMr. Nikrant’s Adjusted Operating Income performance measures are based two-thirds on business unit-specific results and Company Consolidated Working Capital as a Percentage of Sales.one-third on consolidated PolyOne results.

The Annual Plan, as it relates to the Named Executive Officers, contains a “negative discretion” feature. If at least threshold attainment levels are achieved, then Named Executive Officers are eligible for payments up to the maximum permitted under the Annual Plan provisions. Payouts are capped at 200% of a participant’s award amount at target. The Compensation Committee may use its negative discretion to make a final determination of the amount to be paid.

We set aggressive performance goals in 20122015 under the Annual Plan that focused our efforts on those factors that we believebelieved were critical to our on-goingongoing success, including profitablerevenue growth, earnings improvement, cash generation from working capital, efficiencies in our operations and the continued implementation of our overall strategy. In 2012, we were able to sustain our strongfour pillar strategy of globalization, specialization, commercial excellence and operational excellence. The 2015 performance from the previous year by maintaining a world-class performance Working Capital as a Percentage of Sales with a result of 9.9%. As a result of this performance, the Company Working Capital as a Percentage of Sales incentive goal attainment and the Performance Products and Solutions Working Capital as a Percentage of Sales incentive goal attainment was 200% of our target performance level.

In addition, on a consolidated basis,goals for our performance and results under the total Company Adjusted Operating Income metricmeasures were strong; Adjusted Operating Income increased 22% from 2011 to $221 millionset in 2012. Thus, Company Adjusted Operating Income achieved 180.7% of the target performance level andaccordance with our performance and results for our Performance Products and Solutions Operating Income metric exceeded the upper end of the performance range and paid at 200% of target performance level.strategic plan framework. We viewed the targeted level of performance for this metriceach measure as very challenging to achieve,achieve. The target goals and attainment levels for each Named Executive Officer are set forth below (dollars in millions). Progress against the actual levelWorking Capital as a Percentage of performance reflects exceptionalSales metric is reflected by lower levels of working capital, so results that are less than target are viewed as exceeding target performance.

Mr. Patterson’s and Mr. Richardson’s Annual Plan opportunities are based on consolidated results. TheTotal attainment for consolidated PolyOne under the 2015 Annual Incentive Program was 44.9%, with the components consisting of: (1) 50% based on consolidated Adjusted Operating Income attainment of 0% (2015 attainment of $322.3 million measured against a target of $367.9 million); (2) 25% based on Working Capital as a Percentage of Sales attainment of 179.7% (2015 attainment of 9.7% measured against a target of 10%); and (3) 25% based on Revenue attainment of 0% (2015 attainment of $3,376.5 million measured against a target of $3,933.0 million).

Mr. Van Hulle and Mr. Nikrant have responsibility for business unit-specific results and while their performance measures based on Adjusted Operating Income are weighted 50% overall, their opportunities are based two-thirds on business unit-specific results and one-third on consolidated Adjusted Operating Income results. For Mr. Van Hulle, whose 2015 results were based on the Color, Additives and Inks Plan, total attainment was 80.0%, with the components consisting of: (1) 33.3% based on business unit Adjusted Operating Income attainment of our90.1% (2015 attainment of $139.6 million measured against a target of $142.7 million); (2) 16.7% based on consolidated Adjusted Operating Income attainment of 0% (2015 attainment of $322.3 million measured against a target of $367.9 million); (3) 25.0% based on Working Capital as Percentage of Sales attainment of 200.0% (2015 attainment of 9.5% measured against a target of 10.1%); and (4) 25.0% based on Revenue attainment of 0% (2015 attainment of $842.2 million measured against a target of $906.6 million). For Mr. Nikrant, whose 2015 results were based on the Specialty Engineered Materials Plan, total attainment was 70.1%, with the components consisting of: (1) 33.3% based on business units varied greatly due to the uncertain global economy with resultingunit Adjusted Operating Income attainment levels that ranged from 57% to 200% of target.61.4% (2015 attainment of $80.8 million measured against a target of $88.8 million); (2) 16.7% based on consolidated Adjusted Operating Income attainment of 0% (2015 attainment of $322.3 million measured against a target of $367.9 million); (3) 25.0% based on Working Capital as Percentage of Sales attainment of 198.7% (2015 attainment of 9.2% measured against a target of 9.6%); and (4) 25.0% based on Revenue attainment of 0% (2015 attainment of $556.8 million measured against a target of $605.5

		34

---

COMPENSATION DISCUSSION AND ANALYSIS

 

31

---

The performance measuresmillion). Due to her separation from service and targets, and the respective levelsas part of achievement for each performance measureher severance compensation, Ms. McAlindon received a pro-rata portion of what she would have received under the 20122015 Annual Incentive Program, based on the amount of time during 2015 that she was with the Company. For Ms. McAlindon, whose cash payout was based on the results of the Designed Structures and Solutions Plan, for our Named Executive Officers are set forth below. Payouts are capped at 200%total attainment was 38.8%, with the components consisting of: (1) 33.3% based on business unit Adjusted Operating Income attainment of 0% (2015 attainment of $13.8 million measured against a participant’s award amount at target.target of $60.0 million); (2) 16.7% based on consolidated Adjusted Operating Income attainment of 0% (2015 attainment of $322.3 million measured against a target of $367.9 million); (3) 25.0% based on Working Capital as Percentage of Sales attainment of 155.4% (2015 attainment of 11.4% measured against a target of 11.6%); and (4) 25.0% based on Revenue attainment of 0% (2015 attainment of $455.6 million measured against a target of $605.0 million).

		2011 Actual Result				2012 Goals																2012 Payout as % of Target
Performance Measure ($ in millions)						Threshold 50%				Target 100%				Maximum 200%				2012 Actual Result
Company Adjusted Operating Income		$	180.6			$	180.9			$	201.2			$	226.0			$	221.0				180.7%
Company Consolidated Working Capital as a Percentage of Sales(1)			9.6%				11.1%				10.5%				10.0%				9.9%				200%
Performance Products and Solutions Company Operating Income		$	62.4			$	54.9			$	60.5			$	70.3			$	74.9				200%
Performance Products and Solutions Consolidated Working Capital as a Percentage of Sales			5.4%				5.5%				5.2%				5%				4.6%				200%

(1)	Actual 2011 Company Consolidated Working Capital as a Percentage of Sales of 9.6% excluded ColorMatrix. As a result of our acquisition of ColorMatrix, our Company Consolidated Working Capital as a Percentage of Sales was increased slightly in 2012.

The actual amounts earned by the Named Executive Officers underAll short-term incentive plan awards have been made in accordance with the Annual Plan, which was unanimously approved and adopted by our Board on March 6, 2015 and approved by shareholders at the Annual Meeting in May 2015. Mr. Newlin was not eligible for 2012 are set forth ina payout under the Non-Equity2015 Annual Incentive Plan Compensation column of the 2012 Summary Compensation Table. The Annual Plan, as it applies to the Named Executive Officers, is intended to comply with Section 162(m) of the Internal Revenue Code. A more detailed discussion of Section 162(m) of the Internal Revenue Code appears in the “Tax Considerations” section below.Program.

Long-Term Incentive

Incentive.We also provide performance-based long-term incentive compensation to our senior executives, including the Named Executive Officers to directly tie the interests of these individuals to the interests of our shareholders. We also believe that long-term incentive compensation is an important retention tool. At the Annual Meeting in May 2010, our shareholders approved the 2010 Equity and PerformanceLong-Term Incentive Plan (referred to as the “2010 Plan” or the “Long-Term Incentive Plan”),under which was used to makewe can provide long-term equity incentive awards in 2012.to our executives. At the Annual Meeting in May 2012, our shareholders approved the First Amendmentfirst amendment to the 2010 Plan (referred to as the “2010 Amended Plan”). Future Long-Term Incentive Plan. The 2015 awards were granted under the Amended Long-Term Incentive Plan.

On March 6, 2015, our Board unanimously approved and adopted the Amended and Restated PolyOne Corporation 2010 Equity and Performance Incentive Plan grants, including(the “Long-Term Incentive Plan”) which was approved by shareholders at the 2013 grants,Annual Meeting in May 2015. Future long-term incentive plan awards are expected to be madegranted under the 2010 AmendedLong-Term Incentive Plan.

Individual Long-Term Incentive Plan targets,The individual long-term incentive target opportunities provided to our Named Executive Officers, which are reflected as a percentage of base salary, are established with consideration of our competitive market pay philosophy discussed in the “Competitive Market Pay Information“Executive Compensation Philosophy and Benchmarking”Objectives” section aboveof this proxy statement and are intended to reward the Named Executive Officers for achieving specific performance objectives. The awards granted for 2015 under the Amended Long-Term Incentive Plan grants for 2012 are based upon our closing stock price on December 31, 2011.2014. The accounting value of the granteach award is determined using the grant date of the award. The value of the grant varies as the stock price increases or decreases in the interim. In order to focus participants on the

32

---

Mr. Newlin was not eligible for a 2015 long-term performance goals critical to our success and investment success for our shareholders, theincentive award. The Compensation Committee approved the following decisions with respect to the individual target Long-Term Incentive Planlong-term incentive opportunities forof the Named Executive Officers during the first quarterfor 2015, which were in effect as of 2012:February 2015 (the grant date of our annual long-term incentive awards): Mr. Patterson’s opportunity was increased from 150% to 325%, reflecting his promotion to CEO; Mr. Richardson’s opportunity continued to be 135%; Messrs. Van Hulle and Nikrant’s opportunities continued to be 100%; and Ms. McAlindon’s opportunity was increased from 90% to 100% based on market factors.

		Long-Term Incentive Opportunity
Named Executive Officer		2011 Target (as a percentage of base salary)				2012 Target (as a percentage of base salary)
S.D. Newlin		350%				350%
R.M. Patterson		135%				140%
R.J. Diemer, Jr.(1)		N/A				100%
R.M. Rosenau		100%				100%
K.M. Smith		100%				100%
T.J. Kedrowski		100%				100%

(1)	Mr. Diemer was hired in March, 2012 and did not have a PolyOne Long-Term Incentive Plan opportunity in 2011.

Based on 20122015 competitive market data provided by the Consultant, we determined that the individual Long-Term Incentive Plantarget opportunities granted to the Named Executive Officers in 20122015 ranged from 17%5% to 60% below to 25% above the 20122015 market median for comparable positions,positions. Mr. Patterson’s target opportunity is 60% below the 2015 market median. This reflects the Compensation Committee’s intention to move Mr. Patterson’s pay toward the market median as he becomes more tenured as CEO. Mr. Newlin was excluded from this analysis as he did not receive a 2015 long-term incentive award and individual opportunities varied based on timeMs. McAlindon was excluded from this analysis as she was no longer with the Company individual performance and leadership efforts.at the time this analysis was performed.

Awards Granted in 2012

In February 2012, we granted Long-Term Incentive Plan awards under the 2010 Plan.2015. After a thorough evaluation of other possible equity vehicles, the Compensation Committee decidedelected to retain the same three equitycompensation vehicles and weightings that we used in 2011,2014 for the 2015 long-term incentive awards, which are listed below,below. We maintained this plan design to continue to provide a balance between the relative values of the three components and tocompensation vehicles while efficiently useusing the shares available under the 2010 Plan. However, we shifted 5% of the value previously allocated to cash-settled performance units to SARs in order to align theAmended Long-Term Incentive Plan opportunity more closely with shareholder interests by emphasizing stock price appreciation.Plan. Of these three equity vehicles, the cash-settled performance units and the SARs were established with requisitehave performance conditions. The amount ofconditions, as described in detail below. Both the cash-settled performance units earned by the Named Executive Officers is determined based on our achievement of Adjusted Earnings Per Share performance goals, and the SARs were designedare additionally subject to vest based on our achievement of certain stock price hurdlestime-based vesting as described below, and additionally vest in annual time-based tranches over a three-year period from the date of the grant.detail below. The restricted stock units (“RSUs”) are time-based awards that vest in their entirety on the third anniversary of the grant date.

 

Award		2011         Weighting		2012         Weighting
Cash-Settled Performance Units		34%		29%
Stock Appreciation Rights (SARs)		33%		38%
Restricted Stock Units (RSUs)		33%		33%

 

33

---

Cash-Settled Performance Units

The cash-settled performance units granted in February 2012 will be earned based on achieving performance goals relating to our Adjusted Earnings Per Share during the three-year period 2012-2014. The Compensation Committee maintained Adjusted Earnings Per Share as the performance measure in order to drive improvements in shareholder value. In 2012, we instituted the following four performance periods and relative weightings to drive annual performance as well as cumulative performance (requiring yearly, as well as cumulative, performance goals ensures that Adjusted Earnings Per Share growth is a constant and visible incentive goal for our Named Executive Officers to achieve each year).

 

Performance Period		Weighting
January 1, 2012 through December 31, 2012		25%
January 1, 2013 through December 31, 2013		25%
January 1, 2014 through December 31, 2014		25%
January 1, 2012 through December 31, 2014		25%35

The attainment level for

---

COMPENSATION DISCUSSION AND ANALYSIS

On February 4, 2015, we granted awards under the cash-settled performance units will be determined at the end of each applicable performance period. We established threshold, target and maximum Adjusted Earnings Per Share goals for each of the above listed performance periods. Participants will earn, for the applicable performance period: (1) 100% of the target award of cash-settled performance units upon attainment of the target performance level; (2) 50% of the target award upon attainment of the threshold performance level or (3) 200% of the target award upon attainment of the maximum (or greater) performance level. If final performance falls between the threshold and target or between target and maximum, earned award amounts will be interpolated. If threshold performance is not achieved, no award will be paidAmended Long-Term Incentive Plan to the participants for the applicable performance period. The cash-settled performance units generally do not vest and pay out until December 31, 2014, in order to serve as a retention vehicle.

We do not disclose the specific Adjusted Earnings Per Share goals that we have established for the cash-settled performance units granted in 2012 in this proxy statement because (1) these goals relate to executive compensation to be earned and/or paid in future years and do not effect a fair understanding of the Named Executive Officers’ compensation for 2012 and (2) we believe that disclosure of such goals while the applicable performance period is on-going would cause us competitive harm. However, we expect to disclose such goals in future proxy statements once the applicable performance periods have ended as part of our discussion and analysis about the amounts earned by the Named Executive Officers under these awards. In setting the applicable target levels, the Compensation Committee considered how achievement of the performance goals could be impacted by events expected to occur in the coming years. When establishing the specific goals for the Adjusted Earnings Per Share performance metric, we specifically considered how likely it will be for us to achieve the goals. We believe that the threshold goals have been established at levels that should be appropriately difficult to attain, and that the target goals will require considerable and increasing collective effort on the part of our employees, includingall our Named Executive Officers, to achieve. Achievement of the maximum goal is considered to be a stretch goal given current market conditions.

The performance unit grants made in 2012 for the Named Executive Officers under the 2010 Plan are set forth in the 2012 Grants of Plan-Based Awards table.

34

---

Stock-Settled SARs

To continually reinforce our ongoing commitment to enhancing shareholder value, the Named Executive Officers received an award of performance-based SARs that, when exercised by the holder, are settled in our common shares. Each SAR granted to our Named Executive Officers in 2012 has a base price equal to the closing market price of our common shares on the date of grant. For the 2012 grants, SARs initially vest one-third upon attaining each of the following stock price hurdles for thirty consecutive trading days: 10%, 15% and 20% increase respectively over the initial grant date closing stock price of $14.61. These hurdles were achieved in 2012. The SARs are then subject to additional time-based vesting requirements that lapse one-third on each of the first three anniversaries of the date of the grant, generally subject to the officer’s continued employment. They have an exercise term of ten years.

The performance-based SARs granted in 2012 to the Named Executive Officers under the 2010 Plan are set forth in the 2012 Grants of Plan-Based Awards table.

Restricted Stock Units (RSUs)

To promote share ownership and enhance the retention of our executives, we also granted time-based RSUs in 2012 to all Named Executive Officers. The RSUs vest on the third anniversary of the grant date. The time-based RSUs granted in 2012 to the Named Executive Officers under the 2010 Plan are set forth in the 2012 Grants of Plan-Based Awards table.

Awards Granted in Prior Years

In 2011, the Compensation Committee approved the attainment level of cash-settled performance units granted at the start of 2010 for performance during the period January 1, 2010 through December 31, 2010. The performance units were not to be paid until the end of the three-year vesting period, which began in 2010, for retention purposes. These cash-settled performance units were earned by achieving performance goals related to our Working Capital as a Percentage of Sales over the one-year performance period. In 2012, the Named Executive Officers received a cash payout based on an attainment of 200% of the target level performance for this goal, as reflected below:

		2010 Goals
Performance Measure		Threshold    (50%)		Target    (100%)		Maximum      (200%)		Actual Result		% Attainment
Working Capital as a Percentage of Sales		12.0%		11.5%		10.6%		9.6%		200%

Payouts for the cash-settled performance units originally granted in 2010 to the Named Executive Officers under the Long-Term Incentive Plan are reflected in the Non-Equity Incentive Plan Compensation column of the 2012 Summary Compensation Table in this proxy statement. Due to the uncertainty in the tax environment, the payment was made in December, 2012 instead of January, 2013.

All equity awards outstanding as of December 31, 2012 are set forth in the Outstanding Equity Awards at 2012 Fiscal Year-End table in this proxy statement.

35

---

Retirement Benefits

We offer the following retirement benefits to eligible employees and certain Named Executive Officers as specified below. Additional details about these plans, as they apply to the Named Executive Officers, are included in the narrative to the 2012 Pension Benefits Table and 2012 Deferred Compensation Table in this proxy statement.

A defined contribution retirement benefit available to all United States employees through an Internal Revenue Code tax-qualified profit sharing/401(k) plan (referred to as the “Qualified Savings Plan”);

An unfunded, nonqualified plan that provides benefits similar to the Qualified Savings Plan (referred to as the “Nonqualified Savings Plan”), but without the Internal Revenue Code contribution and earnings limitations;

An employer-funded Internal Revenue Code-qualified defined benefit pension plan (referred to as the “Qualified Pension Plan”), as well as an unfunded, nonqualified defined benefit pension plan (referred to as the “Benefit Restoration Plan”), under which Messrs. Rosenau and Smith are eligible, along with certain other employees, to receive frozen benefits. In addition, since becoming retirement eligible (55 years of age with 10 years of service), Messrs. Rosenau and Smith are eligible to receive certain retiree medical benefits for which they will be required to pay 100% of the notional annual premium; and

A supplemental retirement benefit forexcept Mr. Newlin that provides annual supplemental retirement payments, payable in the form of a 15-year certain and continuous life annuity, conditioned upon his execution of a release and waiver and upon a “qualifying separation from service” (as such term is defined in his employment agreement).

Other Benefits

We provide minimal benefits to the Named Executive Officers, which we believe are necessary to compete for executive talent. The additional benefits for the Named Executive Officers generally consist of a benefit allowance, limited reimbursement of expenses for financial planning and tax preparation, a moving allowance (where applicable), and an annual physical examination. The specific amounts attributable to other benefits for 2012 for the Named Executive Officers are disclosed in the 2012 Summary Compensation Table in this proxy statement.

The benefit allowance, and reimbursement of expenses for financial planning and tax preparation are treated as taxable income to the Named Executive Officers and arewho was not grossed up by the Company. The moving allowance is also treated as taxable income to the Named Executive Officers. Tax gross-ups are provided for taxable moving allowances and imputed income for spouse/guest travel.

We also provide other benefits such as medical, dental, life insurance and disability coverage to each United States based Named Executive Officer, which are benefits identical to the benefits provided to all other eligible United States based employees. We provide vacation and paid holidays to all employees, including the Named Executive Officers. The Named Executive Officers were eligible for the following vacation periods in 2012: Mr. Newlin — five weeks; Mr. Patterson — four weeks; Mr. Diemer – 4 weeks; Mr. Rosenau — five weeks; Mr. Smith — five weeks; and Mr. Kedrowski — four weeks.

36

---

Employment Agreements with Named Executive Officers

Mr. Newlin is a party to an employment agreement with us, as described below. We do not maintain employment agreements with any of the other Named Executive Officers, although each of our Named Executive Officers is a party to a Continuity Agreement, as described in “Potential Payments Upon Termination or Change of Control” below.

Mr. Newlin

On February 6, 2006, we entered into an agreement with Mr. Newlin, under which he serves as our Chairman, President and Chief Executive Officer. We entered into this agreement in order to attract Mr. Newlin to PolyOne and setlong-term incentive award per the terms of his employment. The agreement provided for specified equity awards that were intended to serve as an inducement to join PolyOne, set an initial base salary and provided for his participation in our various long-term incentive and benefit plans in effect during the term of his employment. In addition, the agreement provides for certain payments upon termination of employment, as described more fully in “Potential Payments Upon Termination or Change of Control” below. Mr. Newlin’s agreement also provides for a supplemental retirement benefit, as described above and more fully in the narrative for the 2012 Pension Benefits Table in this proxy statement.

Tax Considerations

Cash compensation, such as base salary and annual incentive compensation, is taxable to the recipient as ordinary income when earned, unless deferred under a company-sponsored deferral plan. Deferrals under Internal Revenue Code tax-qualified plans, such as a 401(k) plan, do not affect our current tax deduction. Deferrals under supplemental executive deferral plans delay our tax deduction until the deferred amount (and any accumulation thereon) is paid. Stock-settled SARs are generally taxable as ordinary income when exercised, RSUs are taxable as ordinary income when they vest, and cash-settled performance units are generally taxable when paid. We realize a tax deduction at those specified times. The Compensation Committee reviews potential tax implications before making decisionsLetter Agreement. Details regarding compensation.

Management and the Compensation Committee are aware of Section 162(m) of the Internal Revenue Code, which generally limits the deductibility of executive pay in excess of one million dollars for certain Named Executive Officers, and which specifies the requirements for the “performance-based” exemption from this limit. The Compensation Committee generally intends for our incentive programs to qualify for the performance-based exemption. It also reserves the right to provide compensation that does not meet the exemption criteria if, in its sole discretion, it determines that doing so advances our business objectives.

Accounting Considerations

When reviewing preliminary recommendations and in connection with approving the terms of a given incentive plan period, management and the Compensation Committee review and consider the accounting implications of a given award, including the estimated expense and/or dilutive considerations. Depending upon the type of accounting treatment associated with an incentive plan design, management and the Compensation Committee may alter or modify the incentive award due to the accounting treatment if the award (and the related accounting consequences) were to adversely affect our financial performance.

37

---

Executive Compensation Governance

Stock Ownership and Retention Guidelines

In order to better align the financial interests of our executives with those of our shareholders, we believe our executives should own a meaningful number of shares of PolyOne stock. We have adopted Guidelines specifying a minimum level of stock ownership for all executives, including all Named Executive Officers. In December 2012, we amended our Guidelines to more accurately reflect the market median multiple of salary for all of our executive officers, including our Named Executive Officers. This change was necessary due to significant stock price appreciation that had occurred since the prior adoption of the Guidelines.

The current retention requirements state that all officers are required to retain 100% of all net shares obtained through the Company as compensation for services provided. The requirement to retain 100% will cease when the Guidelines have been met provided that an officer can only divest of a number of shares such that the Guidelines continue to be met. In general, shares counted toward required ownership include shares directly held, shares and phantom shares held in our retirement or deferral plans, and RSUs. The specific levels of stock ownership for the Named Executive Officers are noted in the following table. Executives are expected to accumulate the specified shares within five years of their becoming subject to the Guidelines. These policies, as they relate to our Directors, are discussed in the “Stock Ownership Guidelines for Directors” sectioneach component of this proxy statement.

Stock Ownership Guidelines

		Newlin				Patterson				Diemer				Rosenau				Smith				Kedrowski
Stock Ownership Target (in shares)			275,000				120,000				75,000				45,000				45,000				45,000
Prorated Stock Ownership Target (in shares)(1)							96,000				15,000
Multiple of Salary (based on 3/1/13 closing stock price of $22.55)			5.9				3.9				0.8				2.8				2.8				2.5
Total Share Ownership as of 3/1/13			581,304				258,859				97,917				168,674				139,965				226,453
Value of Total Share Ownership as of 3/1/13		$	13,108,413			$	5,837,276			$	2,208,033			$	3,803,599			$	3,156,211			$	5,106,515
Value of Share Ownership as a Multiple of Salary			12.48				10.59				5.08				10.42				8.65				12.77

(1)

Mr. Patterson and Mr. Diemer have been with PolyOne less than five years and are not yet required to reach 100% of the full Guidelines (120,000 shares for Mr. Patterson and 75,000 shares for Mr. Diemer). The stock ownership targets for Messrs. Patterson and Diemer have been reduced to reflect that each have been with PolyOne for less than five years.

Timing with Respect to Equity Award Grants

We have adopted a policy with respect to the timing of the grant of equity awards, which provides that equity awards are granted pursuant to approval by the Board or the Compensation Committee or, pursuant to authority delegated by the Board or the Compensation Committee to the Chief Executive Officer. Such grants generally should be made at times when the Company is not in possession of material non-public information; and not made during a “blackout period,” which is the period of time that is in close proximity to the release of financial or material non-public information. The policy further provides that, to the extent practicable, annual grants to existing employees should be approved

38

---

at regularly scheduled meetings and that the grant price for any stock option or stock appreciation right shall not be less than the fair market value of the Company’s common shares on the date of grant (which is defined as the closing price of our common shares on the date of grant).

Clawback Policy

We have adopted a policy that is consistent with the requirements of the Sarbanes-Oxley Act of 2002, which requires the Chief Executive Officer and Chief Financial Officer to reimburse us for any awards received during the twelve-month period following the release of financial results that subsequently require an accounting restatement due to material noncompliance with any financial reporting requirement if they are subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act. If necessary, we plan to modify our policy to comply with the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), when the SEC or NYSE implements rules and regulations.

Prohibition on Hedging and Pledging

Our Securities Trading Policy currently provides that, consistent with our philosophy to encourage long-term investments, Directors, officers and certain other employees of PolyOne are prohibited from engaging in any speculative transactions involving our securities, including buying or selling puts or calls, short sales, or margin purchases of our securities. Directors, Officers and certain other employees are also prohibited from pledging our securities. If necessary, we plan to modify our policy to comply with the provisions of the Dodd-Frank Act when they are finalized.

39

---

Executive Compensation

The following tables, narrative and footnotes discuss the compensation of our Named Executive Officers.

2012 SUMMARY COMPENSATION TABLE

The following table sets forth the compensation earned by, and the compensation opportunity granted to, our principal executive officer, our principal financial officers that served in such capacity in 2012, and our other three most highly compensated executive officers for 2012, during the fiscal years ended December 31, 2012, December 31, 2011 and December 31, 2010, as applicable.

Name and Principal Position (a)		Year (b)		Salary ($) (c)		Bonus   ($) (d)		Stock Awards ($) (e)		Option Awards ($) (f)		Non- Equity Incentive Plan  Compensation  ($) (g)		Change in Pension Value and Nonqualified Deferred  Compensation  Earnings ($) (h)		All Other  Compensation  ($) (i)		Total ($) (j)
Stephen D. Newlin, Chairman, President and Chief Executive Officer		2012		978,846		—		1,519,440		1,611,627		4,081,699		1,273,625		336,808		9,802,045
		2011		946,538		—		1,285,508		1,282,148		4,088,859		520,514		309,7591		8,433,326
		2010		860,000		—		967,589		850,590		3,030,236		538,990		1,263,730		7,511,135
Robert M. Patterson, Executive Vice President and Chief Operating Officer		2012		513,461		—		318,498		338,997		1,071,941		—		107,419		2,350,317
		2011		473,269		—		247,327		247,660		996,654		—		97,152		2,062,062
		2010		424,231		—		191,760		167,700		509,077		—		71,168		1,363,936
Richard J. Diemer, Jr., Senior Vice President and Chief Financial Officer		2012		339,635		—		537,100		185,500		381,885		—		109,706		1,553,826
Robert M. Rosenau, Senior Vice President, President of Performance Products and Solutions		2012		359,615		—		151,944		161,857		636,766		283,024		63,024		1,656,231
Kenneth M. Smith, Senior Vice President, Chief Information and Human Resources Officer		2012		359,615		—		151,944		161,857		612,645		249,773		84,186		1,620,021
		2011		350,769		—		131,809		130,732		617,187		158,619		83,045		1,472,161
		2010		340,923		—		107,865		94,380		504,501		130,531		70,308		1,248,508
Thomas J. Kedrowski, Executive Vice President, Global Operations and Process Improvement		2012		350,615		—		151,944		161,857		593,368		—		64,329		1,322,114
		2011		341,000		—		131,809		130,732		596,738		—		75,073		1,275,352
		2010		328,769		—		107,865		94,380		484,735		—		221,966		1,237,715

(1)	Compensation for Mr. Diemer is provided only for 2012 as he was hired as our Senior Vice President and Chief Financial Officer in March 2012. Compensation for Mr. Rosenau is provided only for 2012 because he was not a Named Executive Officer in 2010 and 2011.

Bonus (column (d))

No amounts are reported in this column because the Company paid annual incentives to the Named Executive Officers based upon pre-determined performance metrics. These payments, which were made under the Company’s Annual Plan, are reported in the Non-Equity Incentive Plan Compensation column (column (g)).

40

---

Stock Awards (column (e))

The amounts reported in the stock awards column include, for 2012, time-vested stock settled RSUs granted in 2012 to the Named Executive Officers under our 2010 Plan. The amounts reported for 2012 represent the grant date fair value of those stock awards determined pursuant to FASB Accounting Standards Codification (“ASC”) Topic 718. For information regarding the assumptions used in determining the fair value of these awards, please refer to Note 14, Share-Based Compensation, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. These grantsaward are described more fully in the narrative following the 2012 Grants of Plan-Based Awards table and in the “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Long-Term Incentive — Awards Granted in 2012 — Restricted Stock Units” section of this proxy statement.

The Company cautions that the amounts reported for these awards may not represent the amounts that the Named Executive Officers will actually realize from these awards. To what extent a Named Executive Officer realizes value will depend on our stock price and continued employment.

Option Awards (column (f))

The amounts reported in the Option Awards column include, for 2012, stock-settled SARs with time and performance based vesting requirements that were granted in 2012 to the Named Executive Officers under our 2010 Plan. The amounts reported for 2012 represent the grant date fair value of those SARs granted to each of the Named Executive Officers, calculated in accordance with FASB ASC Topic 718. For information regarding the assumptions used in determining the fair value of these awards, please refer to Note 14, Share-Based Compensation, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. These grants are described more fully in the narrative following the 2012 Grants of Plan-Based Awards table and in the “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Long-Term Incentive — Awards Granted in 2012 — Stock-Settled SARs” section of this proxy statement.

The Company cautions that the amounts reported for these awards may not represent the amounts that the Named Executive Officers will actually realize from the awards. To what extent a Named Executive Officer realizes value will depend on our stock price and continued employment.

To see the value actually received upon exercise of SARs by the Named Executive Officers in 2012, refer to the Option Exercises and Stock Vested table section of this proxy statement.

Non-Equity Incentive Plan Compensation (column (g))

The amounts reported in the Non-Equity Incentive Plan Compensation column for 2012 reflect the amounts earned by each Named Executive Officer under the 2012 Annual Plan (and received in February, 2013), and under the 2010 — 2012 Long-Term Incentive Plan awards (and received in December, 2012). The terms of the Annual Plan are described more fully in the narrative following the 2012 Grants of Plan-Based Awards table and in the “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Annual Incentive” section of this proxy statement.

41

---

The terms of the 2010 — 2012 Long-Term Incentive Plan cash-settled performance units are described more fully in the narrative following the “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Awards Granted in Prior Years” section of this proxy statement. The amounts earned by the named Executive Officers under each award are listed below.

Name		Annual Plan         ($)		Cash-Settled         Performance Units         ($)
S.D. Newlin		2,017,794		2,063,905
R.M. Patterson		673,559		398,382
R.J. Diemer, Jr.		381,885		N/A
R.M. Rosenau		395,577		241,189
K.M. Smith		370,656		241,989
T.J. Kedrowski		361,379		231,989

Change in Pension Value and Nonqualified Deferred Compensation Earnings (column (h))

The amounts reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column for 2012 are comprised entirely of changes between December 31, 2011 and December 31, 2012.

Mr. Newlin is entitled to a supplemental retirement benefit under his employment agreement, as described more fully in the “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Retirement Benefits” section of this proxy statement. The amount listed for him for 2012 represents the aggregate change in actuarial present value (determined by subtracting the December 31, 2011 actuarial present value from the December 31, 2012 actuarial present value) of the annual benefit payment that will be payable as a 15-year certain and continuous life annuity beginning at age 59.9 and assumes that Mr. Newlin has a “Qualifying Separation from Service” as that term is defined in his employment agreement.

Messrs. Rosenau and Smith participate in the Qualified Pension Plan and the Benefit Restoration Plan that existed prior to our formation in 2000 through the consolidation of Geon and M.A. Hanna. The amounts listed for them represent the aggregate change in actuarial present value (determined by subtracting the December 31, 2011 actuarial present value from the December 31, 2012 actuarial present value) of Messrs. Rosenau and Smith’s accumulated benefits under the Qualified Pension Plan and the Benefit Restoration Plan.

All Other Compensation (column (i))

The amounts reported in the All Other Compensation column for 2012 reflect, for each Named Executive Officer, the sum of (1) the incremental cost to the Company of all other executive benefits, (2) dividend equivalents on outstanding RSUs and (3) the amounts contributed by the Company to the Qualified Savings Plan and the Nonqualified Retirement Plan. Amounts contributed to either the Qualified Savings Plan and the Nonqualified Retirement Plan are calculated on the same basis for all participants, including the Named Executive Officers. The material provisions of the Qualified Savings Plan and the Nonqualified Retirement Plan are described in the narrative following the “2012 Pension Benefits” section of this proxy statement.

42

---

The following table outlines those other executive benefits and additional all other compensation required by SEC rules to be separately quantified. The narrative following the table describes all categories of other benefits and other personal benefits provided by the Company in 2012.

Name     (a)		Benefit Allowance ($) (b)		Financial Planning & Tax Preparation ($) (c)		Dividend Equivalents on Outstanding RSUs ($) (d)		Executive Physical ($) (e)		Company Contributions to Qualified Savings Plan ($) (f)		Company Contributions to Nonqualified Retirement Plan ($) (g)		Moving Allowance ($) (h)				Spouse/ Guest Travel ($) (i)				Tax Gross-ups ($) (j)				Total ($) (k)
S.D. Newlin		24,000		13,000		62,380		3,575		16,250		178,991			0				22,675				15,938				336,808
R.M. Patterson		7,200		10,000		12,500		2,036		16,250		56,012			0				2,009				1,412				107,419
R.J. Diemer, Jr.		0		3,500		7,000		3,300		16,250		5,826			44,356				0				29,474				109,706
R.M. Rosenau		19,200		10,000		6,560		0		16,250		7,835			0				1,867				1,312				63,024
K.M. Smith		19,200		8,464		6,560		2,200		16,250		31,512			0				0				0				84,186
T.J. Kedrowski		19,200		10,000		6,560		0		16,250		12,319			0				0				0				64,329

Benefit Allowance (column (b))

The Company provides nominal benefit allowances to certain executives, including the Named Executive Officers.

Financial Planning and Tax Preparation (column (c))

The Company provides a taxable reimbursement to the Named Executive Officers for financial planning, which may include tax preparation and estate planning services. No tax reimbursement is provided to the Named Executive Officers for this benefit.

Dividend Equivalents on Outstanding RSUs (column (d))

The 2010 Plan provides for dividend equivalents on outstanding RSUs for all eligible participants, including the Named Executive Officers, which are deferred and contingent upon meeting the vesting requirements of the underlying RSUs. The amounts in this column represent dividend equivalents attributable to outstanding RSUs in 2012, including dividends declared on October 11, 2012 to shareholders of record on December 12, 2012 and paid on January 7, 2013. As the dividends were not considered in the grant date fair value computation for those awards under FASB ASC Topic 718, they are reported as “All Other Compensation.”

Executive Physicals (column (e))

The Company makes executive physicals available to all executive officers, including the Named Executive Officers.

Company Contributions to Qualified Savings Plan (column (f))

The Company makes matching contributions on behalf of all employees, including the Named Executive Officers in accordance with the Qualified Savings Plan.

Company Contributions to Nonqualified Retirement Plan (column (g))

The Company makes matching contributions on behalf of all eligible participants, including the Named Executive Officers, under the Nonqualified Savings Plan.

43

---

Moving Allowance (column (h))

The Company provided a moving allowance to Mr. Diemer to assist with the expense attributable to relocation, including, temporary housing and house hunting trips.

Spouse/Guest Travel (column (i))

The Company imputes income to our Named Executive Officers for spouse/guest travel, which was incurred by Messrs. Newlin, Patterson and Rosenau in connection with the Company’s achievement award meeting. Attendees at this achievement award meeting are encouraged to bring a guest to celebrate the achievements of the Company’s best performers. Spouse/guest travel was also incurred by Mr. Newlin in conjunction with attending certain business and customer events, where guests were expected to attend as participants in the meetings.

Tax Gross-ups (column (j))

The Company provides a tax gross-up on moving allowances and imputed spouse/guest travel expenses incurred in conjunction with Company business travel.

44

---

2012 GRANTS OF PLAN-BASED AWARDS

Name (a)		Grant Date   (b)		Estimated Future Payouts Under Non-Equity Incentive Plan Awards												Estimated Future Payouts Under Equity Incentive Plan Awards								All Other Stock Awards: Number of Shares of Stock or Units (#) (h)				Exercise or Base Price of Option Awards ($/Sh) (i)						Grant Date Fair Value of Stock and Option Awards ($) (j)
				Threshold ($) (c)				Target ($) (d)				Maximum ($) (e)				Threshold ($) (f)				Target ($) (g)
S.D. Newlin					538,365				1,076,731				2,153,462
		2/14/2012			514,500				1,029,000				2,058,000
		2/14/2012															77,333				232,000								14.61						1,611,627
		2/14/2012																							104,000										1,519,440
R.M. Patterson					179,712				359,423				718,846
		2/14/2012			108,150				216,300				432,600
		2/14/2012															16,267				48,800								14.61						338,997
		2/14/2012																							21,800										318,498
R.J. Diemer, Jr.					101,890				203,781				407,562
		3/8/2012			65,000				130,000				260,000
		3/8/2012					��										10,000				30,000								13.01						185,500
		3/8/2012																							30,000										390,300
		7/16/2012																							10,000										146,800
R.M. Rosenau					98,894				197,788				395,577
		2/14/2012			53,250				106,500				213,000
		2/14/2012															7,767				23,300								14.61						161,857
		2/14/2012																							10,400										151,944
K.M. Smith					98,894				197,788				395,577
		2/14/2012			53,250				106,500				213,000
		2/14/2012															7,767				23,300								14.61						161,857
		2/14/2012																							10,400										151,944
T.J. Kedrowski					96,419				192,838				385,677
		2/14/2012			51,900				103,800				207,600
		2/14/2012															7,767				23,300								14.61						161,857
		2/14/2012																							10,400										151,944

Estimated Future Payouts Under Non-Equity Incentive Plan Awards (columns (c), (d) and (e))

The amounts located in the first row for each Named Executive Officer represent the cash-based award granted to the Named Executive Officer in 2012 under the Annual Plan. There is no grant date for the awards made under the Annual Plan. The actual amount earned for 2012 is included in the “Non-Equity Incentive Plan Compensation” column (column (g)) of the 2012 Summary Compensation Table of this proxy statement.

The amounts located in the second row for each Named Executive Officer represent the cash-settled performance units awarded in 2012 to the Named Executive Officer. Each performance unit is equal in value to $1.00. These cash-settled performance units are initially subject to achieving specified performance goals over the performance period from January 1, 2012 to December 31, 2014. The cash-settled performance units will be paid in cash, if earned, contingent upon the Named Executive Officer remaining in continuous employment through the payment date, which shall be in 2015 and shall occur no later than March 15, 2015.

45

---

“Threshold” refers to the minimum amount payable upon reaching the threshold level of performance under the Annual Plan and the 2010 Plan. If threshold performance is not attained, then the participant will receive $0 for the 2012 awards granted under each applicable plan.

Estimated Future Payouts Under Equity Incentive Plan Awards (columns (f) and (g))

Columns (f) and (g) represent stock-settled SARs granted to the Named Executive Officers, which initially vest in one-third increments upon attaining each of the following stock price hurdles for thirty consecutive trading days: 10%, 15% and 20% respective increase over the initial grant date closing stock price of $14.61. The stock price hurdles were achieved in 2012. These SARs are also subject to time-based vesting, which lapse one-third on each of the first three anniversaries of the date of grant, generally subject to the officer’s continued employment. They have an exercise term of ten years.

“Threshold” refers to the minimum number of shares underlying the SAR award that will vest upon reaching the threshold level of performance, which is satisfaction of the first stock price hurdle. Threshold equates to vesting in one-third of the SAR award. If threshold performance is not attained, then the participant will not vest in any of the SARs for the 2012 award. “Target” refers to the number of shares underlying the SARs that will vest upon satisfaction of all of the stock price hurdles under the 2012 grant. The SARs do not have a “maximum” level of attainment as a participant cannot receive SARs in excess of the initial award.

All Other Stock Awards: Number of Shares of Stock or Units (RSUs) (column (h))

This column represents stock-settled RSUs granted to the Named Executive Officers in 2012 under the 2010 Plan, which vest on the third anniversary of the grant date. The RSUs have dividend equivalent rights that entitle the grantee to dividend equivalents on each share of our common stock underlying the award equal to the dividend per share declared and paid on our issued and outstanding shares of common stock. The dividend equivalent rights are subject to the same restrictions as the underlying RSUs.

Exercise or Base Price of Option Awards (column (i))

In setting the base price of these SARs, we followed the practice of using the closing price on the grant date. This practice is in compliance with the 2010 Plan. The award of stock-settled SARs that was granted in 2012 to the Named Executive Officers was established with a base price equal to PolyOne’s closing stock price on the date of the grant.

Grant Date Fair Value of Stock and Option/SAR Awards (columns (j))

The amounts in this column represent the grant date fair value of each equity-based award, computed in accordance with FASB ASC Topic 718. For information regarding the assumptions used in determining the fair value of an award, please refer to Note 14, Share-Based Compensation, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Narrative disclosure relating to the 2012 Summary Compensation Table and the 2012 Grants of Plan-Based Awards Table

Annual Plan

Annual cash incentives were awarded for 2012 under our Annual Plan and are based on achieving performance goals relating to Company Adjusted Operating Income and consolidated Working Capital

46

---

as a Percentage of Sales (for the corporate staff participants) and business unit Operating Income and consolidated Working Capital as a Percentage of Sales (for Mr. Rosenau). For a more detailed discussion of our Annual Plan, see “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Annual Incentive.”

Cash-Settled Performance Units

.Cash-settled performance units were grantedprovide an opportunity for employees to receive a cash bonus if specified performance measures are met for a pre-defined performance period. The Compensation Committee maintained Adjusted Earnings Per Share as the 2015 performance measure in 2012order to all ofdrive improvements in shareholder value. We will use the four performance periods and relative weightings listed below to drive annual performance as well as cumulative performance. Requiring annual, as well as cumulative, performance goals ensures that Adjusted Earnings Per Share growth is a constant and visible incentive goal for our Named Executive Officers under our 2010 Planto achieve each year.

Performance Period		Weighting
January 1, 2015 through December 31, 2015		25%
January 1, 2016 through December 31, 2016		25%
January 1, 2017 through December 31, 2017		25%
January 1, 2015 through December 31, 2017		25%

The attainment level for the cash-settled performance units will be certified at the end of the three-year performance period. We established threshold, target and are based upon achieving four distinct performance goals related to four distinct performance periods that are weighted 25% each. There are three one-year performance periods and one three-year cumulative performance period, each of which requires performance at a range specified between January 1, 2012 and December 31, 2014. The performance goals are based uponmaximum Adjusted Earnings Per Share. ForShare goals for each of the above listed performance goal that is achieved,periods. Participants will earn, for the applicable performance period: (1) 100% of the target award of cash-settled performance units upon attainment of the target performance level; (2) 50% of the target award upon attainment of the threshold performance level or (3) 200% of the target award upon attainment of the maximum (or greater) performance level. If final performance falls between the threshold and target or between target and maximum, earned award amounts will be interpolated. If threshold performance is not achieved for a particular performance period, then no award will vestbe paid to the participants for such performance period. The cash-settled performance units do not pay out until the payment date in order to serve as a retention vehicle and participants must generally be distributedemployed on the payment date to receive payment. The payment date will be a date in early 2015, generally subject to continued employment. For a more detailed discussion of2018 determined by the Compensation Committee (or its authorized delegate), which shall occur no later than March 15, 2018.

We do not disclose the specific, forward-looking Adjusted Earnings Per Share goals that we established for the cash-settled performance units granted in 2012, see “Compensation Discussion2015 in this proxy statement because (1) these goals relate to executive compensation to be earned and/or paid in future years and Analysis — Analysisdo not affect a fair understanding of 2012 Compensation Decisionsthe Named Executive Officers’ compensation for 2015 and Actions — Long-Term Incentive — Awards Granted(2) we believe that disclosure of such goals while the applicable performance period is ongoing would cause us competitive harm. However, we disclose such goals in 2012 — Cash-Settled Performance Units.”future proxy statements once

Stock-Settled SARs

		36

---

COMPENSATION DISCUSSION AND ANALYSIS

the applicable performance periods have ended as part of our discussion and analysis about the amounts earned by the Named Executive Officers under these awards. In 2012,setting the applicable target levels, the Compensation Committee granted stock-settled SARsconsidered how achievement of the performance goals could be impacted by events expected to occur in the coming years. When establishing the specific goals for the Adjusted Earnings Per Share performance measure, we specifically considered how likely it will be for us to achieve the goals. We believe that the threshold goals have been established at levels that should be appropriately difficult to attain, and that the target goals will require considerable and increasing collective effort on the part of our employees, including our Named Executive Officers, to achieve. Achievement of the maximum goal is considered to be a stretch goal given current market conditions. The performance unit grants made in 2015 for the Named Executive Officers. TheseOfficers are set forth in the 2015 Grants of Plan-Based Awards table of this proxy statement.

Stock-Settled Stock Appreciation Rights.The SARs, initiallywhen exercised by the Named Executive Officers, are settled in our common shares and have an exercise price equal to the closing market price of our common shares on the grant date. However, the SARs are subject to an appreciation cap of 200% of the initial grant date closing stock price. To continually reinforce our ongoing commitment to enhancing shareholder value, the 2015 awards vest in one-third increments upon attainingthe later of: (1) achieving each of the following stock price hurdles and maintaining them for thirty consecutive trading days: 10%, 15% and 20% respective increase, respectively, over the initial grant date closing stock price of $14.61. The stock price hurdles were achieved in 2012. These SARs are also subject to$38.27; and (2) time-based vesting whichrequirements that lapse one-third on each of the first three anniversaries of the grant date, of grant, generally subject to the officer’sNamed Executive Officer’s continued employment. TheyNo performance hurdles were met in 2015. The SARs have an exercise term of ten years. For a more detailed discussion of the stock-settledThe SARs granted in 2012, see “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Long-Term Incentive — Awards Granted in 2012 — Stock-Settled SARs.”

Restricted Stock Units

The Compensation Committee granted RSUs2015 to the Named Executive Officers are set forth in 2012.the 2015 Grants of Plan-Based Awards table of this proxy statement.

Restricted Stock Units.RSUs are designed to promote share ownership and enhance the retention of our executives. The RSUs generally vest 100% and are payable in full on the third anniversary of the grant date. The RSUsdate and are accompanied by dividend equivalent rights that entitleset forth in the grantee to dividend equivalents2015 Grants of Plan-Based Awards table of this proxy statement.

Actions Taken on each share of our common stock underlying the award equal to the dividend per share declared and paid on our issued and outstanding shares of common stock. The dividend equivalent rights are subject to the same restrictions as the underlying RSUs. For a more detailed discussion of the RSUs granted in 2012, see “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Long-Term Incentive — Awards Granted in 2012Prior Years. In February 2016, the Compensation Committee reviewed, certified and approved the attainment level of cash-settled performance units granted at the start of 2013 for the three-year performance period of January 1, 2013 through December 31, 2015. The four, equally weighted performance periods listed below were used in order to drive annual as well as cumulative performance. The cash-settled performance units were earned by achieving performance goals related to our cumulative Adjusted Earnings Per Share over each performance period. For retention purposes, the performance units generally could not be paid until the payment date as approved by Compensation Committee (or its authorized delegate). The Named Executive Officers received a cash payout based on achieving 200% of the target level performance for this goal, reflected below.

		37

---

COMPENSATION DISCUSSION AND ANALYSIS

2013 – 2015 Cash-Settled Performance Units   Performance Measure: Adjusted Cumulative Earnings Per Share*
Performance Periods		Weighting		2013 - 2015     Threshold		2013 - 2015     Target		2013 - 2015     Maximum		2013 - 2015     Results		Payout     %
January 1, 2013 – December 31, 2013		25%		$1.13		$1.21		$1.33		$1.39		200%
January 1, 2014 – December 31, 2014		25%		$1.03		$1.21		$1.49		$1.80		200%
January 1, 2015 – December 31, 2015		25%		$1.05		$1.34		$1.81		$1.96		200%
January 1, 2013 – December 31, 2015		25%		$3.21		$3.76		$4.63		$5.15		200%
Total Attainment												200%

* All financial measures (performance measures and results) reported in the table above were calculated with adjustments for acquisitions, divestitures and special items pursuant to the terms of the plans and as approved by the Compensation Committee.

Actual payouts of the cash-settled performance units granted in 2013 to the Named Executive Officers under the Amended Long-Term Incentive Plan are set forth in the “Non-Equity Incentive Plan Compensation” column of the 2015 Summary Compensation Table of this proxy statement.

All equity awards outstanding as of December 31, 2015 are set forth in the Outstanding Equity Awards at 2015 Fiscal Year-End table of this proxy statement.

Other Aspects of Our Compensation Programs

The Compensation Committee, with support from management, also considers, adopts, reviews and revises executive officer benefit programs, promotions, and any individual agreements impacting the compensation and benefits of our Named Executive Officers. In addition, the Compensation Committee also oversees the governance of our compensation practices. The following section describes significant activities relating to the above that occurred in 2015.

Retirement Benefits. We offer the following retirement benefits to eligible employees and eligible Named Executive Officers as specified below. Additional details about these plans, as they apply to the Named Executive Officers, are included in the “2015 Pension Benefits” and “2015 Nonqualified Deferred Compensation” sections of this proxy statement.

·

A defined contribution retirement benefit available to eligible United States employees (as defined in the plan document) through an Internal Revenue Code tax-qualified profit sharing/401(k) plan (referred to as the “Qualified Savings Plan”);

·

An unfunded, nonqualified plan that provides benefits similar to the Qualified Savings Plan (referred to as the “PolyOne Supplemental Retirement Benefit Plan”), but without the Internal Revenue Code contribution and earnings limitations;

·

A supplemental retirement benefit for Mr. Newlin that provides annual supplemental retirement payments, payable in the form of a 15-year certain and continuous life annuity, conditioned upon his execution of a release and waiver and upon a “Qualifying Separation from Service” (as such term is defined herein).

Other Benefits.We provide other benefits to the Named Executive Officers that we believe are necessary to compete for executive talent. The additional benefits for the Named Executive Officers generally consist of a benefit allowance (which has been phased out for newly hired executive officers), limited reimbursement of expenses for financial planning and tax preparation, global travel health benefits and an annual physical examination. The specific amounts attributable to the 2015 other benefits provided to the Named Executive Officers are set forth in the “All Other Compensation” column of the 2015 Summary Compensation Table of this proxy statement. The benefit allowance and reimbursement of expenses for financial planning/tax preparation are treated as taxable income to the Named Executive Officers and are not grossed up by PolyOne. Tax gross-ups are provided for imputed income for spouse/guest travel.

		38

---

COMPENSATION DISCUSSION AND ANALYSIS

We also provide other benefits such as medical, dental, life insurance and disability coverage to each United States-based Named Executive Officer, which are identical to the benefits provided to all other eligible United States-based employees (as defined in the plan document). We provide vacation and paid holidays to all employees, including the Named Executive Officers. The Named Executive Officers were eligible for the following vacation periods in 2015: Mr. Patterson — Restricted Stock Units.”four weeks; Mr. Richardson — four weeks; Mr. Newlin — five weeks; Mr. Van Hulle — four weeks; Mr. Nikrant— four weeks; and Ms. McAlindon — four weeks.

Employment Agreements

Agreement with Named Executive Officer.Mr. Newlin is a party to an employment agreement with us, as described below. We do not havemaintain employment agreements with any of the other Named Executive Officers, although each of our Named Executive Officers except for Mr. Newlin. Mr. Newlin’s employmentis a party to a management continuity agreement, isthe details of which are described in detail in the “Compensation Discussionbelow and Analysis — Employment Agreements with Named Executive Officers” andare set forth in the “Potential Payments uponUpon Termination or Change of Control” sectionssection of this proxy statement.

On February 6, 2006, we entered into an agreement with Mr. Newlin, under which he served as our Chairman, President and Chief Executive Officer. We entered into this agreement in order to attract Mr. Newlin to PolyOne and set the terms of his employment. The agreement provided for specified equity awards that were intended to serve as an inducement to join PolyOne, set an initial base salary and provided for his participation in our various long-term incentive and benefit plans in effect during the term of his employment. In addition, the agreement provided for certain payments upon termination of employment, as described more fully in “Potential Payments Upon Termination or Change of Control” section of this proxy statement. Mr. Newlin’s employment agreement was amended and restated as of July 16, 2008, to provide for a supplemental retirement benefit, as described in the “2015 Pension Benefits” section of this proxy statement. Mr. Newlin’s employment agreement was further amended and restated by letter agreement (the “Letter Agreement”), on March 6, 2014, in connection with his retirement as CEO (effective May 15, 2014) and further amended on February 10, 2016 to extend his employment to July 1, 2016.

Under the Letter Agreement, Mr. Newlin is entitled to receive an annual salary of $655,850, which was reduced from his previous salary of $1,050,000 effective May 15, 2015. Further information regarding the Letter Agreement is detailed in the “Potential Payments Upon Termination or Change of Control” section of this proxy statement.

Departure of Former Executive.PolyOne and Ms. McAlindon agreed that Ms. McAlindon would step down from her position as Senior Vice President, President of Designed Structures and Solutions effective May 15, 2015. In conjunction with her departure, Ms. McAlindon received the benefits that she was entitled to under the Executive Severance Plan (as defined herein) and PolyOne and Ms. McAlindon executed an executive severance agreement and release (the “Severance Agreement”). The compensation and benefits that Ms. McAlindon received and the terms of the Severance Agreement are set forth in the “Potential Payments Upon Termination or Change of Control” section of this proxy statement.

Tax Considerations.Cash compensation, such as base salary and annual incentive compensation, is taxable to the recipient as ordinary income when earned, unless deferred under a company-sponsored deferral plan. Deferrals under Internal Revenue Code tax-qualified plans, such as a 401(k) plan, do not affect our current tax deduction. Deferrals under supplemental executive deferral plans delay our tax deduction until the deferred amount (and any accumulation thereon) is paid. Stock-settled SARs are generally taxable as ordinary income when exercised, RSUs are generally taxable as ordinary income when they vest, and cash-settled performance units are generally taxable when paid. We realize a tax deduction at those specified times. The Compensation Committee reviews potential tax implications before making decisions regarding compensation.

Management and the Compensation Committee are aware of Code Section 162(m), which generally disallows a federal income tax deduction to publicly traded companies like PolyOne for compensation in excess of $1 million per year paid to a company’s Chief Executive Officer and the company’s three other most highly compensated executive officers, other than the company’s Chief Financial Officer, who are employed as of the end of the year. The $1 million deduction limit generally does not apply to compensation that satisfies Section 162(m)’s requirements for qualified performance-based compensation. The Compensation Committee may provide compensation that does not meet the exemption criteria if, in its sole discretion, it determines that doing so advances our business objectives.

		39

---

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee believes that Section 162(m) is only one of several relevant considerations in setting compensation. The Compensation Committee also believes that Section 162(m) should not be permitted to compromise its ability to design and maintain executive compensation arrangements that, among other things, are intended to attract, motivate and help retain a highly qualified and successful management team to lead PolyOne. As a result, the Compensation Committee retains the flexibility to provide compensation it determines to be in the best interests of PolyOne and its shareholders even if that compensation ultimately is not deductible for tax purposes. Moreover, even if we intend to grant compensation that qualifies as performance-based compensation for purposes of Section 162(m), we cannot guarantee that such compensation will so qualify or ultimately will be deductible by us.

Accounting Considerations. When reviewing preliminary recommendations and in connection with approving the terms of a given incentive plan period, management and the Compensation Committee review and consider the accounting implications of a given award, including the estimated expense and dilutive considerations. With consideration of the accounting treatment associated with an incentive plan design, management and the Compensation Committee may alter or modify the incentive award if the award (and the related accounting consequences) were to adversely affect our financial performance.

Stock Ownership and Retention Guidelines. In order to better align the financial interests of our executives with those of our shareholders, we believe our executives should own a meaningful number of shares of PolyOne stock. We have adopted Guidelines specifying a minimum level of stock ownership for all executives, including all Named Executive Officers.

The current Guidelines require all executives, including the Named Executive Officers, to retain 100% of all net shares obtained through PolyOne as compensation for services provided. This requirement will cease when the Guidelines have been met, provided that an officer can only divest of a number of shares such that the Guidelines continue to be met. In general, shares counted toward required ownership include shares directly held, shares and phantom shares held in our retirement or deferral plans, RSUs and performance shares (if the applicable performance measures are met). The specific levels of stock ownership for the Named Executive Officers are noted in the following table. Executives are expected to accumulate the specified shares within five years of their becoming subject to the Guidelines. These policies, as they relate to our Directors, are discussed in the “Stock Ownership Guidelines for Directors” section of this proxy statement.

		Stock Ownership Target (in shares)				Prorated Stock Ownership Target (in shares)				Multiple of Salary(2)				Total Share Ownership as of 3/1/16				Value of Total Share Ownership 3/1/16(2)				Value of Share Ownership as a Multiple of Base Salary
R.M. Patterson			125,000				N/A				3.8				306,954				$8,447,374				9.4
B.C. Richardson(1)			45,000				21,000				1.0				52,207				$1,436,737				2.6
S.D. Newlin			62,500				N/A				2.6				335,426				$9,230,924				14.1
J.V. Van Hulle			20,000				N/A				1.2				84,745				$2,332,182				5.2
C.M. Nikrant			20,000				N/A				1.4				65,166				$1,793,368				4.4

(1)	Mr. Richardson has been with PolyOne less than five years. The stock ownership target for Mr. Richardson has been reduced to reflect that he is not yet required to reach 100% of the Guidelines.

(2)	Calculated using PolyOne’s March 1, 2016 closing stock price of $27.52.

Timing with Respect to Equity Award Grants. We have adopted a policy with respect to the timing of the grant of equity awards, which provides that equity awards are granted pursuant to approval by the Board or the Compensation Committee or, pursuant to authority delegated by the Board or the Compensation Committee to the Chief Executive Officer. Such grants generally should be made at times when PolyOne is not in possession of material non-public information; and not made during a “blackout period,” which is the period of time that is in close proximity to the release of financial or material non-public information. The policy further provides that, to the extent practicable, annual grants to existing employees should be approved at regularly scheduled meetings and that the grant price for any stock option or SAR shall not be less than the fair market value of PolyOne’s common shares on the grant date (which is defined as the closing price of our common shares on the grant date).

		40

---

COMPENSATION DISCUSSION AND ANALYSIS

Clawback Policy.In March 2015, our Board adopted a clawback policy that, upon any act of fraud, dishonesty or recklessness in the performance of an executive officer’s duties that contributed to the Company’s material noncompliance with any financial reporting requirements resulting in a material accounting restatement, would generally require such executive officer to repay all incentive-based compensation that he or she received in excess of what would have been paid if the restated financial statements had originally been prepared without such material accounting restatement. The Board expects to amend the clawback policy again when SEC or NYSE final regulations become available.

Prohibition on Hedging or Pledging Our Securities.PolyOne’s trading policy currently provides that, consistent with our philosophy to encourage long-term investments, Directors, officers and certain other employees of PolyOne are prohibited from hedging or pledging our securities.

		41

---

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

The following tables, narrative and footnotes discuss in more detail the compensation of our Named Executive Officers.

2015 Summary Compensation Table

The following table sets forth the compensation for the fiscal years ended December 31, 2015, December 31, 2014 and December 31, 2013, as applicable, for our Chief Executive Officer and our Chief Financial Officer serving during 2015, our three other most highly compensated executive officers serving as of December 31, 2015, and one of our former executive officers (collectively referred to as our Named Executive Officers).

Name and Principal Position (a)		Year   (b)					Salary   ($)   (c)					Bonus   ($)   (d)					Stock   Awards   ($) (e)					Option     Awards     ($) (f)					Non-Equity Incentive Plan Compensation ($) (g)					Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)					All Other Compensation ($) (i)					Total ($) (j)
Robert M. Patterson, President and Chief Executive Officer		2015					854,615					-					918,480					930,020					879,622					-					142,839					3,725,576
		2014					702,846					-					4,041,574					288,093					1,334,946					-					108,667					6,476,126
		2013					546,292					-					1,580,236					332,481					1,177,619					-					109,279					3,745,907
Bradley C. Richardson, Executive Vice President, Chief Financial Officer		2015					564,823					-					256,409					260,740					164,844					-					79,905					1,326,721
		2014					521,538					-					245,490					244,528					479,685					-					49,947					1,541,188
		2013					50,000					-					606,400					-					56,485					-					3,250					716,135
Stephen D. Newlin, Executive Chairman(1)		2015					846,315					-					-					-					2,205,000					1,928,984					223,430					5,203,729
		2014					1,050,000					-					1,276,548					1,278,853					3,692,325					2,028,725					292,176					9,618,627
		2013					1,040,846					-					3,812,040					1,483,710					4,649,890					161,443					285,550					11,433,479
John V. Van Hulle, Senior Vice President, President of Global Color, Additives and Inks(2)		2015					455,069					-					153,080					156,165					440,230					-					67,420					1,271,964
		2014					421,154					-					1,984,794					146,155					485,657					-					72,651					3,110,411
Craig M. Nikrant, Senior Vice President, President of Global Specialty Engineered Materials(3)		2015					411,115					-					130,118					129,673					368,506					-					45,241					1,084,653
Julie A. McAlindon, Former Senior Vice President, President of Designed Structures and Solutions(2)		2015					150,029					-					377,127 (4)					112,941 (4)					-					-					902,608					1,542,705
		2014					310,385					-					508,317 (4)					109,616 (4)					239,365					-					51,814					1,219,497

(1)	Mr. Newlin was ineligible for 2015 awards under both the Annual Plan and the Amended Long-Term Incentive Plan pursuant to the terms of his Letter Agreement.

(2)	Compensation for Mr. Van Hulle and Ms. McAlindon is provided only for 2015 and 2014 because they were not Named Executive Officers in 2013.

(3)	Compensation for Mr. Nikrant is provided only for 2015 because he was not a Named Executive Officer in 2014 or 2013.

(4)

As a result of Ms. McAlindon’s departure and pursuant to the terms of her applicable grant agreements, Ms. McAlindon forfeited $152,713 in value of her 2013 RSUs, $508,317 in reported value of her 2014 RSUs and $110,983 in reported value of her 2015 RSUs upon her separation from service. The RSU forfeiture values represent the aggregate grant date fair value of those awards determined pursuant to FASB ASC Topic 718, but such amounts have not been deducted from the amounts appearing in column (e) above. In addition, pursuant to the terms of her applicable grant agreements, Ms. McAlindon forfeited $126,000 in value of her 2013 cash-settled performance units (reflected at a 200% attainment), $81,000 in value of her 2014 cash-settled performance units (reflected at a 100% attainment) and $95,000 in value of her 2015 cash-settled performance units (reflected at a 100% attainment) upon her separation from service. The cash-settled performance unit forfeiture value has not been deducted from any amounts appearing in column (g) above. Ms. McAlindon also forfeited all unvested SARs pursuant to the terms of the applicable grant agreements. Thus, the amounts reported in column (f) above do not reflect the amount Ms. McAlindon actually received, as she forfeited $72,410 in reported value of her 2014 SARs and $112,941 in reported value of her 2015 SARs.

		42

---

EXECUTIVE COMPENSATION

In connection with Ms. McAlindon agreeing to a release of claims and certain confidentiality, non-competition and other obligations as part of her severance arrangement, PolyOne modified certain RSUs previously granted to Ms. McAlindon in 2013, 2014 and 2015 that would have otherwise been forfeited under the terms of the applicable grant agreements. The value of the modified RSUs as reported in Ms. McAlindon’s “Stock Awards” column for 2015 is $266,144. The modified awards and details regarding their value are set forth in the 2015 Grants of Plan-Based Awards table of this proxy statement and in its accompanying footnotes. PolyOne also modified certain cash-settled performance units previously granted to Ms. McAlindon in 2013, 2014 and 2015 that would have otherwise been forfeited under the terms of the applicable grant agreements. The value of the modified cash-settled performance units as reported in Ms. McAlindon’s 2015 “All Other Compensation” column is $147,121. The modified awards and details regarding their value are set forth in the 2015 Grants of Plan-Based Awards table of this proxy statement and in its accompanying footnotes.

Bonus (column (d))

No amounts are reported in this column because PolyOne paid annual incentives to the Named Executive Officers based upon pre-determined performance measures. These payments, which were made under the Annual Plan, are reported in column (g) “Non-Equity Incentive Plan Compensation”.

Stock Awards (column (e))

The amounts reported in the “Stock Awards” column relate to, for 2015, time-vested stock-settled RSUs (including the modification value for certain RSUs granted to Ms. McAlindon) granted to the Named Executive Officers. These awards are described more fully in the “What We Pay and Why: Elements of Compensation” section of this proxy statement.

The amounts reported for 2015 represent the aggregate grant date fair value of those stock awards determined pursuant to FASB ASC Topic 718. Accordingly, this column includes amounts for awards that have not yet vested, as well as for awards that were later cancelled (such as upon an executive’s separation from service). For information regarding the assumptions used in determining the fair value of these awards, please refer to Note 15, Share-Based Compensation, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

PolyOne again cautions that the amounts reported for these awards may not represent the amounts that the Named Executive Officers will actually realize from these awards. To what extent a Named Executive Officer realizes value will depend on our stock price and continued employment. The value actually received upon a settlement of RSUs for the Named Executive Officers in 2015 is reflected in the 2015 Option Exercises and Stock Vested table of this proxy statement.

Option Awards (column (f))

The amounts reported in the “Option Awards” column consist of, for 2015, stock-settled SARs (with time and performance based vesting requirements as well as a SAR appreciation cap) that were granted to the Named Executive Officers under our Amended Long-Term Incentive Plan. The amounts reported for 2015 represent the grant date fair value of the SARs granted to each of the Named Executive Officers, calculated in accordance with FASB ASC Topic 718. Accordingly, this column includes amounts for awards that have not yet vested, as well as for awards that were later cancelled (such as upon an executive’s separation from service). For information regarding the assumptions used in determining the fair value of these awards, please refer to Note 15, Share-Based Compensation, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. These awards are described more fully in the “What We Pay and Why: Elements of Compensation” section of this proxy statement.

PolyOne again cautions that the amounts reported for these awards may not represent the amounts that the Named Executive Officers will actually realize from the awards. To what extent a Named Executive Officer realizes value will depend on our stock price and continued employment. The value actually received by the Named Executive Officers as a result of exercising SARs during 2015 is reflected in the 2015 Option Exercises and Stock Vested table of this proxy statement.

Non-Equity Incentive Plan Compensation (column (g))

The amounts reported in the “Non-Equity Incentive Plan Compensation” column for 2015 include amounts earned by Named Executive Officers (as applicable) under the 2015 Annual Incentive Program (and paid in February 2016), and cash-settled performance units granted on February 15, 2013 under the 2013 – 2015 Amended Long-Term Incentive Plan (and paid in February 2016). The terms of the 2015 Annual Incentive Program and the 2013 – 2015 Amended

		43

---

EXECUTIVE COMPENSATION

Long-Term Incentive Plan cash-settled performance units are described more fully in the “What We Pay and Why: Elements of Compensation” section of this proxy statement. The amounts earned by the Named Executive Officers under both plans (as applicable) are: Mr. Patterson – $383,722 (2015 Annual Incentive Program) and $495,900 (cash-settled performance units); Mr. Richardson – $164,844 (2015 Annual Incentive Program); Mr. Newlin – $2,205,000 (cash-settled performance units); Mr. Van Hulle – $200,230 (2015 Annual Incentive Program) and $240,000 (cash-settled performance units); and Mr. Nikrant – $158,506 (2015 Annual Incentive Program) and $210,000 (cash-settled performance units).

Change in Pension Value and Nonqualified Deferred Compensation Earnings (column (h))

The amounts reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column for 2015 are comprised entirely of changes in pension values between December 31, 2014 and December 31, 2015.

Mr. Newlin is entitled to a supplemental retirement benefit under his Letter Agreement as described more fully in the “2015 Pension Benefits” section of this proxy statement. The amount listed for him for 2015 represents the aggregate change in actuarial present value (determined by subtracting the December 31, 2014 actuarial present value from the December 31, 2015 actuarial present value) of the annual benefit payment that will be payable as a 15-year certain and continuous life annuity upon Mr. Newlin’s Qualifying Separation from Service (as such term is defined herein).

All Other Compensation (column (i))

The amounts reported in the “All Other Compensation” column for 2015 reflect, for each Named Executive Officer, the sum of (1) the amounts contributed by PolyOne to the Qualified Savings Plan and the PolyOne Supplemental Retirement Benefit Plan, which are calculated on the same basis for all participants, including the Named Executive Officers, (2) limited tax gross-ups, (3) amounts paid or accrued relating to a Named Executive Officer’s separation from service; and (4) the incremental cost to PolyOne of all other executive benefits that are required to be reported by SEC rules. The material provisions of the Qualified Savings Plan and the PolyOne Supplemental Retirement Benefit Plan are described in the “2015 Pension Benefits” section of this proxy statement.

The narrative following the table below describes these components of All Other Compensation:

Name		Company   Contributions to   Qualified Savings Plan   ($)		Company Contributions   to PolyOne Supplemental   Retirement Benefit Plan   ($)		Tax   Gross-ups   ($)		Payments Upon   Separation from   Service   ($)		Other   Benefits   ($)
R.M. Patterson		17,225		96,977		4,211		-		24,426
B.C. Richardson		17,225		50,668		-		-		12,012
S.D. Newlin		17,225		144,017		8,001		-		54,187
J.V. Van Hulle		17,225		30,467		2,921		-		16,807
C.M. Nikrant		17,225		23,969		4,047		-		-
J.A. McAlindon		14,729		986		3,424		883,469		-

Company Contributions to Qualified Savings Plan. PolyOne makes matching contributions on behalf of all eligible participants, including Named Executive Officers, in accordance with the Qualified Savings Plan. PolyOne also makes a retirement contribution to all eligible participants, including Named Executive Officers, in an amount equal to 2% of eligible earnings, subject to Internal Revenue Code limitations.

Company Contributions to PolyOne Supplemental Retirement Benefit Plan. PolyOne makes matching contributions on behalf of all eligible participants, including the Named Executive Officers, under the PolyOne Supplemental Retirement Benefit Plan. PolyOne also makes a retirement contribution to all eligible participants, including Named Executive Officers, in an amount equal to 2% of eligible earnings.

Tax Gross-ups. PolyOne provides a reimbursement for taxes incurred when a spouse/guest travels for business purposes as it is sometimes necessary for spouses to accompany the executives to business functions. These taxes are incurred because of the Internal Revenue Service’s rules governing business travel by spouses/guests and PolyOne reimburses the associated taxes.

		44

---

EXECUTIVE COMPENSATION

Payments Upon Separation from Service. This column reflects amounts that Ms. McAlindon received upon her separation from service. Ms. McAlindon received the following payments pursuant to the Executive Severance Plan: $630,000 representing 24 months of salary continuation, a payment equal to the amount calculated under the 2015 Annual Incentive Program as earned in 2015 of $28,440 (which was paid in 2016 at the same time as all Named Executive Officer annual incentive payments), a payment of $16,760 for accrued but unused vacation, 24 months of accrued post-separation medical, vision and dental coverage reimbursements estimated to be $52,848 and accrued post-separation outplacement services totaling $8,300. As a result of Ms. McAlindon’s departure, she forfeited a total of $772,013 in value of her outstanding RSUs, $302,000 in value of her outstanding performance units and all unvested SARs upon her separation from service. In connection with her agreeing to a release of claims and certain confidentiality, non-competition and other obligations as part of her severance arrangement, PolyOne modified certain cash-settled performance units previously granted to Ms. McAlindon in 2013, 2014 and 2015, which would have otherwise been forfeited under the terms of the applicable grant agreements. The incremental value of the cash-settled performance units’ modifications is $147,121. The modified awards and details regarding their value are set forth in the 2015 Grants of Plan-Based Awards table of this proxy statement and in its accompanying footnotes, plus footnote 4 to the 2015 Summary Compensation Table. Details regarding Ms. McAlindon’s separation from service are further described in the “Potential Payments Upon Termination or Change of Control” section of this proxy statement.

Other Benefits. Certain additional limited benefits are made available to executives, including the Named Executive Officers. The aggregate incremental value of those benefits that exceeds $10,000 is included for each Named Executive Officer in the “All Other Compensation” column of the 2015 Summary Compensation Table, but the individual values for each item are not required to be disclosed under SEC rules because none exceeded the greater of $25,000 or 10% of the total amount of personal benefits for each Named Executive Officer. In general, these benefits include a nominal benefit allowance (provided to each Named Executive Officer except Mr. Richardson), taxable reimbursement to the Named Executive Officers for financial planning (used by each Named Executive Officer except Ms. McAlindon) and reimbursement for the incremental value of spouse/guest travel expenses (used by each Named Executive Officer except Mr. Richardson). PolyOne also makes available executive physicals to all Named Executive Officers (used by each Named Executive Officer except Ms. McAlindon). Finally, Global CARE Insurance (Critical Care Air Rescue and Evacuation), which provides supplemental medical services and medical transportation related to business travel, is provided to all Named Executive Officers.

		45

---

EXECUTIVE COMPENSATION

2015 Grants of Plan-Based Awards

				Estimated Future Payouts Under Non-     Equity Incentive Plan Awards						Estimated Future Payouts     Under Equity Incentive      Plan Awards				All Other Stock     Awards:     Number of     Shares of Stock     or Units     (#)     (h)		Exercise or Base Price of Option Awards ($/Sh) (i)		Grant Date Fair Value of Stock and Option Awards ($) (j)
Name (a)		Grant Date (b)		Threshold ($) (c)		Target ($) (d)		Maximum ($) (e)		Threshold (#) (f)		Target (#) (g)
R. M. Patterson				106,827 (2)		854,615 (2)		1,709,230 (2)
				390,000 (3)		780,000 (3)		1,560,000 (3)
		2/4/2015								22,234		66,700 (5)				38.27		930,020
		2/4/2015												24,000 (6)				918,480
B. C. Richardson				45,892 (2)		367,135 (2)		734,270 (2)
				109,500 (3)		219,000 (3)		438,000 (3)
		2/4/2015								6,234		18,700 (5)				38.27		260,740
		2/4/2015												6,700 (6)				256,409
S. D. Newlin(1)
J. V. Van Hulle				31,286 (2)		250,288 (2)		500,576 (2)
				65,500 (3)		131,000 (3)		262,000 (3)
		2/4/2015								3,734		11,200 (5)				38.27		156,165
		2/4/2015												4,000 (6)				153,080
C. M. Nikrant				28,264 (2)		226,113 (2)		452,226 (2)
				54,500 (3)		109,000 (3)		218,000 (3)
		2/4/2015								3,100		9,300 (5)				38.27		129,673
		2/4/2015												3,400 (6)				130,118
J. A. McAlindon				9,162 (1)		73,298 (1)		146,596 (1)
				47,500 (4)		95,000 (4)		190,000 (4)
				24,769 (4)		49,537 (4)		99,074 (4)
				18,343 (4)		36,685 (4)		73,370 (4)
				5,681 (4)		11,362 (4)		22,724 (4)
		2/4/2015								2,700		8,100 (5)				38.27		112,941
		2/4/2015												2,900 (6)				110,983
		6/15/2015												2,740 (7)				106,613
		6/15/2015												2,541 (7)				98,870
		6/15/2015												1,302 (7)				50,661
		6/15/2015												257 (7)				10,000

(1)	Mr. Newlin was ineligible for 2015 awards under both the Annual Plan and the Amended Long-Term Incentive Plan pursuant to the terms of his Letter Agreement.

Estimated Future Payouts Under Non-Equity Incentive Plan Awards (columns (c), (d) and (e))

(2)

2015 Annual Incentive Program Payments. The amounts located in the first row for each Named Executive Officer represent the cash-based award opportunities granted to the Named Executive Officer in 2015 under the 2015 Annual Incentive Program. We established threshold, target and maximum goals for each of the three performance measures specified under the 2015 Annual Incentive Program. Participants will earn, for the applicable performance measure: (1) 100% for the target award upon attainment of the “target” performance level; (2) 50% of the target award upon attainment of the “threshold” performance level; or (3) 200% of the target award upon attainment of the “maximum” (or greater) performance level. If final performance for any measure falls between the threshold and target or between target and maximum, earned award amounts for that measure will be interpolated on a straight-line mathematical basis. If threshold performance is not achieved for any one performance measure, then that performance measure will have an attainment of 0%. For purposes of this table and threshold level disclosure, we assumed that only one of the three performance measures achieved the threshold level of attainment (in other words, 12.5% of the target award was earned). Additionally, negative discretion can be used to reduce the payment to essentially zero. Annual Plan payments, if earned, are contingent

		46

---

EXECUTIVE COMPENSATION

upon the Named Executive Officer remaining in continuous employment through the payment date. The actual amount earned by each Named Executive Officer for 2015 is included in the “Non-Equity Incentive Plan Compensation” column (column (g)) of the 2015 Summary Compensation Table of this proxy statement.

(3)

Cash-Settled Performance Units. The amounts located in the second row for each Named Executive Officer represent the cash-settled performance units granted to the Named Executive Officers on February 4, 2015 as part of our 2015 long-term incentive award under the Amended Long-Term Incentive Plan. Each performance unit is equal in value to $1.00. Payouts of these cash-settled performance units are subject to achieving four specified performance goals over the annual and cumulative performance periods from January 1, 2015 to December 31, 2017. We established threshold, target and maximum goals for each of the four performance periods. Participants will earn, for the applicable performance period: (1) 100% for the target award upon attainment of the “target” performance level; (2) 50% of the target award upon attainment of the “threshold” performance level or (3) 200% of the target award upon attainment of the “maximum” (or greater) performance level. If final performance falls between the threshold and target or between target and maximum for any performance period, then the earned award amount for that performance period will be interpolated on a straight-line mathematical basis. If threshold performance is not achieved for any one performance period, then that performance period will have an attainment of 0%. The cash-settled performance units will be paid in cash, if earned, contingent upon the Named Executive Officer remaining in continuous employment through the payment date, which shall be no later than March 15, 2018.

(4)

Modification of Cash-Settled Performance Units in Connection with Separation.As a result of Ms. McAlindon’s departure, she forfeited a total of $302,000 in value of her outstanding performance units. The amounts in the table represent modified awards of cash-settled performance units that were previously granted to Ms. McAlindon and would have been forfeited upon her separation from service. The awards were modified in connection with Ms. McAlindon agreeing to a release of claims and certain confidentiality, non-competition and other obligations as part of her severance arrangement. The amounts that would have been forfeited are as follows: 95,000 of the cash-settled performance units originally granted on February 4, 2015, 81,000 of the cash-settled performance units originally granted on February 11, 2014 and 63,000 of the cash-settled performance units originally granted on February 15, 2013. The modifications were based upon the period of time that Ms. McAlindon was employed by PolyOne from the original grant date of the award through June 15, 2015 (the modification date).

The awards that were originally granted to Ms. McAlindon on February 11, 2014 and February 4, 2015 remain subject to achieving specified performance goals over the performance periods from January 1, 2014 to December 31, 2016 and from January 1, 2015 to December 31, 2017, respectively, and will be paid in cash if earned. The threshold, target and maximum payout ranges are the same as those described in footnote 3 to the 2015 Grants of Plan-Based Awards table above. The modified awards’ incremental value of $48,047 is included in the “All Other Compensation” column (column (i)) of the 2015 Summary Compensation Table of this proxy statement. The cash-settled performance units originally granted to Ms. McAlindon on February 15, 2013 were paid out on February 15, 2016 as a result of achieving 200% attainment under the award. The modified award’s incremental value of $99,074 is included in the “All Other Compensation” column (column (i)) of the 2015 Summary Compensation Table of this proxy statement.

Estimated Future Payouts Under Equity Incentive Plan Awards (columns (f) and (g))

(5)

Stock Appreciation Rights. These amounts represent stock-settled SARs granted to the Named Executive Officers on February 4, 2015 as part of our 2015 long-term incentive award under the Amended Long-Term Incentive Plan. The SARs generally vest one-third upon the later of: (1) achieving each of the following stock price hurdles for thirty consecutive trading days: 10%, 15% and 20% increase, respectively, over the initial grant date closing stock price of $38.27; and (2) time-based vesting, with restrictions lapsing in one-third increments on each of the first three anniversaries of the grant date, generally subject to the officer’s continued employment and have an exercise term of ten years. No stock price hurdles were achieved in 2015. The SARs are also subject to an appreciation cap of 200% of the initial grant date closing stock price.

“Threshold” refers to the minimum number of shares underlying the SAR award that will vest upon reaching the threshold level of performance, which is satisfaction of the first stock price hurdle. Threshold equates to vesting

		47

---

EXECUTIVE COMPENSATION

in one-third of the SAR award. If threshold performance is not attained, then the participant will not vest in any of the SARs for the 2015 award. “Target” refers to the number of shares underlying the SARs that will vest upon satisfaction of all of the stock price hurdles under the 2015 grant. The SARs do not have a “maximum” level of attainment as a participant cannot receive SARs in excess of the initial award.

All Other Stock Awards: Number of Shares of Stock or Units (RSUs) (column (h))

(6)

Annual Grant of RSUs. These amounts represent stock-settled RSUs granted to the Named Executive Officers on February 4, 2015 as part of our 2015 annual long-term incentive award under the Amended Long-Term Incentive Plan. The RSUs generally vest on the third anniversary of the grant date. For Ms. McAlindon, this award was modified and a portion was forfeited. The actual award retained by Ms. McAlindon following her separation from service is described in footnote 7 to this 2015 Grants of Plan-Based Awards table below. The RSUs have dividend equivalent rights that entitle the grantee to dividend equivalents on each share of our common stock underlying the award equal to the dividend per share declared and paid on our issued and outstanding shares of common stock. The dividend equivalent rights are subject to the same restrictions as the underlying RSUs.

(7)

Award Modification in Connection with Separation.As a result of Ms. McAlindon’s departure, she forfeited a total of $772,013 in value of her outstanding RSUs. The amounts in the table represent modified awards of RSUs that were previously granted to Ms. McAlindon that would have been forfeited upon her separation from service. The awards were modified in connection with Ms. McAlindon agreeing to a release of claims and certain confidentiality, non-competition and other obligations as a part of her severance arrangement. The modified RSUs represent a prorated portion of the following RSUs: 257 of the RSUs originally granted on February 4, 2015, 1,302 of the RSUs originally granted on February 11, 2014 and 2,740 of the RSUs originally granted on February 15, 2013. The proration was based upon the period of time that Ms. McAlindon was employed by PolyOne from the original grant date of the award through her last day of employment. In addition, the modified RSUs represent the full value of the 2,541 RSUs originally granted on July 10, 2013. The awards will vest in full on the third anniversary of their original grant date.

A substantial portion of Ms. McAlindon’s unvested long-term incentive awards were forfeited as a result of her separation from service under the terms of her applicable grant agreements. For details regarding the long-term incentive awards that Ms. McAlindon forfeited, see footnote 4 to the 2015 Summary Compensation Table of this proxy statement.

Exercise or Base Price of Option Awards (column (i))

In setting the base price of these SARs, we followed the practice of using our closing stock price on the grant date. This practice complies with the Amended Long-Term Incentive Plan.

Grant Date Fair Value of Stock and Option Awards (column (j))

The amounts in this column represent the grant date fair value of each equity-based award, computed in accordance with FASB ASC Topic 718. For information regarding the assumptions used in determining the fair value of an award, please refer to Note 15, Share-Based Compensation, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

Narrative Disclosure Relating to the 2015 Summary Compensation Table and the 2015 Grants of Plan-Based Awards Table

For more information regarding the employment agreement with Mr. Newlin and the Severance Agreement with Ms. McAlindon, refer to the “Potential Payments Upon Termination or Change of Control” section of this proxy statement.

 

47

		48

---

OUTSTANDING EQUITY AWARDS AT 2012 FISCAL YEAR-ENDEXECUTIVE COMPENSATION

Outstanding Equity Awards at 2015 Fiscal Year-End

 

Name (a)		Option Awards																				StockOption Awards																									Stock Awards
	Name (a)		Number of Securities Underlying Unexercised Options (#) (#) Exercisable (b) (b)						Number of Securities Underlying Unexercised Options (#) (#) Unexercisable (c)									Equity Incentive Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) Options (#) (d)							Option Exercise Price ($) (e) (e)							Option Expiration Date (f) (f)							Number of Shares or or Units of Stock That Have Not Vested (#) (g) (#) (g)									Market Value of Shares or Units of Stock That Have Not Vested ($) (h)			Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) (i)					Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) (j)
S.D. NewlinR.M.Patterson			—				—				—				—				—				124,077	(1)-					2,533,652
			—				—				—				—				—				88,934	(2)-					1,816,032
			—				—				—				—				—				105,267	(3)-					2,149,552
			—				72,700	(8)			—				7.99				2/16/2017				—-					-	—				14,650	(1)				465,284					-					-
			52,633	(9)			105,267	(9)-			—		-					-					-					-					25,724	(2)				816,994					-					-
				-					-					-					-					-					8,384	(3)				266,276					-					-
				-					-					-					-					-					24,306	(4)				771,959					-					-
				-					-					-					-					-					-					-					25,724	(9)				816,994
				-					-					-					-					-					-					-					50,991	(10)				1,619,474
				-					-					-					-					-					-					-					50,991	(10)				1,619,474
				30,500	(12)				-					-					14.81					2/16/2021				—	-					-	—				-					-
			—	48,800	(13)				232,000	(10)-			—		-					14.61					2/14/2022				—	-						—
R.M. Patterson			—				—				—				—				—				24,590	(1)-					502,128
			—				—				—				—				—				17,110	(2)-					349,386-
			—	20,467	(14)				10,233	(14)				—				—				—				—				22,065	(3)-					450,567
			20,000	(6)			—				—				7.72				5/14/2015				—23.08						—
			28,667	(8)			14,333	(8)			—				7.99				2/16/2017				—15/2023						—
			10,167	(9)			20,333	(9)			—				14.81				2/16/2021				—-					-	—				-					-
			—	6,834	(15)				48,8006,833	(10) (15)			—	6,833	(15)				35.07					2/11/2024					-					-					-					-
			-					-					66,700	(16)				38.27					2/4/2025					-					-					-					-
B.C.Richardson				-					-					-					-					-					20,490	(5)				650,762					-					-
				-					-					-					-					-					7,157	(3)				227,306					-					-
				-					-					-					-					-					6,788	(4)				215,587					-					-
				5,800	(15)				5,800	(15)				5,800	(15)				35.07					2/11/2024					-					-					-					-
				-					-					18,700	(16)				38.27					2/4/2025					-					-					-					-
S.D.Newlin				-					-					-					-					-					64,981	(1)				2,063,797					-					-
				-					-					-					-					-					102,877	(6)				3,267,374					-					-
				-					-					-					-					-					37,201	(3)				1,181,504					-					-
				91,334	(14)				45,666	(14)				-					23.08					2/15/2023					-					-					-					-
				30,334	(15)				30,333	(15)				30,333	(15)				35.07					2/11/2024					-					-					-					-
J.V.Van Hulle				-					-					-					-					-					6,504	(1)				206,567					-					-
				-					-					-					-					-					4,294	(3)				136,377					-					-
				-					-					-					-					-					25,551	(7)				811,500					-					-
				-					-					-					-					-					4,052	(4)				128,692					-					-
				-					-					-					-					-					-					-					25,551	(11)				811,500
				9,134	(14)				4,566	(14)				-					23.08					2/15/2023					-					-					-					-
				3,467	(15)				3,467	(15)				3,466	(15)				35.07					2/11/2024					-					-					-					-
				-					-					11,200	(16)				38.27					2/4/2025					-					-					-					-
C.M.Nikrant				-					-					-					-					-					6,504	(1)				206,567					-					-
				-					-					-					-					-					3,579	(3)				113,669					-					-
				-					-					-					-					-					3,446	(4)				109,445					-					-
				23,300	(13)				-					-					14.61					2/14/2022				—	-						—
	R.J. Diemer, Jr.			—				—				—				—				—				30,365	(4)-					620,053
				—				—				—				—				—				10,051	(5)-					205,241-
				—	9,134	(14)				30,0004,566	(11)(14)			—				13.01				3/8/2022				—-						—
R.M. Rosenau			—				—				—				—				—				13,831	(1)23.08					282,429
			—				—				—				—				—				9,118	(2)2/15/2023					186,190
			—				—				—				—				—				10,526	(3)-					214,941
			24,000	(7)			—				—				1.43				3/4/2016				—-						—
			16,133	(8)			8,067	(8)			—				7.99				2/16/2017				—-						—-
				5,3672,900	(9)(15)			10,733	(9)			—	2,900	(15)				2,900	(15)				14.81				2/16/2021				—35.07						—
			—				23,300	(10)			—				14.61				2/14/2022				—11/2024						—
K.M. Smith			—				—				—				—				—				13,831	(1)-					282,429
			—				—				—				—				—				9,118	(2)-					186,190
			—				—				—				—				—				10,526	(3)-					214,941-
			—				8,067	(8)			—				7.99				2/16/2017				—-						—
			5,367	(9)			10,733	(9)			—-				14.81	9,300	(16)				2/16/2021				—38.27						—
			—				23,300	(10)			—				14.61				2/14/2022				—4/2025						—
T.J. Kedrowski			—				—				—				—				—				13,831	(1)-					282,429
			—				—				—				—				—				9,118	(2)-					186,190
			—				—				—				—				—				10,526	(3)-					214,941-
			—				8,067	(8)			— J.A.McAlindon				7.99				2/16/2017				—-						—
				—				10,733	(9)			—				14.81				2/16/2021				—-						—
				—				23,300	(10)			—				14.61				2/14/2022				—-					-	—				-					2,769	(8)				87,943					-					-
				-					-					-					-					-					2,567	(8)				81,528					-					-
			-					-					-					-					-					1,316	(8)				41,796					-					-
			-					-					-					-					-					261	(8)				8,289					-					-

 

48

---

(1)

Represents a stock-settled RSUsRSU award that werewas granted on February 17, 201015, 2013 and vestgenerally vests in full on the third anniversary of the grant date. The RSUs includeaward includes shares deemed purchased with reinvested dividend equivalents that becomeare subject to the same forfeiture conditions as the shares to which the dividends relate.

 

(2)

Represents a stock-settled RSUsRSU award that werewas granted on February 16, 2011March 13, 2013 and vestgenerally vests in full on the third anniversary of the grant date. The RSUs includeaward includes shares deemed purchased with reinvested dividend equivalents that becomeare subject to the same forfeiture conditions as the shares to which the dividends relate.

		49

---

EXECUTIVE COMPENSATION

 

(3)

Represents a stock-settled RSUsRSU award that werewas granted on February 14, 201211, 2014 and vestgenerally vests in full on the third anniversary of the grant date. The RSUs includeaward includes shares deemed purchased with reinvested dividend equivalents that becomeare subject to the same forfeiture conditions as the shares to which the dividends relate.

 

(4)

Represents a stock-settled RSUsRSU awards that werewas granted on March 8, 2012February 4, 2015 and vestgenerally vests in full on the third anniversary of the grant date. The RSUs includeaward includes shares deemed purchased with reinvested dividend equivalents that becomeare subject to the same forfeiture conditions as the shares to which the dividends relate.

 

(5)

Represents a stock-settled RSUsRSU award that werewas granted on July 16, 2012November 11, 2013 and vestgenerally vests in full on the third anniversary of the grant date. The RSUs includeaward includes shares deemed purchased with reinvested dividend equivalents that becomeare subject to the same forfeiture conditions as the shares to which the dividends relate.

 

(6)

TheseRepresents a stock-settled SARsRSU award that was granted on March 8, 2013 and generally vests in full on the third anniversary of the grant date. The award includes shares deemed purchased with reinvested dividend equivalents that are subject to the same forfeiture conditions as the shares to which the dividends relate.

(7)

Represents a stock-settled RSU award that was granted on March 13, 2014 and generally vests in full on the third anniversary of the grant date. The award includes shares deemed purchased with reinvested dividend equivalents that are subject to the same forfeiture conditions as the shares to which the dividends relate.

(8)

Represents modified stock-settled RSUs previously provided to Ms. McAlindon that were grantedmodified on June 15, 2015 in connection with her Severance Agreement. The modified RSUs include shares deemed purchased with reinvested dividend equivalents that are subject to the same forfeiture conditions as the shares to which the dividends relate and vest in full (beginning with the first row) on February 15, 2016, July 10, 2016, February 11, 2017 and February 4, 2018, respectively. Refer to the 2015 Grants of Plan-Based Awards table of this proxy statement for more information about the modified awards for Ms. McAlindon as a result of her separation from service.

(9)

Represents a grant of performance shares on March 13, 2013. The performance shares will be earned contingent upon achieving specific synergies resulting from PolyOne’s acquisition of Spartech (the “Synergy Goal”). If the Synergy Goal is achieved, then the performance shares vest in full on March 31, 2016. The award includes shares deemed purchased with reinvested dividend equivalents that are subject to the same forfeiture conditions as the shares to which the dividends relate.

(10)

Represents a grant of performance shares on May 15, 20082014. If a specified Earnings Per Share goal is met by December 31, 2018 and Mr. Patterson has remained in continuous employment with the Company, then 50,000 performance shares shall become non-forfeitable and fully vested on May 15, 2019. If a specified Earnings Per Share goal is met by December 31, 2023 and Mr. Patterson has remained in continuous employment with the Company, then the remaining 50,000 performance shares shall become non-forfeitable and fully vested on May 15, 2024. Both awards include shares deemed purchased with reinvested dividend equivalents that are subject to the same forfeiture conditions as the shares to which the dividends relate.

(11)

Represents a grant of performance shares on March 13, 2014. If a specified Operating Income goal is met by December 31, 2016 and Mr. Van Hulle has remained in continuous employment with the Company, then the performance shares shall become non-forfeitable and fully vested on March 13, 2017. The award includes shares deemed purchased with reinvested dividend equivalents that are subject to the same forfeiture conditions as the shares to which the dividends relate.

(12)	Represents stock-settled SARs granted on February 16, 2011 that generally vested in one-third increments on each of the first three anniversaries of the date of grant.grant date.

 

(7)(13)

TheseRepresents stock-settled SARs were granted on March 5, 2009 and vested upon (1) the attainment of the following target prices sustained for three consecutive trading days for our common shares: one-third at $1.57; one-third at $1.72; and one-third at $1.86 and (2) time based vesting in one-third increments on each of the first three anniversaries of the date of grant.

(8)	These stock-settled SARs were granted on February 17, 2010 and14, 2012 that vested in one-third increments on each of the first three anniversaries of the date of grant.

(9)	These stock-settledgrant date. The SARs were granted on February 16, 2011also subject to performance-based vesting and vest in one-third increments on each of the first three anniversaries of the date of grant.

(10)

These stock-settled SARs were granted on February 14, 2012 and vest in incrementsvested upon the attainment of target prices (sustainedstock price hurdles (based on PolyOne’s closing stock price and sustained for thirty consecutive trading days) for our common shares as follows: one-third at $16.07; one-third at $16.80; and one-third at $17.53. The stock price hurdles were achieved in 2012. The SARs are now subject to time-based vesting that lapse one-third on each of the first three anniversaries of the date of grant.

 

(11)(14)

TheseRepresents stock-settled SARs were granted on March 8, 2012 andFebruary 15, 2013 that vest in increments upon the attainment of target prices (sustainedstock price hurdles (based on PolyOne’s closing stock price and sustained for thirty consecutive trading days) for our common shares as follows: one-third at $16.07;$25.39; one-third at $16.80;$26.54; and one-third at $17.53.$27.70. The stock price hurdles were achieved in 2012.2013. The SARs are now subject generally to time-based vesting that lapse in one-third increments on each of the first three anniversaries of the date of grant.grant date.

		50

---

EXECUTIVE COMPENSATION

(15)

Represents stock-settled SARs granted on February 11, 2014 that vest in increments upon the attainment of stock price hurdles (based on PolyOne’s closing stock price and sustained for thirty consecutive trading days) for our common shares as follows: one-third at $38.58; one-third at $40.33; and one-third at $42.08. The first two stock price hurdles were achieved in 2014. The SARs are also subject generally to time-based vesting that lapse in one-third increments on each of the first three anniversaries of the grant date.

(16)

Represents stock-settled SARs granted on February 4, 2015 that vest in increments upon the attainment of stock price hurdles (based on PolyOne’s closing stock price and sustained for thirty consecutive trading days) for our common shares as follows: one-third at $42.10; one-third at $44.01; and one-third at $45.92. The stock price hurdles were not achieved in 2015. The SARs are also subject generally to time-based vesting that lapse in one-third increments on each of the first three anniversaries of the grant date.

Number of Securities Underlying Unexercised Options (#) Exercisable (column (b))

This column shows the fully vested and exercisable SARs held by the Named Executive Officers as of December 31, 2012.2015.

Number of Securities Underlying Unexercised Options (#) Unexercisable (column (c))

This column shows the unvested and unexercisable SARs held by the Named Executive Officers as of December 31, 2012.

2015.

49

---

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (column (d))

There are noThis column shows shares underlying unexercised SARs awarded under any equity incentive planthe Amended Long-Term Incentive Plan that have not been earned.earned as an applicable stock price hurdle has not been met as of December 31, 2015.

Option Exercise Price (column (e))

This column shows the exercise (or base)base price for each SAR instrument reported in columncolumns (b), (c) and (d).

Option Expiration Date (column (f))

This column shows the expiration dates for each SAR instrument reported in columncolumns (b), (c) and (d).

Number of Shares or Units of Stock That Have notNot Vested (column (g))

This column shows the unvested RSUs held by the Named Executive Officers as of December 31, 2012.2015. The RSUs have dividend equivalent rights that entitle the grantee to dividend equivalents on each share of our common stock underlying the award equal to the dividend per share declared and paid on our issued and outstanding shares of common stock. The amounts in this column include all dividend equivalents declared in 2011 and 2012from 2013 through 2015 attributable to the awards (including the 4^th quarter dividend declared on October 11, 2012,8, 2015 to shareholders of record on December 12, 2012,18, 2015, which was paid on January 7, 2013)2016).

Market Value of Shares or Units of Stock That Have notNot Vested (column (h))

The market value is determined based on the closing marketstock price of our common shares on December 31, 20122015 ($20.42)31.76).

2012 OPTION EXERCISES AND STOCK VESTEDEquity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (column (i))

This column shows the performance shares held by the Named Executive Officers as of December 31, 2015 that have not vested and have not been earned. The performance shares have dividend equivalent rights that entitle the grantee to dividend equivalents on each share of our common stock underlying the award equal to the dividend per share declared and paid on our issued and outstanding shares of common stock. The amounts in this column include all dividend equivalents declared from 2013 through 2015 attributable to the awards (including the 4^th quarter dividend declared on October 8, 2015 to shareholders of record on December 18, 2015, which was paid on January 7, 2016).

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (column (j))

The market value is determined based on the closing stock price of our common shares on December 31, 2015 ($31.76).

 

Name  (a)		Option Awards				Stock Awards
		Number of Shares   Acquired on Exercise (#) (b)		Value Realized on   Exercise ($) (c)		Number of Shares   Acquired on Vesting   (#) (d)		Value Realized   on Vesting ($) (e)
S.D. Newlin		749,133		$7,486,830		249,152		$3,273,857
R.M. Patterson		122,300		2,034,633		48,089		631,889
R.J. Diemer, Jr.		—		—		—		—
R.M. Rosenau		55,200		501,048		28,043		368,485
K.M. Smith		133,833		968,215		28,043		368,485
T.J. Kedrowski		160,700		1,612,918		28,043		368,485

		51

---

EXECUTIVE COMPENSATION

2015 Option Exercises and Stock Vested

Name (a)		Option Awards						Stock Awards
		Number of Shares Acquired on Exercise (#) (b)				Value Realized on   Exercise ($) (c)		Number of Shares Acquired on Vesting (#) (d)				Value Realized on Vesting ($) (e)
R.M. Patterson		-				-		22,472				900,024
B.C. Richardson		-				-		-				-
S.D. Newlin		77,333				1,991,325		107,208				4,293,694
J.V. Van Hulle		20,900				516,620		10,720				429,369
C.M. Nikrant		16,100				395,577		10,720				429,369
J.A. McAlindon		7,200				109,246		2,783				111,471

Option Awards (columns (b) and (c))

Column (b) reports exercises of stock options and SARs during 20122015 on an aggregate basis. The value realized on exercise (column (c)) was computed by determining the difference between the marketclosing stock price of the underlying securities at exercise and the exercise price of the options/SARs. All of Mr. Newlin’s transactions involved SARs that were exercised pursuant to a trading plan established under Rule 10b5-1 of the Exchange Act.

50

---

Stock Awards (columns (d) and (e))

Column (d) reports the vesting and release of RSUs during 20122015 on an aggregate basis. All of the stock awards that vested and were releasedsettled in 20122015 were granted on March 5, 2009February 14, 2012 and releasedsettled on March 5, 2012.February 14, 2015. The amounts in this columnthese columns include shares awarded through the dividend equivalent right feature of the 2010 Plan, which have also been reported in the 2012 Summary Compensation Table under the “All Other Compensation” column of this proxy statement. Amended Long-Term Incentive Plan.

The value realized on releasesettlement (column (e)) was computed by multiplying the number of vested RSUs, including the corresponding dividend equivalent rights, by the marketclosing stock price of the underlying securities on the trading day prior to the vesting date, in accordance with the 2010Amended Long-Term Incentive Plan. Column (e) also includes cash-in-lieu of equity received by each Named Executive Officer, as we do not release partial shares resulting from dividend equivalents.

2012 PENSION BENEFITS

		52

---

EXECUTIVE COMPENSATION

2015 Pension Benefits

 

Name		Plan Name		Number of Years  Credited Service (#)		Present Value of  Accumulated  Benefit  (#)($)		Present Value ofPayments During    Accumulated Benefit   Last Fiscal Year  ($)
R.M. Patterson		N/A		-		-		-
Payments During Last   Fiscal YearB.C. Richardson   ($)		N/A		-		-		-
S.D. Newlin		Supplemental retirement benefit under employment agreement, as amended		-		11,310,088(1)		-
J.V. Van Hulle		—N/A		7,190,936(1)-		—-		-
R.M. PattersonC.M. Nikrant		N/A		-		-		-
J.A. McAlindon		—N/A		—-		—
R.J. Diemer, Jr. -		N/A		—		—		—
R.M. Rosenau		PolyOne Merged Pension Plan The Geon Company Section 401(a)(17) Benefit Restoration Plan		26.0 26.0		1,016,405(2) 764,895(2)		— —
K.M. Smith		PolyOne Merged Pension Plan The Geon Company Section 401(a)(17) Benefit Restoration Plan		17.4 17.4		661,909(2)(3) 843,520(2)(4)		— —
T.J. Kedrowski		N/A		—		—		—-

 

(1)

Although lump-sum payments are not allowed under the terms of the arrangement, the Present Value of Accumulated Benefit shown above for Mr. Newlin is the lump-sum value as of December 31, 20122015 of the annual benefit payment earned as of December 31, 20122015 that will be payable under Mr. Newlin’s Amended and Restated Letter Agreement dated as of July 16, 2008, providing for a 15-year certain and continuous life annuity beginning at age 59.9. The assumptions used to determine the lump-sum value are a discount rate of 4.13% and a post-retirement mortality using the 2013 static annuitant table described in Internal Revenueupon Mr. Newlin’s Qualifying Separation from Service Regulation §1.430(h)(3). No pre-retirement decrements are assumed.

(2)

Although lump-sum payments are not allowed under either plan, the Present Value of Accumulated Benefit shown above for each plan for Messrs. Rosenau and Smith are the lump-sum values as of December 31, 2012 of the monthly pension benefit earned as of December 31, 2012 that would be payable under that plan for Messrs. Rosenau’s and Smith’s respective lives beginning at age 62 (the earliest age prior to the normal retirement age of 65 when benefits can commence unreduced for early retirement)(as such term is defined herein). The assumptions used to determine the lump-sum value are a discount rate of 4.13%3.58% and a post-retirement mortality using the 2013 static annuitant table described in Internal Revenue Service Regulation §1.430(h)(3).RP-2014 White Collar Mortality Table rolled back to 2006 and then projected with the Buck Modified MP-2015 Projection Scale. No pre-retirement decrements are assumed.

(3)

Mr. Smith’s Number of Years Credited Service includes four additional years of pension service discussed in the narrative following the 2012 Pension Benefits Table. Without the four additional years of pension service, the Present Value of Accumulated Benefit would have been $509,937 instead of the $661,909 shown in the table. Subsequent earnings under the qualified and nonqualified plan were frozen effective March 20, 2009.

(4)

Mr. Smith’s Present Value of Accumulated Benefit includes four additional years of pension service discussed in the narrative following the 2012 Pension Benefits Table. Without the four additional years of pension service, the Present Value of Accumulated Benefit would have been $649,853 instead of the

51

---

$843,520 in the table. Subsequent earnings under the qualified and nonqualified plan were frozen effective March 20, 2009.

Messrs. RosenauPatterson, Richardson, Van Hulle, and Smith are eligible, along with certain other employees, to receive pension payments under the Qualified Pension Plan, as well as the Benefit Restoration Plan. In addition, since becoming retirement eligible (55 years of age with 10 years of service), Messrs. RosenauNikrant, and Smith are eligible to receive certain retiree medical benefits for which they will be required to pay a substantial portion of the cost. This plan will be phased out until its elimination in 2013. These plans existed prior to our formation in 2000 through the consolidation of Geon and M.A. Hanna and generally benefited all nonunion employees of Geon.

The Benefit Restoration Plan provides benefits that are in addition to those offered under the Qualified Pension Plan. Benefits are calculated under a formula similar to that of the Qualified Pension Plan, but without the compensation and benefit limits imposed by the Internal Revenue Code. The benefits under the Benefit Restoration Plan are offset by benefits provided under the Qualified Pension Plan. The Qualified Pension Plan makes available a pension that is paid from funds in trust provided through contributions by us. Any pension benefit provided under the Benefit Restoration Plan is paid from our general assets.

The amount of Messrs. Rosenau’s and Smith’s pension depends on a number of factors including monthly Final Average Earnings (“FAE”) and years of benefit service to us (“Benefit Service”). FAE is determined based on the highest four consecutive calendar years of an employee’s earnings. Earnings include salary, overtime pay, holiday pay, vacation pay, and certain incentive payments including annual cash bonuses, but exclude awards under long-term incentive programs and the match contributed by us in the qualified savings plans. The Qualified Pension Plan provides a monthly lifetime benefit equal to 1.15% times FAE times Benefit Service plus 0.45% times FAE in excess of 2002 Covered Compensation (as defined by the Internal Revenue Code) times Benefit Service limited to 35 years.

A retirement-eligible employee can elect to commence vested benefit payments as early as age 55 in lieu of waiting to age 65. However, the benefit described above is subject to reduction in recognition of the additional payments that are received because of early commencement. The reduction for early retirement is determined differently depending on whether the employee terminated employment before or after attaining age 55. If an employee terminates employment on or after age 55 and commences his or her benefit before age 62, the benefit payments would be reduced by 0.5% per month. If an employee terminates employment before age 55 and commences his or her benefit before age 65, the reduction is more severe and is determined on an actuarially equivalent basis. No reduction will occur if an employee (1) terminates employment on or after age 55 and commences his or her benefit on or after age 62 or (2) terminates employment before age 55 and commences his or her benefit at age 65.

The normal form of payment provides that an employee will receive his or her benefit in a lifetime payment with a minimum of 60 monthly payments guaranteed. Married participants receive payments in an actuarially equivalent 50% joint and survivor form. Other actuarially equivalent monthly lifetime forms of payments are available if elected by the participant with spousal agreement if married. Lump sum payments are not available.

52

---

In general, if a married, vested participant dies prior to commencing his pension benefit, then the spouse is eligible to receive the benefit that would have otherwise been payable had the participant terminated employment on the day he died, survived to his normal retirement date and elected a 50% joint and survivor form of payment and then immediately died. The 50% joint and survivor form provides the surviving spouse with monthly lifetime payments at the participant’s normal retirement age equal to 50% of the benefit that otherwise would have been payable. Payments can commence prior to the participant’s normal retirement age but may be reduced for early commencement.

The Qualified Pension Plan and Benefit Restoration Plan were frozen to new entrants effective December 31, 1999. Benefit Service was frozen effective December 31, 2002 in both plans and, effective March 20, 2009, earnings under both plans were frozen for all participants. We decided to freeze these plans following a comprehensive retirement benefits review, during which the Compensation Committee examined whether our retirement programs were consistent with PolyOne goals, including fairness to all associates and competitiveness in the marketplace. With this change, we have a single and competitive retirement plan for our United States-based employees.

Messrs. Diemer, Kedrowski, Newlin and PattersonMs. McAlindon do not participate in a defined benefit plan.plan with PolyOne.

We offer a defined contribution retirement benefit to all United States employeeseligible PolyOne participants through the Qualified Savings Plan. The Qualified Savings Plan provides employees with individual retirement accounts funded by (1) an automatic PolyOne-paid contribution of 2% of employee eligible earnings, and (2) an employer-paid match on employee 401(k) contributions dollar-for-dollar on the first 3% of earnings the employee contributes plus $0.50 per dollar on the next 3% of earnings the employee contributes. The Internal Revenue Code limits employee contributions to the Qualified Savings Plan to $17,000$18,000 ($24,000 for participants over age 50) and earnings upon which employee/employer contributions are basedlimited to $250,000$265,000 in 2012.2015.

The Nonqualified SavingsPolyOne Supplemental Retirement Benefit Plan is an unfunded, nonqualified plan that provides benefits similar to the Qualified Savings Plan, but without the Internal Revenue Code contribution and earnings limitations. Together, these plans are intended to provide the Named Executive Officers with retirement income equivalent to that provided to all other employees who are not impacted by the Internal Revenue Code limitations under the Qualified Savings Plan. As a result, the Named Executive Officers can expect a retirement income that replaces a portion of their income while employed, similar to that received by all other employees participating in the Qualified Savings Plan who are not impacted by the Internal Revenue Code limitations.

During 2008, the Compensation Committee reviewed Mr. Newlin’s total compensation package among the peer companies and across the broader general industry. The Compensation Committee determined that it was in the best interests of PolyOne and our shareholders to provide a supplemental retirement benefit for him that would be competitive with industry practices and serve as an additional retention vehicle. Thus, Mr. Newlin’s employment agreement (which provides for the terms of Mr. Newlin’s employment) was amended and restated on February 21, 2008 to comply with Code Section 409A, further amended and restated on July 16, 2008 to include certain retirement benefits. benefits, further amended and restated on March 6, 2014 by the Letter Agreement in connection with his retirement as President and Chief Executive Officer and transition to Executive Chairman, effective May 15, 2014, and further amended on February 10, 2016 to extend his employment to July 1, 2016.

Specifically, the employment agreement was amended to provideLetter Agreement provides that upon a Qualifying Separation from Service, Mr. Newlin will be entitled to annual supplemental retirement payments upon a Qualifying Separation from Service (as defined below), payable in the form of a 15-year certain and continuous life annuity, conditioned upon Mr. Newlin’s execution of a release and waiver. If Mr. Newlin dies or incurs

		53

---

EXECUTIVE COMPENSATION

a disability prior to a Qualifying Separation from Service (as defined below), he or his designated beneficiary will be entitled to certain supplemental retirement payments. Generally, the definition of a Qualifying Separation from Service is (1) Mr. Newlin attains the age of 55 (he is now 60) and has at least five years of service with us (he now has seven), is serving as

53

---

Chairman and Chief Executive Officer at the time of his retirement (provided that if the Board, in its sole discretion, has identified a suitable successor for the position of Chief Executive Officer, he only needs to be serving as Chairman at the time of his retirement) and the Board, in its sole discretion, has identified a suitable successor to the position of Chief Executive Officer; or (2) Mr. Newlin’s employment is involuntarily terminated other than for Serious Cause (as defined below)in his Letter Agreement) or Mr. Newlin terminates employment for good reason following a change of control of PolyOne. Under the terms of the amended employment agreement, he will also be treated as a retiree for purposes of any SARs, RSUs, performance shares and cash-settled performance units awarded to him as long-term incentive awards. In addition, he and his eligible dependents will have access to the same retiree medical benefits made available to all retirement eligible employees under our standard retiree medical benefit program, to the extent we continue to maintain such programs for the benefit of our retirees and their eligible dependents. Notwithstanding the foregoing, Mr. Newlin will forfeit his rights to receive the supplemental retirement payments and retiree medical benefits if he engages in any conduct prohibited by his non-competition agreement or any acts that constitute fraud, embezzlement, or disclosure of confidential information or deliberate dishonesty.

2012 NONQUALIFIED DEFERRED COMPENSATION2015 Nonqualified Deferred Compensation

 

Name		Executive Contributions in Last FY ($)(1)				Registrant Contributions in Last FY ($)(2)				Aggregate Earnings in Last  FY ($)(3)				Aggregate Withdrawals/ Distributions ($)				Aggregate Balance at Last FYE ($)(4)				Aggregate Balance at 12/31/2011 ($)(5)
S.D. Newlin			163,222				178,991				32,091				—				1,612,581				1,238,277
R.M. Patterson			177,888				56,012				131,763				—				1,113,706				748,043
R.J. Diemer, Jr.			152,817				5,826				7,409				—				166,052				—
R.M. Rosenau			—				7,835				2,027				—				99,243				89,381
K.M. Smith			27,088				31,512				73,004				—				584,758				453,154
T .J. Kedrowski			—				12,319				22,977				—				172,485				137,189

Name		Aggregate   Balance at   12/31/2014   ($)(1)					Executive Contributions   in Last FY ($)(2)					Registrant Contributions   in Last FY ($)(3)					Aggregate   Earnings in   Last FY   ($)(4)					Aggregate   Withdrawals/   Distributions   ($)					Aggregate Balance at Last FYE ($)(1)(5)
R.M. Patterson		2,071,384					245,544							96,977					43,821			-							2,457,726
B.C. Richardson		134,826					190,902							50,668					(5,102)			-							371,294
S.D. Newlin		2,375,237					130,838							144,017					42,246			-							2,692,338
J.V. Van Hulle		568,917					26,024							30,467					39,699			-							665,107
C.M. Nikrant		303,720					53,170							23,969					5,773			-							386,632
J.A. McAlindon		21,941					-							986					154			23,081(6)							-

 

(1)	Includes amounts reported as compensation for the Named Executive Officers in our summary compensation tables for previous years. The following aggregate amounts of executive and employer contributions were included in our summary compensation tables for fiscal years 2006 - 2014.

Name		Executive Contributions           FY 2006 – 2014         ($)					Registrant Contributions             FY 2006 – 2014         ($)
R.M. Patterson				1,071,410					315,362
B.C. Richardson				108,105					23,922
S.D. Newlin				1,045,723					1,145,811
J.V. Van Hulle				41,971					31,922
C.M. Nikrant				-					-
J.A. McAlindon				-					11,115

(2)	These amounts reflect actual amounts earned by the Named Executive Officers in 20122015 that have been deferred on a voluntary basis. The amounts reflected in this column are included in the 20122015 Summary Compensation Table of this proxy statement as follows:

 

Name		2012 “Salary” Column ($)				2012 “Non-Equity Incentive Plan Compensation” Column ($)
S.D. Newlin			49,754				113,468
R.M. Patterson			65,365				112,523
R.J. Diemer, Jr.			152,817				—
R.M. Rosenau			—				—
K.M. Smith			18,300				8,788
T.J. Kedrowski			—				—

Name		2015 “Salary”                Column ($)					2015 “Non-Equity Incentive     Plan Compensation” Column     ($)
R.M. Patterson				105,115					140,429
B.C. Richardson				96,350					94,552
S.D. Newlin				41,086					89,752
J.V. Van Hulle				23,289					2,735
C.M. Nikrant				42,614					10,556
J.A. McAlindon				-					-

 

(2)(3)

This column contains contributions by us in the last fiscal year under our nonqualified retirement plan, the PolyOne Supplemental Retirement Benefit Plan, which provides for benefits in excess of amounts permitted to be contributed under our qualified retirement plan, as follows: (a) our cash contributions in amounts equal to 100% on the first 3% of employee contributions plus 50% on the next 3% of employee contributions (the “Company Match”) limited to 4.5% of eligible earnings, and (b) a retirement contribution by us in an

 

54

---

		amount equal to 2% of eligible earnings (the “Retirement Contribution”). The following table breaks out the contributions made by us in 2012 under each of the types of contributions described above:54

---

EXECUTIVE COMPENSATION

Company Contribution		Newlin				Patterson				Diemer				Rosenau				Smith				Kedrowski
Company Match		$	123,917			$	38,777			$	4,033				—			$	21,816			$	3,012
Retirement Contribution		$	55,074			$	17,234			$	1,793			$	7,835			$	9,696			$	9,307

contributions plus 50% on the next 3% of employee contributions (the “Company Match”) limited to 4.5% of eligible earnings, and (b) a retirement contribution by us in an amount equal to 2% of eligible earnings (the “Retirement Contribution”). The following table breaks out the contributions made by us in 2015 under each of the types of contributions described above:

Name		Company Match              ($)					Retirement Contribution     ($)
R.M. Patterson				67,138					29,839
B.C. Richardson				35,078					15,590
S.D. Newlin				99,704					44,313
J.V. Van Hulle				21,093					9,374
C.M. Nikrant				16,594					7,375
J.A. McAlindon				-					986

All of these amounts are included in the “All Other Compensation” column (column (i)) of the 20122015 Summary Compensation Table.Table of this proxy statement.

 

(3)(4)

Because amounts included in this column do not include above-market or preferential earnings, none of these amounts are included inunder the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column (column (h)) of the 20122015 Summary Compensation Table.Table of this proxy statement.

 

(4)(5)

A portion of the balance reflected in the table represents amounts earned by the executives,Named Executive Officers, which they have elected to defer on a voluntary basis. Messrs. Rosenau and Smith also have a balance in a frozen nonqualified deferred compensation plan sponsored by our predecessor company, Geon. The Geon Company Section 401(a)(17) Benefit Restoration Plan amounts are reflected in the table.

 

(5)(6)

Includes amounts reported as compensation forMs. McAlindon received a distribution of $23,081 from the Named Executive Officers in the Summary Compensation Table for previous years. The following aggregate amounts of executive and employer contributions were included in the Summary Compensation Table for fiscal years 2007 — 2011.PolyOne Supplemental Retirement Benefit Plan due to her separation from service.

Name		Executive Contributions FY 2007 — 2011 ($)				Registrant Contributions FY 2007 — 2011 ($)
S.D. Newlin			531,213				581,215
R.M. Patterson			540,424				124,650
R.J. Diemer, Jr.			—				—
R.M. Rosenau			—				4,905
K.M. Smith			76,687				96,346
T.J. Kedrowski			34,940				49,354

We currently offer participation in a nonqualified deferred compensation retirement plan, called the PolyOne Supplemental Retirement Benefit Plan, to specified employees that include the Named Executive Officers. This plan is an unfunded, nonqualified plan that provides benefits similar to our Qualified Savings Plan, but without Internal Revenue Code contribution and earnings limitations. The Named Executive Officers are permitted to elect to defer up to 50% of their salary and annual bonus into the plan. The amounts deferred are credited to accounts selected by the executiveNamed Executive Officer that mirror the investment alternatives available in our qualified retirement plan, except that participantsthey cannot elect the PolyOne stock fund with respect to amounts deferred under the nonqualified plan. Each Named Executive Officer who is a participantparticipates in the supplemental planPolyOne Supplemental Retirement Benefit Plan is 100% vested in that portion of histheir account that is attributable to elective deferrals and the Company Match. Further, Named Executive Officers who are participantsparticipate in the plan are vested in the Retirement Contribution (as defined above) upon three years of service. A Named Executive Officer’s vested accounts will commence to be paid to such executivethem within 30 days of the date of the executive’stheir termination of employment with us in the form of payment they selected by the executive (lump sum(lump-sum payment or payment in installments over a period not exceeding 10 years) on an election form received by us.

The PolyOne Supplemental Retirement Benefit Plan and the frozen plans areis subject to the rules of Code Section 409A, of the Internal Revenue Code, which restricts the timing of distributions. Thus, payment, or commencement of payment, to the Named Executive Officers of their accounts may need to be delayed by six months following the executive’s “separationtheir separation from service”service with us.

Potential Payments Upon Termination or Change of Control

55

---

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROLSummary of Potential Payments

Our Named Executive Officers’ employment may be terminated under several possible scenarios. In certain of these scenarios, our plans, agreements, arrangements or typical practices would provide severance benefits to our Named Executive Officers (except Ms. McAlindon) in varying amounts to the executive.executive under certain scenarios. We do not have employment agreements with our Named Executive Officers other than Mr. Newlin. We do have management continuity agreements (“Continuity Agreements”) with each of our Named Executive Officers that provide for specified benefits upon a termination of employment following a change of control, and each of our Named Executive Officers other(other than Mr. Newlin participatesNewlin) participate in our Executive Severance Plan. Further, ourother Company plans, agreements and arrangements may provide for specified benefits upon a change of control (or for acceleration of such benefits). Severance and other benefits that are payable upon a termination of employment and/or upon a change of control are described below. The table following thethis narrative discussion summarizes the amounts payable upon termination or a change of control under certain circumstances to our current Named Executive Officers, assuming that the executive’s employment terminated on December 31, 2012.2015.

		55

---

EXECUTIVE COMPENSATION

Management Continuity Agreements

We have entered into management continuity agreements (referred to as the “Continuity Agreements”)Continuity Agreements with all of our elected corporate officers, including each of the Named Executive Officers. The purpose of the Continuity Agreements isserve to encourage the individualsthese key executives to carry out their duties and provide continuity of management in the event of a “change of control” of PolyOne. The Continuity AgreementsNamed Executive Officers are generally provide for the continuation of employment of the individualsprovided with severance protection for a period of two or three years in(depending on the same positions and with the same responsibilities, authorities, benefits and level of compensation that they possessed immediately prior to the change of control. The agreements provide severance protectionexecutive) should the officer’shis or her employment be terminated either by us without cause or by the executive for good reason (as defined in the agreements) following a change of control. The Continuity Agreements are automatically renewed each year unless we give prior notice of termination.

The Continuity Agreementstermination and do not provide any assurance of continued employment unless there is a change of control.employment. For these purposes, “change of control” has, “cause” and “good reason” have the meaningmeanings ascribed to such termterms in the Continuity Agreement.

In order to provide additional protection, our Long-Term Incentive Plan grant agreements and Annual Plan provide for accelerated benefits in the event of a change of control, as described in such documents. Those change of control provisions affect all participants in those programs, including the Named Executive Officers.Agreements.

If a change of control occurs and the Named Executive Officer’s employment is terminated by us or a successor for reasons other than “cause” or is terminated voluntarily by the individual for “good reason”reason,” then the Continuity Agreements generally provide that the individual would be entitled to receive:

 

A lump sum payment of three years of base salary;

·

A lump-sum payment equal to two or three years (depending on the executive) of the base salary in effect immediately prior to the change of control, or if greater, the termination date;

 

A payment three times the executive’s targeted annual incentive amount in effect prior to the change of control;

·

A lump-sum payment equal to two or three times (depending on the executive) the executive’s targeted Annual Incentive Amount, as that term is defined the Continuity Agreement, in effect prior to the change of control;

 

Employee health and welfare benefits for up to three years at active employee rates;

·

Employee health and welfare benefits (excluding the long-term disability plan) for up to two or three years (depending on the executive) at active employee rates;

 

A financial planning/tax preparation allowance equal to one year of financial planning/tax preparation allowance the executive was entitled to receive prior to the change of control;

·

An allowance equal to one year of financial planning/tax preparation that the executive was entitled to receive prior to the change of control;

 

56

---

A lump sum

·

A lump-sum payment equal to the employer contributions required to be made to certain retirement plans on behalf of the executive for the year of the change of control or the year of termination;

·

A tax gross-up for any excise tax due under the Internal Revenue Code for any so-called “golden parachute” payments made under the agreements (but only for Named Executive Officers with “grandfathered” Continuity Agreements). In 2011, the Compensation Committee eliminated the tax gross-up benefit for so called “excess parachute payments” under Code Section 280G from the Continuity Agreements provided to Named Executives Officers who were hired in or who had Continuity Agreements amended in 2011 and thereafter.

None of the executiveagreements contain a single trigger or a modified single trigger for the year of the change of control or the year of termination; and

A tax gross-up for any excise tax due under the Internal Revenue Code for any so-called “golden parachute” payments made under the agreements (only for Named Executive Officers with “grandfathered” Continuity Agreements).

In 2011, the Compensation Committee eliminated the tax gross-up benefit for so called “excess parachute payments” under Section 280G of the Internal Revenue Code from thebenefits. The Continuity Agreements provided to new executives in 2011 and in future years.

For these purposes “cause” and “good reason” have the meanings ascribed to such terms in the Named Executive Officers’ Continuity Agreements. For the CEO, “good reason” also includes his election to terminate employmentdo not provide for any reason during the 30-day period immediatelybenefits upon death or disability following the first anniversary of thea change of control.

To the extent a payment or benefit that is paid or provided under a Continuity Agreement would also be paid or provided under the terms of another plan, program, agreement, arrangement or legal requirement, the executive would be entitled to payment under the Continuity Agreement or such other applicable plan, program, agreement, arrangement or legal requirement, whichever provides for greater benefits, but would not be entitled to benefits under both the Continuity Agreement and such other plan, program, agreement, arrangement or legal requirement.

In addition, in order to receive payment and benefits under the Continuity Agreement, the Named Executive Officer must execute a release of claims against usPolyOne and comply with confidentiality, non-compete and non-solicitation covenants for two or three years.years, depending on the executive.

Employment Agreement with Mr. Newlin

We have entered into an employment agreement with Mr. Newlin, pursuant to which he serves as our Chairman, President and Chief Executive Officer. The agreement provides that if (1) Mr. Newlin’s employment is terminated by us without Serious Cause (as defined below), (2) Mr. Newlin is not otherwise entitled to receive benefits under his Continuity Agreement (discussed above), (3) Mr. Newlin agrees to standard non-compete and non-solicitation covenants for a period of 36 months following the date of termination and (4) Mr. Newlin executes a release of claims against us, Mr. Newlin will be entitled to 36 months of salary continuation, car allowance and financial planning/tax preparation allowance, a pro-rated annual incentive amount as earned for the year in which the termination of employment occurs and reimbursement for the costs previously paid by us while Mr. Newlin was employed for the continued coverage in our medical and dental plans for 24 months (but not life insurance, short-term disability or long-term disability), plus any taxes imposed as a result of such reimbursement.

Mr. Newlin is also entitled to supplemental retirement benefits under his employment agreement if his employment is involuntarily terminated other than for Serious Cause or if Mr. Newlin terminates employment for “good reason” (as defined above) following a change of control. For this purpose, Serious Cause has the meaning ascribed to such term in the PolyOne Employee Transition Plan as amended from time to time, and also includes any breach of the employment agreement or certain other agreements between us and Mr. Newlin. These supplemental retirement benefits are described more fully in the “Compensation Discussion and Analysis — Analysis of 2012 Compensation Decisions and Actions — Retirement Benefits” section of this proxy statement.

57

---

Executive Severance Plan

Effective May 25, 2006, and as amended most recently effective May 15, 2014, the Compensation Committee adopted the Executive Severance Plan. The Executive Severance Plan provides for severance payments upon certain terminations of employment to our executive officersNamed Executive Officers and other elected officers who are expected to make

		56

---

EXECUTIVE COMPENSATION

substantial contributions to our success and thereby provide for stability and continuity of operations. All of the Named Executive Officers participate in the Executive Severance Plan except Mr. Newlin.Newlin, whose severance benefits are provided through his Letter Agreement.

The Executive Severance Plan provides that, if we terminatePolyOne terminates the employment of a Named Executive Officer for any reason other than cause,Cause (as defined in the Executive Severance Plan), death or disability, then the Named Executive Officer will be entitled to receive:

 

Salary continuation payments in an amount equal to two times the Named Executive Officer’s base salary;

·

Salary continuation payments in an amount equal to two times the Named Executive Officer’s base salary;

 

A pro rata payment of his annual bonus for the year of termination;

·

A payment in an amount equal to the Named Executive Officer’s annual bonus under the Annual Plan as earned for the year in which the separation occurs;

 

Reimbursement for the costs previously paid by us for continued coverage for two years in our medical, dental and vision plans, plus any taxes imposed as a result of such reimbursement; and

·

Reimbursement for the costs previously paid by us for continued coverage for two years in our medical, dental and vision plans, plus any taxes imposed as a result of such reimbursement; and

 

Fees for outplacement benefits for a period of 12 months.

·

Fees for outplacement benefits for a period of 12 months.

We do not have to make payments to Named Executive Officers under the Executive Severance Plan if they are entitled to receive payment under a Continuity Agreement discussed above. In addition, in order to receive payments under the Executive Severance Plan, the Named Executive Officer must execute a release of claims against us and is subject to confidentiality, non-compete, non-solicitation and non-disparagement covenants during the two-year severance period.

Employment Agreement with Mr. Newlin

We have entered into an employment agreement with Mr. Newlin, pursuant to which he serves as our Executive Chairman, and formerly served as our Chairman, President and Chief Executive Officer. No other Named Executive Officer executed an employment agreement. The agreement provides that if (1) Mr. Newlin’s employment is terminated by us without Serious Cause (as defined below), (2) Mr. Newlin is not otherwise entitled to receive benefits under his Continuity Agreement (discussed above), (3) Mr. Newlin agrees to standard non-compete and non-solicitation covenants following the date of termination and (4) Mr. Newlin executes a release of claims against PolyOne, he will be entitled to 36 months of salary continuation, benefit allowance and financial planning/tax preparation allowance and reimbursement for the costs previously paid by us while Mr. Newlin was employed for the continued coverage in our medical and dental plans for 24 months (but not life insurance, short-term disability or long-term disability), plus any taxes imposed as a result of such reimbursement.

Mr. Newlin is also entitled to supplemental retirement benefits under his employment agreement if his employment is terminated for any reason other than involuntarily for Serious Cause. For this purpose, Serious Cause has the meaning ascribed to such term in the PolyOne Employee Transition Plan as amended from time to time, and also includes any breach of the employment agreement or certain other agreements between us and Mr. Newlin. These supplemental retirement benefits are described more fully in the “2015 Pension Benefits” section of this proxy statement.

In connection with his retirement as President and Chief Executive Officer and transition to Executive Chairman, Mr. Newlin’s employment agreement was amended, via Letter Agreement effective May 15, 2014. In addition to various changes to his compensation as described in the “Other Aspects of Our Compensation Programs” section of this proxy statement, the Letter Agreement also provides Mr. Newlin with access to furnished PolyOne office space and administrative assistance for five years in the event he retires from the Company. If Mr. Newlin is terminated for any reason other than for Serious Cause, then the Company will waive the requirement that he be in the continuous employ of the Company in order for his outstanding long-term incentive awards to become non-forfeitable. The Letter Agreement also eliminates any term in his outstanding long-term incentive awards that provides for prorated vesting and/or payment of an award upon separation from service or for forfeiture of the awards if his employment is terminated before a specified time. The modification reflects the Company’s strong performance over Mr. Newlin’s tenure and the Company’s desire to maintain a strong alignment of interest between Mr. Newlin and shareholders by allowing him to retain his outstanding equity while serving as our Executive Chairman.

		57

---

EXECUTIVE COMPENSATION

Mr. Newlin will be entitled to substantially the same severance benefits as described above if he terminates his employment for “Good Reason,” which is generally defined as a material diminution in authority, duties or responsibilities or any action or inaction by the Company that constitutes a material breach of Mr. Newlin’s Letter Agreement.

Mr. Newlin’s Letter Agreement was further amended on February 10, 2016 to extend his employment to July 1, 2016, but he will cease serving as a Director on May 12, 2016 due to his retirement as a Board member as of our Annual Meeting.

Severance Agreement with Former Executive

PolyOne and Ms. McAlindon agreed that Ms. McAlindon would step down from her position as Senior Vice President, President of Designed Structures and Solutions, effective May 15, 2015. In conjunction with her departure, Ms. McAlindon received the benefits that she was entitled to under the Executive Severance Plan. The benefits include: $630,000, representing 24 months of salary continuation, a payment equal to the amount calculated under the Annual Plan as earned in 2015 of $28,440, a payment of $16,760 for accrued but unused vacation, 24 months of accrued post-separation medical, vision and dental coverage reimbursements totaling approximately $52,848 and accrued post-separation outplacement services totaling $8,300. Any of the above noted items that were deemed to be deferred compensation pursuant to Code Section 409A were subject to a six-month delay, and were paid the first day of the seventh month following her separation from service.

PolyOne and Ms. McAlindon executed the Severance Agreement whereby Ms. McAlindon provided a release of claims, and an acknowledgement that she remains subject to certain confidentiality, non-competition and non-solicitation obligations.

A portion of Ms. McAlindon’s unvested long-term incentive awards were forfeited as a result of her separation from service pursuant to the terms of the applicable grant agreements. For details regarding the awards that were forfeited, see the description in footnote 4 to the 2015 Summary Compensation Table of this proxy statement. Effective June 15, 2015, PolyOne modified certain RSUs and cash-settled performance units previously granted to her, which would have otherwise been forfeited under the terms of her applicable grant agreements upon her separation from service. For details regarding the modified awards, see the description in footnotes 4 and 7 to the 2015 Grants of Plan-Based Awards table of this proxy statement.

Annual Plan

All of our Named Executive Officers, except Mr. Newlin, participate in the Annual Plan. The Annual Plan provides that, if a change of control occurs, we are required to pay each participant a pro-ratedan interim lump-sum cash payment equal to the product of the number of months that have elapsed in the calendar year prior toin which the change of control occurs and one-twelfth of the participant’s target annual incentive award opportunity in effect prior to the change of control. We have the obligation to make a final payment under the terms of the Annual Plan for the plan year in which the change of control occurs, but may offset the amount of any interim payment made. For these purposes “change of control” has the meaning ascribed to such term in the Annual Plan. In addition, participants receive a payout, as earned, upon their death, disability or retirement after the first quarter of the Plan year.

Equity/Long-Term Incentive Awards

Each of the grant agreements evidencing outstanding awards of restricted stock units, stock options,RSUs, SARs, and cash-settled performance units providesand performance shares provide that the vesting of such award will accelerate upon a change of control. For this purpose, a “change of control” is defined in the Amended 2010Long-Term Incentive Plan. The grant agreements also provide for prorated vesting upon death, disability and retirement, as those terms are defined in the grant agreements, with the exception of Mr. Newlin’s outstanding awards, which were modified by his Letter Agreement to eliminate any prorated vesting provisions, as well as the March 13, 2013 and May 15, 2014 performance shares granted to Mr. Patterson and the March 13, 2014 performance shares and RSUs granted to Mr. Van Hulle (all of which do not provide for prorated vesting upon retirement).

Retirement Benefits

Our defined benefit retirement plans applicable to Messrs. Rosenau and Smith also have provisions relating to the termination of the participants’ employment with us. Mr. Newlin’s supplemental retirement benefit under his employment agreementLetter Agreement also has provisions relating to the termination of his employment with us. These payments are described more fully in the disclosure provided in connection with the 2012“2015 Pension Benefits Table contained inBenefits” section of this proxy statement.

 

58

		58

---

EXECUTIVE COMPENSATION

The PolyOne Supplemental Retirement Benefit Plan that is made available to all of our Named Executive Officers has provisions relating to the termination of employment with PolyOne. These payments are described more fully in the disclosure provided in the “2015 Nonqualified Deferred Compensation” section of this proxy statement.

Payments and Benefits Upon Termination — As of the End of Fiscal Year 20122015

The following table summarizes the amounts payable to the Named Executive Officers (except for Ms. McAlindon) upon termination under specified circumstances or upon a change of control. The data in the tablesbelow assumes that each triggering event listed in the tables occurred on December 31, 20122015 and that the stock price for our common shares is $20.42,was $31.76, the closing salesstock price of our common shares on December 31, 2012.2015.

 

Name		Benefits and Payments		Voluntary Termination   ($)		Retirement(1)   ($)		Disability   ($)		Death     ($)		Involuntary Termination   with Cause ($)		Involuntary Termination without cause   ($)		Involuntary Termination without Cause or for Good Reason Following a Change of Control ($)		Benefits and Payments		Voluntary  Termination  ($)		Retirement(1)  ($)				Disability  ($)				Death ($)				Involuntary  Termination  with Cause ($)		Involuntary  Termination  without Cause ($)				Termination  without Cause or for Good Reason Following a Change of Control ($)
R.M. Patterson																		Cash Severance Benefit (2)		-			-				-				-			-			2,183,722				5,400,000
																		Annual Incentive for Year of Termination		-			-				383,722				383,722			-			-				854,615
																		Cash-Settled Performance Units (3)		-			-				921,133				921,133			-			-				1,523,850
																		Restricted Stock Units (4)		-			-				1,603,213				1,603,213			-			-				2,310,730
																		Performance Shares (5)		-			-				1,536,358				1,536,358			-			-				4,038,982
																		Unexercisable Stock Options/SARs (4)		-			-				85,090				85,090			-			-				88,822
																		Health and Welfare Benefits (6)		-			-				-				-			-			61,032				91,548
																		Financial Planning Services (8)		-			-				-				-			-			-				13,000
																		Outplacement Benefits		-			-				-				-			-			8,300				-
																		Lump Sum for Defined Contribution Plans		-			-				-				-			-			-				351,000
																		Excise Tax Gross-up (9)		-			-				-				-			-			-				5,673,243
B.C. Richardson																		Cash Severance Benefit (2)		-			-				-				-			-			1,278,844				1,838,100
																		Annual Incentive for Year of Termination		-			-				164,844				164,844			-			-				367,135
																		Cash-Settled Performance Units (3)		-			-				213,358				213,358			-			-				429,600
																		Restricted Stock Units (4)		-			-				668,897				668,897			-			-				1,089,051
																		Unexercisable Stock Options/SARs (4)		-			-				-				-			-			-				-
																		Health and Welfare Benefits (6)		-			-				-				-			-			33,096				33,096
																		Financial Planning Services (8)		-			-				-				-			-			-				10,000
																		Outplacement Benefits		-			-				-				-			-			8,300				-
																		Lump Sum for Defined Contribution Plans		-			-				-				-			-			-				119,480
S.D. Newlin																		Cash Severance Benefit (2)		-			-				-				-			-			1,967,550				1,967,550
		Cash Severance Benefit(2)		—		—		—		—		—		2,940,000		6,174,000		Annual Incentive for Year of Termination		-			-				-				-			-			-				-
		Annual Incentive for Year of Termination		—		2,017,794		2,017,794		2,017,794		—		2,017,794		2,017,794		Cash-Settled Performance Units (3)		-			3,307,500				3,307,500				3,307,500			-			3,307,500				3,307,500
		Cash-Settled Performance Units(3)		—		1,230,228		1,230,228		1,230,228		—		1,230,228		2,359,000		Restricted Stock Units (4)		-			6,485,424				6,485,424				6,485,424			-			6,485,424				6,485,424
		Restricted Stock Units		—		4,187,155		4,187,155		4,187,155		—		4,187,155		6,499,237		Unexercisable Stock Options/SARs (4)		-			396,381				396,381				396,381			-			396,381				396,381
		Unexercisable Stock Options/SARs		—		1,608,528		1,608,528		1,608,528		—		1,608,528		2,842,127		Health and Welfare Benefits (6)		-			52,968				52,968				52,968			-			52,968				79,452
		Health and Welfare Benefits(4)		—		—		—		—		—		32,274		48,411		Other Benefits (7)		-			-				-				-			-			72,000				-
		Other Benefits(5)		—		—		—		—		—		72,000		—		Financial Planning Services (8)		-			-				-				-			-			39,000				13,000
		Financial Planning Services(6)		—		—		—		—		—		39,000		13,000		Lump Sum for Defined Contribution Plans		-			-				-				-			-			-				127,890
		Lump Sum for Defined Contribution Plans		—		—		—		—		—		—		401,310		Excise Tax Gross-up (9)		-			-				-				-			-			-				-
		Excise Tax Gross-up(7)(8)		—		—		—		—		—		—		—		Incremental Pension Benefit (10)		-			-				-				-			-			-				-
		Incremental Pension Benefit		—		—		—		—		—		—		—
R. M. Patterson
J.V. Van Hulle																		Cash Severance Benefit (2)		-			-				-				-			-			1,098,230				1,391,900
		Cash Severance Benefit(2)		—		—		—		—		—		1,030,000		2,626,500		Annual Incentive for Year of Termination		-			200,230				200,230				200,230			-			-				250,288
		Annual Incentive for Year of Termination		—		—		673,559		673,559		—		673,559		673,559		Cash-Settled Performance Units (3)		-			367,641				367,641				367,641			-			367,641				497,000
		Cash-Settled Performance Units(3)		—		—		243,211		243,211		—		—		472,800		Restricted Stock Units (4)		-			321,316				807,212				807,212			-			321,316				1,277,737
		Restricted Stock Units		—		—		830,458		830,458		—		—		1,302,081		Performance Shares (5)		-			-				485,896				485,896			-			-				808,101
		Unexercisable Stock Options/SARs		—		—		320,875		320,875		—		—		575,758		Unexercisable Stock Options/SARs (4)		-			37,966				37,966				37,966			-			37,966				39,633
		Health and Welfare Benefits(4)		—		—		—		—		—		48,886		73,329		Health and Welfare Benefits (6)		-			-				-				-			-			55,320				55,320
		Financial Planning Services(6)		—		—		—		—		—		—		10,000		Financial Planning Services (8)		-			-				-				-			-			-				10,000
		Outplacement Benefits		—		—		—		—		—		8,300		—		Outplacement Benefits		-			-				-				-			-			8,300				-
		Lump Sum for Defined Contribution Plans		—		—		—		—		—		—		170,720		Lump Sum for Defined Contribution Plans		-			-				-				-			-			-				90,470
		Excise Tax Gross-up(7)		—		—		—		—		—		—		1,481,476
		Incremental Pension Benefit		—		—		—		—		—		—		—
R.J. Diemer, Jr.
		Cash Severance Benefit(2)		—		—		—		—		—		870,000		2,088,000
		Annual Incentive for Year of Termination		—		—		381,885		381,885		—		381,885		381,885
		Cash-Settled Performance Units(3)		—		—		43,353		43,353		—		—		130,000
		Restricted Stock Units		—		—		200,805		200,805		—		—		825,295
		Unexercisable Stock Options/SARs		—		—		60,646		60,646		—		—		222,300
		Health and Welfare Benefits(4)		—		—		—		—		—		46,155		69,232
		Financial Planning Services(6)		—		—		—		—		—		—		10,000
		Outplacement Benefits		—		—		—		—		—		8,300		—
		Lump Sum for Defined Contribution Plans		—		—		—		—		—		—		135,720
		Excise Tax Gross-up(7)		—		—		—		—		—		—		—
		Incremental Pension Benefit		—		—		—		—		—		—		—

 

59

---

Name		Benefits and Payments		Voluntary Termination   ($)		Retirement(1)   ($)		Disability   ($)		Death     ($)		Involuntary Termination   with Cause ($)		Involuntary Termination without cause   ($)		Involuntary Termination without Cause or for Good Reason Following a Change of Control ($)
R. M. Rosenau
		Cash Severance Benefit(2)		—		—		—		—		—		730,000		1,697,250
		Annual Incentive for Year of Termination		—		395,577		395,577		395,577		—		395,577		395,577
		Cash-Settled Performance Units(3)		—		127,291		127,291		127,291		—		127,291		244,100
		Restricted Stock Units		—		449,367		449,367		449,367		—		449,367		683,560
		Unexercisable Stock Options/SARs		—		170,989		170,989		170,989		—		170,989		295,844
		Health and Welfare Benefits(4)		—		—		—		—		—		30,580		45,870
		Financial Planning Services(6)		—		—		—		—		—		—		10,000
		Outplacement Benefits		—		—		—		—		—		8,300		—
		Lump Sum for Defined Contribution Plans		—		—		—		—		—		—		110,320
		Excise Tax Gross-up(7)		—		—		—		—		—		—		—
		Incremental Pension Benefit		—		—		—		—		—		—		—
K.M. Smith
		Cash Severance Benefit(2)		—		—		—		—		—		730,000		1,697,250
		Annual Incentive for Year of Termination		—		370,656		370,656		370,656		—		370,656		370,656
		Cash-Settled Performance Units(3)		—		127,291		127,291		127,291		—		127,291		244,100
		Restricted Stock Units		—		449,367		449,367		449,367		—		449,367		683,560
		Unexercisable Stock Options/SARs		—		170,989		170,989		170,989		—		170,989		295,844
		Health and Welfare Benefits(4)		—		—		—		—		—		30,580		45,870
		Financial Planning Services(6)		—		—		—		—		—		—		10,000
		Outplacement Benefits		—		—		—		—		—		8,300		—
		Lump Sum for Defined Contribution Plans		—		—		—		—		—		—		110,320
		Excise Tax Gross-up(7)		—		—		—		—		—		—		—
		Incremental Pension Benefit		—		—		—		—		—		—		—
T. J. Kedrowski
		Cash Severance Benefit(2)		—		—		—		—		—		712,000		1,655,400
		Annual Incentive for Year of Termination		—		—		361,379		361,379		—		361,379		361,379
		Cash-Settled Performance Units (3)		—		—		123,456		123,456		—		—		237,000
		Restricted Stock Units		—		—		449,367		449,367		—		—		683,560
		Unexercisable Stock Options/SARs		—		—		170,989		170,989		—		—		295,844
		Health and Welfare Benefits(4)		—		—		—		—		—		30,580		45,870
		Financial Planning Services(6)		—		—		—		—		—		—		10,000
		Outplacement Benefits		—		—		—		—		—		8,300		—
		Lump Sum for Defined Contribution Plans		—		—		—		—		—		—		107,600
		Excise Tax Gross-up(7)		—		—		—		—		—		—		822,539
		Incremental Pension Benefit		—		—		—		—		—		—		—

		59

---

EXECUTIVE COMPENSATION

Name		Benefits and Payments		Voluntary Termination ($)		Retirement(1) ($)		Disability ($)				Death ($)				Involuntary Termination with Cause ($)		Involuntary Termination without Cause ($)				Termination without Cause or for Good Reason Following a Change of Control ($)
C.M. Nikrant		Cash Severance Benefit (2)		-		-			-				-			-			968,506				1,255,500
		Annual Incentive for Year of Termination		-		-			158,506				158,506			-			-				226,113
		Cash-Settled Performance Units (3)		-		-			316,313				316,313			-			-				424,000
		Restricted Stock Units (4)		-		-			301,275				301,275			-			-				427,840
		Unexercisable Stock Options/SARs (4)		-		-			37,966				37,966			-			-				39,633
		Health and Welfare Benefits (6)		-		-			-				-			-			33,096				33,096
		Financial Planning Services (8)		-		-			-				-			-			-				10,000
		Outplacement Benefits		-		-			-				-			-			8,300				-
		Lump Sum for Defined Contribution Plans		-		-			-				-			-			-				122,410

(1)

Retirement is generally defined as the executive’s attainment of age 55 with ten10 years of service or age 58 with five years of service. Pursuant to the terms of the Letter Agreement, in the case of Mr. Newlin, a voluntary termination would be deemed a retirement for purposes of his outstanding equity awards and other benefits.

 

(2)

SeveranceCash severance benefits are payable under either the (a) Executive Severance Plan in the event of an involuntary termination without cause;cause, under either the Executive Severance Plan or, in the case of Mr. Newlin, his Letter Agreement, or (b) Management Continuity Agreement in the event of an involuntary termination following a change of control; or (c) incontrol, under the case of Mr. Newlin, his employment agreement.Continuity Agreement.

 

(3)

For Cash-Settled Performance UnitsExcept for Mr. Newlin, cash-settled performance units granted in 20122015 and 2011, awards2014 reflect a prorated target amount in cases of retirement, disability or death. Mr. Newlin’s 2014 award reflects the full value award at target in cases of retirement, disability, death and involuntary termination without cause as a result of the modifications to his awards per the terms of his Letter Agreement. For cash-settled performance units granted in 2013, awards reflect actual attainment. In the case of involuntary termination following a change of control, awards granted in 2015 and 2014 reflect the full value award at target.

(4)

Except for Mr. Newlin, RSUs and Unexercisable Stock Options/SARs granted in 2015, 2014 and 2013 reflect a prorated amount of the award in cases of retirement, disability or death. Mr. Newlin’s 2014 and 2013 awards reflect the full value in cases of retirement, disability, death and involuntary termination without cause as a result of the modifications to his awards per the terms of his Letter Agreement. In the case of involuntary termination following a change of control, all of these awards reflect their full value. SARs with an exercise price below the December 31, 2015 closing stock price of $31.76 were valued at zero.

(5)	Performance shares granted in 2013 and 2014 reflect a prorated amount in cases of disability or death. In the case of involuntary termination following a change of control, all awards granted in 2012 and 2011 are at target.reflect their full value.

 

60

---

(4)(6)

Continuation of health and welfare benefits asupon an involuntary termination without cause are provided under the Executive Severance Plan or, in the eventcase of an involuntary termination without cause,Mr. Newlin, his Letter Agreement, or the Continuity Agreement in the event of an involuntary termination following a change of control. Mr. Newlin’s Letter Agreement provides for continuation of health and welfare benefits upon retirement, death and disability.

 

(5)(7)

Mr. Newlin’s employment agreementLetter Agreement provides for continuation of certain benefits following an involuntary termination without cause. The Letter Agreement also provides for five years of the use of furnished PolyOne office space and administrative assistance in the event of Mr. Newlin’s voluntary termination.

 

(6)(8)

Continuation of financial planning benefit asbenefits are provided under the terms of the Continuity Agreements, or in the case of Mr. Newlin, his employment agreement.Letter Agreement.

 

(7)(9)

Represents the amount of excise tax that would be imposed on the executive under Code Section 280G of the Code and a tax gross-up amount relating to the payment of such tax. In 2011, weWe eliminated the tax gross-ups for excise taxes imposed under Code Section 280G of the Internal Revenue Code from any new Continuity Agreements provided to executive officers.Named Executive Officers who were hired in or who had Continuity Agreements amended in 2011 and thereafter. Messrs. Richardson, Van Hulle and Nikrant are not provided a Code Section 280G gross-up benefit under their Continuity Agreements; instead, their severance benefits will be reduced in the event that an excise tax would be imposed on them under Code Section 280G in an amount sufficient to eliminate the excise tax.

 

(8)	This assumes that the presumption that any arrangement entered into within 12 months of a change of control is a parachute payment under Section 280G of the Internal Revenue Code is rebutted and, thus, the retirement benefit for
		60

---

EXECUTIVE COMPENSATION

(10)

Mr. Newlin is not consideredthe only Named Executive Officer disclosed in this table that is entitled to a parachute payment for purposespension benefit. The supplemental retirement benefit is provided pursuant to his Letter Agreement. As there was no acceleration or enhancement of Mr. Newlin’s pension benefit upon a triggering event, the calculationsamount was reported as zero. Details regarding Mr. Newlin’s pension benefits are described in the table.“2015 Pension Benefits” section of this proxy statement.

Compensation Committee Interlocks and Insider Participation

During 2012,2015, none of our executive officers was a member of the Boardboard of Directorsdirectors or compensation committee of any other company where the relationship would be construed to constitute a committee interlock within the meaning of the rules of the SEC.

Policy on Related Person Transactions

Under our Guidelines for Ethical Business Conduct, we prohibit all employees, including our officers and non-employee Directors from engaging in activities that would impact their ability to carry out their duties in an independent, objective fashion. We also have adopted a written “Policy for Review of Transactions Between the Company and Its Directors, Executive Officers and Other Related Persons.” This policy requires an initial review by our Chief Legal Officer, Chief Financial Officer and Ethics and Compliance Officer, in consultation with each other (the “Reviewing Team”), of all transactions, arrangements or relationships with us in which any Director, executive officer or other related person (including immediate family members of all related persons) has a direct or indirect material interest, and which involve $50,000 or more. Further, the Audit Committee must review and approve any transaction that the Reviewing Team determines may be required to be disclosed pursuant to Item 404 of Regulation S-K under the Exchange Act or any similar provision. In reviewing the related person transactions, the Reviewing Team and the Audit Committee consider the following factors: (1) whether the transaction is in conformity with our Guidelines for Ethical Business Conduct and is in our best interests; (2) whether the transaction would be in the ordinary course of our business; (3) whether the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party; (4) the disclosure standards set forth in Item 404 of Regulation S-K under the Exchange Act or any similar provision; and (5) whether the transaction could call into question the status of any Director or Director nominee as an independent director under the NYSE rules.

Risk Assessment of the Compensation Programs

As part of the Compensation Committee’s annual governance process, in December 2012,October 2015 we conducted a formal assessment of our compensation programs to ensure that they do not create risks that are reasonably likely to have a material adverse effect on PolyOne. With guidance from the Consultant,

61

---

our Internal Audit and Human Resources groups completed the initial risk assessment of our compensation programs, including those that extend beyond the executive officers. The assessment was reviewed by our legal department and the Consultant, with these groups providing additional analysis and validation of the results. The results of the compensation risk assessment were presented to the Compensation Committee at its December 2012October 2015 meeting. The areas we considered in determining that our compensation programs do not pose a material risk to PolyOne included our:

 

Compensation philosophy;

Compensation plan design:

Compensation Philosophy		¡Payout Curves		Clawback Policy
Compensation Plan Design		Weightings of Incentive Plan Measures		Anti-Hedging/Anti-Pledging Policies
Balanced Pay Mix		Balanced pay mix;Compensation Plan Governance and

Oversight

¡

Weightings of measures; Stock Ownership Requirements

¡Timing on Incentive Payouts

Payout curves; and

¡Selection of Performance Measures

Timing of incentive payouts; and

Compensation plan governance and oversight:

¡

Selection of performance measures;

¡

Stock ownership requirements;

¡

Clawback policy; and

¡

Hedging policy. Pay-for-Performance Validation

As a result of the assessment, the Compensation Committee concluded that our compensation structures are appropriate and no material risks were identified. Several process improvements have been made as a result of the assessment that will continue to ensure the appropriate level of oversight is in place for these programs.

		61

---

EXECUTIVE COMPENSATION

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth in this proxy statement with management. Based on this review and discussion, the Compensation Committee has recommended to the Board of Directors the inclusion of the Compensation Discussion and Analysis in this proxy statement and in PolyOne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.2015.

The Compensation Committee

of the Board of Directors

Gordon D. Harnett, Chairperson

William H. Powell, Chairperson

Kerry J. Preete

Farah M. Walters

William A. Wulfsohn

 

62

---

PROPOSAL 2 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

As required under the Dodd-Frank Act and Section 14A of the Exchange Act, our Board of Directors is submitting a “Say on Pay” proposal for shareholder consideration. While the vote on Named Executive Officer compensation is non-binding and solely advisory in nature, our Board of Directors and the Compensation Committee will review the voting results. If there are a significant number of negative votes, we will seek to understand the concerns that influenced the vote and expect to address them in making future decisions about executive compensation programs.

Currently, advisory “Say on Pay” votes are scheduled to be held once every year. The next advisory vote on Named Executive Officer compensation is expected to occur at our 2014 Annual Meeting of Shareholders.

As described more fully in the “Compensation Discussion and Analysis” section of this proxy statement, the Compensation Committee of our Board of Directors has structured our executive compensation program to achieve the following key objectives:

 

Objective				How Our Executive Compensation Program Achieves This Objective
Pay-For-Performance				Setting a significant portion of each Named Executive Officer’s total compensation in the form of variable compensation that is earned when pre-established financial and annual performance goals are achieved.
Align Goals and Objectives with     Interests of Shareholders				Focusing incentive programs on the critical performance measures that determine the Company’s overall success and rewarding executives for attainment of short-term results, balanced with the need for sustainable long-term success.
Attract, Motivate and Retain     Management				Competing effectively to attract, motivate and retain a management team who leads in setting and achieving the overall goals and objectives of the Company.62

We believe you should vote “FOR” our Named Executive Officer compensation program because the compensation actually earned by our Named Executive Officers for 2012 performance, as summarized below, was aligned with both our pay-for-performance objectives and our Company’s performance. 2012 was another strong year for PolyOne as described above under “Compensation Discussion and Analysis.” Each of our three strategic platforms achieved record levels of Adjusted Operating Income and Operating Margins, despite recessionary conditions in Europe. Guided by our strong performance results for 2012 and in prior years, our key pay decisions and actions for 2012 included:

---

Our Named Executive Officers (other than Mr. Rosenau) earning Annual Plan payouts at 187.4% of their target Annual Plan opportunities based upon exceeding the target performance goals under that plan. Mr. Rosenau is the only Named Executive Officer with responsibility for business unit specific results, and his Annual Plan opportunity and payout of 200% is based on business unit specific performance goals.

Maintaining the performance measure for our long-term cash-settled performance units awards granted in 2012 as Adjusted Earnings Per Share in order to drive improvements in shareholder value, with a three-year performance period. However, there are four individual performance

63

---

periods (three one-year periods and one three-year aggregate period), weighted 25% each to drive annual performance as well as maximize long-term performance; and

Paying out cash-settled performance units granted in 2010, based on attainment of 200% of target level performance for our achievement of Working Capital as a Percentage of Sales goals in 2010.

As described above, our recent key pay decisions have been linked to our performance in terms of key business metrics that drive long-term shareholder value. For example, for 2012, we achieved 180.7% of our Company Adjusted Operating Income goal and 200% of our consolidated Working Capital as a Percentage of Sales goal established under our short-term cash incentive program, which primarily drove the 2012 Annual Plan payouts described above. In addition, our time and performance based stock appreciation rights help drive long-term shareholder value. These awards deliver value to our Named Executive Officers only to the extent our shareholders realize increased stock price value. Our stock price has risen to $20.42 as of December 31, 2012 from $11.55 on December 30, 2011. Our Named Executive Officers have realized value for these awards as our shareholders have realized increased stock price value in their investment since those dates.

Based on these demonstrated links between pay and performance, as well as our more in-depth discussion in “Compensation Discussion and Analysis” above of how our CEO’s compensation has been commensurate with performance in recent years, we believe we have successfully implemented a pay-for-performance culture at PolyOne.

In 2012, we also maintained or implemented pay practices favored by a number of institutional shareholders and their advisors, including:

We revised our relocation policy as it relates to the loss on the sale of an executive’s residence. We limit the amount of the reimbursable loss provided to the Named Executive Officers to 80% of the loss, with a maximum total reimbursement of $85,000. In addition, no tax gross-ups on reimbursed losses are provided for this group.

We also maintain stock ownership guidelines for our Named Executive Officers that are denominated in shares. All of our Named Executive Officers exceed the Guidelines applicable to them.

We eliminated the use of excise tax gross-up provisions in all management continuity agreements offered to newly hired executives.

We instituted a policy prohibiting our Named Executive Officers and Directors from both pledging company stock and engaging in speculative transactions involving our securities.

The Board of Directors believes the Company’s compensation programs demonstrate a clear link between pay and performance, especially for 2012. The Board of Directors urges you to review carefully the “Compensation Discussion and Analysis” section of this Proxy Statement that describes our compensation philosophy and programs in greater detail and to approve the following resolution:

“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

Our Board of Directors unanimously recommends a vote FOR Proposal 2 to approve, on an advisory basis, our Named Executive Officer compensation.MISCELLANEOUS

 

64MISCELLANEOUS PROVISIONS

---

PROPOSAL 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2013. The Board of Directors recommends ratification of the Audit Committee’s appointment of Ernst & Young LLP.

The selection of Ernst & Young LLP as our independent registered public accounting firm is not required to be submitted to a vote of our shareholders for ratification. The Sarbanes-Oxley Act of 2002 requires that the Audit Committee be directly responsible for the appointment, compensation and oversight of our independent auditors. The Board of Directors is submitting the appointment to our shareholders for ratification as a matter of good corporate practice. If our shareholders fail to vote on an advisory basis in favor of the selection, the Audit Committee will reconsider whether to retain Ernst & Young LLP and may retain that firm or another firm without re-submitting the matter to our shareholders. Even if our shareholders ratify the appointment, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interests and the best interests of our shareholders. The affirmative vote of a majority of the shares voting on this proposal is required for ratification.

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting of Shareholders. The representative will be given an opportunity to make a statement if desired and to respond to questions regarding Ernst & Young LLP’s examination of our consolidated financial statements and records for the year ended December 31, 2012.

Our Board of Directors unanimously recommends a vote FOR Proposal 3 to ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for 2013.

Independent Registered Public Accountant Services and Related Fee Arrangements

Services provided by Ernst & Young LLP, our independent registered public accounting firm, and related fees in each of the last two fiscal years were as follows:

Audit Fees.    Audit services include the annual audit of the financial statements, the audit of internal controls over financial reporting, the reviews of our quarterly reports on Form 10-Q, the issuance of comfort letters, review of registration statements filed with the SEC and international statutory audits. Fees for audit services totaled $2,694,800 in 2012 and $2,312,600 in 2011. The full Audit Committee or the Chair of the Audit Committee pre-approved all audit services and related fee arrangements billed for 2012 in accordance with the Audit Committee Pre-Approval Policy for all Audit and Non-Audit Services and Related Fee Arrangements.

Audit-Related Fees.    Audit-related services principally include audits of businesses identified for divestment. Fees for audit-related services totaled $149,450 in 2012 and $379,300 in 2011. The Audit Committee pre-approved all audit-related fee arrangements billed for 2012.

65

---

Tax Fees.    Tax services include tax compliance, tax advice and tax planning. Fees for tax services totaled $645,300 in 2012 and $1,175,800 in 2011. The Audit Committee pre-approved all tax fee arrangements billed in 2012.

All Other Fees.    No fees for other services were billed in 2012 and 2011.

Our Audit Committee Pre-Approval Policy for all Audit and Non-Audit Services and Related Fee Arrangements (the “Pre-Approval Policy”) requires our Audit Committee to pre-approve all audit and non-audit services performed by Ernst & Young LLP in order to assure that the provision of such services and related fee arrangements do not impair Ernst & Young LLP’s independence. Under the Pre-Approval Policy, the Audit Committee may delegate pre-approval authority to one or more of its members, and the member or members to whom the Audit Committee delegates such authority must report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee has formally delegated this pre-approval authority to its Chair. Management has no authority to approve services performed by Ernst & Young LLP that have not been pre-approved by the Audit Committee. The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period.

Ernst & Young LLP will provide us a description of work scope and supporting back-up documentation regarding the specific services they will provide. At each meeting of the Audit Committee, the current year’s previously pre-approved independent auditor fees along with any proposed revisions will be presented for approval. Any interim requests between Audit Committee meetings to provide services that require separate pre-approval will be submitted to the Audit Committee or the Audit Committee Chair by Ernst & Young LLP and our Chief Financial Officer, or Controller, and must include a statement as to whether, in each of their respective views, the request is consistent with the Commission’s rules on auditor independence.

66

---

REPORT OF THE AUDIT COMMITTEE

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities to shareholders relating to the integrity of the company’s financial statements, the company’s compliance with legal and regulatory requirements, the independent auditors’ qualifications and independence and the performance of the company’s internal and independent auditors. Management has the primary responsibility for the completeness and accuracy of the company’s financial statements and disclosures, the financial reporting process and the effectiveness of the company’s internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements in the Annual Report with management and the independent auditors including any significant changes in the company’s selection or application of accounting principles. The Committee also reviewed and discussed with management and the independent auditors management’s report on internal control over financial reporting, including the significance and status of control deficiencies identified by management and the results of remediation efforts undertaken, to determine the effectiveness of internal control over financial reporting at December 31, 2012.

The Committee reviewed with the independent auditors, which have the responsibility for expressing an opinion on the conformity of the financial statements with generally accepted accounting principles and applicable rules and regulations, their judgments as to the quality, not just the acceptability, of PolyOne’s critical accounting principles and estimates and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards. The Committee also reviewed with the independent auditors their report on the company’s internal control over financial reporting at December 31, 2012, including the basis for their conclusions. The Audit Committee reviewed and discussed with the independent registered public accounting firm all communications required by generally accepted auditing standards, including the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, Ernst & Young LLP has provided the Committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Committee concerning independence and the Committee has discussed with Ernst & Young LLP their firm’s independence from management and PolyOne. The Committee has pre-approved all audit and non-audit services and fees provided to the company by the independent auditors. Based upon the Committee’s considerations, the Committee has concluded that Ernst & Young LLP is independent. The Committee discussed with PolyOne’s internal and independent auditors the overall scope and audit plans and evaluated their performance. The Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of PolyOne’s internal control over financial reporting, and the overall quality of PolyOne’s financial reporting. The Audit Committee met eight times during 2012.

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors (and the Board has approved) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2012, for filing with the Securities and Exchange Commission.

The Committee has re-appointed Ernst & Young as independent auditors for the year 2013.

All members of the Audit Committee concur in this report.

The Audit Committee of the Board of Directors

Richard H. Fearon, Chairperson

Carol A. Cartwright

Gordon D. Harnett

Richard A. Lorraine

February 15, 2013

67

---

GENERAL

Voting at the Meeting

Shareholders of record at the close of business on March 18, 201315, 2016 are entitled to vote at the meeting. On that date, a total of 99,768,71285,543,574 common shares were outstanding. Each share is entitled to one vote.

The affirmative vote of a majority of the common shares represented and voting, in person or by proxy, at any meeting of shareholders at which a quorum is present is required for action by shareholders on any matter, unless the vote of a greater number of shares or voting by classes or series is required under Ohio law. Abstentions and broker non-votes are tabulated in determining the votes present at a meeting for purposes of determining a quorum. Shareholders will not be entitled to dissenter’s rights with respect to any matter to be considered at the Annual Meeting of Shareholders.Meeting.

Directors are elected by a plurality of the votes of shares present, in person or by proxy, and entitled to vote on the election of Directors at a meeting at which a quorum is present. An abstention or a broker non-vote has the same effect as a vote against a Director nominee, as each abstention or broker non-vote would be one less vote in favor of a Director nominee. Your broker or other nominee willnotbe able to vote your shares with respect to the election of Directors if you have not provided directions to your broker. We strongly encourage you to submit your proxy card and exercise your right to vote as a shareholder. Holders of common shares have no cumulative voting rights. If any of the nominees listed on pages 47 through 811 becomes unable or declines to serve as a Director, each properly signed proxy card will be voted for another person recommended by the Board of Directors.Board. However, we have no reason to believe that this will occur.

Because the vote to approve Named Executive Officer compensation is advisory, there is technically no minimum vote requirement for the proposal. An abstention or broker non-vote will have no effect on the proposal as the abstention or broker non-vote will not be counted in determining the number of votes cast.

The affirmative vote of holders of at least a majority of the shares cast, in person or by proxy, is necessary for approval of the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm. Because the proposal to ratify the appointment of Ernst & Young LLP is considered “routine,” your broker or other nominee will be able to vote your shares with respect to this proposal without your instructions. An abstention will have no effect on this proposalthese proposals as the abstention will not be counted in determining the number of votes cast.

We know of no other matters that will be presented at the meeting; however, if other matters do properly come before the meeting, the persons named in the proxy card will vote on these matters in accordance with their best judgment.

Shareholder Proposals

Any shareholder who wishes to submit a proposal to be considered for inclusion in next year’s Proxy Statement should send the proposal to us, addressed to the Secretary, so that it is received on or before December 3, 2013.2, 2016. We suggest that all proposals be sent by certified mail, return receipt requested.

Additionally, a shareholder may submit a proposal for consideration at the 20142017 Annual Meeting, of Shareholders, but not for inclusion in next year’s Proxy Statement, if the shareholder gives timely

68

---

written notice of such proposal in accordance with Regulation 8(c) of our Regulations. In general, Regulation 8(c) provides that, to be timely, a shareholder’s notice must be delivered to our principal executive offices not less than 60 nor more than 90 days prior to the first anniversary of the date on which we first mailed our proxy materials for the preceding year’s annual meeting.Annual Meeting. If the date of the 20142017 Annual Meeting of Shareholders is delayed by more than 60 calendar days after the anniversary of the 20132017 Annual Meeting, of Shareholders, then a shareholder’s notice must be delivered to our principal executive offices not later than the close of business on the later of the 90th day prior to the 20142017 Annual Meeting of Shareholders or the 10th10^th calendar day following the day on which public announcement of the date of the 20142017 Annual Meeting of Shareholders is first made.

Our proxy materials for the 20132016 Annual Meeting of Shareholders will be mailed on or about April 2, 2013.1, 2016. Sixty days prior to the first anniversary of this date will be February 1, 2014,January 31, 2017, and 90 days prior to the first anniversary of this date will be January 2, 2014.1, 2017. Our proxies for the 20142017 Annual Meeting of Shareholders will confer discretionary authority to vote on any matter if we do not receive timely written notice of such matter in accordance with Regulation 8(c). For business to be properly requested by a shareholder to be brought before the 20142017 Annual Meeting, of Shareholders, the shareholder must comply with all of the requirements of Regulation 8(c), not just the timeliness requirements set forth above.

		63

---

MISCELLANEOUS

Proxy Solicitation

We are making this proxy solicitation and will bear the expense of preparing, printing and mailing this notice and proxy statement. In addition to requesting proxies by mail, our officers and regular employees may request proxies by telephone or in person. We have retained Morrow & Co., LLC, 470 West Avenue, Stamford, CT 06902, to assist in the solicitation for an estimated fee of $7,500 plus reasonable expenses. We will ask custodians, nominees, and fiduciaries to send proxy material to beneficial owners in order to obtain voting instructions. We will, upon request, reimburse them for their reasonable expenses for mailing the proxy material.

We are mailing our Annual Report to Shareholders, including consolidated financial statements for the year ended December 31, 2012,2015, to shareholders of record with this proxy statement.

We will furnish without charge to each person from whom a proxy is being solicited, upon written request of any such person, a copy of the Annual Report on Form 10-K of the Company for the fiscal year ending December 31, 2012,2015, as filed with the SEC, including the financial statements and schedules thereto. Requests for copies of such Annual Report on Form 10-K or for information on how to obtain directions to be able to attend the Annual Meeting of Shareholders and vote in person should be directed to: PolyOne Center, 33587 Walker Road, Avon Lake, Ohio 44012, Attention: Secretary.

For the Board of Directors

PolyOne Corporation

LISA K. KUNKLE

LISA K. KUNKLE

Senior Vice President, General Counsel and

Secretary

April 2, 20131, 2016

 

69

		64

---

AppendixAPPENDIX A

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(inIn millions, except per share data)

Senior management uses comparisons of Adjusted Net Income from Continuing Operations attributable to PolyOne shareholders and diluted Earnings Per Share (EPS) from continuing operations attributable to PolyOne shareholders, excluding special items, to assess performance and facilitate comparability of results. Below is a reconciliation of these non-GAAP financial measures to their most directly comparable measures calculated and presented in accordance with U.S. GAAP (GAAP).

 

Reconciliation to Consolidated Statements of Income		Year Ended December 31, 2012								Year Ended December 31, 2011
		$				EPS				$				EPS
Net income attributable to PolyOne common shareholders		$	71.9			$	0.80			$	172.6			$	1.83
SunBelt equity income, after tax			—				—				(3.7	)			(0.04	)
Special items, after-tax (a)			35.7				0.40				(30.5	)			(0.32	)
Tax adjustments (b)			0.5				—				(42.3	)			(0.45	)
Adjusted net income / EPS		$	108.1			$	1.20			$	96.1			$	1.02

	��	Year Ended								Year Ended
		December 31, 2015								December 31, 2014
Reconciliation to Condensed Consolidated Statements of Income		$				EPS				$				EPS
Net income from continuing operations attributable to PolyOne shareholders		$	144.6			$	1.63			$	78.0			$	0.83
Special items, after tax(1), (2)			28.9				0.33				90.5				0.97
Adjusted net income / EPS – excluding special items		$	173.5			$	1.96			$	168.5			$	1.80
		Year Ended								Year Ended
		December 31, 2013								December 31, 2012
Reconciliation to Condensed Consolidated Statements of Income		$				EPS				$				EPS
Net income from continuing operations attributable to PolyOne shareholders		$	94.0			$	0.97			$	53.3			$	0.59
Special items, after tax(1), (2)			32.6				0.34				36.2				0.41
Adjusted net income / EPS – excluding special items		$	126.6			$	1.31			$	89.5			$	1.00
										Year Ended
										December 31, 2011
Reconciliation to Condensed Consolidated Statements of Income										$				EPS
Net income from continuing operations attributable to PolyOne shareholders										$	153.4			$	1.63
Special items, after tax(1), (2)											(72.8)				(0.77)
SunBelt equity earnings, after tax											(3.7)				(0.04)
Adjusted net income / EPS – excluding special items and Sunbelt equity earnings										$	76.9			$	0.82

 

(a)(1)

Special items isare a non-GAAP financial measure.measure and are used to determine adjusted earnings. Special items include charges related to specific strategic initiatives or financial restructuringsrestructuring, such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant phaseoutphase-in costs and executive separation agreements; asset impairments; mark-to-market adjustments associated with actuarial gains and losses on pension and other postretirementpost-retirement benefit plans; environmental remediation costs, fines, or penalties forand related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, joint ventures and equity investments; gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; acquisition related costs incurred directly in connection with potential or completed acquisitions; unrealized gains and losses from foreign currency option contracts; other one-time, non-recurring items; and the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results.

 

(b)
		A-1

---

(2)	Tax adjustments include the net tax loss (benefit)expense/benefit from one-time income tax items, the set-up or reversal of uncertain tax position reserves and deferred income tax valuation allowance adjustments.

Reconciliation to Consolidated Operating Income		Year Ended December 31,
		2012				2011
Operating income adjusted		$	221.0			$	180.6
SunBelt equity income			—				5.7
Special items in operating income			(53.9	)			46.7
Operating income – GAAP		$	167.1			$	233.0

Senior management uses operating income before special items to assess performance and allocate resources because senior management believes that this measure is useful in understanding current profitability levels and that current levels may serve as a base for future performance. In addition, operating income before the effect of special items is a component of various PolyOne annual and long-term employee incentive plans and is used in debt covenant computations. Below is a reconciliation of non-GAAP financial measure to the most directly comparable measures calculated and presented in accordance with GAAP.

 

		Year Ended December 31,
Reconciliation to Consolidated Statements of Income		2015				2014
Operating income adjusted		$	322.2			$	320.0
Special items in operating income			(71.3)				(164.9)
Operating income - GAAP		$	250.9			$	155.1

A-1Liquidity is calculated as follows:

---

PolyOne Corporation

Summary of Special Items (Unaudited)

(In millions, except per share data)

Special items:		Year Ended December 31,
		2012				2011
Cost of sales:
Employee separation and plant phaseout costs		$	(0.4	)		$	(1.2	)
Reimbursement of previously incurred environmental costs			—				3.3
Environmental remediation costs			(12.8	)			(9.7	)
Acquisition related costs			(5.4	)			(1.4	)
Pension and other post-retirement mark-to-market adjustment			(1.3	)			(2.5	)
Impact on cost of sales			(19.9	)			(11.5	)
Selling and administrative expense:
Employee separation and plant phaseout costs			(11.1	)			(1.6	)
Legal related costs			(0.6	)			—
Unrealized loss on foreign currency option contracts			(1.1	)			—
Acquisition related costs			(3.9	)			(5.2	)
Pension and other post-retirement mark-to-market adjustment			(40.7	)			(81.3	)
Impact on selling and administrative expense			(57.4	)			(88.1	)
Gain on sale of investment in equity affiliates			23.4				146.3
Impact on operating income (loss)		$	(53.9	)		$	46.7

A-2

---

		Shareowner Services P.O. Box 64945
		St. Paul, MN 55164-0945				COMPANY #

 

		As of December 31,
		2015
Cash and cash equivalents		$	279.8
Revolving credit availability			341.9
		Vote by Internet, Telephone or Mail	24 Hours a Day, 7 Days a Week
Liquidity		$	621.7

Net debt to adjusted EBITDA is calculated as follows:

 

		Year Ended
		December 31, 2015
Your phone or internet vote authorizes the namedShort-term portion and current portion of long-term debt		$	18.6
proxies to vote your sharesLong-term debt			1,128.0
Less: Cash and cash equivalents			(279.8)
Net Debt		$	866.8
Operating Income		$	250.9
Other expense, net			(2.7)
Depreciation and amortization			104.3
Special items, impact on operating (loss)/income			71.2
Accelerated depreciation included in the same manner as if you marked, signed and returned your proxy card.special items			(6.2)
Adjusted EBITDA		$	417.5
Net Debt/Adjusted EBITDA			2.1

		A-2

---

POLYONE CORPORATION 33587 WALKER ROAD AVON LAKE, OH 44012		VOTE BY INTERNETINTERNET-www.proxyvote.com– www.eproxy.com/pol Use the Internet to votetransmit your voting instructions and for electronic delivery of information up until 11:59 P.M. eastern time on May 11, 2016. Have your proxy until 11:59 p.m. (CT) on May 14, 2013.and voting instruction card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.   ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you may consent to receiving all future proxy statements, proxy and voting instruction cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE–1-800-560-1965 - 1-800-690-6903 Use aany touch-tone telephone to votetransmit your proxy voting instructions up until 11:59 p.m. (CT)P.M. eastern time on May 14, 2013.11, 2016. Have your proxy and voting instruction card in hand when you call and then follow the instructions.   VOTE BY MAIL– Mark, sign and date your proxy and voting instruction card and return it in the postage-paid envelope provided.
		If you vote your proxy by internetwe have provided or by telephone, you do NOT needreturn it to mail back your proxy card.Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

òPlease detach hereòE00198-P71292                         KEEP THIS PORTION FOR YOUR RECORDS

 — — — — — — — — — — — —  — — — — — — — — — — — — — — — — — — — —  — — — — — — — — — — — — —

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY AND VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

POLYONE CORPORATION

For All

Withhold All

For All   Except

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Directors recommends ayou vote FOR all the nominees listed in Proposal 1 and FOR Proposals 2 and 3.

¨

¨

¨

1.

Election of Directors:

Nominees:

1. Election of     directors:

01 Sandra Beach Lin            05 Gordon D. Harnett     09 Farah M. Walters 02 Dr. Carol A. Cartwright    06 Richard A. Lorraine   10 William A.  Wulfsohn 03 Richard H. Fearon           07 Stephen D. Newlin 04 Gregory J. Goff                08 William H.  Powell

¨

Vote FOR all nominees (except as marked)

¨

Vote WITHHELD     from all nominees

(Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.)

2.

01)

Richard H. Fearon

06)    Robert M. Patterson

02)

Gregory J. Goff

07)    William H. Powell

03)

William R. Jellison

08)    Kerry J. Preete

04)

Sandra B. Lin

09)    Farah M. Walters

05)

Richard A. Lorraine

10)    William A. Wulfsohn

For

Against

Abstain

2.

Proposal to approve the advisory resolution on named executive officer compensation.

¨

¨

¨

For

¨ 3.

Against

¨

Abstain

3.

Proposal to ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the year ending December 31, 2013.2016.

¨

¨

¨

NOTE:Such other business as may properly come before the meeting or any adjournment thereof.

¨

For

¨

Against

¨

Abstain

THIS PROXY AND VOTING INSTRUCTION CARD WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS.

For address changes and/or comments, please check this box and write them on the back where indicated.

¨

Please indicate if you plan to attend this meeting.

¨

¨

Meeting Attendance? Mark box if you plan to attend 2013 Annual Meeting of Shareholders:    ¨

Address Change? Mark box, sign, and indicate changes below:    ¨

Yes

DateNo

Signature(s) in Box

Please sign exactly as your name(s) appears on proxy.appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If helda corporation or partnership, please sign in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full corporate or partnership name of corporation and title ofby authorized officer signing proxy.officer.

---

PolyOne Corporation

2013 ANNUAL MEETING OF SHAREHOLDERS

Wednesday, May 15, 2013

9:00 a.m.

PolyOne Corporation Headquarters

33587 Walker Road

Avon Lake, Ohio 44012

proxy

This proxy is solicited by the Board of Directors for use at the Annual Meeting of Shareholders on May 15, 2013.

The shares of common stock you hold will be voted as you specify on the reverse side.

If no choice is specified, this proxy will be voted FOR all the nominees listed in Proposal 1 and FOR Proposals 2 and 3.

By signing this proxy, you revoke all prior proxies and appoint Richard J. Diemer, Lisa K. Kunkle and Kenneth M. Smith, and each of them, with full power of substitution, to vote your common shares of PolyOne Corporation, held of record on March 18, 2013, on the matters shown on the reverse side hereof and on any other matters that may come before the Annual Meeting of Shareholders and all adjournments.

See reverse for voting instructions.

---

		Shareowner Services P.O. Box 64945
		St. Paul, MN 55164-0945				COMPANY #

		Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week Your phone or internet vote authorizes the Trustee to vote your shares in the same manner as if you marked, signed and returned your voting instruction card.
				INTERNET– www.eproxy.com/pol Use the Internet to vote until 11:59 p.m. (CT) on May 13, 2013. PHONE–1-800-560-1965 Use a touch-tone telephone to vote until 11:59 p.m. (CT) on May 13, 2013. MAIL– Mark, sign and date your voting instruction card and return it in the postage-paid envelope provided.
		If you vote by internet or by telephone, you do NOT need to mail back your voting instruction card.

òPlease detach hereò

The Board of Directors recommends a vote FOR all the nominees listed in Proposal 1 and FOR Proposals 2 and 3.

1. Election of     directors:

01 Sandra Beach Lin            05 Gordon D. Harnett     09 Farah M. Walters 02 Dr. Carol A. Cartwright    06 Richard A. Lorraine   10 William A.  Wulfsohn 03 Richard H. Fearon           07 Stephen D. Newlin 04 Gregory J. Goff                08 William H.  Powell

¨

Vote FOR all nominees (except as marked)

¨

Vote WITHHELD     from all nominees

(Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.)

2.

Proposal to approve the advisory resolution on named executive officer compensation.

¨

For

¨

Against

¨

Abstain

3.

Proposal to ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the year ending December 31, 2013.

¨

For

¨

Against

¨

Abstain

Meeting Attendance? Mark box if you plan to attend 2013 Annual Meeting of Shareholders:    ¨

Address Change? Mark box, sign, and indicate changes below:    ¨

Date

Signature(s) in Box

Please sign exactly as your name(s) appears on voting instruction card. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

---

PolyOne Corporation

20132016 ANNUAL MEETING OF SHAREHOLDERS

Wednesday,Thursday, May 15, 201312, 2016

9:00 a.m.

PolyOne Corporation Headquarters

33587 Walker Road

Avon Lake, Ohio 44012

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.

 

 

 — — — — — — — — — — — —  — — — — — — — — — — — — — — — — — — — —  — — — — — — — — — —

voting instructionsE00199-P71292

 

 

This voting instruction card is solicited by the Board of Directors in connection with the Annual Meeting of Shareholders on May 15, 2013.

As a participant under either the PolyOne Retirement Savings Plan or the PolyOne Canada Inc. Retirement Savings Program (each a “Plan”), I hereby direct New York Life Trust Company as trustee of The PolyOne Retirement Savings Plan or Sun Life Financial as trustee

				POLYONE CORPORATION This proxy and voting instruction card is solicited by the Board of Directors for use at and in connection with the Annual Meeting of Shareholders on May 12, 2016. The shares of common stock held will be voted as you specify on the reverse side. If no choice is specified, this proxy and voting instruction card will be voted FOR all the nominees listed in Proposal 1 and FOR Proposals 2 and 3. By signing this proxy and voting instruction card, you revoke all prior proxies and appoint Bradley C. Richardson, Lisa K. Kunkle and Ana G. Rodriguez, and each of them, with full power of substitution, to vote the common shares of PolyOne Corporation, held of record onMarch 15, 2016,on the matters shown on the reverse side hereof and on any other matters that may come before the Annual Meeting of Shareholders and all adjournments.
				IMPORTANT NOTICE TO PARTICIPANTS IN THE POLYONE RETIREMENT SAVINGS PLAN AND POLYONE CANADA INC. RETIREMENT SAVINGS PROGRAM: As a participant under either thePolyOne Retirement Savings Planor thePolyOne Canada Inc. Retirement Savings Program(each a “Plan” and together the “Plans”),New York Life Trust Company andSun Life Financial, each as Trustee of one of the Plans, have been requested to forward you important information concerning your rights as a participant in either of these Plans. The number of common shares you are eligible to direct the applicable Trustee to vote is based on your balance in the applicable Plan (based on your balance in the PolyOne Stock Fund) onMarch 15, 2016, the record date for the determination of shareholders eligible to vote at the Annual Meeting of Shareholders to be held onMay 12, 2016. We encourage you to exercise your rights under either of the Plans. Please review the enclosed documents carefully before deciding how to direct the applicable Trustee. Because the common shares in the Plans are registered in the name of the applicable Trustee, you will not be able to direct the common shares attributable to your interest in either Plan in person at the Annual Meeting of Shareholders. To give a proper direction, you must vote by returning this completed proxy and voting instruction card, signed and dated, in the enclosed envelope or by following telephone or internet voting procedures set forth in this proxy and voting instruction card. Directions must be received byMay 9, 2016. If you give a proper direction, the applicable Trustee will vote the common shares attributable to your interest in either of the Plans as you direct, unless otherwise required by law. If you do not give a proper direction, the applicable Trustee will vote the common shares attributable to your interest in the same proportion as the proper directions that the Trustee does receive, unless otherwise required by law. Directions received afterMay 9, 2016will not be counted for common shares held in the Plans. Your direction to either of the Trustees is confidential and will not be disclosed unless required by law. As a participant under either thePolyOne Retirement Savings Planor thePolyOne Canada Inc. Retirement Savings Program, I hereby directNew York Life Trust Companyas Trustee of the PolyOne Retirement Savings Plan orSun Life Financialas Trustee of the PolyOne Canada Inc. Retirement Savings Program (each a “Trustee”) to vote (in person or by proxy), as designated on the reverse side, the whole number of common shares of PolyOne Corporation that are held by the applicable Trustee and attributable to my interest in the applicable Plan onMarch 15, 2016, and also a proportionate number of shares as of such date to which no directions have been received, at the Annual Meeting of Shareholders to be held onMay 12, 2016.

		Address Changes/Comments:

(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side, the whole number of common shares of PolyOne Corporation that are held by the Trustee and attributable to my interest in the Plan on March 18, 2013, and also a proportionate number of shares as of such date as to which no directions have been received, at the Annual Meeting of Shareholders to be held on May 15, 2013.side.)

See reverse for voting instructions.