10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period year ended March 31, 2000

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________to_________________

Commission file number 0-15899

WELLMAN, INC. (Exact name of registrant as specified in its charter)
Delaware          State or other jurisdiction of incorporation or organization)	04-1671740             (I.R.S. Employer Identification No.)
1040 Broad Street, Suite 302 Shrewsbury, New Jersey	07702
(Address of principal executive offices)	(Zip Code)

Registrant 's telephone number, including area code: (732) 542-7300

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No-------

As of May 4, 2000, there were 31,540,634 shares of the registrant 's Class A common stock, $.001 par value, outstanding and no shares of Class B common stock outstanding.

WELLMAN, INC.

INDEX

Page No.

PART I - FINANCIAL INFORMATION

ITEM 1 - Financial Statements

Condensed Consolidated Statements of Income - For the three months ended March 31, 2000 and 1999 3

Condensed Consolidated Balance Sheets - March 31, 2000 and December 31, 1999 4

Condensed Consolidated Statements of Stockholders ' Equity - For the three months ended March 31, 2000 and the year ended December 31, 1999 5

Condensed Consolidated Statements of Cash Flows - For the three months ended March 31, 2000 and 1999 6

Notes to Condensed Consolidated Financial Statements 7

ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 11

PART II - OTHER INFORMATION

ITEM 6 - Exhibits and Reports on Form 8-K 16

SIGNATURES 17

WELLMAN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

	Three Months ended March 31,
	2000	1999
Net sales	$274,271	$218,891
Cost of sales	249,001	194,074
Gross profit	25,270	24,817
Selling, general and administrative expenses	16,900	18,672
Operating income	8,370	6,145
Interest expense, net	2,452	3,332
Earnings before income taxes and cumulative effect of accounting change	5,918	2,813
Income taxes	1,717	1,027
Earnings before cumulative effect of accounting change	4,201	1,786
Cumulative effect of accounting change, net of tax	-	1,769
Net income	$ 4,201  ======	$ 17  ======
Basic and diluted net earnings per common share:
Income before cumulative effect of accounting change	$ 0.13	$ 0.06
Cumulative effect of accounting change	-	(0.06)
Net income	$ 0.13  ======	$ 0.00  ======

See Notes to Condensed Consolidated Financial Statements.

WELLMAN, INC.

CONDENSED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	March 31,	December 31,
	2000	1999
Assets:
Current assets:
Cash and cash equivalents	$ --	$ --
Accounts receivable, less allowance of $4,380 in 2000 and $4,415 in 1999	80,421	79,599
Inventories	160,255	174,735
Prepaid expenses and other current assets	8,309	10,127
Total current assets	248,985	264,461
Property, plant and equipment, at cost:
Land, buildings and improvements	132,495	133,039
Machinery and equipment	838,033	840,921
Construction in progress	245,215	227,540
	1,215,743	1,201,500
Less accumulated depreciation	397,694	385,855
Property, plant and equipment, net	818,049	815,645
Cost in excess of net assets acquired, net	246,015	248,697
Other assets, net	19,731	15,165
	$1,332,780  ========	$1,343,968  ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 64,353	$ 78,919
Accrued liabilities	31,740	33,534
Current portion of long-term debt	40,405	30,294
Other	17,785	19,547
Total current liabilities	154,283	162,294
Long-term debt	375,680	375,680
Deferred income taxes and other liabilities	191,751	194,589
Total liabilities	721,714	732,563
Stockholders' equity:
Common stock, $0.001 par value; 55,000,000 shares authorized, 34,029,334 shares issued in 2000 and 33,938,753 in 1999	34	34
Class B common stock, $0.001 par value; 5,500,000 shares authorized; no shares issued	--	--
Paid-in capital	241,210	239,473
Accumulated other comprehensive income (loss)	(9,465)	(6,019)
Retained earnings	428,811	427,441
Less common stock in treasury at cost: 2,500,000 shares	(49,524)	(49,524)
Total stockholders' equity	611,066	611,405
	$1,332,780  ========	$1,343,968  ========

See Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

	Common Stock Issued		Paid-In	Accumulated Other Comprehensive	Retained	Treasury
	Shares	Amount	Capital	Income (Loss)	Earnings	Stock	Total
(In thousands)
Balance at December 31, 1998	33,816	$34	$237,810	$ 5,133	$449,801	$(49,524)	$643,254
Net loss					(11,050)		(11,050)
Currency translation adjustments				(11,152)			(11,152)
Total comprehensive loss							(22,202)
Cash dividends ($0.36 per share)					(11,310)		(11,310)
Issuance of restricted stock	123		1,151				1,151
Tax effect of restricted stock			17				17
Amortization of deferred compensation			495				495
Balance at December 31, 1999	33,939	34	239,473	(6,019)	427,441	(49,524)	611,405
Net income					4,201		4,201
Currency translation adjustments				(3,446)			(3,446)
Total comprehensive income							755
Cash dividends ($0.09 per share)					(2,831)		(2,831)
Exercise of stock options	66		1,146				1,146
Tax effect of exercise of stock options			70				70
Issuance of restricted stock	24		391				391
Amortization of deferred compensation			130				130
Balance at March 31, 2000	34,029 =====	$34     ===	$241,210 =======	$(9,465)       =====	$428,811  =======	$(49,524) ======	$611,066  =======

See Notes to Condensed Consolidated Financial Statements.

WELLMAN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(In thousands)
	2000	1999
Cash flows from operating activities:
Net income	$ 4,201	$ 17
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	14,558	15,021
Amortization	2,473	2,187
Deferred income taxes and other	(1,520)	432
Changes in assets and liabilities	(9,944)	(15,818)
Net cash provided by operating activities	9,768	1,839
Cash flows from investing activities:
Additions to property, plant and equipment	(19,397)	(31,584)
Net cash used in investing activities	(19,397)	(31,584)
Cash flows from financing activities:
Borrowings under long-term debt, net	11,094	31,670
Dividends paid on common stock	(2,831)	(2,806)
Issuance of restricted stock	391	917
Exercise of stock options	1,216	--
Net cash provided by financing activities	9,870	29,781
Effect of exchange rate changes on cash and cash equivalents	(241)	(36)
Increase (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents at beginning of period	0	0
Cash and cash equivalents at end of period	$ 0  =====	$ 0  ======

See Notes to Condensed Consolidated Financial Statements.

WELLMAN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information for the three months ended

March 31, 2000 and 1999 is unaudited)

(In thousands, except per share data)

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ended December 31, 2000.

The balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Wellman, Inc. 's (which, together with its subsidiaries, is herein referred to as the "Company ") annual report on Form 10-K for the year ended December 31, 1999.

2. EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated:

	Three Months Ended March 31,
	2000	1999
Numerator for basic and diluted earnings per share:
Earnings before cumulative effect of accounting change	$ 4,201	$ 1,786
Cumulative effect of accounting change	-	(1,769)
Net income	$ 4,201 ======	$ 17  ======
Denominator:
Denominator for basic earnings per share - weighted-average shares	31,221	31,203
Effect of dilutive securities:
Employee stock options and restricted stock	580	128
Denominator for diluted earnings per share-adjusted weighted average shares	31,801 ======	31,331  ======
Basic and diluted net earnings per common share:
Income before cumulative effect of accounting change	$ 0.13	$ 0.06
Cumulative effect of accounting change	-	(0.06)
Net income	$ 0.13 ======	$ 0.00  ======

3. INVENTORIES

Inventories consist of the following:

		March 31,		December 31,,
		2000	1999
Raw materials		$ 70,199	$ 64,700
Finished and semi-finished goods		79,044	97,855
Supplies		11,012	12,180
		$160,255 =======	$174,735 =======
4.	ACCOUNTING CHANGE

Effective January 1, 1999, the Company adopted the AICPA 's Statement of Position (SOP) No. 98-5, "Reporting on the Costs of Start-Up Activities, " which required the Company to begin expensing all start-up and organization costs as incurred. Start-up and organization costs incurred prior to the adoption of this SOP were reported as a cumulative effect of an accounting change. The effect of the change was to decrease net income for the three months ended March 31, 1999 by $1,769, or $0.06 per diluted share, after tax.

5. RESTRUCTURING CHARGES

1999 Restructuring

During 1999, in an effort to offset in part the effects of lower selling prices and higher raw material costs and to improve long-term profitability and stockholder returns, the Company approved an overall cost reduction and productivity improvement plan. As a result, the Company recorded a pretax restructuring charge in 1999 of $17,789 related to the 1999 plan. The plan included a pretax charge of $10,606 for closing the Company 's wool business, which consisted of an impairment charge of $6,986 to write-down the related assets to their expected fair value, an accrual for closure costs of $1,880, a $1,320 accrual for severance, and a $420 accrual for other exit costs. The Company's wool business reported sales and an operating loss for the first quarter of 1999 of $5,691 and $(137), respectively. In addition, the plan included a pretax charge of $2,073 to close the Company 's New York facility, which included lease termination costs and an accrual for severance. The plan included an additional accrual for severance costs for other positions throughout the Company. The closure of the wool business and other cost reductions throughout the Company will result in the termination of approximately 127 and 130 employees, respectively. These positions included both plant and administrative personnel. As of March 31, 2000, the Company had terminated 245 employees as part of the plan.

The following represents changes in the accruals since December 31, 1999:

	Termination Benefits	Closure and       Lease Termination Costs		Accrual   for Other Expenses
Accrual balance at December 31, 1999	$3,112		$2,003	$768
Cash payments in 2000	(1,241)		(120)	(152)
Accrual balance at March 31, 2000	$1,871     =====		$1,883          =====	$616    ====

1998 Restructuring

During 1998, the Company adopted a restructuring plan to consolidate and lower the overall operating costs of the business units in the Fibers and Recycled Products Group. In connection with this plan, the Company closed the operations at a leased manufacturing facility in New Jersey and a sales office in the United Kingdom. The Company recorded a pretax charge of $6,861 in its fourth quarter of 1998, which included a $3,738 write-off of equipment and other assets to be sold or scrapped; a $1,717 accrual primarily for the removal and dismantling of the equipment and restoration of the leased facility to its original state; and a $1,406 accrual for the termination benefits of approximately 88 employees. Total costs associated with the New Jersey facility and the sales office in England were $4,371 and $827, respectively.

The 1998 restructuring plan is expected to be completed during the second quarter of 2000. There were no changes in the accruals since December 31, 1999:

	Termination Benefits	Accrual   for Other Expenses
Accrual balance at December 31, 1999	$96		$0
Activity in 2000	(0)		(0)
Accrual balance at March 31, 2000	$96       ===		$0       ==

6. COMMITMENTS AND CONTINGENCIES

The Company has commitments and contingent liabilities, including environmental liabilities, letters of credit, commitments relating to certain state incentives, raw material purchase commitments, and various operating commitments, including operating lease commitments.

The Company 's operations are subject to extensive laws and regulations governing air emissions, wastewater discharges and solid and hazardous waste management activities. The Company 's policy is to expense environmental remediation costs when it is both probable that a liability has been incurred and the amount can be reasonably estimated. While it is often difficult to reasonably quantify future environmental-related expenditures, the Company currently estimates its future non-capital expenditures related to environmental matters to range between approximately $8,300 and $29,000. In connection with these expenditures, the Company has accrued undiscounted liabilities of approximately $15,000 at March 31, 2000 and December 31, 1999, which are reflected as other noncurrent liabilities in the Company 's Condensed Consolidated Balance Sheets. These accruals represent management 's best estimate of probable non-capital environmental expenditures. In addition, aggregate future capital expenditures related to environmental matters are expected to range from approximately $8,400 to $21,900. These non-capital and capital expenditures are expected to be incurred during the next 10 to 20 years. The Company believes that it is entitled to recover a portion of these expenditures under indemnification and escrow agreements.

In order to receive certain state grants, the Company agreed to meet certain conditions, including capital expenditures and employment levels at its Pearl River facility. During the three months ending March 31, 2000, the Company recognized approximately $2,000 of grant income. As of March 31, 2000, the Company had a deferred liability of approximately $19,000 which it expects to be reduced as these conditions are satisfied.

  7. COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) is comprised solely of foreign currency translation. Substantially all of the earnings associated with the Company's investments in foreign entities are considered to be permanently invested, and no provision for U.S. federal and state income taxes on those earnings or translation adjustments has been provided. Comprehensive income (loss) was $755 and $(7,146) for the three months ended March 31, 2000 and 1999, respectively.

8. SEGMENT INFORMATION

Beginning in the first quarter of 2000, the Company reduced its reportable operating segments from three to two: the Fibers and Recycled Products Group and the Packaging Products Group. In an effort to streamline its costs and integrate its fiber operations, the Company has changed its organizational structure so that both the chemical and recycled-based fiber operations report to one individual. The financial information of the Company is now being reported to the chief operating decision maker under these two segments. This represents a change in the Company's segment reporting, and the Company accordingly has restated its segment information where appropriate to reflect this change.

Generally, the Company evaluates segment profit on the basis of operating profit less certain charges for research and development costs, administrative costs, and amortization expenses. The accounting policies are the same as those described in the Company 's most recently filed Form 10-K.

Three months ended March 31, 2000	Fibers and     Recycled Products Group	Packaging Products  Group	Total
Revenues	$157,830	$116,441	$ 274,271
Segment profit (1)	4,885	3,485	8,370
Assets	628,324	431,202	1,059,526
Three months ended March 31, 1999 (restated)
Revenues	$156,326	$ 62,565	$ 218,891
Segment profit (loss) (1)	6,572	(427)	6,145
Assets	699,286	450,429	1,149,715

(1) Segment profit (loss) includes administrative expenses and corporate research and development costs.

Following are reconciliations to corresponding totals in the accompanying condensed consolidated financial statements:

		Three Months Ended     March 31,
Segment Profit		2000	1999
Total for Reportable Segments		$ 8,370	$ 6,145
Interest Expense, Net		(2,452)	(3,332)
Earnings Before Income Taxes and Cumulative Effect of Accounting Change		$ 5,918  ========	$ 2,813  ========
Assets
Total for Reportable Segments		$1,059,526	$1,149,715
Corporate assets(1)		273,254	345,315
		$1,332,780  ========		$1,495,030  ========
(1)	Corporate assets include prepaid expenses, construction in progress and other assets not allocated to the segments.

WELLMAN, INC.

MANAGEMENT 'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company is principally engaged in the manufacture and marketing of high-quality polyester products, including Fortrel® brand polyester textile fibers, polyester fibers made from recycled raw materials and PermaClear® brand PET (polyethylene terephthalate) packaging resins. The Company currently has annual capacity to manufacture approximately 1.1 billion pounds of fiber and 1.1 billion pounds of resins worldwide at six major production facilities in the United States and Europe. See "Outlook" below. The Company is also the world 's largest PET plastics recycler, utilizing a significant amount of recycled raw materials in its manufacturing operations.

Beginning in the first quarter of 2000, the Company reduced its reportable operating segments from three to two: the Fibers and Recycled Products Group (FRPG) and the Packaging Products Group (PPG). In an effort to streamline its costs and integrate its fiber operations, the Company has changed its organizational structure so that both the chemical and recycled-based fiber operations report to one individual. The financial information of the Company is now being reported to the chief operating decision maker under these two segments.

The FRPG produces Fortrel® textile fibers, which currently represent approximately 60% of the Company 's fiber production. These fibers are used in apparel, home furnishings, and non-wovens and are produced from two chemical raw materials, purified terephthalic acid (PTA) and monoethylene glycol (MEG). The other 40% of its fiber production, primarily fiberfill and carpet fibers, is manufactured from recycled raw materials, including postindustrial fiber, resin and film materials and postconsumer PET containers. The Company 's PET resins, produced by the PPG from PTA and MEG, are primarily used in the manufacture of clear plastic soft drink bottles and other food and beverage packaging.

The Company 's markets are highly competitive. It competes in these markets primarily on the basis of product quality, customer service, brand identity and price. It believes it is the largest polyester staple producer in the United States and the third-largest PET packaging resins producer in North America. Several of the Company 's competitors are substantially larger than the Company and have substantially greater economic resources.

Demand for polyester fiber historically has been cyclical, as it is subject to changes in consumer preferences and spending, retail sales patterns, and fiber or textile product imports. Since late 1997, the Far East has been experiencing a significant economic and financial crisis. This crisis has led to higher imports of polyester fiber, fabric and apparel, resulting in fiber price pressure in the United States and Europe, which has adversely affected profitability. Global PET resins demand continues to grow, driven by new product applications for PET and conversions from other packaging materials to PET. Sales for PET resins, primarily for soft drink bottles and other beverages, may be influenced by weather.

The Company 's profitability is primarily determined by its raw material margins (the difference between product selling prices and raw material costs). Both fiber and PET resin raw material margins experience increases or decreases primarily based on selling price and raw material cost changes, which stem from supply and demand factors and competitive conditions. Given the Company 's substantial unit volumes, the impact on profitability of changes in selling prices and raw material costs is significant.

Supply, demand, prices and raw material costs each may be affected by global economic and market conditions, export and import activity, and the prices of competing materials.

RESTRUCTURING CHARGES

During 1999, in an effort to offset in part the effects of lower selling prices and higher raw material costs in both its FRPG and PPG and to improve long-term profitability and stockholder returns, the Company approved an overall cost reduction and productivity improvement plan. As a result, the Company recorded a pretax restructuring charge in 1999 of $17.8 million. Pursuant to the plan, the Company closed its New York office and its wool business in Johnsonville, SC during 1999 and began implementing other cost reduction and productivity improvement initiatives throughout the Company. The restructuring, which is expected to be completed by the end of 2000, will be funded from operating cash flows. See note 5 to the Condensed Consolidated Financial Statements for details of the accruals and changes in the accruals since year end.

The Company's cost reduction and productivity improvement plan adopted in 1999 is expected to generate planned annual pretax savings of approximately $35.0 million, which began to phase in during 1999 and are continuing into 2000. See "Outlook" below. The savings associated with the cost reduction portion of the plan, expected to be approximately $25.0 million annually compared to 1999 budgeted levels, will primarily result from lower costs for services, supplies and wages. The expected savings are net of other continuing costs, such as fixed overhead, that the businesses have to absorb as a result of the restructuring. The productivity improvement portion of the plan is expected to generate earnings of approximately $10.0 million as PET resin market conditions improve. This will be achieved through increased production volumes and lower annual costs by means of throughput and manufacturing improvements and operational efficiencies in production facilities. Cost reductions pursuant to the 1999 restructuring plan derived in the first quarter of 2000 are estimated to be approximately $5.0 to $6.0 million.

In the fourth quarter of 1998, the Company adopted a restructuring plan to consolidate and lower the overall operating costs of the business units in the FRPG. In connection with this plan, the Company closed operations at a leased manufacturing facility in New Jersey and a sales office in the United Kingdom. The Company recorded a pretax charge of approximately $6.9 million in the fourth quarter of 1998. The 1998 restructuring is expected to be completed during the second quarter of 2000. See note 5 to the Condensed Consolidated Financial Statements for details of the accruals and changes in the accruals since December 31, 1999.

RESULTS OF OPERATIONS

Net sales for the three months ended March 31, 2000 increased 25.3% to $274.3 million from $218.9 million for the prior year period. This increase was principally due to increased volume in the Company's PET resins business that resulted from new production capacity added in 1999 at the Company's Pearl River facility and improved selling prices for the PPG. Net sales for the FRPG were essentially unchanged from the prior period. Net sales for the PPG increased 86% to $116.4 million for the three months ended March 31, 2000 from $62.6 million for the 1999 period, reflecting improved selling prices and the start-up of the two PET resin production lines at the Company's Pearl River facility during the first half of 1999.

Cost of sales increased 28.3% to $249.0 million for the three months ended March 31, 2000 from $194.1 million for the three months ended March 31, 1999, reflecting the aforementioned start-up of two PET resin production lines. Cost of sales as a percentage of sales increased to 90.8% in 2000 from 88.7% in 1999 due primarily to higher raw material costs, which more than offset higher selling prices, increased volumes and lower fixed spending associated with the Company's cost reduction and productivity improvement plan. See "Restructuring Charges" above. For the FRPG, cost of sales as a percentage of sales increased 1.8% in the 2000 period compared to the 1999 period. This increase was primarily due to higher raw material costs, which more than offset lower fixed spending and slightly improved selling prices. For the PPG, cost of sales as a percentage of sales increased 2.2% in the 2000 period compared to the 1999 period, resulting primarily from higher chemical raw material costs, offset in part by higher PET resin selling prices and higher unit volumes.

As a result of the foregoing, gross profit increased to $25.3 million for the three months ended March 31, 2000 compared to $24.8 million for the three months ended March 31, 1999.

Selling, general and administrative expenses were $16.9 million, or 6.2% of sales, in the 2000 period compared to $18.7 million, or 8.5% of sales, in the 1999 period. This decrease was primarily due to lower spending associated with the Company's closed facilities and its cost reduction and productivity plan adopted in 1999 (see "Restructuring Charges" above), offset in part by discounts taken on accounts receivable sold.

As a result of the foregoing, the Company reported operating income of $8.4 million, or 3.1% of sales, for the 2000 period, compared to $6.1 million, or 2.8% of sales, for the 1999 period.

Net interest expense was $2.5 million for the 2000 period compared to $3.3 million for the 1999 period. The decrease is due to a lower level of debt offset in part by higher interest rates and less capitalized interest relating to the construction in progress at the Company's Pearl River facility in 2000. See "Outlook" below for information with respect to the impact on interest expense expected during the remainder of 2000 from the start-up of the Pearl River facility.

The Company's effective tax rate for the three months ended March 2000 was 29.0% compared to 36.5% for the three months ended March 1999. The estimated rate for 2000 has decreased primarily as a result of increased earnings at the Company's Irish recycled fiber operation, which is subject to significantly lower tax rates than the U.S. operations.

As a result of the foregoing, the Company reported net income of $4.2 million, or $0.13 per diluted share, for the three months ended March 31, 2000 compared to net income before the cumulative effect of an accounting change of $1.8 million, or $0.06 per diluted share, for the three months ended March 31, 1999.

Effective January 1, 1999, the Company adopted the AICPA's Statement of Position No. 98-5, "Reporting on the Costs of Start-Up Activities," which required the Company to begin expensing all start-up and organization costs as incurred. Start-up and organization costs incurred prior to the adoption of this SOP were reported as a cumulative effect of a change in accounting principle. The effect of the change was to decrease net income in the first quarter of 1999 by $1.8 million (or $2.9 million less taxes of $1.1 million), or $0.06 per diluted share.

OUTLOOK

The following statements are forward-looking and should be read in conjunction with "Forward-Looking Statements; Risks and Uncertainties" below.

Capacity utilization for the PET packaging resin industry is expected to increase in the near term. The Company believes continued growing demand may improve both selling prices and profit margins in 2000. PET resins producers announced a significant selling price increase in PET packaging resins for March 2000, and expect at least one additional price increase to be announced in 2000. However, there can be no assurance that any or all of these price increases will be realized or maintained. Recent increases in the price of oil are exerting upward price pressure on petrochemical feedstock, resulting in an increase in chemical raw material costs in the second quarter of 2000. Raw material prices may decline later in 2000 due to expected decreases in oil prices and additional EG capacity. Management expects selling price increases for PET packaging resins to exceed raw material cost increases for the remainder of 2000. However, given the competitive nature of the business and other market influences, there can be no assurance that this will occur. Each one-cent per pound change in the Company's PET resins margin has approximately a $10.0 million effect on its pretax income on an annualized basis.

The U.S. and European fiber markets continue to be severely impacted by the Far Eastern imports throughout the textile chain, including fiber, yarn, fabric and apparel from that region. Although excess fiber supply continues to plague the industry, fiber shipments in the United States have shown signs of recovery, and inventories at domestic fiber producers and fiber customers are at historically low levels. As the business climate in Asia improves and as anti-dumping duties are implemented, imports into the United States and Europe may decline, which may result in a lessening of the downward price pressure on fibers. Both chemical-based and recycled-based fiber raw material costs are expected to increase in the second quarter of 2000. Management does not expect selling price increases for fibers to exceed raw material cost increases in the near term, which could result in lower profitability.

During the final stages of construction, certain equipment at the Company's new 230 million pound staple fiber line at its Pearl River facility did not perform to specifications. As a result, this facility is expected to operate at one half capacity in the second quarter of 2000, increasing during 2000 as the equipment is modified to perform to specifications. After the new staple production line is operating at planned levels, the Company expects to take various staple lines at its other manufacturing facilities out of production for maintenance. After the maintenance is completed, these lines will be returned to production when justified by business conditions. Earnings associated with the increased revenue will be reduced by operating costs, including depreciation expense, at the Pearl River facility, fixed costs related to nonproductive staple manufacturing equipment at other manufacturing facilities, and interest expense that was previously capitalized as part of the construction costs of the Pearl River facility.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operations was $9.8 million for the three months ended March 31, 2000 compared to $1.8 million provided by operations for the three months ended March 31, 1999.

Net cash used in investing activities amounted to $19.4 million in the first three months of 2000 compared to $31.6 million in the first three months of 1999. With the expected completion of its Pearl River facility in Mississippi, the Company anticipates capital expenditures for 2000 to be reduced to approximately $40.0 million.

Net cash provided by financing activities amounted to $9.9 million in the 2000 period compared to $29.8 million in the 1999 period.

In February 2000, the Company obtained a $50.0 million, 8.41% senior unsecured note due February 2003. In conjunction with this financing, the Company entered into interest rate swaps, which effectively convert the total amount of this fixed-rate debt to floating-rate debt. The proceeds from the $50.0 million senior unsecured debt were used to pay down other debt. In April 2000, the Company reduced the commitment amount on its $450.0 million unsecured revolving credit facility to $400.0 million. The $400.0 million is comprised of a $125.0 million 364-day revolving credit facility and a $275.0 million four-year revolving credit facility, which matures in September 2003. Neither facility has scheduled principal repayments. The Company 's financing agreements contain normal financial and restrictive covenants. Certain subsidiaries have guaranteed substantially all of the Company 's indebtedness for borrowed money.

The Company has an effective universal shelf registration statement covering the issuance of up to $400.0 million of debt and or equity securities. No securities have been sold under this shelf registration.

The financial resources available to the Company at March 31, 2000 include $271.5 million under its revolving credit facilities, unused short-term uncommitted lines of credit aggregating approximately $67.7 million, and internally generated funds. Based on its debt level as of March 31, 2000, the Company could have had an average of approximately $174.6 million of additional debt outstanding during the year without amending the terms of its debt agreements. The Company believes these financial resources and other credit arrangements will be sufficient to meet its foreseeable needs for working capital, capital expenditures and dividends.

For information about the Company 's derivative financial instruments, see Item 7A. "Quantitative and Qualitative Disclosure About Market Risk " of the Company 's Form 10-K for the year ended December 31, 1999.

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities " (FAS 133), effective for fiscal years beginning after June 15, 2000. The Company expects to adopt FAS 133 in January 2001. The Company has not yet determined what the effect of FAS 133 will be on its results of operations or financial position. However, the statement could increase volatility in earnings and comprehensive income.

FORWARD-LOOKING STATEMENTS; RISKS AND UNCERTAINTIES

Statements contained in this Form 10-Q that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as "believes, " "anticipates, " "expects " and similar expressions are intended to identify forward-looking statements. The Company cautions that a number of important factors could cause actual results for 2000 and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Such statements contain a number of risks and uncertainties, including, but not limited to, demand and competition for polyester fiber and PET packaging resins; availability and cost of raw materials; levels of production capacity and announced changes to existing levels; changes in financial markets, interest rates and foreign currency exchange rates; work stoppages; natural disasters; U.S., European, Far Eastern and global economic conditions and changes in laws and regulations; prices and volumes of imports; prices of competing products; and the Company 's ability to complete expansions and other capital projects on time and budget and to maintain the operations of its existing production facilities. The Company cannot assure that it will be able to anticipate or respond timely to changes which could adversely affect its operating results in one or more fiscal quarters. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of the Company 's common stock.

For a more complete description of the prominent risks and uncertainties inherent in the Company 's business, see the Company 's Form 10-K for the year ended December 31, 1999.

PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

4(a)	Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the registrant has not filed herewith any instrument with respect to long-term debt which does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.
4(b)	Amendment to Loan Agreement, dated April 28, 2000, by and between the Company and Fleet National Bank, N.A., as administrative agent, and certain other financial institutions

10(a)	Employment Agreement dated as of January 1, 1990, as amended by the Third Amendment to said Employment Agreement dated as of January 1, 1997, between the Company and Thomas M. Duff
10(b)	Employment Agreement dated as of December 1, 1994 between the Company and Clifford J. Christenson
10(c)	Employment Agreement dated as of December 1, 1994 between the Company and Keith R. Phillips
10(d)	Employment Agreement dated as of April 10, 2000 between the Company and Michael Dewsbury.

27 Financial Data Schedule.

(b) Reports on Form 8-K.

None.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

    Dated May 12, 2000 WELLMAN, INC. By /s/ Keith R. Phillips________________________ Chief Financial Officer, Vice President and Treasurer (Principal Financial Officer)

    Dated May 12, 2000   By /s/ Mark J. Rosenblum_______________________ Chief Accounting Officer, Vice President and Controller (Principal Accounting Officer)

EX-4

April 28, 2000

Wellman, Inc.

Shrewsbury Executive Center

1040 Broad Street

Suite 302

Shrewsbury, New Jersey 07702

Attention: Keith R. Phillips, Vice President, Chief Financial Officer and Treasurer and Audrey Goodman, Assistant Treasurer

Re: Loan Agreement dated as of September 28, 1999 by and between Wellman, Inc. a Delaware corporation ("Borrower") and Fleet National Bank as Agent (the "Agent") for itself and the other Banks party thereto and such Banks (the "Agreement")

Ladies and Gentlemen:

The Borrower has requested the Agent and the Banks to consent to application of a permanent reduction of the 4-Year Commitment (which will also constitute a permanent reduction of the Commitment) in the manner described below.

Capitalized terms used herein and not expressly defined herein shall have the respective meanings assigned thereto in the Agreement.

Subsequent to the execution of the Agreement and prior to the date hereof, the Borrower executed a $50,000,000 private placement financing. The Borrower now desires to permanently reduce the 4-Year Commitment by $50,000,000 pursuant to Section 2.09 of the Agreement, but to apply (i) at least $45,000,000 of such reduction on a non-pro rata basis in Wellman's discretion to the Pro Rata Shares of the 4-Year Commitment held by the five Banks currently holding the largest Pro Rata Shares of the 4-Year Commitment (the "Five Banks") and (ii) up to $5,000,000 of the $50,000,000 4-Year Commitment reduction in Wellman's discretion to the Pro Rata Shares of the 4-Year Commitment held by any of the Banks on a non-pro rata basis; provided that after giving effect to such reduction in the 4-Year Commitment none of the Five Banks' Pro Rata Shares of the 4-Year Commitment shall have been reduced by more than $15,000,000 and Fleet National Bank shall retain the largest Pro Rata Share of the 4-Year Commitment. Wellman hereby requests the consent of the Banks and the Agent to such 4-Year Commitment permanent reduction which shall occur only upon the consents of the Banks and the Agent becoming effective.

Borrower's request for consent shall be deemed withdrawn unless the consent hereto of the Banks and the Agent shall have become effective by April 30, 2000 unless such date is extended by notice from the Borrower to the Agent.

The Agent and the Banks hereby consent to said permanent reduction of the 4-Year Commitment in this one instance and waive the provisions of Sections 2.09, 2.16 and 2.18 to the extent any of such Sections may be inconsistent with said permanent reduction. The Agent, the Banks and the Borrower hereby confirm that future permanent reductions in the Commitment pursuant to Section 2.09 of the Agreement may be applied by the Borrower toward a reduction in the 4-Year Commitment and/or 364-Day Commitment as Borrower determines, so long as any such reduction is applied on a pro rata basis to the Pro Rata Shares of the Commitment being reduced.

The Borrower, the Agent and the Banks hereby agree that immediately after such permanent reduction of the 4-Year Commitment Exhibit K to the Loan Agreement shall thereupon be deemed amended to accurately reflect the Pro Rata Shares of the Banks after giving effect to said permanent reduction of the 4-Year Commitment.

The Borrower represents that no Default or Event of Default exists under the Agreement.

The amendment and consent contained herein are limited to the voluntary permanent reduction of the 4-Year Commitment described above only and are not nor shall they be construed as an amendment and/or consent with respect to any other reduction of the Commitment.

Except to the extent of the above-referenced amendment and consent, each of the above-referenced provisions in the Agreement shall remain in full force and effect.

The signatures below on behalf of each of the Borrower, the Agent and each Bank establishes said party's consent to and agreement with the foregoing.

FLEET NATIONAL BANK, as Agent and a Lender

By: /s/ John P. O'Laughlin

Name: John P. O'Laughlin

Title: Vice President

AGREED TO:

WELLMAN, INC.

By: /s/ Audrey Goodman

Name: Audrey Goodman

Title: Assistant Treasurer

LENDERS:

BANK OF AMERICA, N.A., as Bank and as Syndication Agent

By: /s/ Eileen C. Higgins

Name: Eileen C. Higgins

Title: Vice President

FIRST UNION NATIONAK BANK, as a Bank and as Documentation Agent

By: /s/ Peter G. Macey

Name: Peter G. Macey

Title: Senior Vice Pres.

WACHOVIA BANK, N.A., as a Bank and as a Senior Managing Agent

By: /s/ M. Eugene Wood, III

Name: M. Eugene Wood, III

Title: Senior Vice President

THE CHASE MANHATTAN BANK, as a Bank and as a Senior Managing Agent

By: /s/ Lawrence Palumbo, Jr.

Name: Lawrence Palumbo, Jr.

Title: Vice President

THE NORTHERN TRUST COMPANY., as a Bank

By: /s/ David J. Mitchell

Name: David J. Mitchell

Title: Vice President

THE GOVERNOR & COMPANY OF THE BANK OF IRELAND, as a Bank

By: /s/ Tony O'Donovan

Name: Tony O'Donovan

Title: Executive

MELLON BANK, N.A., as a Bank

By: /s/ Leonard M. Karpen, Jr.

Name: Leonard M. Karpen, Jr.

Title: Vice President

BANCA MONTE DEI PASCHI DI SIENA S.P.A., as a Bank

By: /s/ G. Nataliechi Nicolas A. Kanaris

Name: G. Nataliechi Nicolas A. Kanaris

Title: S.V.P. & Vice President

General Manager

MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as a Bank

By: /s/ R. David Stone

Name: R. David Stone

Title: Vice President

THE BANK OF NOVA SCOTIA, as a Bank

By: /s/ B.S. Allen

Name: B.S. Allen

Title: Managing Director

KBC BANK N.V., as a Bank

By: /s/ Robert M. Surdam, Jr.

Name: Robert M. Surdam, Jr.

Title: Vice President

HIBERNIA NATIONAL BANK, as a Bank

By: /s/ Nancy G. Moragas

Name: Nancy G. Moragas

Title: Assistant Vice President

EXHIBIT K

PRO RATA SHARES

Name of Bank, Address for Notices and Instructions for Wire Transfers Pro Rata Share

Fleet National Bank 100 Federal Street Boston, Massachusetts 02110 Attention: John P. O'Loughlin Vice President Telephone: (617) 434-3952 Telecopy: (617) 434-0601 E-mail: john_p_o'loughlin@fleet.com Loans and Commitment 18.00% 364-Day Loan and 364-Day Commitment 12.00% 4-Year Loan and 4-Year Commitment 20.7272727273%

Wire Transfer Instructions:

Fleet National Bank

Boston, Massachusetts

ABA #011000138 (FNB-MA)

Account: Commercial Loan Services

Attn: Agent Bank MA

Account #: 1510351 G/L

Re: Wellman, Inc.

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: Wachovia Bank, N.A. 152 W. 57th Street, 37th Floor New York, NY 10019 Attention: Mary Ann Zagroba, Senior Vice President Telephone: (212) 603-7702 Telecopy: (212) 603-7729 E-mail:mary anne.zagroba@wachovia.com Loans and Commitment 10.00% 364-Day Loan and 364-Day Commitment 11.1111112000% 4-Year Loan and 4-Year Commitment 9.4949494545%

For Administrative/Operations Matters:

Wachovia Bank, N.A.

191 Peachtree Street, NE

28th Floor, MC370

Atlanta, GA 30303

Attn: Trudy T. Collins

Tel: (404) 332-6688

Fax: (404) 332-4320

Wire Transfer Instructions:

Wachovia Bank, N.A.

ABA #: 061000010

Account Name: FW Money Transfer Suspense

Attn: Complex Unit

Re: Wellman, Inc.

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: KBC Bank N.V. 125 West 55th Street New York, NY 10019 Attn: Robert Surdam, Vice President Rasha Mosaad, Assistant Vice President Telephone: (212) 541-0704/0712 Telecopy: (212) 541-0793 E-mail: robert.surdam@kb.be rasha.mosaad@kb.be Loans and Commitment 2.50% 364-Day Loan and 364-Day Commitment 2.2222224000% 4-Year Loan and 4-Year Commitment 2.6262625455%

For Administrative/Operations Matters:

KBC Bank N.V.

125 West 55th Street

New York, NY 10019

Attn: Charleen Cumberbatch/Robert Pacific

Tel: (212) 541-0653/0671

Fax: (212) 956-5581

Wire Transfer Instructions:

KBC Bank N.V.

ABA #: 026-008-248

Account Name: KBC New York

Attn: Loan Administration

Re: Wellman, Inc.

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: First Union National Bank 190 River Road, NJ3161 Summit, NJ 07901 Attn: Peter Mace, Senior Vice President Tel: (908) 598-3237 Fax: (908) 598-3050 E-mail: peter.mace@firstunion,com Loans and Commitment 15.00% 364-Day Loan and 364-Day Commitment 16.6666664000% 4-Year Loan and 4-Year Commitment 14.2424243636%

For Administrative/Operations Matters:

First Union National Bank

190 River Road, NJ3130

Summit, NJ 07901

Attn: Janie Cusack

Tel: (904) 489-1823

Fax: (904) 489-1010

Wire Transfer Instructions:

First Union National Bank

Jacksonville, FL

Fed Wire #: 031201467

Chips #: 0509

Tax I.D. #: 22 114 7033

ABA #: 063000021

Account #: 145916-2008

Attn: Cindy Perry

Re: Wellman, Inc.

Obligor #: 9565178503

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: The Bank of Nova Scotia One Liberty Plaza, 26th Floor New York, NY 10006 Attn: Brian Allen, Senior Relationship Manager Tel: (212) 225-5030 Fax: (212) 225-5090 E-mail: ballen@scotiabank.com Loans and Commitment 3.75% 364-Day Loan and 364-Day Commitment 3.3333336000% 4-Year Loan and 4-Year Commitment 3.9393938182%

For Administrative/Operations Matters:

The Bank of Nova Scotia

One Liberty Plaza, 24th Floor

New York, NY 10006

Attn: Peter Colletta,

Senior Loan Admin. Officer

Tel: (212) 225-5069

Fax: (212) 225-5145

Wire Transfer Instructions:

The Bank of Nova Scotia

ABA #: 026-002532

Account Name: Loan Accounting

Attn: Marcia Samuals

Re: Wellman, Inc.

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: Morgan Guaranty Trust Company of New York JP Morgan Securities, Inc. 60 Wall Street, 5th Floor New York, NY 10260-0060 Attn: Dennis Wilczek, Associate Tel: (212) 648-1265 Fax: (212) 648-5018 E-mail: wilczek_dennis@jpmorgan.com Loans and Commitment 6.25% 364-Day Loan and 364-Day Commitment 5.5555552000% 4-Year Loan and 4-Year Commitment 6.5656567273%

For Administrative/Operations Matters:

Morgan Guaranty Trust

Company of New York

c/o J.P. Morgan Services, Inc.

500 Stanton Christiana Road

Newark, DE 19713

Attn: Jeannie Mattson,

Associate Credit Administrator

Tel: (302) 634-1938

Fax: (302) 634-1852

Wire Transfer Instructions:

Morgan Guarauty Trust

Company of New York

New York, NY

ABA #: 021000238

Account Name: Loan Department

A/C #999-99-090

Attn: Corporate Processing - Mod 23

Re: Wellman, Inc.

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: Bank of America, N.A. 335 Madison Avenue, 5th Floor New York, NY 10017 Attn: Eileen C. Higgins, Vice President Tel: (212) 503-7260 Fax: (212) 503-7878 E-mail: eileen.c.higgins@bankamerica.com Loans and Commitment 16.25% 364-Day Loan and 364-Day Commitment 16.6666664000% 4-Year Loan and 4-Year Commitment 16.0606061818%

For Administrative/Operations Matters:

Bank of America, N.A.

101 N. Tryon Street

NC1-001-15-05

Charlotte, NC 28255

Attn: Bobbie Boratea, CSR

Tel: (704) 386-8389

Fax: (704) 409-0059

Wire Transfer Instructions:

Bank of America, N.A.

ABA #: 053000196

Attn: Bobbie Boratea

Re: Wellman, Inc.

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: The Northern Trust Company 50 S. LaSalle, 11th Floor Chicago, IL 60675 Attn: David J. Mitchell Tel: (312) 444-5033 Fax: (313) 444-5055 E-mail: David_Mitchell@notes.ntrs.com Loans and Commitment 3.75% 364-Day Loan and 364-Day Commitment 3.3333336000% 4-Year Loan and 4-Year Commitment 3.9393938182%

For Administrative/Operations Matters:

The Northern Trust Company

50 S. LaSalle, 11th Floor

Chicago, IL 60675

Attn: Ms. Linda Honda

Tel: (312) 444-3532

Fax: (312) 630-1566

Wire Transfer Instructions:

The Northern Trust Bank

ABA #: 071000152

Comm. Loan Account #: 5186401000

Credit to: Commercial Loan Dept.

Re: Wellman

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: The Governor & Company of the Bank of Ireland Corporate Banking Head Office Lower Baggot Street Dublin 2 IRELAND Attn: Helen Prendergast Tel: 011-353-1-6044044 Fax: 011-353-1-6044025 E-mail: helen.prendergast@boi.ie Loans and Commitment 5.00% 364-Day Loan and 364-Day Commitment 4.4444448000% 4-Year Loan and 4-Year Commitment 5.2525250909%

For Administrative/Operations Matters:

Bank of Ireland Corporate Banking

Loan Administration

Hume House, Pembroke Road, Ballsbridge

Dublin 4

IRELAND

Attn: Cathal Browne/Yvonne Manahan

Tel: 011-353-1-6187489

Fax: 011-353-1-6187462/75

Wire Transfer Instructions:

The Chase Manhattan Bank

New York

ABA #: 021000021

Further Credit: Bank of Ireland

Group Treasury

Attn: Yvonne Manahan

Re: Wellman, Inc.

Account #: 0011015815

Swift Code: CHASUS33

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: Mellon Bank, N.A. 1735 Market Street, 7th Floor Philadelphia, PA 19103 Attn: Leonard M. Karpen, Jr., Vice President Tel: (215) 553-3126 Fax: (215) 553-4899 Loans and Commitment 3.75% 364-Day Loan and 364-Day Commitment 3.3333336000% 4-Year Loan and 4-Year Commitment 3.9393938182%

For Administrative/Operations Matters:

Mellon Bank, N.A.

3 Mellon Bank Center, 12th Floor

Pittsburgh, PA 15259

Attn: Sannford Richards

Tel: (412) 234-8285

Fax: (412) 209-6118

Wire Transfer Instructions:

Fed Wire #: 990873800

Mellon Bank, N.A.

ABA #: 043-000-261

Re: Wellman, Inc.

Attn: Sannford Richards

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: Banca Monte dei Paschi di Siena S.p.A. 55 East 59th Street New York, NY 10022 Attn: Nick Kanaris, Vice President Tel: (212) 891-3655 Fax: (212) 891-3661 E-mail: mpsnyb@compuserve,com Loans and Commitment 2.50% 364-Day Loan and 364-Day Commitment 2.2222224000% 4-Year Loan and 4-Year Commitment 2.6262625455%

For Administrative/Operations Matters:

Banca Monte dei Paschi di Siena S.p.A.

55 East 59th Street

New York, NY 10022

Attn: Mei Tam

Tel: (212) 891-3649

Fax: (212) 891-3661

Wire Transfer Instructions:

The Chase Manhattan Bank

ABA #: 021000021

Further Credit: Banca Monte dei

Paschi di Siena S.p.A.

Account #: 544-7-78865

Re: Wellman

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: The Chase Manhattan Bank 270 Park Avenue, 33th Floor New York, NY 10017 Attn: Lawrence Palumbo, Vice President Tel: (212) 270-7525 Fax: (212) 270-7939 E-mail: lawrence.palumbo@chase,com Loans and Commitment 10.75% 364-Day Loan and 364-Day Commitment 11.1111112000% 4-Year Loan and 4-Year Commitment 10.5858585455%

For Administrative/Operations Matters:

The Chase Manhattan Bank

1 Chase Manhattan Plaza, 8th Floor

New York, NY 10081

Attn: Tanya Mitchell

Tel: (212) 552-7206

Fax: (212) 552-5777

For Bid Loans:

The Chase Manhattan Bank

270 Park Avenue, 8th Floor

New York, NY 10017

Attn: Frank Angelico

Tel: (212) 834-4434

Fax: (212) 834-6160

Wire Transfer Instructions:

The Chase Manhattan Bank

ABA #: 021000021

Attn: Vicky Taler

Re: Wellman, Inc.

*******************

Name of LENDER, address for notices and Instructions for Wire Transfers Pro Rata Share

For Credit Matters: Hibernia National Bank 313 Carondelet Street New Orleans, LA 70130 Attn: Nancy Moragas, Assistant Vice President Tel: (504) 533-2863 Fax: (504) 533-5434 E-mail: nmoragas@hiberniabank,com Loans and Commitment 2.50% 364-Day Loan and 364-Day Commitment 8.00% 4-Year Loan and 4-Year Commitment 0%

For Administrative/Operations Matters:

Hibernia National Bank

313 Carondelet Street

New Orleans, LA 70130

Attn: Debbie Lee,

Assistant Account Representative

Tel: (504) 533-5395

Fax: (504) 533-5434

Wire Transfer Instructions:

Hibernia National Bank

New Orleans, LA

ABA: 065-000-090

Further Credit: Energy/Maritime

Wire No. 0600-36615

Attn: Debbie Lee

Re: Wellman, Inc.

*******************

EX-10

EXHIBIT 10(a)

EMPLOYMENT AGREEMENT

AGREEMENT by and between WELLMAN, INC., a Delaware corporation (the "Company") and THOMAS M. DUFF (the "Executive"), dated as of the 1st day of January, 1990.

The Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued service and dedication of the Executive. In addition, the Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements currently and upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. The Board of Directors also believes that the autonomy, authority and responsibility possessed by the Executive is a significant attribute of his employment and a Change of Control would be likely to significantly diminish the attractiveness to Executive of employment by the Company, and has determined to allow Executive to chose whether to continue in the employ of the Company upon a Change of Control. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions. (a) The "Effective Date" shall be the first date during the "Employment Period" (as defined in Section 1(b)) on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding, if the Executive's employment with the Company is terminated or the Executive ceases to be an officer of the Company prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination of employment (1) was at the request of a third party who has taken steps reasonably calculated to effect the Change of Control or (2) otherwise arose in connection with or anticipation of the Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

(b) The "Employment Period" is the period commencing on the date hereof and ending on the third anniversary of such date; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as the "Renewal Date"), the Employment Period may be extended so as to terminate three years from such Renewal Date, if prior to the Renewal Date the Company shall give notice in writing to the Executive that the Employment Period shall be so extended and the Executive agrees to such extension in writing. Notwithstanding the foregoing, unless the Employment Period has already terminated, the Employment Period shall be automatically extended upon a Change of Control so as to terminate three years from the Effective Date (such three year period of the Employment Period being hereinafter referred to as the "Change of Control Employment Period").

(c) "Change of Control". For the purpose of this Agreement, a "Change of Control" shall mean:

(i) The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Company Voting Securities"), provided, however, that any acquisition by the Company or its subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries, or any corporation with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the Outstanding Company Common Stock and Company Voting Securities, as the case may be, shall not constitute a Change of Control; or

(ii) Individuals who, as of January 1, 1990, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to January 1, 1990 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(iii) Approval by the stockholders of the Company of (x) a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation, or (y) a complete liquidation or dissolution of the Company or (z) the sale or other disposition of all or substantially all of the assets of the Company.

(iv) Anything in this Agreement to the contrary notwithstanding, if an event that would, but for this paragraph, constitute a Change of Control results from or arises out of a purchase or other acquisition of the Company, directly or indirectly, by a corporation or other entity in which the Executive has a direct or indirect equity interest, such event shall not constitute a Change of Control; provided, however, that the limitation contained in this sentence shall not apply to any direct or indirect equity interest in a corporation or other entity (1) which equity interest is part of a class of equity interests which are publicly traded on any securities exchange or other market system, (2) received by the Executive, without the Executive's concurrence or consent, as a result of a purchase or other acquisition of the Company by such corporation or other entity, or (3) received by the Executive, without the Executive's concurrence or consent, in connection with a purchase or other acquisition of the Company by such corporation or other entity in respect of any stock options or performance awards granted to the Executive by the Company.

2. Employment Period. The Company hereby agrees to continue the Executive in its employ, and, subject to Executive's right to terminate his employment for Good Reason (as hereinafter defined), the Executive hereby agrees to remain in the employ of the Company for the Employment Period.

3. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, the Company agrees to employee the Executive as President and Chief Executive Officer, or in such other capacity as the Company may designate, provided that during the Change of Control Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location and in no event shall Executive be required to travel outside such location more often than 45 days in any calendar year.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the company and to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Change of Control Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company.

(b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary") of at least $500,000 which shall be payable no less frequently than monthly. Within 30 days following the end of each three year period within the Employment Period, the Annual Base Salary shall be reviewed for consideration of possible increases based on the Executive's performance and other relevant circumstances in such a manner as shall be substantially consistent with increases in base salary awarded in the ordinary course of business to other peer executives of the Company and its affiliated companies. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term "affiliated companies" includes any company controlled by, controlling or under common control with the Company.

(ii) Executive Bonus Plan. In addition to Annual Base Salary, during each year of the Employment Period, the Executive shall be designated as a participant in the Company's Executive Bonus Plan (the "Bonus Plan"), which provides for bonus payments of up to 100% of Executive's Annual Base Salary and, subject to meeting the criteria of the Bonus Plan, shall receive the bonus award provided for therein (the "Annual Award").

(iii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year during the Change of Control Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to (x) the average annualized (for any fiscal year consisting of less than twelve full months or with respect to which the Executive has been employed by the Company for less than twelve full months) bonus (the "Recent Annual Bonus") paid or payable to the Executive by the Company and its affiliated companies in respect of the two fiscal years immediately preceding the fiscal year in which the Effective Date occurs less (y) the Annual Award actually paid to the Executive with respect to the current fiscal year under the Bonus Plan. Each such Annual Bonus shall be paid not later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

(iv) Incentive, Savings and Retirement Plans. In addition to Annual Base Salary, the Annual Award and Annual Bonus payable as hereinabove provided, the Executive shall be eligible to participate during the Employment Period in all incentive, savings and retirement plans, practices, policies and programs applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive during the Change of Control Employment Period with incentive, savings and retirement benefits opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date.

(v) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) and applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide benefits during the Change of Control Employment Period which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period immediately preceding the Effective Date.

(vi) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive provided that during the Change of Control Employment Period such reimbursement shall be in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vii) Fringe Benefits. During the Change of Control Employment Period, the Executive shall be entitled to fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii) Office and Support Staff. During the Change of Control Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(ix) Vacation. During the Change of Control Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plan, policies, programs and practices of the Company and its affiliated companies as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other peer incentives of the Company and its affiliated companies.

(x) Perquisites. During the Employment Period the Company also will furnish the Executive without cost to him, (i) a Company owned or leased full-sized luxury automobile not more than three years old (Jaguar [SJ6] or equivalent), (ii) an annual examination of the Executive by a physician selected in accordance with the Company's current policy, and (iii) personal financial, investment and tax advice not to exceed $15,000 per annum, to the extent costs and expenses of the Executive to be reimbursed are properly documented for federal income taxation purposes to preserve any deduction for such reimbursement to which the Company may be entitled.

(xi) Deferrals. Prior to January 31, in each calendar year during the Employment Period, the Executive may elect to defer receipt of up to 50% of the Base Salary provided for under Section 3(b)(i) above and up to 100% of the Bonus Award under Section 3(b)(ii) above, otherwise payable to the Executive during such year, to a date or event specified by the Executive that shall be no later than the 10th anniversary of the date of the Executive's termination of employment by the Company. Upon the date specified by the Executive for receipt of his deferred compensation, the Executive will be entitled to a cash payment in a lump sum or annual installments as he shall have previously elected, equal to the aggregate amount of deferrals increased by the "Interest Equivalent" on such deferrals. The "Interest Equivalent" shall be equal to the amount of interest that would have been earned had such deferrals been immediately invested in an interest bearing account bearing the "Applicable Rate" at the time such payment of Base Salary or Bonus Award would otherwise have been made to the Executive. The "Applicable Rate" shall be an annual rate determined as of the first business day of each year, applied prospectively to the deferred compensation account, equal to the greater of the "Prime Rate" announced by Fleet National Bank as its Prime Rate as of the first business day of each calendar year, or the yield to maturity on ten-year United States Treasury Bonds.

4. Termination of Employment. (a) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of "Disability" set forth below), it may give to the Executive written notice in accordance with Section 11(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).

(b) Cause. The Company may terminate the Executive's employment during the Employment Period for "Cause". For purposes of this Agreement, "Cause" means (i) an act or acts of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company, (ii) repeated violations by the Executive of the Executive's obligations under Section 3(a) of this Agreement which are demonstrably willful and deliberate on the Executive's part and which are not remedied in a reasonable period of time after receipt of written notice from the Company or (iii) the conviction of the Executive of a felony involving moral turpitude; and prior to the Change of Control Employment Period also shall mean gross misconduct and the willful failure to perform the directives of the Board of Directors and which are not remedied in a reasonable time after written notice thereof.

(c) Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" means (i) a Change of Control and/or (ii) if Executive shall elect to remain in the employ of the Company during the Change of Control Employment Period, the occurrence of any one or more of the following during the Change of Control Employment Period:

A. the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 3(a)(i)(A) of this Agreement, or any other action by the Company which results in a diminition in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

B. any failure by the Company to comply with any of the provisions of Section 3(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

C. the Company's requiring the Executive to be based at any office or location other than that described in Section 3(a)(i)(B) hereof;

D. any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

E. any failure by the Company to comply with and satisfy Section 10(c) of this Agreement.

The Company acknowledges and agrees that a material inducement to Executive in entering into this Agreement was the right of Executive to terminate his employment for Good Reason, as defined herein, including the right to determine whether to continue in the employ of the Company upon a Change of Control or terminate such employment and receive the monetary payments and other benefits provided for in Section 5(e).

(d) Notice of Termination. Any termination on or after the Effective Date by the Company for Cause or by the Executive for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 11(b) of this Agreement. For purpose of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, and (ii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen days after the giving of such notice), and (iii) if the Date of Termination is on or after the Effective Date, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision referred to in clause (1) hereof. The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing the Executive's rights hereunder.

(e) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be; provided, however, that (i) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (ii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

5. Obligations of the Company upon Termination.

(a) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, provided that if the Executive's death occurs during the Change of Control Employment Period, the Company shall have the following obligations: (i) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (ii) the product of the greater of the Annual Bonus paid or payable (and annualized for any fiscal year consisting of less than twelve full months or for which the Executive has been employed for less than twelve full months) to the Executive for the most recently completed fiscal year during the Employment Period, if any, and the Recent Annual Bonus (such greater amount hereafter referred to as the "Highest Annual Bonus") and a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (iii) any compensation previously deferred by the Executive (together with any accrued interest thereon) and not yet paid by the Company (the amounts described in paragraphs (i), (ii) and (iii) are hereafter referred to as "Accrued Obligations"). All Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if the Executive's death occurs during the Change of Control Employment Period, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Company and any of its affiliated companies to surviving families of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to family death benefits, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their families.

(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executives, other than for Accrued Obligations. All Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if the Disability Effective Date occurs during the Change of Control Employment Period, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families.

(c) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive the Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Executive, in each case to the extent theretofore unpaid. If the Executive terminates employment during the Employment Period other than for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

(d) Termination Other than for Cause or Disability Prior to the Effective Date. If, during the Employment Period but prior to the Effective Date, the Company shall terminate the Executive's employment other than for Cause or Disability.

(i) the Company shall pay to the Executives:

A. an amount equal to the product of (x) the Annual Base Salary and (y) a fraction, the numerator of which is the number of months remaining in the Employment Period immediately prior to the Executive's termination of employment and the denominator of which is twelve, such amount to be paid in equal monthly installments; and

B. an amount equal to the product of (i) the Highest Annual Bonus and (ii) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365, such amount to be paid in equal monthly installments; and

C. any compensation previously deferred by the Executive (together with any accrued interest therein) and not yet paid by the Company, such amount to be paid in a lump sum within 30 days following the Date of Termination; and

(ii) for the remainder of the Employment Period, the Company shall continue benefits to the Executive and/or the Executive's family equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 3(b)(v) of this Agreement in effect as of the Date of Termination if the Executive's employment had not been terminated. For purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Period and to have retired on the last day of such period.

(e) Termination for Good Reason; Termination During Change of Control Employment Period. If the Executive shall terminate his employment under this Agreement for Good Reason or if during the Change of Control Employment Period, the Company shall terminate the Executive's employment other than for Cause or Disability:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination all Accrued Obligations;

(ii) the Company shall pay to the Executive as severance pay within 30 days after the Date of Termination an amount equal to the product of (x) 3 and (y) the sum of (i) Annual Base Salary and (ii) the Highest Annual Bonus; and

(iii) from the Date of Termination through the end of the Change of Control Employment Period, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 3(b)(v) of this Agreement if the Executive's employment had not been terminated in accordance with the most favorable plans, practices, programs or policies of the Company and its affiliated companies applicable to other peer executives and their families during the 90-day period immediately preceding the Effective Date, or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families. For purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Change of Control Employment Period and to have retired on the last day of such period.

6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices, provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any other agreements with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program except as explicitly modified by this Agreement.

7. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and amounts payable to Executive from any other employment or source shall not reduce the amounts payable to Executive hereunder. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity of enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to Section 8 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code").

8. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 8(c), all determinations required to be made under this Section 8, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by Ernst & Young (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within fifteen business days of the Date of Termination, if applicable, or such earlier time as is requested by, the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The initial Gross-Up Payment, if any, as determined pursuant to this Section 8(b), shall be paid to the Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with an opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but not later than twenty business days after the Executive knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim.

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company.

(iii) cooperate with the Company in good faith in order effectively to contest such claim.

(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 8(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

9. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 9 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement during or with respect to the Change of Control Employment Period.

10. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

11. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, or by Federal Express, Express Mail or other overnight courier service, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

Thomas M. Duff

5 North Ward Avenue

Rumson, New Jersey 07760

If to the Company:

The Compensation Committee

of the Board of Directors of Wellman, Inc.

c/o Dr. Richard P. Heitmiller

12 Sullivan Street

Nashua, New Hampshire 03060

and:

Jonathan M. Nelson

c/o Narragansett Capital, Inc.

Fleet Center - 9th Floor

50 Kennedy Plaza

Providence, RI 02903

with a copy to:

David K. Duffell, Esq.

c/o Edwards & Angell

2700 Hospital Trust Tower

Providence, RI 02903

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.

(f) This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof.

IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written .

By /s/ Thomas M. Duff

Thomas M. Duff

WELLMAN, INC.

By /s/ Clifford J. Christenson

Clifford J. Christenson

Chief Financial Officer

THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

This Third Amendment to Employment Agreement (the "Agreement") made as of the 1st day of January, 1997 by and between WELLMAN, INC., a Delaware corporation (the "Company"), and THOMAS M. DUFF (the "Executive").

W I T N E S S E T H:

WHEREAS, the parties hereto entered into an Employment Agreement dated as of January 1, 1990, as amended by a First Amendment thereto dated as of January 1, 1993 and further amended by a Second Amendment thereto dated as of January 1, 1995 (collectively, the "Original Employment Agreement"), pursuant to which the Company agreed to continue to employ the Executive, and the Executive agreed to remain in the employ of the Company; and

WHEREAS, the parties have agreed to certain modifications to the Original Employment Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein, and for good and valuable other consideration, receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Defined Terms. All capitalized terms not defined herein shall have the same meaning ascribed to such terms in the Original Employment Agreement.

Section 2. Amendments to Original Employment Agreement. (a) Effective as of the date hereof, Section 1(b) of the Original Employment Agreement is amended in its entirety to read as follows:

"(b) Subject to earlier termination as provided in Section 4 herein, the "Employment Period" shall be the period commencing on January 1, 1997 and continuing until the date either the Company or the Executive shall notify the other, in writing, that such party desires to terminate the Executive's employment under this Agreement. Notwithstanding the foregoing, unless the Employment Period has already terminated, the Employment Period shall be automatically extended upon a Change in Control so as to terminate three years from the Effective Date (such three year period of the Employment Period being hereinafter referred to as the "Change in Control Employment Period")."

(b) Effective as of the date hereof, clause (i) of Section 4(e) of the Original Employment Agreement is amended in its entirety to read as follows:

"(i) if the Executive's employment is terminated by the Company (other than for Cause or Disability) or by the Executive, the Date of Termination shall be the date on which the Company or the Executive, as the case may be, notifies the other of such termination and"

(c) Effective as of the date hereof, Section 5(d) of the Original Employment Agreement is amended in its entirety to read as follows:

.	"(d) Termination Other than for Cause or Disability Prior to the Effective Date. If, during the Employment Period but prior to the Effective Date, the Company shall terminate the Executive's employment other than for Cause or Disability.
	(i) the Company shall pay to the Executive:

	(A) an amount equal to the Annual Base Salary, such amount to be paid in twelve substantially equal monthly installments; and
	(B) an amount equal to the Highest Annual Bonus, such amount to be paid in twelve substantially equal monthly installments; and
	(C) any compensation previously deferred by the Executive (together with any accrued interest therein) and not yet paid by the Company, such amount to be paid in a lump sum within 30 days following the Date of Termination.
(ii) for a period of twelve (12) months following the Date of Termination, the Company shall continue benefits to the Executive and/or the Executive's family equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 3(b)(v) of this Agreement in effect as of the Date of Termination if the Executive's employment had not been terminated. For purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of such twelve (12) month period and to have retired on the last day of such period."

(d) Effective as of the date hereof, the address for the Executive and the Company set forth in Section 11(b) of the Original Employment Agreement are amended to read as follows:

"If to the Executive:

Thomas M. Duff

105 Rumson Road

Rumson, NJ 07760

If to the Company:

James E. Rogers, Chairman

Compensation Committee of the Board

of Directors of Wellman, Inc.

SCI Investors, Inc.

101 Shockoe Slip, Suite 0

Richmond, VA 23219-4144

with a copy to:

David K. Duffell, Esquire

Edwards & Angell

2700 Hospital Trust Tower

Providence, RI 02903"

Section 3. Ratification. Each party hereto hereby ratifies and confirms all of its obligations, covenants, duties and agreements set forth in the Original Employment Agreement, as amended by the terms hereof. All references to the "Employment Agreement" or the "Agreement" or any other defined term amended hereby contained in the Original Employment Agreement, shall be deemed to be amended to refer to the Original Employment Agreement, as amended by the terms hereof or to such amended defined term, as the case may be.

IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written .

/s/ Thomas M. Duff

Thomas M. Duff

WELLMAN, INC.

/s/ Clifford J. Christenson

Clifford J. Christenson

Title: Executive Vice President

EX-10

EXHIBIT 10(b)

EMPLOYMENT AGREEMENT

AGREEMENT by and between WELLMAN, INC., a Delaware corporation (the "Company"), and Clifford J. Christenson (the "Executive"), dated as of the 1st day of December, 1994.

The Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued service and dedication of the Executive. In addition, the Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements currently and upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. The Board of Directors also believes that the autonomy, authority and responsibility possessed by the Executive is a significant attribute of his employment and a Change of Control would be likely to significantly diminish the attractiveness to Executive of employment by the Company, and has determined to allow Executive to chose whether to continue in the employ of the Company upon a Change of Control. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions. (a) The "Effective Date" shall be the first date during the "Employment Period" (as defined in Section 1(b)) on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding, if the Executive's employment with the Company is terminated or the Executive ceases to be an officer of the Company prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination of employment (1) was at the request of a third party who has taken steps reasonably calculated to effect the Change of Control or (2) otherwise arose in connection with or anticipation of the Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

(b) The "Employment Period" is the period commencing on the date hereof and ending on the earlier of the third anniversary hereof or the Date of Termination (as defined in Section 4(f); provided, however, that if the Date of Termination has not yet occurred, commencing on the third anniversary hereof and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as a "Renewal Date"), the Employment Period will be extended so as to terminate three years from such Renewal Date unless either party shall have delivered to the other a Notice of Termination (as defined in Section 4(e)). Notwithstanding the foregoing, unless the Employment Period has already terminated, the Employment Period shall be automatically extended upon a Change of Control so as to terminate three years from the Effective Date (such three year period of the Employment Period being hereinafter referred to as the "Change of Control Employment Period").

(c) "Change of Control". For the purpose of this Agreement, a "Change of Control" shall mean:

(i) There shall have occurred a change in control which the Company would be required to report in response to Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or if such regulation is no longer in effect, any regulations promulgated by the Securities and Exchange Commission pursuant to the Exchange Act which are intended to serve similar purposes;

(ii) The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Company Voting Securities"), provided, however, that any acquisition by the Company or its subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries, or any corporation with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the Outstanding Company Common Stock and Company Voting Securities, as the case may be, shall not constitute a Change of Control; or

(iii) Individuals who, as of January 1, 1994, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to January 1, 1994 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(iv) Approval by the stockholders of the Company of (x) a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation, or (y) a complete liquidation or dissolution of the Company, or (z) the sale or other disposition of all or substantially all of the assets of the Company.

(v) Anything in this Agreement to the contrary notwithstanding, if an event that would, but for this paragraph, constitute a Change of Control results from or arises out of a purchase or other acquisition of the Company, directly or indirectly, by a corporation or other entity in which the Executive has a direct or indirect equity interest, such event shall not constitute a Change of Control; provided, however, that the limitation contained in this sentence shall not apply to any direct or indirect equity interest in a corporation or other entity (1) which equity interest is part of a class of equity interests which are publicly traded on any securities exchange or other market system, (2) received by the Executive, without the Executive's concurrence or consent, as a result of a purchase or other acquisition of the Company by such corporation or other entity, or (3) received by the Executive, without the Executive's concurrence or consent, in connection with a purchase or other acquisition of the Company by such corporation or other entity in respect of any stock options or performance awards granted to the Executive by the Company.

2. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company during the Employment Period, in each case subject to the terms and conditions of this Agreement.

3. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, the Company agrees to employ the Executive as Executive Vice President, or in such other capacity as the Company may designate, provided that during the Change of Control Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location and in no event shall Executive be required to travel outside such location more often than 45 days in any calendar year.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Change of Control Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company.

(b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary") in an amount determined annually by the Compensation Committee of the Board of Directors of the Company. The Annual Base Salary shall be payable no less frequently than monthly.

(ii) Management Incentive Compensation Plan. In addition to Annual Base Salary, during each year of the Employment Period, the Executive shall be designated as a participant in the Company's Management Incentive Compensation Plan (the "Bonus Plan") and, subject to meeting the criteria of the Bonus Plan, shall receive the bonus award provided for therein (the "Annual Award").

(iii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year during the Change of Control Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to (x) the average annualized (for any fiscal year consisting of less than twelve full months or with respect to which the Executive has been employed by the Company for less than twelve full months) bonus (the "Recent Annual Bonus") paid or payable to the Executive by the Company and its affiliated companies in respect of the two fiscal years immediately preceding the fiscal year in which the Effective Date occurs less (y) the Annual Award actually paid to the Executive with respect to the current fiscal year under the Bonus Plan. Each such Annual Bonus shall be paid not later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

(iv) Incentive, Savings and Retirement Plans. In addition to Annual Base Salary, the Annual Award and Annual Bonus payable as hereinabove provided, the Executive shall be eligible to participate during the Employment Period in all incentive, savings and retirement plans, practices, policies and programs applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive during the Change of Control Employment Period with incentive, savings and retirement benefits opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date.

(v) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) and applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide benefits during the Change of Control Employment Period which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period immediately preceding the Effective Date.

(vi) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive provided that during the Change of Control Employment Period such reimbursement shall be in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vii) Fringe Benefits. During the Change of Control Employment Period, the Executive shall be entitled to fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii) Office and Support Staff. During the Change of Control Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(ix) Vacation. During the Change of Control Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plan, policies, programs and practices of the Company and its affiliated companies as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other peer incentives of the Company and its affiliated companies.

(x) Perquisites. During the Employment Period the Company also will furnish the Executive without cost to him, (i) a Company owned or leased full-sized luxury automobile not more than three years old, and (ii) an annual examination of the Executive by a physician selected in accordance with the Company's current policy, to the extent costs and expenses of the Executive to be reimbursed are properly documented for federal income taxation purposes to preserve any deduction for such reimbursement to which the Company may be entitled.

4. Termination of Employment. (a) Prior to Effective Date. At any time prior to the Effective Date, the Executive's employment may be terminated for any reason, with or without cause, by the Company or by the Executive by delivery of a Notice of Termination (as defined below) to the other party hereto given in accordance with Section 11(b) of this Agreement.

(b) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of "Disability" set forth below), it may give to the Executive written notice in accordance with Section 11(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).

(c) Cause. The Company may terminate the Executive's employment during the Change of Control Employment Period for "Cause". For purposes of this Agreement, "Cause" means (i) an act or acts of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the

Executive at the expense of the Company, (ii) repeated violations by the Executive of the Executive's obligations under Section 3(a) of this Agreement which are demonstrably willful and deliberate on the Executive's part and which are not remedied in a reasonable period of time after receipt of written notice from the Company, or (iii) the conviction of the Executive of a felony involving moral turpitude.

(d) Good Reason. The Executive's employment may be terminated by the Executive during the Change of Control Employment Period for Good Reason. For purposes of this Agreement, "Good Reason" means (i) a Change of Control and/or (ii) if Executive shall elect to remain in the employ of the Company during the Change of Control Employment Period, the occurrence of any one or more of the following during the Change of Control Employment Period:

A. the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 3(a)(i)(A) of this Agreement, or any other action by the Company which results in a diminition in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

B. any failure by the Company to comply with any of the provisions of Section 3(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

C. the Company's requiring the Executive to be based at any office or location other than that described in Section 3(a)(i)(B) hereof;

D. any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

E. any failure by the Company to comply with and satisfy Section 10(c) of this Agreement.

The Company acknowledges and agrees that a material inducement to Executive in entering into this Agreement was the right of Executive to determine whether to continue in the employ of the Company upon a Change of Control or terminate such employment and receive the monetary payments and other benefits provided for in Section 5(e).

(e) Notice of Termination. Any termination by the Company or by the Executive shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 11(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice), and (ii) if the Date of Termination is on or after the Effective Date, indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under such provision. The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing the Executive's rights hereunder.

(f) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be; provided, however, that (i) if the Executive's employment is terminated by the Company other than for death or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, and (ii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

5. Obligations of the Company upon Termination.

(a) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, provided that if the Executive's death occurs during the Change of Control Employment Period, the Company shall have the following obligations: (i) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (ii) the product of the greater of the Annual Bonus paid or payable (and annualized for any fiscal year consisting of less than twelve full months or for which the Executive has been employed for less than twelve full months) to the Executive for the most recently completed fiscal year during the Employment Period, if any, and the Recent Annual Bonus (such greater amount hereafter referred to as the "Highest Annual Bonus") and a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (iii) any compensation previously deferred by the Executive (together with any accrued interest thereon) and not yet paid by the Company (the amounts described in paragraphs (i), (ii) and (iii) are hereafter referred to as "Accrued Obligations"). All Accrued Obligations, as well as any amounts (the "SERP Amounts") payable to the Executive pursuant to the Wellman, Inc. Executive Restoration Plan (the "Plan"), shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if the Executive's death occurs during the Change of Control Employment Period, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Company and any of its affiliated companies to surviving families of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to family death benefits, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their families.

(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. All Accrued Obligations, and all SERP Amounts if the Disability Effective Date occurs during the Change of Control Employment Period, shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if the Disability Effective Date occurs during the Change of Control Employment Period, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families.

(c) Termination during Change of Control Employment Period for Cause or Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Change of Control Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive the Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Executive, in each case to the extent theretofore unpaid. If the Executive terminates employment during the Change of Control Employment Period other than for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. In such case, all Accrued Obligations and all SERP Amounts shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

(d) Termination Other than for Death or Disability Prior to the Effective Date. If the Executive's employment shall be terminated during the Employment Period but prior to the Effective Date, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. In such case, all Accrued Obligations shall be paid to the executive in a lump sum in cash within 30 days of the Date of Termination.

(e) Termination During Change of Control Employment Period for Good Reason. If the Executive shall terminate his employment during the Change of Control Employment Period for Good Reason or if the Company shall terminate the Executive's employment during the Change of Control Employment Period other than for Cause or Disability:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination all Accrued Obligations and all SERP Amounts, provided that notwithstanding the terms of the Plan, 100% of the Company Contribution Credit Account (as defined therein) shall be deemed vested;

(ii) the Company shall pay to the Executive as severance pay within 30 days after the Date of Termination an amount equal to the product of (x) 3 and (y) the sum of (i) Annual Base Salary and (ii) the Highest Annual Bonus; and

(iii) from the Date of Termination through the end of the Change of Control Employment Period, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 3(b)(v) of this Agreement if the Executive's employment had not been terminated in accordance with the most favorable plans, practices, programs or policies of the Company and its affiliated companies applicable to other peer executives and their families during the 90-day period immediately preceding the Effective Date, or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families. For purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Change of Control Employment Period and to have retired on the last day of such period.

6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any other agreements with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program except as explicitly modified by this Agreement.

7. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and amounts payable to Executive from any other employment or source shall not reduce the amounts payable to Executive hereunder. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to Section 8 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code").

8. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 8(c), all determinations required to be made under this Section 8, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by Ernst & Young (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within fifteen business days of the Date of Termination, if applicable, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The initial Gross-Up Payment, if any, as determined pursuant to this Section 8(b), shall be paid to the Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with an opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but not later than twenty business days after the Executive knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim;

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim;

(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 8(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

9. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 9 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement during or with respect to the Change of Control Employment Period.

10. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

11. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, or by Federal Express, Express Mail or other overnight courier service, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

Clifford J. Christenson

7 Honeysuckle Court

Holmdel, NJ 07733

If to the Company:

The Compensation Committee

of the Board of Directors of Wellman, Inc.

c/o Wellman, Inc.

1040 Broad Street

Shrewsbury, NJ 07702

with a copy to:

David K. Duffell, Esq.

c/o Edwards & Angell

2700 Hospital Trust Tower

Providence, RI 02903

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.

(f) This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof.

IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written .

/s/ Clifford J. Christenson

Clifford J. Christenson

WELLMAN, INC.

By /s/ Thomas M. Duff

Thomas M. Duff

President

EX-10

EXHIBIT 10(c)

EMPLOYMENT AGREEMENT

AGREEMENT by and between WELLMAN, INC., a Delaware corporation (the "Company"), and Keith R. Phillips (the "Executive"), dated as of the 1st day of December, 1994.

The Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued service and dedication of the Executive. In addition, the Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements currently and upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. The Board of Directors also believes that the autonomy, authority and responsibility possessed by the Executive is a significant attribute of his employment and a Change of Control would be likely to significantly diminish the attractiveness to Executive of employment by the Company, and has determined to allow Executive to chose whether to continue in the employ of the Company upon a Change of Control. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions. (a) The "Effective Date" shall be the first date during the "Employment Period" (as defined in Section 1(b)) on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding, if the Executive's employment with the Company is terminated or the Executive ceases to be an officer of the Company prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination of employment (1) was at the request of a third party who has taken steps reasonably calculated to effect the Change of Control or (2) otherwise arose in connection with or anticipation of the Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

(b) The "Employment Period" is the period commencing on the date hereof and ending on the earlier of the third anniversary hereof or the Date of Termination (as defined in Section 4(f); provided, however, that if the Date of Termination has not yet occurred, commencing on the third anniversary hereof and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as a "Renewal Date"), the Employment Period will be extended so as to terminate three years from such Renewal Date unless either party shall have delivered to the other a Notice of Termination (as defined in Section 4(e)). Notwithstanding the foregoing, unless the Employment Period has already terminated, the Employment Period shall be automatically extended upon a Change of Control so as to terminate three years from the Effective Date (such three year period of the Employment Period being hereinafter referred to as the "Change of Control Employment Period").

(c) "Change of Control". For the purpose of this Agreement, a "Change of Control" shall mean:

(i) There shall have occurred a change in control which the Company would be required to report in response to Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or if such regulation is no longer in effect, any regulations promulgated by the Securities and Exchange Commission pursuant to the Exchange Act which are intended to serve similar purposes;

(ii) The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Company Voting Securities"), provided, however, that any acquisition by the Company or its subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries, or any corporation with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the Outstanding Company Common Stock and Company Voting Securities, as the case may be, shall not constitute a Change of Control; or

(iii) Individuals who, as of January 1, 1994, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to January 1, 1994 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(iv) Approval by the stockholders of the Company of (x) a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation, or (y) a complete liquidation or dissolution of the Company, or (z) the sale or other disposition of all or substantially all of the assets of the Company.

(v) Anything in this Agreement to the contrary notwithstanding, if an event that would, but for this paragraph, constitute a Change of Control results from or arises out of a purchase or other acquisition of the Company, directly or indirectly, by a corporation or other entity in which the Executive has a direct or indirect equity interest, such event shall not constitute a Change of Control; provided, however, that the limitation contained in this sentence shall not apply to any direct or indirect equity interest in a corporation or other entity (1) which equity interest is part of a class of equity interests which are publicly traded on any securities exchange or other market system, (2) received by the Executive, without the Executive's concurrence or consent, as a result of a purchase or other acquisition of the Company by such corporation or other entity, or (3) received by the Executive, without the Executive's concurrence or consent, in connection with a purchase

or other acquisition of the Company by such corporation or other entity in respect of any stock options or performance awards granted to the Executive by the Company.

2. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company during the Employment Period, in each case subject to the terms and conditions of this Agreement.

3. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, the Company agrees to employ the Executive as Vice President and Chief Financial Officer, or in such other capacity as the Company may designate, provided that during the Change of Control Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location and in no event shall Executive be required to travel outside such location more often than 45 days in any calendar year.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Change of Control Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company.

(b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary") in an amount determined annually by the Compensation Committee of the Board of Directors of the Company. The Annual Base Salary shall be payable no less frequently than monthly.

(ii) Management Incentive Compensation Plan. In addition to Annual Base Salary, during each year of the Employment Period, the Executive shall be designated as a participant in the Company's Management Incentive Compensation Plan (the "Bonus Plan") and, subject to meeting the criteria of the Bonus Plan, shall receive the bonus award provided for therein (the "Annual Award").

(iii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year during the Change of Control Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to (x) the average annualized (for any fiscal year consisting of less than twelve full months or with respect to which the Executive has been employed by the Company for less than twelve full months) bonus (the "Recent Annual Bonus") paid or payable to the Executive by the Company and its affiliated companies in respect of the two fiscal years immediately preceding the fiscal year in which the Effective Date occurs less (y) the Annual Award actually paid to the Executive with respect to the current fiscal year under the Bonus Plan. Each such Annual Bonus shall be paid not later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

(iv) Incentive, Savings and Retirement Plans. In addition to Annual Base Salary, the Annual Award and Annual Bonus payable as hereinabove provided, the Executive shall be eligible to participate during the Employment Period in all incentive, savings and retirement plans, practices, policies and programs applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive during the Change of Control Employment Period with incentive, savings and retirement benefits opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date.

(v) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) and applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide benefits during the Change of Control Employment Period which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period immediately preceding the Effective Date.

(vi) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive provided that during the Change of Control Employment Period such reimbursement shall be in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vii) Fringe Benefits. During the Change of Control Employment Period, the Executive shall be entitled to fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii) Office and Support Staff. During the Change of Control Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(ix) Vacation. During the Change of Control Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plan, policies, programs and practices of the Company and its affiliated companies as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other peer incentives of the Company and its affiliated companies .

(x) Perquisites. During the Employment Period the Company also will furnish the Executive without cost to him, (i) a Company owned or leased full-sized luxury automobile not more than three years old, and (ii) an annual examination of the Executive by a physician selected in accordance with the Company's current policy, to the extent costs and expenses of the Executive to be reimbursed are properly documented for federal income taxation purposes to preserve any deduction for such reimbursement to which the Company may be entitled.

4. Termination of Employment. (a) Prior to Effective Date. At any time prior to the Effective Date, the Executive's employment may be terminated for any reason, with or without cause, by the Company or by the Executive by delivery of a Notice of Termination (as defined below) to the other party hereto given in accordance with Section 11(b) of this Agreement.

(b) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of "Disability" set forth below), it may give to the Executive written notice in accordance with Section 11(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).

(c) Cause. The Company may terminate the Executive's employment during the Change of Control Employment Period for "Cause". For purposes of this Agreement, "Cause" means (i) an act or acts of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company, (ii) repeated violations by the Executive of the Executive's obligations under Section 3(a) of this Agreement which are demonstrably willful and deliberate on the Executive's part and which are not remedied in a reasonable period of time after receipt of written notice from the Company, or (iii) the conviction of the Executive of a felony involving moral turpitude.

(d) Good Reason. The Executive's employment may be terminated by the Executive during the Change of Control Employment Period for Good Reason. For purposes of this Agreement, "Good Reason" means (i) a Change of Control and/or (ii) if Executive shall elect to remain in the employ of the Company during the Change of Control Employment Period, the occurrence of any one or more of the following during the Change of Control Employment Period:

A. the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 3(a)(i)(A) of this Agreement, or any other action by the Company which results in a diminition in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

B. any failure by the Company to comply with any of the provisions of Section 3(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

C. the Company's requiring the Executive to be based at any office or location other than that described in Section 3(a)(i)(B) hereof;

D. any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

E. any failure by the Company to comply with and satisfy Section 10(c) of this Agreement.

The Company acknowledges and agrees that a material inducement to Executive in entering into this Agreement was the right of Executive to determine whether to continue in the employ of the Company upon a Change of Control or terminate such employment and receive the monetary payments and other benefits provided for in Section 5(e).

(e) Notice of Termination. Any termination by the Company or by the Executive shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 11(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice), and (ii) if the Date of Termination is on or after the Effective Date, indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under such provision. The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing the Executive's rights hereunder.

(f) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be; provided, however, that (i) if the Executive's employment is terminated by the Company other than for death or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, and (ii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

5. Obligations of the Company upon Termination.

(a) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, provided that if the Executive's death occurs during the Change of Control Employment Period, the Company shall have the following obligations: (i) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (ii) the product of the greater of the Annual Bonus paid or payable (and annualized for any fiscal year consisting of less than twelve full months or for which the Executive has been employed for less than twelve full months) to the Executive for the most recently completed fiscal year during the Employment Period, if any, and the Recent Annual Bonus (such greater amount hereafter referred to as the "Highest Annual Bonus") and a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (iii) any compensation previously deferred by the Executive (together with any accrued interest thereon) and not yet paid by the Company (the amounts described in paragraphs (i), (ii) and (iii) are hereafter referred to as "Accrued Obligations"). All Accrued Obligations, as well as any amounts (the "SERP Amounts") payable to the Executive pursuant to the Wellman, Inc. Executive Restoration Plan (the "Plan"), shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if the Executive's death occurs during the Change of Control Employment Period, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Company and any of its affiliated companies to surviving families of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to family death benefits, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their families.

(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. All Accrued Obligations, and all SERP Amounts if the Disability Effective Date occurs during the Change of Control Employment Period, shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if the Disability Effective Date occurs during the Change of Control Employment Period, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families.

(c) Termination during Change of Control Employment Period for Cause or Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Change of Control Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive the Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Executive, in each case to the extent theretofore unpaid. If the Executive terminates employment during the Change of Control Employment Period other than for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. In such case, all Accrued Obligations and all SERP Amounts shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

(d) Termination Other than for Death or Disability Prior to the Effective Date. If the Executive's employment shall be terminated during the Employment Period but prior to the Effective Date, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

(e) Termination During Change of Control Employment Period for Good Reason. If the Executive shall terminate his employment during the Change of Control Employment Period for Good Reason or if the Company shall terminate the Executive's employment during the Change of Control Employment Period other than for Cause or Disability:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination all Accrued Obligations and all SERP Amounts, provided that notwithstanding the terms of the Plan, 100% of the Company Contribution Credit Account (as defined therein) shall be deemed vested;

(ii) the Company shall pay to the Executive as severance pay within 30 days after the Date of Termination an amount equal to the product of (x) 3 and (y) the sum of (i) Annual Base Salary and (ii) the Highest Annual Bonus; and

(iii) from the Date of Termination through the end of the Change of Control Employment Period, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 3(b)(v) of this Agreement if the Executive's employment had not been terminated in accordance with the most favorable plans, practices, programs or policies of the Company and its affiliated companies applicable to other peer executives and their families during the 90-day period immediately preceding the Effective Date, or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families. For purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Change of Control Employment Period and to have retired on the last day of such period.

6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any other agreements with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program except as explicitly modified by this Agreement.

7. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and amounts payable to Executive from any other employment or source shall not reduce the amounts payable to Executive hereunder. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to Section 8 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code").

8. Certain Additional Payments by the Company. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 8(c), all determinations required to be made under this Section 8, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by Ernst & Young (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within fifteen business days of the Date of Termination, if applicable, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The initial Gross-Up Payment, if any, as determined pursuant to this Section 8(b), shall be paid to the Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with an opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but not later than twenty business days after the Executive knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim;

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim;

(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 8(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

9. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 9 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement during or with respect to the Change of Control Employment Period.

10. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

11. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, or by Federal Express, Express Mail or other overnight courier service, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

Keith Phillips

177 Rumson Road

Rumson, NJ 07702

If to the Company:

The Compensation Committee

of the Board of Directors of Wellman, Inc.

c/o Wellman, Inc.

1040 Broad Street

Shrewsbury, NJ 07702

with a copy to:

David K. Duffell, Esq.

c/o Edwards & Angell

2700 Hospital Trust Tower

Providence, RI 02903

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.

(f) This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof.

IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written .

/s/ Keith R. Phillips

Keith R. Phillips

WELLMAN, INC.

Thomas M. Duff

Thomas M. Duff

President

EX-10

EXHIBIT 10(d)

EMPLOYMENT AGREEMENT

AGREEMENT by and between WELLMAN, INC., a Delaware corporation (the "Company"), and Michael Dewsbury (the "Executive"), dated as of the 10th day of April, 2000.

The Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued service and dedication of the Executive. In addition, the Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements currently and upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. The Board of Directors also believes that the autonomy, authority and responsibility possessed by the Executive is a significant attribute of his employment and a Change of Control would be likely to significantly diminish the attractiveness to Executive of employment by the Company, and has determined to allow Executive to chose whether to continue in the employ of the Company upon a Change of Control. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions. (a) The "Effective Date" shall be the first date during the "Employment Period" (as defined in Section 1(b)) on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding, if the Executive's employment with the Company is terminated or the Executive ceases to be an officer of the Company prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination of employment (1) was at the request of a third party who has taken steps reasonably calculated to effect the Change of Control or (2) otherwise arose in connection with or anticipation of the Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

(b) The "Employment Period" is the period commencing on the date hereof and ending on the earlier of the third anniversary hereof or the Date of Termination (as defined in Section 4(f); provided, however, that if the Date of Termination has not yet occurred, commencing on the third anniversary hereof and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as a "Renewal Date"), the Employment Period will be extended so as to terminate three years from such Renewal Date unless either party shall have delivered to the other a Notice of Termination (as defined in Section 4(e)). Notwithstanding the foregoing, unless the Employment Period has already terminated, the Employment Period shall be automatically extended upon a Change of Control so as to terminate three years from the Effective Date (such three year period of the Employment Period being hereinafter referred to as the "Change of Control Employment Period").

(c) "Change of Control". For the purpose of this Agreement, a "Change of Control" shall mean:

(i) There shall have occurred a change in control which the Company would be required to report in response to Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or if such regulation is no longer in effect, any regulations promulgated by the Securities and Exchange Commission pursuant to the Exchange Act which are intended to serve similar purposes;

(ii) The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Company Voting Securities"), provided, however, that any acquisition by the Company or its subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries, or any corporation with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the Outstanding Company Common Stock and Company Voting Securities, as the case may be, shall not constitute a Change of Control; or

(iii) Individuals who, as of January 1, 2000, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to January 1, 2000 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(iv) Approval by the stockholders of the Company of (x) a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation, or (y) a complete liquidation or dissolution of the Company, or (z) the sale or other disposition of all or substantially all of the assets of the Company.

(v) Anything in this Agreement to the contrary notwithstanding, if an event that would, but for this paragraph, constitute a Change of Control results from or arises out of a purchase or other acquisition of the Company, directly or indirectly, by a corporation or other entity in which the Executive has a direct or indirect equity interest, such event shall not constitute a Change of Control; provided, however, that the limitation contained in this sentence shall not apply to any direct or indirect equity interest in a corporation or other entity (1) which equity interest is part of a class of equity interests which are publicly traded on any securities exchange or other market system, (2) received by the Executive, without the Executive's concurrence or consent, as a result of a purchase or other acquisition of the Company by such corporation or other entity, or (3) received by the Executive, without the Executive's concurrence or consent, in connection with a purchase or other acquisition of the Company by such corporation or other entity in respect of any stock options or performance awards granted to the Executive by the Company.

2. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company during the Employment Period, in each case subject to the terms and conditions of this Agreement.

3. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, the Company agrees to employ the Executive as Vice President-U.S. PET Resins, or in such other capacity as the Company may designate, provided that during the Change of Control Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location and in no event shall Executive be required to travel outside such location more often than 45 days in any calendar year.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Change of Control Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company.

(b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary") in an amount determined annually by the Compensation Committee of the Board of Directors of the Company. The Annual Base Salary shall be payable no less frequently than monthly.

(ii) Management Incentive Compensation Plan. In addition to Annual Base Salary, during each year of the Employment Period, the Executive shall be designated as a participant in the Company's Management Incentive Compensation Plan (the "Bonus Plan") and, subject to meeting the criteria of the Bonus Plan, shall receive the bonus award provided for therein (the "Annual Award").

(iii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year during the Change of Control Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to (x) the average annualized (for any fiscal year consisting of less than twelve full months or with respect to which the Executive has been employed by the Company for less than twelve full months) bonus (the "Recent Annual Bonus") paid or payable to the Executive by the Company and its affiliated companies in respect of the two fiscal years immediately preceding the fiscal year in which the Effective Date occurs less (y) the Annual Award actually paid to the Executive with respect to the current fiscal year under the Bonus Plan. Each such Annual Bonus shall be paid not later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

(iv) Incentive, Savings and Retirement Plans. In addition to Annual Base Salary, the Annual Award and Annual Bonus payable as hereinabove provided, the Executive shall be eligible to participate during the Employment Period in all incentive, savings and retirement plans, practices, policies and programs applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive during the Change of Control Employment Period with incentive, savings and retirement benefits opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date.

(v) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) and applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide benefits during the Change of Control Employment Period which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period immediately preceding the Effective Date.

(vi) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive provided that during the Change of Control Employment Period such reimbursement shall be in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vii) Fringe Benefits. During the Change of Control Employment Period, the Executive shall be entitled to fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii) Office and Support Staff. During the Change of Control Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(ix) Vacation. During the Change of Control Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plan, policies, programs and practices of the Company and its affiliated companies as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter with respect to other peer incentives of the Company and its affiliated companies.

(x) Perquisites. During the Employment Period the Company also will furnish the Executive without cost to him, (i) a Company owned or leased full-sized luxury automobile not more than three years old, and (ii) an annual examination of the Executive by a physician selected in accordance with the Company's current policy, to the extent costs and expenses of the Executive to be reimbursed are properly documented for federal income taxation purposes to preserve any deduction for such reimbursement to which the Company may be entitled.

4. Termination of Employment. (a) Prior to Effective Date. At any time prior to the Effective Date, the Executive's employment may be terminated for any reason, with or without cause, by the Company or by the Executive by delivery of a Notice of Termination (as defined below) to the other party hereto given in accordance with Section 11(b) of this Agreement.

(b) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of "Disability" set forth below), it may give to the Executive written notice in accordance with Section 11(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably).

(c) Cause. The Company may terminate the Executive's employment during the Change of Control Employment Period for "Cause". For purposes of this Agreement, "Cause" means (i) an act or acts of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company, (ii) repeated violations by the Executive of the Executive's obligations under Section 3(a) of this Agreement which are demonstrably willful and deliberate on the Executive's part and which are not remedied in a reasonable period of time after receipt of written notice from the Company, or (iii) the conviction of the Executive of a felony involving moral turpitude.

(d) Good Reason. The Executive's employment may be terminated by the Executive during the Change of Control Employment Period for Good Reason. For purposes of this Agreement, "Good Reason" means (i) a Change of Control and/or (ii) if Executive shall elect to remain in the employ of the Company during the Change of Control Employment Period, the occurrence of any one or more of the following during the Change of Control Employment Period:

A. the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 3(a)(i)(A) of this Agreement, or any other action by the Company which results in a diminition in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

B. any failure by the Company to comply with any of the provisions of Section 3(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

C. the Company's requiring the Executive to be based at any office or location other than that described in Section 3(a)(i)(B) hereof;

D. any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

E. any failure by the Company to comply with and satisfy Section 10(c) of this Agreement.

The Company acknowledges and agrees that a material inducement to Executive in entering into this Agreement was the right of Executive to determine whether to continue in the employ of the Company upon a Change of Control or terminate such employment and receive the monetary payments and other benefits provided for in Section 5(e).

(e) Notice of Termination. Any termination by the Company or by the Executive shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 11(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice), and (ii) if the Date of Termination is on or after the Effective Date, indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under such provision. The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing the Executive's rights hereunder.

(f) Date of Termination. "Date of Termination" means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be; provided, however, that (i) if the Executive's employment is terminated by the Company other than for death or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, and (ii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

5. Obligations of the Company upon Termination.

(a) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, provided that if the Executive's death occurs during the Change of Control Employment Period, the Company shall have the following obligations: (i) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (ii) the product of the greater of the Annual Bonus paid or payable (and annualized for any fiscal year consisting of less than twelve full months or for which the Executive has been employed for less than twelve full months) to the Executive for the most recently completed fiscal year during the Employment Period, if any, and the Recent Annual Bonus (such greater amount hereafter referred to as the "Highest Annual Bonus") and a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (iii) any compensation previously deferred by the Executive (together with any accrued interest thereon) and not yet paid by the Company (the amounts described in paragraphs (i), (ii) and (iii) are hereafter referred to as "Accrued Obligations"). All Accrued Obligations, as well as any amounts (the "SERP Amounts") payable to the Executive pursuant to the Wellman, Inc. Executive Restoration Plan (the "Plan"), shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if the Executive's death occurs during the Change of Control Employment Period, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Company and any of its affiliated companies to surviving families of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to family death benefits, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their families.

(b) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. All Accrued Obligations, and all SERP Amounts if the Disability Effective Date occurs during the Change of Control Employment Period, shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, if the Disability Effective Date occurs during the Change of Control Employment Period, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families.

(c) Termination during Change of Control Employment Period for Cause or Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Change of Control Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive the Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Executive, in each case to the extent theretofore unpaid. If the Executive terminates employment during the Change of Control Employment Period other than for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. In such case, all Accrued Obligations and all SERP Amounts shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

(d) Termination Other than for Death or Disability Prior to the Effective Date. If the Executive's employment shall be terminated during the Employment Period but prior to the Effective Date, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

(e) Termination During Change of Control Employment Period for Good Reason. If the Executive shall terminate his employment during the Change of Control Employment Period for Good Reason or if the Company shall terminate the Executive's employment during the Change of Control Employment Period other than for Cause or Disability:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination all Accrued Obligations and all SERP Amounts, provided that notwithstanding the terms of the Plan, 100% of the Company Contribution Credit Account (as defined therein) shall be deemed vested;

(ii) the Company shall pay to the Executive as severance pay within 30 days after the Date of Termination an amount equal to the product of (x) 3 and (y) the sum of (i) Annual Base Salary and (ii) the Highest Annual Bonus; and

(iii) from the Date of Termination through the end of the Change of Control Employment Period, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 3(b)(v) of this Agreement if the Executive's employment had not been terminated in accordance with the most favorable plans, practices, programs or policies of the Company and its affiliated companies applicable to other peer executives and their families during the 90-day period immediately preceding the Effective Date, or, if more favorable to the Executive, as in effect at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families. For purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Change of Control Employment Period and to have retired on the last day of such period.

6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any other agreements with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program except as explicitly modified by this Agreement.

7. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and amounts payable to Executive from any other employment or source shall not reduce the amounts payable to Executive hereunder. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to Section 8 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code").

8. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 8(c), all determinations required to be made under this Section 8, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by Ernst & Young (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within fifteen business days of the Date of Termination, if applicable, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The initial Gross-Up Payment, if any, as determined pursuant to this Section 8(b), shall be paid to the Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with an opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but not later than twenty business days after the Executive knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim;

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim;

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 8(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 8(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

9. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 9 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement during or with respect to the Change of Control Employment Period.

10. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

11. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, or by Federal Express, Express Mail or other overnight courier service, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

Michael Dewsbury

6101 Providence Glen Road

Charlotte, NC 28270

If to the Company:

The Compensation Committee

of the Board of Directors of Wellman, Inc.

c/o Wellman, Inc.

1040 Broad Street

Shrewsbury, NJ 07702

with a copy to:

David K. Duffell, Esq.

c/o Edwards & Angell

2700 Hospital Trust Tower

Providence, RI 02903

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.

(f) This Agreement contains the entire understanding of the Company and the Executive with respect to the subject matter hereof.

IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written .

/s/ Michael Dewsbury__________________

Michael Dewsbury

WELLMAN, INC.

By_/s/ Clifford J. Christenson____________

Clifford J. Christenson

EX-27

 

<ARTICLE> 5
<LEGEND>
FDS for First quarter 2000 10-q


                             
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<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-END>                               MAR-31-2000
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<PP&E>                                       1,215,743
<DEPRECIATION>                                 397,694
<TOTAL-ASSETS>                               1,332,780
<CURRENT-LIABILITIES>                          154,283
<BONDS>                                        375,680
<PREFERRED-MANDATORY>                                0
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<TOTAL-LIABILITY-AND-EQUITY>                 1,332,780
<SALES>                                        274,271
<TOTAL-REVENUES>                               274,271
<CGS>                                          249,001
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<OTHER-EXPENSES>                                     0
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<INTEREST-EXPENSE>                               2,452
<INCOME-PRETAX>                                  5,918
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<INCOME-CONTINUING>                              4,201
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