Exhibit 10.1

 

FORM OF
SERIES B UNIT AGREEMENT

 

This SERIES B UNIT AGREEMENT (this “Agreement”) is executed and agreed to as of
                                     (the “Effective Date”), between Nexeo
Solutions Holdings, LLC, a Delaware limited liability company (the “Company”)
and                                    (the “Employee”).

 

Capitalized terms used in this Agreement but not defined in the body hereof are
defined in Exhibit A.

 

WHEREAS, the Amended and Restated Limited Liability Company Agreement of the
Company (as amended, supplemented and restated from time to time, the “LLC
Agreement”) authorizes the issuance by the Company of Series B Units;

 

WHEREAS, the Company desires to issue to the Employee on the terms and
conditions hereinafter set forth, and the Employee desires to accept on such
terms and conditions, the number of Series B Units specified herein; and

 

WHEREAS, the Company and the Employee desire to agree to certain repurchase and
forfeiture restrictions which shall apply to Series B Units held by the
Employee.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and
obligations contained herein and other good and valuable consideration, the
Company and the Employee agree as follows:

 

1.                                      Issuance of Series B Units.  The Company
hereby issues to the Employee                      B-     Units on the Effective
Date.  Each Series B-     Unit has a Threshold Value of $     .  The
Series B-     Units are intended to constitute “profits interests” within the
meaning of Revenue Procedures 93-27 and 2001-43 (or the corresponding
requirements of any subsequent guidance promulgated by the United States
Internal Revenue Service or other applicable law), and thus the capital account
associated with each such Series B-     Unit at the time of its issuance shall
be equal to zero dollars ($0.00).  The Series B-     Units issued by the Company
to the Employee pursuant to this Agreement are referred to herein as the
“Granted Series B-     Units.”

 

2.                                      Terms of Issuance of Series B Units.

 

(a)                                 As an inducement to Company to enter into
this Agreement, the Employee has entered into an employment relationship with
Nexeo Solutions, LLC, a Delaware limited liability company and a wholly owned
Subsidiary of the Company (“Nexeo Solutions”).

 

(b)                                 The Employee agrees that no provision
contained in this Agreement shall entitle the Employee to remain in the
employment of the Company, Nexeo Solutions, or any other Affiliate Controlled by
the Company that may from time to time employ the Employee (any such entity that
from time to time employs the Employee, a “Nexeo Employer”) or any Affiliate of
any such entity or affect in any way the right of any such entity to terminate
any such employment at any time.  Any question as to whether and when there has
been a termination of any such employment, and the cause of such termination,
shall be determined by

 

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the Board and its determination shall be final; provided, however, that a change
in employment from one Nexeo Employer to another Nexeo Employer will not be
considered a termination of employment for purposes of this Agreement.

 

(c)                                  The Employee agrees that the Employee’s
execution of this Agreement evidences the Employee’s intention to be bound by
the terms of the LLC Agreement, in addition to the terms of this Agreement, and
acknowledges and agrees that the Granted Series B-     Units are subject to all
of the terms and restrictions applicable to Series B Units as set forth in the
LLC Agreement and in this Agreement.  On or prior to the Effective Date, the
Employee has executed a counterpart signature page to the LLC Agreement or to an
Addendum Agreement thereto.

 

(d)                                 The Employee agrees to make an election
under Section 83(b) of the Code with respect to the Granted Series B-     Units
and to consult with the Employee’s tax advisor to determine the tax consequences
of filing such an election under Section 83(b) of the Code.  The Employee
acknowledges that it is the Employee’s sole responsibility, and not the
responsibility of the Company, to file the election under Section 83(b) of the
Code even if the Employee requests the Company or its managers, directors,
officers, employees and authorized representatives (including attorneys,
accountants, consultants, bankers, lenders, prospective lenders and financial
representatives) to assist in making such filing.

 

3.                                      Unvested Series B Units.  The Granted
Series B-     Units issued pursuant to this Agreement shall initially be deemed
Unvested Units (“Unvested Series B Units”) under the LLC Agreement, shall be
subject to all of the restrictions on Unvested Units (as well as on Series B
Units, in general) under the LLC Agreement and shall carry only such rights as
are conferred on Unvested Units under the LLC Agreement.  The Unvested Series B
Units will become Vested Units (the “Vested Series B Units”) under the LLC
Agreement in accordance with the provisions of Sections 4 and 5 of this
Agreement.

 

4.                                      Vesting of Granted Series B-     Units.

 

(a)                                 Fifty percent (50%) of the Unvested Series B
Units (the “Time-Based Units”) will become Vested Series B Units in accordance
with the vesting schedule set forth in the following table; provided, however,
that the Employee remains continuously employed by a Nexeo Employer from the
Effective Date through each vesting date set forth below.

 

Vesting Date

 

Portion of Time-Based Units
that become Vested Series B Units

 

 

 

 

 

First anniversary of the Vesting Beginning Date

 

20

%

 

 

 

 

Second anniversary of the Vesting Beginning Date

 

20

%

 

 

 

 

Third anniversary of the Vesting Beginning Date

 

20

%

 

 

 

 

Fourth anniversary of the Vesting Beginning Date

 

20

%

 

 

 

 

Fifth anniversary of the Vesting Beginning Date

 

20

%

 

 

 

 

 

 

100

%

 

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Upon vesting in accordance with this Section 4(a), such vested Time-Based Units
shall no longer be subject to the restrictions on Unvested Series B Units (but
shall remain subject to the restrictions on the Series B Units, in general)
under the LLC Agreement and shall become Vested Series B Units.

 

(b)                                 The second 50% of the Unvested Series B
Units (the “Performance-Based Units”) will become Vested Series B Units in
accordance with a performance-based vesting schedule that is divided into five
separate and equal twelve month periods, beginning with the Vesting Beginning
Date (the “Annual Performance Periods”).  Twenty percent (20%) of the
Performance-Based Units will be assigned to each Annual Performance Period.  The
EBITDA-based target for each fiscal year will be an adjusted EBITDA amount,
which the Compensation Committee of the Board of Directors has defined as the
Company’s earnings before interest, taxes, depreciation and amortization for the
applicable year, adjusted as the Company deems necessary to reflect
extraordinary or non-recurring events, including, without limitation,
acquisitions, divestitures and other similar transactions.  The current
performance-based metrics for the FY2013-17 Annual Performance Periods are set
forth within the chart that is attached hereto as Exhibit B.  The FY2018
adjusted EBITDA amount will be established by the Compensation Committee prior
to that fiscal year and will be communicated to the Employee prior to the start
of that fiscal year.  The Employee must remain continuously employed by a Nexeo
Employer from the Effective Date to the last date of each Annual Performance
Period in order to become vested in the tranche of the Performance-Based Units
assigned to that Annual Performance Period.

 

In the event that the Adjusted EBITDA performance target amount for any given
Annual Performance Period is not achieved, the Performance-Based Units assigned
to that Annual Performance Period shall no longer be eligible for vesting under
this Section (b), but instead, shall remain Unvested Series B Units and shall
become vested, if at all, pursuant to Section 5 or pursuant to the discretion of
the Compensation Committee of the Board of Directors.  Notwithstanding the
foregoing sentence, however, in the event that any Performance-Based Units do
not vest for any applicable Annual Performance Period due to the failure to
achieve that Annual Performance Period’s Adjusted EBITDA performance target
amount, the Performance-Based Units assigned to that Annual Performance Period
shall subsequently vest upon the achievement of the Adjusted EBITDA performance
target amount for the Annual Performance Period following the failed Annual
Performance Period.  Upon vesting in accordance with this Section 4(b), such
vested Units shall no longer be subject to the restrictions on Unvested Series B
Units (but shall remain subject to the restrictions on the Series B Units, in
general) under the LLC Agreement and shall become Vested Series B Units.

 

5.                                      Vesting of Granted Series B-     Units
upon Certain Events.

 

(a)                                 Upon the occurrence of a Liquidity Event in
which the Majority Sponsors realize an MoM that is equal to or greater than
3.0x, all Performance-Based Units issued pursuant hereto that have not
previously become Vested Series B Units shall automatically become Vested
Series B Units; provided, however, that the Employee remains employed by a Nexeo
Employer through the date of the consummation of such a Liquidity Event.

 

(b)                                 In the event that the Employee’s employment
with a Nexeo Employer is terminated by reason of an Involuntary Termination on
or at any time on or within the twenty-four (24) month period immediately
following a Change of Control, then all Unvested Series B

 

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Units shall become Vested Series B Units immediately upon such a termination;
provided, however, that the Employee remains employed by a Nexeo Employer
through the date of the Involuntary Termination.

 

With respect to Sections 5(a) and 5(b), the Liquidity Event or Change of
Control, respectively, must occur within seven (7) years of the Vesting
Beginning Date; provided however, that the Compensation Committee of the Board
of Directors shall, in any event, retain the discretion to extend the seven
(7) year period.

 

6.                                      Forfeitures, Redemptions and Repurchase
Rights in Connection with the Employee’s Termination of Employment.

 

(a)                                 If the Employee voluntarily terminates his
employment with a Nexeo Employer without Good Reason or the Employee’s
employment with a Nexeo Employer is terminated upon the death of the Employee or
because the Employee is determined to be Disabled, then:

 

(i)                                     for a period of 180 days from the date
of such termination, the Company shall have the right to redeem, in accordance
with Section 7 below, any or all of the Vested Series B Units held by the
Employee on the date of such termination at the Fair Market Value of such Units
as determined by the Company utilizing the last valuation report issued prior to
the date the Company elects to redeem such Units; and

 

(ii)                                  on the date of such termination, the
Employee shall forfeit to the Company all Unvested Series B Units and all rights
arising from such Unvested Series B Units and from being a holder thereof.

 

(b)                                 If the Employee’s employment with a Nexeo
Employer is terminated by reason of an Involuntary Termination, then:

 

(i)                                     for a period of 180 days from the date
of such termination, the Company shall have the right to redeem, in accordance
with Section 7 below, any or all of the Vested Series B Units (including any
Units that become Vested Series B Unit pursuant to Section 5 held by the
Employee on the date of such termination at the Fair Market Value of such Units
as determined by the Company utilizing the last valuation report issued prior to
the date the Company elects to redeem such Units; and

 

(ii)                                  on the date of such termination, the
Employee shall forfeit to the Company all of his Unvested Series B Units and all
rights arising from such Unvested Series B Units.

 

(c)                                  If the Employee’s employment with a Nexeo
Employer is terminated for Cause, then:

 

(i)                                     on the date of such termination, the
Employee shall forfeit to the Company all of the Employee’s Vested Series B
Units and all rights arising from such Vested Series B Units and from being a
holder thereof; and

 

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(ii)                                  on the date of such termination, the
Employee shall forfeit to the Company all of the Employee’s Unvested Series B
Units and all rights arising from such Unvested Series B Units and from being a
holder thereof.

 

(d)                                 The forfeitures of Series B Units subject to
the terms and conditions of this Section 6 shall occur immediately and without
further action of the Company, the Employee or any other Person upon the
termination giving rise to such forfeitures (the date of the termination of the
Employee’s employment being the “Trigger Date”).

 

7.                                      Procedures for Redemptions of Vested
Series B Units.

 

(a)                                 Notice of Redemption by Company.  If the
Company desires to exercise its rights to redeem any Vested Series B Units that
are subject to redemption by the Company pursuant to Section 6, then the Company
shall deliver written notice (a “Redemption Notice”) to the Employee, the
Employee’s legal representative or guardian, or the executor of the Employee’s
estate, as applicable (the “Holder”) no later than the 180th day after the
Trigger Date.  The Redemption Notice shall include the following:

 

(i)                                     the number of Vested Series B Units that
the Company desires to redeem pursuant to its redemption rights under Section 6;

 

(ii)                                  with respect to the Vested Series B Units
to be redeemed (the “Subject Units”), the Company’s determination of the
aggregate purchase price required to purchase such Units in accordance with the
provisions of Section 6 (the “Purchase Price”); and

 

(iii)                               designation of a reasonable time and place
for the closing of the redemption of the Subject Units, which shall be not less
than 16 days nor more than 30 days after the date of such Redemption Notice.

 

(b)                                 The Company may assign the Company’s right
to redeem Vested Series B Units to one or more other Persons (the “Purchase
Right Assignee(s)”) in such amounts as are determined by the Company.  The
Company shall exercise the right to redeem Subject Units on behalf of the
Purchase Right Assignee(s) by delivery of a written notice thereof to the
Employee no later than the time specified in Section 7(a) for the Company to
give notice of purchase on its own behalf and such notice shall include
substantially the same information as required by Section 7(a).

 

(c)                                  Upon payment of the Purchase Price by the
Company, the Subject Units shall automatically be cancelled without further
action by the Company, the Employee or any other Person.

 

(d)                                 Any payment of the Purchase Price for any
Subject Units by any Purchase Right Assignee shall be made via wire transfer of
immediately available funds to an account designated by the Holder.

 

(e)                                  The Holder shall execute and deliver all
documentation and agreements reasonably requested by the Company to reflect a
redemption or purchase, as applicable, of Subject Units pursuant to this
Agreement, but neither the failure of the Holder to execute or deliver any such
documentation, nor the failure of the Holder to deposit any Company check, as
the case may be, shall affect the validity of a redemption or purchase, as
applicable, of Subject Units pursuant to this Agreement.

 

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(f)                                   In connection with any redemption or
purchase of Subject Units hereunder, the Holder shall make customary
representations and warranties concerning (i) such Holder’s valid title to and
ownership of the Subject Units, free of all liens, claims and encumbrances
(excluding those arising under applicable securities laws), (ii) such Holder’s
authority, power and right to enter into and consummate the sale of the Subject
Units, (iii) the absence of any violation, default or acceleration of any
agreement to which such Holder is subject or by which its assets are bound as a
result of the agreement to sell and the sale of the Subject Units and (iv) the
absence of, or compliance with, any governmental or third party consents,
approvals, filings or notifications required to be obtained or made by such
Holder in connection with the sale of the Subject Units.

 

8.                                      Rights of First Refusal, Drag-Along
Rights and Tag-Along Rights.  The Granted Series B Units shall be subject to all
terms and conditions relating to the Company’s Right of First Refusal, the
Company’s Drag-Along Rights and the Employee’s Tag-Along Rights as described in
Sections 7.4, 7.5 and 7.6 of the LLC Agreement, respectively.

 

9.                                      Representations and Warranties of the
Employee and the Company.

 

(a)                                 The Employee represents and warrants to the
Company as follows:

 

(i)                                     that this Agreement constitutes the
legal, valid and binding obligation of the Employee, enforceable in accordance
with its terms, and that the execution, delivery and performance of this
Agreement by the Employee does not and will not conflict with, violate or cause
a breach of any agreement, contract or instrument to which the Employee is a
party or any judgment, order or decree to which the Employee is subject;

 

(ii)                                  that the Employee believes that the
Employee has received all the information the Employee considers necessary in
connection with his execution of this Agreement, that the Employee has had an
opportunity to ask questions and receive answers from the Company and the
Employee’s independent counsel regarding the terms, conditions and limitations
set forth in this Agreement and the business, properties, prospects and
financial condition of the Company and its Subsidiaries and to obtain additional
information (to the extent the Company possesses such information or could
acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to the Employee or to which the Employee
had access; and

 

(iii)                               that the Employee understands that the
Series B Units are not registered under the Securities Act on the ground that
the grant provided for in this Agreement and the issuance of securities
hereunder is exempt from registration under the Securities Act pursuant to
Section 4(2) thereof or pursuant to Rule 701 promulgated thereunder.

 

(b)                                 The Company represents and warrants to the
Employee that this Agreement constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms, and that the
execution, delivery and performance of this Agreement by the Company does not
and will not conflict with, violate or cause a breach of any agreement, contract
or instrument to which the Company is a party or any judgment, order or decree
to which the Company is subject.

 

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10.                               General Provisions.

 

(a)                                 Notices.  For purposes of this Agreement,
notices and all other communications provided for herein shall be in writing and
shall be deemed to have been duly given when personally delivered, or mailed by
certified mail, return receipt requested by nationally recognized overnight or
second-day delivery service with proof of receipt maintained, at the following
addresses (or any other address that any party may designate by written notice
to the other party, in accordance herewith, except that such notice shall be
effective only upon receipt):

 

If to the Company to:

 

Chief Legal Officer

Nexeo Solutions Holdings, LLC

3 Waterway Square Place

Suite 1000

The Woodlands, TX 77380

 

 

 

If to the Employee to:

 

 

 

 

 

 

Any such notice shall, if delivered personally, be deemed received upon
delivery; shall, if delivered by certified mail, be deemed received upon the
earlier of actual receipt thereof or five Business Days after the date of
deposit in the United States mail, as the case may be; and shall, if delivered
by nationally recognized overnight or second-day delivery service, be deemed
received on the second Business Day after the date of deposit with the delivery
service.

 

(b)                                 Governing Law.  THIS AGREEMENT IS GOVERNED
BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.

 

(c)                                  Administration.  The Board shall supervise
the administration and enforcement of this Agreement according to the terms and
provisions hereof and within the LLC Agreement, and shall have the full
discretionary authority and all of the powers necessary to accomplish these
purposes.  Without limiting the generality of the foregoing, the Board shall
have all of the powers and duties specified for it under this Agreement and the
LLC Agreement, including the power, right, and authority: (i) from time to time
to establish rules and procedures for the administration of this Agreement,
which are not inconsistent with the provisions of this Agreement or the LLC
Agreement; (ii) to construe in its sole discretion all terms, provisions,
conditions, and limitations of this Agreement; (iii) to correct any defect or to
supply any omission or to reconcile any inconsistency that may appear in this
Agreement in such manner and to such extent as the Board shall deem appropriate;
(iv) to determine which Affiliates shall be considered a Nexeo Employer under
this Agreement; and (v) to make all other determinations necessary or advisable
for the administration of this Agreement. All decisions,

 

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determinations and actions to be made or taken by the Board pertaining to this
Agreement, and all determinations with respect to Employee’s service with the
Company or any Nexeo Employer, or a termination of service for purposes of this
Agreement, shall be made by the Board; provided, however, the Board, in its sole
discretion, may delegate to one or more employees of the Company or any Nexeo
Employer all or some of its day-to-day administrative or ministerial duties and
powers under this Agreement.  All such decisions, determinations, and actions by
the Board shall be final, binding and conclusive on all persons.  The members of
the Board shall not be liable for any decision, determination or action taken or
omitted to be taken in connection with the administration of this Agreement.

 

(d)                                 Amendment and Waiver.  The provisions of
this Agreement may be amended, modified or waived only with the prior written
consent of the Company and the Employee, and no course of conduct or failure or
delay in enforcing the provisions of this Agreement shall be construed as a
waiver of such provisions or affect the validity, binding effect or
enforceability of this Agreement or any provision hereof.

 

(e)                                  Severability.  Any provision in this
Agreement which is prohibited or unenforceable in any jurisdiction by reason of
applicable law shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating or affecting the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  Furthermore, in lieu of each such prohibited or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision similar in terms to such prohibited or unenforceable
provision as may be possible and be legal, valid and enforceable.

 

(f)                                   Entire Agreement.  This Agreement and the
other Transaction Documents embody the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and supersede
and preempt any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.

 

(g)                                  Counterparts.  This Agreement may be
executed in one or more counterparts (including facsimile counterparts), each of
which, when so executed and delivered, shall be deemed to be an original, but
all of which together shall constitute one and the same Agreement.  Delivery of
a copy of this Agreement bearing an original signature by facsimile transmission
or by electronic mail shall have the same effect as physical delivery of the
paper document bearing the original signature.

 

(h)                                 Successors and Assigns.  Except as otherwise
provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by and against the Employee, the Company and their respective
successors, assigns, heirs, representatives and estates, as the case may be
(including subsequent holders of Series B Units held by the Employee); provided,
however, that rights and obligations of the Employee under this Agreement shall
not be assignable except in connection with a transfer of Series B Units held by
the Employee permitted under the LLC Agreement.  Notwithstanding anything else
in this Agreement or in the LLC Agreement (i) each of the Series B Units that is
initially held by the Employee shall remain subject to the terms of the LLC
Agreement and this Agreement, regardless of who holds such Units and (ii) the
effect that the employment of the Employee by

 

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the Company, a Nexeo Employer or their respective Affiliates or events related
to such employment have on the rights of and restrictions on Series B Units,
including vesting, and the rights of the Company with regard to the Granted
Series B-     Units under this Agreement, shall not be altered by any transfer
of any Series B Units.  For the avoidance of doubt, each Permitted Transferee of
the Employee who acquires Units from the Employee pursuant to the LLC Agreement
shall be subject to the provisions of this Agreement as if such Permitted
Transferee or Permitted Transferees were a party or parties to this Agreement.

 

(i)                                     Rights of Third Parties.  Except for the
provisions of Section 7 relating to the purchase of Vested B Units by the
Purchase Right Assignee(s), which are intended to be enforceable by such
Purchase Right Assignee(s), nothing expressed or implied in this Agreement is
intended or shall be construed to confer upon or give any Person, other than the
parties hereto and the estate, legal representative or guardian of any
individual party hereto, any rights or remedies under or by reason of this
Agreement.

 

(j)                                    Headings; References; Interpretation.  In
this Agreement, unless a clear contrary intention appears:  (i) pronouns in the
masculine, feminine and neuter genders shall be construed to include any other
gender and words in the singular form shall be construed to include the plural
and vice versa; (ii) the term “including” shall be construed to be expansive
rather than limiting in nature and to mean “including, without limitation;”
(iii) the word “or” is inclusive; (iv) the words “this Agreement,” “herein,”
“hereof,” “hereby,” “hereunder” and words of similar import refer to this
Agreement as a whole, including the Exhibits attached hereto, and not to any
particular subdivision unless expressly so limited; (v) references to Articles
and Sections refer to Articles and Sections of this Agreement; (vi) references
in any Article or Section or definition to any clause means such clause of such
Article, Section or definition; (vii) references to Exhibits are to the items
identified separately in writing by the parties hereto as the described Exhibits
attached to this Agreement, each of which is hereby incorporated herein and made
a part hereof for all purposes as if set forth in full herein; (viii) all
references to money refer to the lawful currency of the United States; and
(ix) references to “federal” or “Federal” means U.S. federal or U.S. Federal,
respectively.  Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed or resolved against any party hereto, whether under any
rule of construction or otherwise.  On the contrary, this Agreement has been
reviewed by each of the parties hereto and shall be construed and interpreted
according to the ordinary meaning of the words used so as to fairly accomplish
the purposes and intentions of the parties hereto.  The Article and
Section titles and headings in this Agreement are inserted for convenience of
reference only and are not intended to be a part of, or to affect the meaning or
interpretation of, this Agreement.

 

(k)                                 Survival of Representations, Warranties and
Agreements.  All representations, warranties and agreements contained herein
shall survive the consummation of the transactions contemplated hereby and the
termination of this Agreement.

 

(l)                                     Adjustment.  In the event that the Board
determines that any distribution (whether in the form of cash, Units, other
securities, or other property), recapitalization, split, reverse split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Units or other securities of the Company, issuance of
warrants or other rights to purchase Units or other securities of the Company,
or other similar transaction or event affects the Units such that an adjustment
is determined by the Board to be appropriate in order to

 

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prevent the dilution or enlargement of the benefits or potential benefits
intended to be made available under this Agreement, then the Board shall, in
such manner as it may deem equitable, in its sole discretion, adjust any or all
of the terms of this Agreement and/or the number of outstanding Granted
Series B-     Units or, if deemed appropriate, make provision for a cash payment
to the holder of an outstanding Granted Series B-     Unit.

 

(m)                             Arbitration; Waiver of Jury Trial.  The Company
and the Employee agree to the resolution by binding arbitration of all claims,
demands, causes of action, disputes, controversies or other matters in question
(“claims”) whether or not arising out of this Agreement, whether sounding in
contract, tort or otherwise and whether provided by statute or common law, that
the Company may have against the Employee or that the Employee may have against
the Company or its parents, subsidiaries and affiliates, and each of the
foregoing entities’ respective officers, directors, employees or agents in their
capacity as such or otherwise; except that this agreement to arbitrate shall not
limit the Company’s right to seek equitable relief, including injunctive relief
and specific performance, and damages in a court of competent jurisdiction.  The
Company and the Employee agree that any arbitration shall be in accordance with
the Federal Arbitration Act (“FAA”) and, to the extent an issue is not addressed
by the FAA, with the then-current National Rules for the Resolution of
Employment Disputes of the American Arbitration Association (“AAA”) or such
other rules of the AAA as applicable to the claims being arbitrated.  If a party
refuses to honor its obligations under this agreement to arbitrate, the other
party may compel arbitration in either federal or state court.  The arbitrator
shall apply the substantive law of the State of Delaware (excluding Delaware
choice-of-law principles that might call for the application of some other
state’s law), or federal law, or both as applicable to the claims asserted.  The
arbitrator shall have exclusive authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of this agreement to
arbitrate, including any claim that all or part of this Agreement is void or
voidable and any claim that an issue is not subject to arbitration.  The parties
agree that venue for arbitration will be in Wilmington, Delaware, and that any
arbitration commenced in any other venue will be transferred to Wilmington,
Delaware, upon the written request of any party to this Agreement.  In the event
that an arbitration is actually conducted pursuant to this Section 10(m), the
party in whose favor the arbitrator renders the award shall be entitled to have
and recover from the other party all costs and expenses incurred, including
reasonable attorneys’ fees, expert witness fees, and costs actually incurred. 
Any and all of the arbitrator’s orders, decisions and awards may be enforceable
in, and judgment upon any award rendered by the arbitrator may be confirmed and
entered by, any federal or state court having jurisdiction.  All proceedings
conducted pursuant to this agreement to arbitrate, including any order, decision
or award of the arbitrator, shall be kept confidential by all parties.  EACH
PARTY ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, SUCH PARTY IS KNOWINGLY AND
VOLUNTARILY WAIVING ANY RIGHT THAT SUCH PARTY MAY HAVE TO A JURY TRIAL OR A
COURT TRIAL OF ANY COVERED CLAIM ALLEGED BY SUCH PARTY.

 

(n)                                 WAIVER OF CERTAIN DAMAGE CLAIMS. 
NOTWITHSTANDING ANYTHING IN ANY TRANSACTION DOCUMENTS TO THE CONTRARY, TO THE
FULLEST EXTENT PERMITTED BY LAW, NEITHER THE COMPANY NOR ANY COVERED PERSON
SHALL BE LIABLE TO THE COMPANY, TO ANY MEMBER OR TO ANY OTHER PERSON MAKING
CLAIMS ON BEHALF OF THE FOREGOING FOR CONSEQUENTIAL, EXEMPLARY,
PUNITIVE, INDIRECT OR SPECIAL DAMAGES, INCLUDING DAMAGES FOR LOSS OF PROFITS,
LOSS OF USE

 

10

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OR REVENUE OR LOSSES BY REASON OF COST OF CAPITAL, ARISING OUT OF OR RELATING TO
ANY TRANSACTION DOCUMENT, THE BUSINESS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, THE GRANTING OR WITHHOLDING OF ANY APPROVAL REQUIRED UNDER THE LLC
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS,
REGARDLESS OF WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY, VIOLATION OF ANY APPLICABLE DECEPTIVE TRADE PRACTICES ACT OR SIMILAR
LAW OR ANY OTHER LEGAL OR EQUITABLE DUTY OR PRINCIPLE, AND THE COMPANY AND EACH
COVERED PERSON RELEASE EACH OF THE OTHER SUCH PERSONS FROM LIABILITY FOR ANY
SUCH DAMAGES.

 

(o)                                 Spouses.

 

(i)                                     The Employee’s spouse shall be required
to execute a spousal consent in substantially the form required to be executed
by spouses of members of the Company in the LLC Agreement (the “Spousal
Agreement”) to evidence such spouse’s agreement and consent to be bound by the
terms and conditions of this Agreement and the LLC Agreement as to such spouse’s
interest, whether as community property or otherwise, if any, in the Series B
Units held by the Employee.  If the spouse of the Employee fails to execute the
Spousal Agreement, until such time as the Spousal Agreement is duly executed,
the Employee’s economic rights associated with his or her Series B Units will be
suspended and not subject to recovery.

 

(ii)                                  In the event of a property settlement or
separation agreement between the Employee and his spouse, the Employee will use
his best efforts to assign to his spouse only the right to share in profits and
losses, to receive distributions, and to receive allocations of income, gain,
loss, deduction or credit or similar item to which the Employee was entitled,
with respect to the Employee’s Series B Units to the extent assigned to the
Employee’s spouse.

 

(iii)                               If a spouse or former spouse of the Employee
acquires all or a portion of the Series B Units held by the Employee as a result
of any property settlement or separation agreement, such spouse or former spouse
hereby grants an irrevocable power of attorney (which will be coupled with an
interest) to the Employee to give or withhold such approval as the Employee will
himself or herself approve with respect to such matter and without the necessity
of the taking of any action by any such spouse or former spouse. Such power of
attorney will not be affected by the subsequent disability or incapacity of the
spouse or former spouse granting such power of attorney. Furthermore, such
spouse or former spouse agrees that the Company will have the option at any time
to purchase all, but not less than all, of such Series B Units at Fair Market
Value as determined by the Company utilizing the last valuation report issued
prior to the date the Company elects to redeem such Units.

 

(p)                                 Sections 83 and 409A of the Code.  The
parties intend for the issuance of the Granted Series B-     Units to be a
transfer of property within the meaning of Section 83 of the Code rather than a
deferral of compensation pursuant to Section 409A of the Code.  Accordingly,
this Agreement and the issuance of the Granted Series B-     Units shall be
construed and interpreted in accordance with such intent and any action required
by either of the parties pursuant to this Agreement will be provided in such a
manner that the Granted Series B-     Units shall not become subject to the
provisions of Section 409A of the Code, including any

 

11

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IRS guidance promulgated with respect to Section 409A; provided, however, in no
event shall any such action to comply with Section 409A reduce the aggregate
amount of the benefit provided or payable to the Employee hereunder unless
expressly agreed in writing by the Employee.

 

[Signature Page Follows]

 

12

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

NEXEO SOLUTIONS HOLDINGS, LLC

 

 

 

 

 

 

 

Name: Michael B. Farnell, Jr.

 

Title:   Executive Vice President, Chief Legal Officer, and Secretary

 

 

 

 

 

EMPLOYEE NAME

 

 

 

 

 

 

 

SIGNATURE PAGE TO

SERIES B UNIT AGREEMENT

 

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EXHIBIT A
DEFINED TERMS

 

“Addendum Agreement” has the meaning assigned to such term in the LLC Agreement.

 

“Adjusted EBITDA” means the Company’s earnings before interest, taxes,
depreciation and amortization for the applicable year, adjusted as the Company
deems necessary to reflect extraordinary or non-recurring events, including,
without limitation, acquisitions, divestitures and other similar transactions.

 

“Affiliate” has the meaning assigned to such term in the LLC Agreement.

 

“Board” has the meaning assigned to such term in the LLC Agreement.

 

“Business Day” has the meaning assigned to such term in the LLC Agreement.

 

“Cause” means (1) a breach by the Employee of the Employee’s professional
obligations to the Company (other than as a result of physical or mental
incapacity) which constitutes nonperformance by the Employee of his obligations
and duties as determined by the Board (which may, in its sole discretion, give
the Employee notice of, and the opportunity to remedy, such breach),
(2) commission by the Employee of an act of fraud, embezzlement,
misappropriation, willful misconduct or breach of fiduciary duty against the
Company or any of its affiliates or other conduct harmful or potentially harmful
to the Company’s or any of its affiliate’s best interest, as reasonably
determined by a majority of the members of the Board, (3) the Employee’s
conviction, plea of no contest or nolo contendere, deferred adjudication or
unadjudicated probation for any felony or any crime involving moral turpitude,
(4) the failure of the Employee to carry out, or comply with, in any material
respect, any lawful directive of the Board (which the Board, in its sole
discretion, may give the Employee notice of, and an opportunity to remedy), or
(5) the Employee’s unlawful use (including being under the influence) or
possession of illegal drugs.

 

“Change of Control” means the occurrence of any of the following events after
the Effective Date: (1) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Nexeo Solutions on a consolidated basis with its Affiliates to
any person or group of related persons (within the meaning of Section 13(d) of
the Exchange Act), other than to the Company and/or its Affiliates; or
(2) (i) any person or group (within the meaning of Section 13(d) of the Exchange
Act) (other than the Company and/or its Affiliates) becoming the beneficial
owner (within the meaning of Section 13(d) of the Exchange Act), directly or
indirectly through any equity purchase, reorganization, merger, consolidation or
other transaction, of securities representing more than 40% of the aggregate
outstanding voting power of Nexeo Solutions and (ii) the Company and its
Affiliates beneficially owning (within the meaning of Section 13(d) of the
Exchange Act), directly or indirectly, in the aggregate a lesser percentage of
the voting power of the Nexeo Solutions than such other person or group (within
the meaning of Section 13(d) of the Exchange Act); but excluding, in each case,
(x) any transfer or transfers by the Company and its Affiliates, directly or
indirectly, of a beneficial interest in any equity securities of the Nexeo
Solutions to any person or group (within the meaning of Section 13(d) of the
Exchange Act) or (y) an Equity Syndication.

 

EXHIBIT A-1

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“Code” has the meaning assigned to such term in the LLC Agreement.

 

“Company Market Value” means, at the time of the applicable valuation, the
difference between (a) the aggregate fair market value of all Company assets and
(b) the aggregate amount of all debts and other liabilities (including an
appropriate value, if any, for contingent liabilities of the Company) of the
Company and its Subsidiaries (including any unpaid tax distributions that are
payable for any calendar year prior to the date of such valuation).

 

“Controlled by” has the meaning assigned to such term in the LLC Agreement.

 

“Covered Person” has the meaning assigned to such term in the LLC Agreement.

 

“Disabled” means the Employee’s inability to perform, with or without reasonable
accommodation, the essential functions of his position with the Company for a
period of 180 consecutive days due to mental or physical incapacity, as
determined by mutual agreement of a physician selected by the Company or its
insurers and a physician selected by the Employee; provided, however, if the
opinion of the Company’s physician and the Employee’s physician conflict, the
Company’s physician and the Employee’s physician shall together agree upon a
third physician, whose opinion shall be binding.

 

“EBITDA” means the Company’s Earnings Before Interest, Taxes, Depreciation and
Amortization.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means, at the time of the valuation of the applicable
Series B Units, the amount that would be distributable to the holders of such
Units if the Company Market Value determined at the time of such valuation were
distributed to the holders of all of the Membership Interests in complete
liquidation pursuant to the rights and preferences set forth in Section 6.1 of
the LLC Agreement (or any provision of the LLC Agreement that replaces such
Section 6.1 as the result of an amendment to the LLC Agreement after the date
hereof) as in effect immediately prior to such valuation.

 

“Good Reason” means (1) either a diminution of the Employee’s duties, or a
change in the Employee’s title or reporting relationship, that results in a
materially adverse impact on the Employee’s seniority, standing or role at the
Company, or (2) a material reduction in the Employee’s annual base salary.

 

“Initial Majority Sponsor Units” means the Company’s common units issued to the
Majority Sponsors in connection with the closing of the Transaction, and shall
include any units, securities or other property or interests received by the
Majority Sponsors (or transferee of such units in an Equity Syndication) in
respect of such units in connection with any distribution, unit split or
combination of units, recapitalization, conversion, reorganization,
consolidation, split-up, spin-off, combination, repurchase, merger, exchange of
units or other transaction or event that affects the Company’s common units
occurring after the date of issuance.

 

EXHIBIT A-2

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“Involuntary Termination” means any termination of the Employee’s employment
with a Nexeo Employer which:

 

(a)                                 is a termination by the employer for any
other reason whatsoever or for no reason at all, in the sole discretion of the
employer other than (i) upon the Employee’s death, (ii) because the Employee is
determined to be Disabled or (iii) for Cause; or

 

(b)                                 results from the Employee’s voluntary
termination of employment for Good Reason.

 

“LIBOR” means on any day, the interest rate per annum equal to the rate per
annum reported on such day (or if such day is not a Business Day, on the prior
Business Day) in the eastern edition of the Wall Street Journal “Money Rates”
section as the one-month London Interbank Offered Rate for U.S. dollar deposits
(or if the Wall Street Journal shall cease to be publicly available, then LIBOR
shall be as reported by any publicly available source of similar market data
selected by the Company that, in the Company’s reasonable judgment, accurately
reflects such London Interbank Offered Rate).

 

“Liquidity Event” shall occur on the date of (a) a transaction, including any
financial restructuring transaction, which when aggregated, if applicable, with
any other prior transaction (whether or not related), results in the cumulative
sale, transfer or other disposition of more than 65% of the Initial Majority
Sponsor Units and with respect to which the Majority Sponsors have received only
cash, marketable securities or any combination of cash or marketable securities;
(b) an underwritten initial public offering of equity securities by the Company
or Nexeo Solutions (or any of their Affiliates or Subsidiaries that will be a
successor to the Company or Nexeo Solutions) pursuant to an effective
registration statement under the Securities Act or the consummation of a similar
initial public offering pursuant to a comparable process under applicable
foreign securities laws which results in equity securities of the Company or
Nexeo Solutions (or any of their Affiliates or Subsidiaries that will be a
successor to the Company or Nexeo Solutions) being listed on a national
securities exchange in the U.S. or another country or (c) any other transaction
or series of transactions (whether or not related) determined by the Board, in
its sole discretion, to constitute a “Liquidity Event.”

 

“Majority Sponsors” shall mean, collectively or individually as the context
requires, TPG Partners VI, L.P. and/or their respective affiliates.

 

“Membership Interests” has the meaning assigned to such term in the LLC
Agreement.

 

“MoM” means a number, determined on each Liquidity Event, equal to the quotient
of (a) all cash received directly or indirectly by the Majority Sponsors in
connection with the Liquidity Event, including all cash dividends and other
distributions made directly or indirectly to the Majority Sponsors, in respect
of the Initial Majority Sponsor Units sold, transferred or otherwise disposed of
on or prior to the date on which the Liquidity Event occurs, divided by (b) the
aggregate purchase price paid by such Majority Sponsors for the Initial Majority
Sponsor Units.

 

“Permitted Transferee” has the meaning assigned to such term in the LLC
Agreement.

 

“Person” has the meaning assigned to such term in the LLC Agreement.

 

EXHIBIT A-3

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“Securities Act” has the meaning assigned to such term in the LLC Agreement.

 

“Series B Units” has the meaning assigned to such term in the LLC Agreement.

 

“Subsidiary” has the meaning assigned to such term in the LLC Agreement.

 

“Threshold Value” has the meaning assigned to such term in the LLC Agreement.

 

“Transaction” means the transactions contemplated under that certain Agreement
of Purchase and Sale, dated as of November 5, 2010, by and between Ashland, Inc.
and TPG Accolade, LLC (TPG Accolade, LLC has since been renamed “Nexeo
Solutions, LLC”).

 

“Transaction Documents” has the meaning assigned to such term in the LLC
Agreement.

 

“Units” has the meaning assigned to such term in the LLC Agreement.

 

“Unvested Units” has the meaning assigned to such term in the LLC Agreement.

 

“Vested Units” has the meaning assigned to such term in the LLC Agreement.

 

“Vesting Beginning Date” shall mean                               .

 

EXHIBIT A-4

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EXHIBIT B

 

CURRENT ADJUSTED EBITDA AMOUNTS FOR
EACH ANNUAL PERFORMANCE PERIOD

 

EXHIBIT B-1

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