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EXHIBIT 4.1
FOURTH AMENDMENT
TO
A. SCHULMAN, INC.
1992 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. PURPOSE OF AMENDMENT.
The A. Schulman, Inc. 1992 Non-Employee Directors' Stock Option Plan (the
"Plan") provides that each Eligible Director (this term and all other
capitalized terms which are not defined herein shall have the meanings
ascribed to such terms in the Plan) shall receive an annual grant of options
to purchase One Thousand (1,000) Shares. The Purpose of this Amendment is to
increase the number of Shares subject to such annual Option Grants to Two
Thousand (2,000) Shares and to provide that each Eligible Director shall
receive an annual grant of Five Hundred (500) Shares of Restricted Stock.
2. AMENDMENT.
Pursuant to the power reserved by the Board in Section 10.2 of the Plan, and
subject to the approval thereof by the stockholders of the Company, the Plan
is hereby amended as follows:
A. Section 2 of the Plan is hereby amended by the addition thereto of the
following Section 2.16:
"2.16 "Award" means a grant under this Plan of an Option
or Restricted Stock."
B. Section 2 of the Plan further is hereby amended by the addition thereto
of the following Section 2.17:
"2.17 "Disability" means a permanent and total disability,
as determined by the Committee in good faith, upon receipt
of sufficient competent medical advice from one or more
individuals, selected by the Committee, who are qualified
to give professional medical advice."
C. Section 2 of the Plan further is amended by the addition thereto of the
following Section 2.18:
"2.18 "Restricted Stock" means a grant of Shares pursuant
to Section 9 herein."
D. Section 3 of the Plan is hereby amended by (i) the deletion of the phrase
"optioned or sold" from the first sentence of the first paragraph
thereof, and the substitution therefor of the word "granted"; (ii) the
deletion of the word "Options" from the first sentence of the first
paragraph thereof, and the substitution therefor of the word "Award";
(iii) the deletion of the phrase "If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased" from the second paragraph thereof, and the substitution
therefor of the phrase "If an Award granted under this Plan is cancelled,
terminates, expires or lapses for any reason, any"; (iv) the deletion of
the word "thereto" from the second paragraph thereof, and the
substitution therefor of the phrase "to such Award"; and (v) the deletion
of the word "Options" from the second paragraph thereof, and the
substitution therefor of the word "Award".
E. Section 4 of the Plan is hereby amended by the deletion of the phrase "a
grant of an Option" from the end of the first sentence thereof, and the
substitution therefor of the phrase "an
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Award". In addition, the word "Option" is hereby deleted from the last
sentence thereof, and the word "Award" is inserted in its stead.
F. Section 5.1 of the Plan is hereby amended by the deletion of the number
"1,000" therefrom and the substitution therefor of the number "2,000".
G. Section 5.2 of the Plan is hereby amended by the deletion of the phrase
"Section 9" therefrom and the substitution therefor of the phrase
"Section 10".
H. Section 6 of the Plan is hereby amended and restated in its entirety as
follows:
"6. TERM OF PLAN.
Subject to approval of the stockholders as
contemplated by Section 11.1, this Plan shall
become effective upon its adoption by the Board,
and shall continue in effect until all Awards
granted hereunder have expired or been exercised,
unless sooner terminated under the provisions
relating thereto. No Award shall be granted after
ten (10) years from the earlier of the date of the
adoption of the original Plan or its original
approval by the stockholders as contemplated by
Section 11.1."
I. Section 7.1 of the Plan is hereby amended by the deletion of the word
"five" therefrom and the substitution therefor of the phrase "ten (10)".
J. Sections 9, 10, 10.1, 10.2, 10.3, 11, 11.1 and 11.2 of the Plan are
hereby re-numbered as Sections 10, 11, 11.1, 11.2, 11.3, 12, 12.1 and
12.2, respectively. A new Section 9 of the Plan is hereby added to the
Plan to read in its entirety as follows:
"9. RESTRICTED STOCK.
9.1 NONDISCRETIONARY ANNUAL GRANT OF
RESTRICTED STOCK. Each Eligible Director shall
receive an annual grant of 500 Shares of
Restricted Stock on each Grant Date subsequent to
his or her election as a director of the Company.
The number of Shares subject to annual grant
hereunder shall be subject to adjustment from time
to time in accordance with Section 10 hereof.
9.2 RESTRICTED STOCK AGREEMENT. Each
Restricted Stock grant shall be evidenced by a
Restricted Stock Agreement that shall specify a
period of restriction (the "Period of
Restriction"), subject to Section 9.9, terminating
upon five (5) years after the Grant Date. All
restrictions shall lapse upon the expiration of
the Period of Restriction. The Restricted Stock
Agreement shall include the number of Restricted
Stock Shares granted and such other provisions as
the Committee shall determine.
9.3 TRANSFERABILITY. Except as provided in
this Section 9, the Shares of Restricted Stock
granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or
hypothecated until the expiration of the Period of
Restriction. All rights with respect to the
Restricted Stock granted to an Eligible Director
under
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the Plan shall be available during his or her
lifetime only to such Eligible Director.
9.4 OTHER RESTRICTIONS. The Committee shall
impose such other restrictions on any Shares of
Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without
limitation, restrictions under applicable Federal
or state securities laws; and may legend the
certificates representing Restricted Stock to give
appropriate notice of such restrictions.
9.5 CERTIFICATE LEGEND. In addition to any
legends placed on certificates pursuant to Section
9.4 herein, each certificate representing Shares
of Restricted Stock granted pursuant to the Plan
shall bear the following legend:
"The sale or other transfer of the Shares of
Stock represented by this certificate, whether
voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set
forth in the A. Schulman, Inc. 1992 Non-Employee
Directors' Stock Option Plan, as the same has
heretofore been and may from time to time be
amended, and in a Restricted Stock Agreement. A
copy of the Plan and such Restricted Stock
Agreement may be obtained from the Secretary of A.
Schulman, Inc."
9.6 REMOVAL OF RESTRICTIONS. Except as
otherwise provided in this Section 9, Shares of
Restricted Stock covered by each Restricted Stock
grant made under the Plan shall become freely
transferable by the Eligible Director after the
last day of the Period of Restriction. Once the
Shares are released from the restrictions, the
Eligible Director shall be entitled to have the
legend required by Section 9.5 removed from his or
her Share certificate.
9.7. VOTING RIGHTS. During the Period of
Restriction, Eligible Directors holding Shares of
Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares.
9.8. DIVIDENDS AND OTHER DISTRIBUTIONS.
(A) The Company shall establish a bookkeeping
account on behalf of each Eligible Director, for
the purpose of recording the amount owed to each
Eligible Director with respect to "dividend
equivalents" earned during the Period of
Restriction. For this purpose, "dividend
equivalent" means an amount equal to each regular
or special dividend declared with respect to one
(1) Share of Restricted Stock during the Period of
Restriction. "Dividend equivalent" shall include
distributions either in cash or property. Such
"dividend equivalents" shall be declared and
credited to the bookkeeping account of each
Eligible Director simultaneous with the dividend
payment date for Company stock.
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(B) Dividend equivalents shall be subject to
the same restrictions on transfer as are the
Shares of Restricted Stock. Amounts credited to
Eligible Directors' dividend equivalent
bookkeeping accounts shall not earn interest. The
Company shall have no obligation to fund the
amounts set forth in the dividend equivalent
bookkeeping accounts, and the rights of Eligible
Directors to these amounts shall be equivalent to
those of general creditors of the Company.
(C) Dividend equivalents shall be paid to
Eligible Directors in cash, in one lump sum,
within thirty (30) days following the date the
restrictions lapse on the Shares of Restricted
Stock with respect to which such dividend
equivalents were earned. The decisions of the
Committee with respect to payout of dividend
equivalents shall be final and binding on all
parties and their successors.
9.9 TERMINATION OF MEMBERSHIP ON THE BOARD.
(A) If an Eligible Director's membership on
the Board terminates for any reason other than the
retirement of such Eligible Director upon
attainment of age 65 or any time thereafter
("Retirement"), Disability, death or a Change in
Control, all Shares of Restricted Stock in respect
of which the Period of Restriction has not expired
upon the effective date of termination immediately
shall be forfeited and returned to the Company
(and shall once again become available for grant
under the Plan). The Committee, in its sole
discretion, shall have the right to provide for
lapsing of the restrictions on Restricted Stock
following termination, upon such terms and
provisions as it deems proper.
(B) In the case of an Eligible Director's
Retirement, Disability, death or upon the
occurrence of a Change in Control, all
restrictions on Restricted Stock immediately shall
lapse, and the Period of Restriction shall expire
at such time."
K. Section 10 of the Plan is hereby amended by deleting the phrase
"portions thereof" therefrom and substituting therefor the phrase
"Restricted Stock".
L. Section 11.1 of the Plan is hereby amended by the deletion of the word
"Options" wherever that word appears therein, and the substitution
therefor of the word "Awards". Section 11.1 further is hereby amended by
the addition thereto of the words "such Options" after the word "and" and
before the word "may" in the final sentence thereof.
Section 11.3 of the Plan is hereby amended by the deletion of the phrase
"Options already granted" therefrom and the substitution therefor of the
phrase "outstanding Awards" in the second sentence thereof. Section 11.3
further is hereby amended by the deletion of the word "Options" in each
instance where said word appears, and the substitution therefor of the
word "Awards".
3. EFFECTIVE DATE.
The effective date of this Fourth Amendment shall be December 7, 2000,
provided, however, that if this Fourth Amendment is not approved by the
stockholders of the Company at or prior to the Company's 2000 Annual Meeting of
Stockholders, this Fourth Amendment shall be null and void and of no effect
whatsoever.
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