Document:

Exhibit

Exhibit 10.8

TENNECO AUTOMOTIVE OPERATING COMPANY INC. 
SEVERANCE BENEFIT PLAN AND SUMMARY PLAN DESCRIPTION
(As Amended and Restated Effective as of April 1, 2020)

		
	1.
	Purpose and Effective Date of the Plan

Tenneco Automotive Operating Company Inc. (the “Company”) established the Tenneco Automotive Operating Company Inc. Severance Benefit Plan (the “Plan”) to grant severance benefits to eligible employees of the Company and the Participating Companies (as defined below) who are involuntarily terminated under the conditions set forth in the Plan.  The Plan was originally effective as of July 20, 2018 and superseded in its entirety the Tenneco Automotive Operating Company Inc. Severance Benefit Plan, as Amended and Restated Effective as of August 1, 2015.  The following provisions constitute an amendment, restatement and continuation of the Plan as in effect immediately prior to April 1, 2020 and shall apply to any termination occurring after March 31, 2020.  This document serves as both the summary plan description (SPD) and official plan document for the Plan.  

		
	2.
	Definitions

a.“Administrative Committee” means a committee consisting of the Chief Executive Officer of the Company, the Chief Financial Officer of the Company, and the Chief Human Resources Officer of the Company.  
b.“Alternative Employment” means, with respect to a Participant, unless otherwise approved in writing by the Administrative Committee, employment with an entity other than a Tenneco Company that commences after the Participant’s Termination Date and regardless of whether such employment is comparable (in position, pay, location or any other aspect) to the Participant’s employment with a Participating Company immediately prior the Participant’s Termination Date.  For the avoidance of doubt, the exercise of the Administrative Committee’s authority to approve exceptions to the Alternative Employment provisions shall be done based on the facts and circumstances of the situation presented and with a view to preserving the intended benefits of the Plan to Participants generally.  
c.“Base Salary” means a Participant’s rate of annual base salary in effect as of his or her Termination Date, excluding overtime, bonuses, shift differentials, performance awards, special additions, income from stock options, stock grants, dividend equivalents, benefits-in-kind, allowances, perquisites or other incentives, and any other forms of extra compensation.  
d.“Cause” means, with respect to an Eligible Employee or Participant, (i) fraud, embezzlement, or theft in connection with his or her employment (ii) gross negligence in the performance of his or her duties, (iii) his or her conviction, guilty plea, or plea of nolo contendere with respect to a felony, (iv) the willful and continued failure to substantially perform his or her duties for the Tenneco Companies (except where the failure results from incapacity due to disability), (v) the failure to meet the obligations required by his or her position, whether or not willful, negligent or continued, (vi) the willful or negligent engagement in conduct which is, or could reasonably be expected to be, materially injurious to any of the Tenneco Companies, monetarily or otherwise.  For purposes of the foregoing, no act, or failure to act, on the part of an Eligible Employee or Participant will be deemed “willful” unless done, or omitted to be done, by the Eligible Employee not in good faith and without reasonable belief that his or her act, or failure to act, was in the best interest of the Tenneco Companies.  “Cause” will be interpreted by the Plan Administrator (or its designee) in its sole discretion and such interpretation will be conclusive and binding on all parties.  
e.“Closing” means the closing of the transactions contemplated by the Purchase Agreement.  
f.“Code” means the Internal Revenue Code of 1986, as amended.
g.“Company” means Tenneco Automotive Operating Company Inc.
h.“Constructive Termination” is defined in Section 4.

i.“Continuous Service” means continuous service as an active Eligible Employee of the Tenneco Companies, including service prior to November 5, 1999 with any affiliate or subsidiary of Tenneco Inc. as it existed on August 1, 1996, determined in the sole discretion of the Plan Administrator by any method for determining applicable service in an equitable and non-discriminatory manner.  In the case of any Federal-Mogul Eligible Employee, Continuous Service will also include service with Federal-Mogul and its subsidiaries (and their respective predecessors) determined immediately prior to the Closing to the extent required under the terms of the Purchase Agreement.  Notwithstanding the foregoing, no service will be counted that would otherwise produce a duplication of benefits under this Plan or any other plan or arrangement of any of the Tenneco Companies. 
j.“Covered Termination” is defined in Section 4.
k.“Effective Date” means July 20, 2018.
l.“Eligible Employee” is defined in Section 3. 
m.“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
n.“Exchange Act” means the Securities Exchange Act of 1934, as amended.
o.“Federal-Mogul” means Federal-Mogul LLC.
p.“Federal-Mogul Eligible Employee” means any individual who was an employee of Federal-Mogul or any of its subsidiaries immediately following the Closing and who is entitled to the grant of past service credit for severance purposes under the terms of the Purchase Agreement. 
q.“Good Reason Event” means, with respect to an Eligible Employee or Participant, the occurrence of any one or more of the following events which occur without his or her express written consent: (i) a material reduction in his or her Base Salary or annualized base salary (used to determine a Week of Pay), other than an across-the-board reduction of salary for substantially all similarly-situated employees, (ii) a reduction in his or her grade level that results in a material diminution of his or her authority, duties or responsibilities, or (iii) a change in the principal location of his or her primary job or office location, such that he or she will be based at a location that is 100 miles or more further from his or her principal job or office location immediately prior to the change in location.  
r.“Group” means the group that applies to an Eligible Employee for purposes of determining the amount of the Severance Benefit under the Plan, determined as follows as of the Eligible Employee’s Termination Date:
		
	(i)
	Group 1:  Eligible Employees who are Officers;

		
	(ii)
	Group 2:  Eligible Employee who is designated as a plant manager or director, or above (but other than an individual described in Group 1), as determined in accordance with the normal policies and practices of the Tenneco Companies; and

		
	(iii)
	Group 3:  Eligible Employees who are not described in Group 1 or Group 2.

s.“Medical Subsidy Payment” means, with respect to a Participant, a cash payment equal to (i) the amount of the employer-paid portion of the monthly premium for the type and level of medical coverage, if any, applicable to the Participant under the plan(s) maintained by the Tenneco Companies as of his or her Termination Date divided by four multiplied by (ii) the number of calendar weeks included in the applicable cash severance benefit indicated in Section 5.  The amount of the employer-paid portion of the applicable premium will be determined based on the same type and level of coverage for similarly-situated active employees whose Termination Date has not occurred.  If a Participant is not covered under a medical plan maintained by the Tenneco Companies as of his or her Termination Date, the amount of the Medical Subsidy Payment will be zero.  
t.“Officer” means an officer of the Tenneco Companies within the meaning of Section 16 of the Exchange Act and any other Eligible Employee who has been designated, in writing by the Senior Vice President of Human Resources & Administration and/or Chief Executive Officer of Tenneco, as eligible to the participate in the Plan as a member of Group 1.  
u.“Participant” means an Eligible Employee whose Termination Date occurs as a result of a Covered Termination.

v.“Participating Company” means Tenneco Automotive Operating Company Inc., Tenneco and all of Tenneco’s U.S. subsidiaries.
w.“Payment Date” means the 70th day following the Termination Date; provided, however, that if or to the extent that the Severance Benefit is not subject to Code Section 409A, the Plan Administrator may, in its sole discretion, designate any date after the Termination Date and prior to the 70th day following the Termination Date as the Payment Date.  In no event will a Participant be permitted to elect the Payment Date.
x.“Plan Administrator” is defined in Section 14.
y.“Purchase Agreement” means that certain Membership Interest Purchase Agreement by and among Tenneco Inc., Federal-Mogul, American Entertainment Properties Corp., and Icahn Enterprises L.P. dated April 10, 2018.
z.“Severance Benefit” means the cash payment (including the Medical Subsidy Payment) provided to a Participant pursuant to Section 5.
aa.“Severance Period” means the number of the number of Weeks of Pay included in the applicable cash severance benefit as determined in accordance with Section 5.
bb.    “Target Bonus” means the target annual incentive bonus to which a Participant who is an Officer would have been entitled for the year in which his or her Termination Date occurs, as determined under the annual incentive bonus plan of the Company or another Tenneco Company had the Participant’s Termination Date not occurred and had any performance criteria been satisfied at the target level of performance. 
cc.    “Tenneco” means Tenneco Inc.
dd.    “Tenneco Company” means the Company and any other entity in which Tenneco has at least a direct or indirect 50% ownership interest.  
ee.    “Termination Date” means date on which an Eligible Employee’s employment with the Tenneco Companies terminates for any reason.  
ff.    “Week of Pay” means an Eligible Employee’s annualized Base Salary as of his or her Termination Date divided by 52.  A Week of Pay excludes overtime, bonuses, performance awards, special additions, shift differentials, income from stock options, stock grants, dividend equivalents, benefits-in-kind, allowances, perquisites or other incentives, and any other forms of extra compensation.  For commissioned sales positions, a Week of Pay determination will be adjusted to provide for an incentive target amount (determined at the sole discretion of the Plan Administrator).  
3.Eligibility
a.For purposes of the Plan, an “Eligible Employee” means a U.S. salaried, regular, full-time employee of a Participating Company, but only if so classified by the Participating Company in accordance with its normal policies and practices, and who has completed at least three months of Continuous Service as of the individual’s Termination Date.  Notwithstanding the foregoing, a Federal-Mogul Employee who otherwise would be an Eligible Employee will not become an Eligible Employee until January 1, 2019 or such later date on which he or she becomes an Eligible Employee.
b.The following employees will not be Eligible Employees for purposes of the Plan: 
		
	(i)
	temporary, part-time or and contract workers;

		
	(ii)
	hourly employees; and 

		
	(iii)
	except and to the extent as expressly provided in Section 5c., an employee who is eligible for any type of severance or termination benefit with respect to a termination otherwise covered by this Plan or who is covered under any other severance plan or agreement of any of the Tenneco Companies, other than government-provided unemployment compensation.

c.Eligible Employees whose hours of work, wages and other conditions of employment are governed by the provisions of a collective bargaining agreement are not Eligible Employees unless the collective bargaining agreement expressly provides for employees’ coverage in this Plan (provided that such employees, if eligible, will in any event remain subject to the terms and conditions of the Plan).

d.Notwithstanding any provision of the Plan to the contrary, any independent contractor or leased employee who performs services for a Participating Company or any other individual performing services who is not classified as an “employee” by a Participating Company will not be considered an “employee” for any purpose of the Plan.  No benefits will be provided or service credited under the Plan on a retroactive basis to any person who has performed services for a Participating Company as an independent contractor or as a leased employee, even if such person subsequently becomes a common law employee of a Participating Company or is deemed by a government agency, court or other third party to have been a common law employee of a Participating Company.
4.Covered Termination 
a.For purposes of the Plan, an Eligible Employee’s Termination Date will occur as a result of a “Covered Termination” (and an Eligible Employee will become a Participant in the Plan) only if all of the following requirements are satisfied:  
		
	(i)
	the Eligible Employee’s employment is terminated (and his or her Termination Date occurs as a result of termination (1) by the Company without Cause or (2) by the Eligible Employee due to Constructive Termination; 

		
	(ii)
	the Eligible Employee has signed and returned such documents  as the Plan Administrator requires;

		
	(iii)
	the Eligible Employee’s Termination Date occurs in accordance with the timing and/or conditions set forth in the notice of termination; and

		
	(iv)
	the Eligible Employee is not ineligible under Section 8 below.

b.An Eligible Employee’s termination of employment will be on account of a Constructive Termination (and the Eligible Employee will become a Participant in the Plan as a result of such termination) only if the Eligible Employee notifies the Plan Administrator in writing of termination for Constructive Termination, specifying the Good Reason Event upon which such termination is based, within 10 business days after the occurrence of the Good Reason Event that he or she believes constitutes a basis for Constructive Termination.  The Eligible Employee’s failure for any reason to give written notice of termination of employment for Constructive Termination in accordance with the foregoing will be deemed a waiver of his or her right to terminate his or her employment for that Good Reason Event.  The Company will have a period of 30 days after receipt of the notice in which to cure, or to cause the cure, of  the Good Reason Event.  If the Good Reason Event is cured within this period, the Eligible Employee will not be entitled to terminate employment as a result of Constructive Termination and will not be entitled to any severance payments and benefits under the Plan.  If the Good Reason Event is not cured within the 30 day period and if the Eligible Employee terminates employment within 30 calendar days after the expiration of the cure period on account of the Good Reason Event (e.g., the termination is not for any other reason, including death or termination for Cause), his or her termination will be treated for purposes of the Plan as a termination due to Constructive Termination. 
c.Severance payments and benefits will be provided to an Eligible Employee whose Termination Date occurs on account of a Covered Termination (and who thereby becomes a Participant in the Plan) only if the terms and conditions of the Plan are satisfied, including the requirements of Section 5

5.Severance Benefits
a.Subject  to the terms and conditions of the Plan and Paragraph 6 below, a Participant’s Severance Benefit will be determined in accordance with the following table based upon the Group applicable to the Participant as of the Termination Date:

	
		
	Position
	Severance Benefit

	Group 1
	The sum of (a) one times the sum of Base Salary (52 Weeks of Pay) plus Target Bonus, determined as of the Termination Date (the “cash severance benefit”) plus (b) the Medical Subsidy Payment

	Group 2
	The sum of (a) 1.5 Weeks of Pay for each full year of Continuous Service, determined as of the Termination Date (the “cash severance benefit”); minimum cash severance benefit for Group 2 equal to 8 Weeks of Pay and maximum cash severance benefit of 52 Weeks of Pay plus (b) the Medical Subsidy Payment

	Group 3
	The sum of (a) 1.5 Weeks of Pay for each full year of Continuous Service, determined as of the Termination Date (the “cash severance benefit”); minimum cash severance benefit for Group 3 equal to 4 weeks of Weeks of Pay and a maximum cash severance benefit of 52 Weeks of Pay plus (b) the Medical Subsidy Payment

b.A Participant will be entitled to outplacement services in accordance with, and subject to the limits of, the Company’s outplacement policy, as amended from time to time and as applicable to the Group of which the Participant is a member.  A Participant will be advised of outplacement benefits at time of termination.  Notwithstanding the foregoing, a Participant will not be entitled to outplacement benefits for any period after the Participant begins Alternative Employment. 
c.    Notwithstanding the provisions of Section 3b.(iii), an individual who is eligible for any type of severance or termination benefit under an individual agreement between such individual and a Tenneco Company with respect to a termination covered by this Plan will, upon a termination of employment that would otherwise constitute a Covered Termination under the Plan if such individual was a Participant in the Plan, be entitled to a Medical Subsidy Payment calculated based on the number of weeks of pay included in such individual’s severance payment under the individual agreement not to exceed 52 weeks.  In the case of an individual described in this Section 5c. who is not covered under a medical plan maintained by the Tenneco Companies as of his or her termination date, the amount of the Medical Subsidy Payment will be zero.  Any Medical Subsidy Payment payable in accordance with this Section 5c. will be subject to the all of the terms and conditions of the Plan that otherwise apply with respect to the payment of the Severance Benefit under the Plan, including the payment provisions of Section 6.  Without limiting the generality of the foregoing, in no event will a Participant be entitled to any Medical Subsidy Payment for any period after which the Participant begins Alternative Employment.
d.A Participant shall agree, as a condition of receiving the Severance Benefit and outplacement services described herein, that he or she will promptly inform that Plan Administrator of any Alternative Employment.
e.A Participant will only be entitled to the Severance Benefit and outplacement services described herein if, in addition to satisfying all other terms and conditions of the Plan, the Participant has signed and returned a general release of claims in such form as the Company determines, any applicable revocation period has expired as of the Payment Date and the release is effective as of the Payment Date.  If the requirements of this Section 5e. are not satisfied as of the Payment Date, no benefits will be paid or provided to the Participant pursuant to the Plan. 
6.Time and Method of Payment of Severance Benefit
Subject to the terms and conditions of the Plan, the Severance Benefit to which a Participant is entitled will be paid in substantially equal installments in accordance with the normal payroll practices of the Participant’s employer, beginning on the Payment Date and continuing during the Severance Period; 

provided, however, that any unpaid portion of the Severance Benefit shall immediately cease and shall be forfeited for any period after the Participant begins Alternative Employment.
		
	7.
	Effect of Death on Payment of Severance Benefit

If an Eligible Employee’s Termination Date occurs on account of death, no benefits will be paid or provided under this Plan.  If a Participant dies after his Termination Date, and before the Payment Date, payment of the Severance Benefit will be made to his/her estate provided that all requirements of the Plan are satisfied as of his Termination Date (including, without limitation, the requirements of Section 5d. hereof).
		
	8.
	Ineligibility

An Eligible Employee or Participant will not be eligible to receive any payment or benefit under the Plan if:
a.the Eligible Employee’s Termination Date occurs for any reason other than a Covered Termination (for example, employees who terminate voluntarily or are discharged for misconduct or poor performance are not eligible);
b.the Plan is terminated (or otherwise amended to eliminate a benefit with respect to that Eligible Employee or Participant);
c.the Participant would receive severance or termination benefits (whether the same or different from those provided by the Plan) under another plan, program, policy or arrangement (including an individual agreement) of any Tenneco Company; 
d.the Eligible Employee has been offered employment, regardless of level of pay or benefits or job location, with any entity other than a Tenneco Company as arranged by a Tenneco Company, including without limitation, in connection with any purchase of any Participating Company’s business or assets, any outsourcing arrangement, or any arrangement to transfer employees or business to a customer, supplier or other entity doing business with any Tenneco Company, or any similar transaction or arrangement (regardless of whether such Eligible Employee accepts such offer of employment); 
e.the Eligible Employee’s employment terminates pursuant to any of the following:
		
	i.
	voluntary termination of employment or retirement or resignation of employment before a job-end date that has been specified by a Participating Company;

		
	ii.
	while receiving benefits under a Tenneco Company short-term or long-term disability plan or program, including failure to return from a period of receiving STD/ LTD or FMLA leave; or

		
	iii.
	mandatory retirement due to policies of a Participating Company or legal requirement.

9.Forfeiture
If a Participant violates the release or any confidentiality, non-competition and/or non-solicitation agreement with any of the Tenneco Companies or if, after a Participant’s Termination Date, facts are disclosed or discovered that would have constituted termination under circumstances that would have made the Participant ineligible for benefits under the Plan as described in Section 8, then the Participant will forfeit any and all rights to payments and benefits under this Plan, and, to the extent that any Severance Benefit has been paid to the Participant under the Plan, the Participant must repay the full amount of the Severance Benefit within 15 days of receiving written notification from the Plan Administrator.
		
	10.
	Offset and Substitution

a.Each Participating Company reserves the right to deduct from any Severance Benefit any amount that the Participant owes to it or any other Tenneco Company, up to the extent permitted by law, including, but not limited to, plan premiums, borrowed vacation days, educational assistance, sign-on bonuses, loans and/or relocation obligations.  Any deduction pursuant to the foregoing will be applied in a 

manner consistent with Code Section 409A to the extent that the Severance Benefit is subject to Code Section 409A.
b.To the extent that any amounts would otherwise be payable (or benefits would otherwise be provided) to a Participant under another plan of a Tenneco Company or an agreement between a Participant and a Tenneco Company, including a change in control plan or agreement, an offer letter or letter agreement, and to the extent that such other payments or benefits or the severance payments and benefits provided under this Plan are subject to Section 409A of the Code, the Plan will be administered to ensure that no payment or benefit under the Plan will be (i) accelerated in violation of Code Section 409A, (ii) further deferred in violation of Code Section 409A or (iii) result in a duplication of benefits.
11.Plan Amendment and Termination
The Plan may be terminated or amended at any time by the Company, provided that the Plan benefit for a Participant who has signed the release and returned it to the Plan Administrator within the time specified therein will not be adversely affected by any such amendment or termination.
		
	12.
	Miscellaneous

a.The Plan does not constitute a contract of employment, and nothing in the Plan provides or may be construed to provide that participation in the Plan is a guarantee of continued employment with the Company, a Participating Company, or any of their affiliates.
b.Each Participating Company will pay the benefits under this Plan out of its general assets at the time the benefits are to be paid.  There will be no special fund out of which benefits will be paid, nor will Eligible Employees or Participants be required to make a contribution as a condition of receiving benefits.
c.The Plan Year will be the calendar year; provided, however, that the initial Plan Year will commence on the Effective Date and will end on December 31, 2018.
d.An Eligible Employee’s or Participant’s benefits under the Plan cannot be assigned, transferred or sold to anyone else and cannot be used as collateral for loans or pledged in payment of debts, contracts, or any other liability.
e.All payments and benefits under the Plan will be subject to all applicable Federal, state, local or other withholding taxes.
f.The Plan will be binding upon and inure to the benefit of the Company and its successors and assigns.
g.The Plan and all rights under it will be governed and construed in accordance with ERISA and, to the extent not preempted by Federal law, with the laws of the state of Illinois.
13.Section 409A
a.It is intended that any amounts payable under this Plan will either be exempt from or comply with Code Section 409A and the provisions hereof will be construed and interpreted in accordance with the requirements of Code Section 409A. 
b.Notwithstanding any other provision of the Plan to the contrary, if any payment or benefit hereunder (whether separately or together with any other payments) is subject to Code Section 409A, and (i) if such payment or benefit is to be paid or provided on account of termination of employment (or other separation from service), (ii) if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code), or (iii) if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant’s separation from service or termination of employment, then such payment or benefit will be delayed until the first day of the seventh month following the Participant’s termination of employment.  For purposes of the foregoing, the determination as to whether a Participant has had a termination of employment (or separation from service) will be made in accordance with the provisions of Code Section 409A without application of any alternative levels of reductions of bona fide services permitted thereunder. 

c.For purposes of Code Section 409A, any installment payment will be treated as a separate payment.  
d.While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Code Section 409A, in no event will the Company  or any other Tenneco Company be liable for any additional tax, interest, or penalties that may be imposed on any person as a result of Code Section 409A. 
14.Administrative Information
a.This Plan is designed to qualify as a severance pay arrangement within the meaning of Section 3(2)(B)(i) of ERISA (as defined below), is intended to be excepted from the definitions of “employee pension benefit plan” and “pension plan” set forth under Section 3(2) of ERISA, and is intended to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of the regulations published by the Secretary of Labor.  

The Company is hereby designated as the “named fiduciary” and “Plan Administrator” of this Plan (within the meaning of Section 3(16) of ERISA) and has the authority to control and manage the operation of the Plan.  The Plan Administrator’s address and telephone number are as follows:  
Tenneco Automotive Operating Company Inc.
500 North Field Drive
Lake Forest, Illinois 60045
Telephone Number:  847-482-5000

b.The Plan Administrator will make all determinations as to the right of any person to a Severance Benefit and other benefits under the Plan and will have the discretionary authority to conclusively construe and interpret the provisions of the Plan and make factual determinations thereunder, including the power to determine the rights or eligibility of any persons, and the amounts of their benefits under the Plan, and to remedy ambiguities, inconsistencies or omissions, and any such determinations will be binding on all parties.  Benefits will only be paid if the Plan Administrator, in its sole discretion, determines that the employee or beneficiary is entitled to them.
c.The Plan Administrator has the authority to delegate any of its powers under this Plan to any other person, persons, or committee.  This person, persons, or committee may further delegate its reserved powers to another person, persons, or committee as they see fit.  Any delegation or subsequent delegation will include the same full, final and discretionary authority that the Plan Administrator has listed herein and any decisions, actions or interpretations made by any delegate will have the same ultimate binding effect as if made by the Plan Administrator.
d.The Plan sponsor is the Company.  The Company’s address and tax identification number are as follows:
Tenneco Automotive Operating Company Inc.
500 North Field Drive
Lake Forest, Illinois 60045
Tax Identification Number: 74-1933558
5.The Plan number assigned to the Plan by the Company is 835. 
f.The Plan Administrator is the Plan’s agent for service of legal process.  Process may be served upon the Plan Administrator at the address set forth in Section 14a.  
15.Claims and Appeals
a.Generally, it is not expected that a Participant will need to make a claim for benefits under the Plan.  If, however, a Participant believes that he or she is entitled to payments and benefits under the 

Plan that are not provided to him or her, then the Participant may submit a claim to the Plan Administrator in writing.  
b.If a Participant files a claim for benefits, the Participant will be notified of the Plan Administrator’s decision with respect to the claim within 90 days (which may be extended to 180 days, if required) of the date the claim is received.  If the Plan Administrator requires an extension of time to respond to a claim, the Plan Administrator will provide the Participant with notice of the reason for the extension within the initial 90-day period and a date by which the Participant can expect a decision.  A claim will be deemed denied if the Plan Administrator fails to notify the Participant within 90 days after receipt of the claim, plus any extension of time for processing the claim not to exceed 90 additional days, as special circumstances require.  
c.If a claim for benefits is denied (or deemed to be denied), in whole or in part, the Plan Administrator will furnish the Participant with a written notice stating the specific reasons for the denial, specific reference to pertinent Plan provisions upon which the denial was based, a description of any additional information or material necessary to perfect the claim, an explanation of why such information or material is necessary and appropriate information concerning steps to take if the Participant wishes to submit the claim for review.
d.Within 60 days after the date of written notice denying any benefits, the Participant may request, in writing, a review of that decision.  Such request for review may contain such issues and comments as the Participant wants considered in the review.  The Participant may also review pertinent documents in the Plan Administrator’s possession. 
e.The Participant will be notified of the Plan Administrator’s decision with respect to the appeal of a denied claim within 60 days (which may be extended to 120 days, if required) of the date the request for review of the denied claim is received.  If the Plan Administrator requires an extension of time to review the appeal, the Plan Administrator will provide the Participant with notice of the reason for the extension within the initial 60-day period and a date by which the Participant can expect a decision.  A claim will be deemed denied on appeal if the Plan Administrator fails to notify the Participant within 60 days after receipt of the claim, plus any extension of time for processing the claim not to exceed 60 additional days, as special circumstances require.  This notice of denial will include the reasons for the denial and the specific provision(s) on which the denial is based.  
f.Any decision on final appeal will be final, conclusive and binding upon all parties.  If the final appeal is denied, however, the Participant will be advised of his or her right to file a claim in court.  

16.Participant Rights
Participants in the Plan are entitled to certain rights and protections under ERISA.  ERISA provides that all Plan Participants will be entitled to: 
Receive Information About the Plan and Benefits 
		
	•
	Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the Plan, including copies of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. 

		
	•
	Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including copies of the latest annual report (Form 5500 Series) and updated summary plan description. The administrator may make a reasonable charge for the copies. 

Receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each Participant with a copy of this summary annual report. 

Prudent Actions by Plan Fiduciaries
In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of Plan Participants and beneficiaries. No one, including an employer or any other person, may fire an employee or Participant or otherwise discriminate against an employee or Participant in any way to prevent such employee or Participant from obtaining a benefit or exercising his or her rights under ERISA.
 Enforcement of Rights 
If a Participant’s claim for a welfare benefit is denied or ignored, in whole or in part, the Participant has a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. 

Under ERISA, there are steps a Participant can take to enforce the above rights.  For instance, if the Participant requests a copy of Plan documents or the latest annual report from the Plan and does not receive them within 30 days, the Participant may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay the Participant up to $110 a day until the Participant receives the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If the Participant has a claim for benefits which is denied or ignored, in whole or in part, the Participant may file suit in a state or Federal court. 

If it should happen that Plan fiduciaries misuse the Plan’s money, or if a Participant is discriminated against for asserting his or her rights, he or she may seek assistance from the U.S. Department of Labor, or he or she may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If the Participant is successful the court may order the person the Participant has sued to pay these costs and fees. If the Participant loses, the court may order him or her to pay these costs and fees, for example, if it finds the claim frivolous. 

Assistance with Questions 
If a Participant has any questions about the Plan, the Participant should contact the Plan Administrator. If the Participant has any questions about this statement or about his or her rights under ERISA, or if he or she needs assistance in obtaining documents from the Plan Administrator, he or she should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the Participant’s telephone directory or: 

Division of Technical Assistance & Inquiries Employee Benefits Security Administration 
U.S. Department of Labor 
200 Constitution Avenue, N.W. 
Washington, D.C., 20210 

A Participant may also obtain certain publications about his or her rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration at (866) 444-EBSA.

IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing, the Company, a Delaware corporation, has caused these presents to be duly executed by its proper Officers thereunto duly authorized effective as of April 1, 2020.

TENNECO AUTOMOTIVE OPERATING COMPANY INC.

By:    /s/ Kaled Awada                
Kaled Awada 

Its:    Senior Vice President and Chief Human Resources Officertlry-ex105_44.htm

Exhibit 10.5

TILRAY, INC. EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered by and between Tilray, Inc. (the “Company” or “Tilray”, and Kathryn P. Dickson (“Executive”).

 

R E C I T A L S

 

WHEREAS, the Company desires to employ Executive as its President, Manitoba Harvest beginning December 4, 2019 (the “Start Date”), and to enter into an agreement embodying the terms of such employment; and

 

WHEREAS, the Company and Executive wish to amend and supersede any prior employment agreements, offer letters, or other understandings regarding Executive’s employment, whether written or oral; and

 

WHEREAS, Executive desires to accept such employment and enter into this Agreement.

 

A G R E E M E N T

 

NOW, THEREFORE, in consideration of the promises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

 

	
 
	
1.
	
Duties and Scope of Employment.

 

	
(a)
	
Positions and Duties. Executive will serve as the Company’s President, Manitoba Harvest, initially reporting to President and Chief Executive Officer and a member of the Executive management leadership team. Executive will render such business and professional services in the performance of Executive’s duties as are customarily associated with Executive’s position within the Company, including without limitation responsibility for management of the Company’s Manitoba Harvest business, and Executive agrees to perform such additional duties and functions as shall from time to time be reasonably assigned or delegated to Executive by Tilray’s Chief Executive Officer. The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.” Executive’s primary work location will be in the Company’s Minneapolis, Minnesota office. 
	
 

 

	
(b)
	
Full-time Employment. Executive hereby accepts this employment upon the terms and conditions contained herein subject to presenting, in accordance with applicable law, verification of identity and legal right to work in the United States.  Executive agrees to devote the full business time, attention and efforts to promote and further the business, interests, objectives and affairs of the Company, and Executive shall not be engaged in any other business activity pursued for gain, profit or other pecuniary advantage without the prior written consent of the Company’s Board of Directors (“Board”) (which consent will not be unreasonably withheld with respect to Executive’s service as a director for two for-profit businesses); provided, however, that the foregoing limitations shall not be construed as prohibiting Executive from serving on civic, charitable or other boards or committees, managing personal or family investments and personal passive investments in securities or from engaging in other activities from time to time, in each case that will not violate the terms of this Agreement. Executive shall faithfully adhere to, execute and fulfill all lawful policies established by the Company in writing, consistent with the other terms of this Agreement.
	
 

 

2.At-Will Employment. The Company agrees to employ Executive, and Executive agrees to serve the Company, on an “at-will” basis, which means that either the Company or Executive may terminate Executive’s employment with the Company and the Employment Term at any time and for any or no reason, 

 

subject to the terms of this Agreement.

 

 

	
 
	
3.
	
Compensation.

 

	
(a)
	
Base Salary. During the Employment Term, the Company will pay Executive as compensation for Executive’s services an annual base salary of US$ 350,000.00 per year, as may be increased from time to time at the discretion of the Board or a duly constituted committee of the Board (the “Compensation Committee”) (the “Base Salary”). The Compensation Committee shall review Executive’s Base Salary annually but any increase will be in its sole discretion. Base Salary will be paid in regular installments in accordance with the Company’s normal payroll practices (subject to required withholding and applicable deductions). Any increase in Base Salary (together with the then existing Base Salary) shall serve as the “Base Salary” as of the effective date of such increase and thereafter during the Employment Term and for future employment under this Agreement. The first and last installment payment(s) will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period. 
	
 

 

	
(b)
	
Annual Bonus. Executive will be eligible for a discretionary annual bonus (“Bonus”) with target payout of fifty percent (50%) of Executive’s Base Salary. Actual Bonus payout will be based on the achievement of Company, business unit or division financial and/or operational business objectives established by the Compensation Committee for any given calendar year and an evaluation of Executive’s contribution toward the achievement of such objectives and individual performance, as determined in the sole discretion of the Compensation Committee. For the 2020 Bonus Year, the Executive will receive a minimum guaranteed Bonus payout of 50% of the Executive’s target bonus (i.e., 50% of 50% of Executive’s Base Salary = $87,500). It is understood that the Executive must be employed by the Company on the date such discretionary bonus is paid to receive a Bonus.
	
 

 

	
(c)
	
Tilray Equity Incentive Compensation. Subject to approval by the Compensation Committee or the Board, under the Tilray, Inc. 2018 Equity Incentive Plan (the “Tilray Plan”), promptly following the Company’s next quarterly earnings call, the Company shall grant the Executive 100,000.00 Restricted Stock Units (the “Tilray Restricted Stock Units”), which settle in shares of the Company’s Common Stock. The Restricted Stock Units will be subject to the terms and conditions of the Plan and Executive’s grant agreement. Executive’s grant agreement will include a three-year vesting schedule, under which 33.33% percent of the Restricted Stock Units will vest on the first anniversary of the grant date of such Restricted Stock Units, with the remaining Restricted Stock Units vesting quarterly thereafter, until either Executive’s Restricted Stock Units are fully vested or Executive’s employment ends, whichever occurs first. 
	
 

(d)Long-Term Incentive Compensation. During the Employment Term, Executive will be eligible to receive long-term equity incentive compensation awards, (as determined by the Compensation Committee in its discretion) pursuant to the Tilray Plan or any other equity incentive compensation plans or programs established by the Company and in effect from time to time. These awards shall be granted in the sole discretion of the Compensation Committee and shall include such terms and conditions (including vesting terms and conditions) as the Compensation Committee in its sole discretion deems appropriate.

 

4.Employee Benefits. Executive will be eligible to participate in the Company benefit programs that are made available to all the Company’s full-time employees, subject to the terms, conditions, and eligibility criteria of such programs. Company benefit policies may be amended from time to time at the discretion of the Company, with or without notice.

 

5.Business Expenses. During the Employment Term, the Company will reimburse Executive for reasonable travel or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s travel and expense reimbursement policies as in effect from time to time.

 

	
 
	
6.
	
Termination of Employment Generally.

 

	
(a)
	
Executive’s employment will terminate automatically upon Executive’s death or, upon fourteen (14) days’ prior written notice from the Company, in the event of Disability (as defined below). Further, 
	
 

 

		
(i) the Company shall be entitled to terminate Executive’s employment with or without Cause (as defined below) and (ii) Executive may resign for any reason by providing thirty (30) days’ prior notice. Notwithstanding the foregoing, in the event that the Executive gives notice of termination to the Company, the Company may unilaterally relieve Executive from any or all duties and responsibilities of her position so long as all compensation and benefits remain in effect for the duration of the notice period, and such removal of duties shall not constitute a termination by the Company for purposes of this Agreement. For clarity, upon any termination of Executive’s employment for any reason, the Employment Term hereunder shall also terminate.
	
 

 

	
(b)
	
Upon termination of Executive’s employment hereunder for any reason, Executive shall be entitled to receive: (i) Executive’s Base Salary through the effective date of termination; (ii) the right to continue group health care benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or under similar applicable state law (collectively “COBRA”), at Executive’s cost, but solely to the extent required by law; (iii) reimbursement of expenses incurred prior to Executive’s termination of employment for which Executive is entitled to be reimbursed, if any, pursuant to Section 5 above, but for which Executive has not yet been reimbursed; and (iv) all other amounts and vested benefits of any kind required by law or pursuant to any other Company plans or policies, as then in effect (collectively, the “Accrued Obligations”).
	
 

 

	
 
	
7.
	
Termination by the Company Without Cause or Executive Resigns for Good Reason

 

(a)Effect of Termination. If Executive’s employment is terminated by the Company without Cause (as defined below), other than any termination due to death or Disability, or if Executive’s employment is terminated by Executive for Good Reason (as defined below), then, in addition to the Accrued Obligations, and subject to the limitations of Sections 7(b), 22 and 23 below, Executive shall be entitled to receive:

 

(i)severance pay in an amount equal to twelve (12) months of the Executive’s Base Salary as then in effect (less applicable withholding), payable in substantially equal instalments in accordance with the Company’s regular payroll practices, payable as provided in Section 7(b), below; 

 

(ii)if Executive timely elects continuation coverage pursuant to COBRA within the time period prescribed by COBRA for Executive and Executive’s eligible dependents, then the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) for a period of twelve (12) months following Executive’s termination of employment; provided, however that such reimbursements shall cease as of the date upon which Executive and/or Executive’s eligible dependents are no longer eligible for COBRA continuation coverage. For the avoidance of doubt, such COBRA continuation cover premium reimbursements will be subject to applicable tax withholdings; 

 

(iii)the Bonus for the calendar year immediately preceding the year in which the termination of employment is effective, if the Bonus for such prior year has not yet been paid and assuming that individual performance objectives have been met at target level; and

 

(iv)an amount equal to Executive’s target Bonus for the calendar year in which the termination of employment is effective, pro-rated based on the number of days during the calendar year Executive was employed by the Company. 

 

 

(v)acceleration of vesting of the portion of each outstanding service-vested equity incentive award that would have vested had Executive remained in employment through the next vesting date prorated for Executive’s period of employment during the vesting period within which Executive’s employment is terminated.  For avoidance of doubt, this clause (v) shall not apply to any equity incentive award that vests, in whole or in part, based on achievement of specified performance conditions  

 

 

 

	
(b)
	
Conditions Precedent. Any severance payments and/or benefits contemplated by Section 7(a) above are conditional on Executive: (i) continuing to comply with the terms of this Agreement and the Confidentiality Agreement (as defined below); and (ii) delivering, and not revoking, in the form provided by the Company, a separation agreement including a general release of claims against the Company or its successor, its subsidiaries and their respective directors, officers and stockholders and other related parties and an affirmation of obligations hereunder and under the Confidentiality Agreement1 (a “Release”) that becomes effective and irrevocable no later than the sixtieth (60th) day following the termination of Executive’s employment, or such earlier date as the Company in its sole discretion may impose (the “Release Deadline”) ”), and which Release shall not require Executive to release any Accrued Obligations, rights under any equity award, nor rights to indemnification or advancement of defense expenses, nor shall the Release include new contractual obligations by Executive beyond those contemplated by this Agreement, the Confidentiality Agreement and the Arbitration Agreement.”. In no event will severance payments or benefits be paid or provided until the Release actually becomes effective and irrevocable. If the Release does not become effective and irrevocable by the Release Deadline, Executive will not be entitled to receive any severance payments or benefits under this Agreement other than the Accrued Obligations. If the Release becomes effective and irrevocable on or before the Release Deadline, payment of severance or other benefits under this Agreement will commence on the Company’s next regular payroll payment date following the date on which the Release becomes effective and irrevocable, subject to Sections 22 and 23. Except as required by Section 22, any payments delayed from the date of Executive’s employment termination through the first regular payroll payment date following the date on which the Release becomes effective and irrevocable will be payable in a lump sum without interest on such next regular payroll payment date, and all other amounts will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding the foregoing, this Section 7(b) shall not limit Executive’s ability to obtain expense reimbursements under Section 5 or the payment or provision of any Accrued Obligations.
	
 

 

(c)Change in Control. Upon a Change in Control (as defined in the Company's 2018 Equity Incentive Plan) or in the event Executive's employment is terminated due to a pending Change in Control, vesting of any then outstanding Restricted Stock Units or other compensatory equity awards granted to you by the Company shall be accelerated such that no less than 100% will be fully vested as of the date of the termination of Executive's employment or the Change in Control, whichever is applicable.

 

	
 
	
8.
	
Definitions.

 

(a)Cause. For purposes of this Agreement, “Cause” shall mean (i) dishonesty, fraud, embezzlement, misrepresentation, or other improper acts committed by Executive resulting in a personal gain or personal enrichment of Executive at the expense of the Company; (ii) Executive’s violation of a federal or state law or regulation applicable to the Company’s business, which violation is or likely to be materially injurious to the Company; (iii) Executive’s conviction of, or a plea of nolo contendre or guilty to, a felony or any crime involving moral turpitude under the laws of the United States or any state; (iv) any gross misconduct, or material violation of any lawful Company policy involving conduct or business ethics; or (v) Executive’s material breach of the terms of this Agreement or the Confidentiality Agreement. No termination of employment by the Company shall be for “Cause” unless (x) the Company has provided to Executive written notice describing the factual basis the Company believes constitutes Cause, (y) Executive has not cured the circumstances giving rise to Cause within thirty (30) days after receiving written notice from the Company, and (z) Executive has been given the opportunity to be heard before the Board before it makes a final determination of Cause. 

	
(b)
	
Good Reason. For purposes of this Agreement, “Good Reason” shall mean, without Executive's written consent: (i) there is a material reduction in Executive’s Base Salary or annual Bonus opportunity (except where there is a general reduction applicable to the management team generally of not more than 10% and such reduction is applied proportionately to similarly situated members of the management team); (ii) there is a material reduction in Executive's overall responsibilities or authority, or scope of duties; (iii) Executive is 
	
 

	
	 

 

 

		
required to relocate her primary work location by more than 50 miles from Executive's residence in Minneapolis, Minnesota; or (iv) material breach by the Company of this Agreement. No resignation by Executive shall be for Good Reason unless (x) Executive has provided the Company with written notice of the acts or omissions constituting the grounds for Good Reason within sixty (60) days of Executive’s actual knowledge of the grounds for Good Reason, (y) the Company has not cured the circumstances giving rise to Good Reason within thirty (30) days to cure the conditions giving rise to such Good Reason, which shall end thirty (30) days after receiving written notice from Executive, and (z) Executive’s resignation from employment is effective within thirty (30) days after the end of the cure period. 
	
 

 

(c)Disability.  For purposes of this Agreement “Disability” means that Executive, at the  time notice of termination is given, has been unable to perform the essential job duties of Executive’s position with reasonable accommodation for not less than one-hundred and twenty (120) work days within a twelve (12) consecutive month period as a result of Executive’s incapacity due to an injury or a physical or mental condition.

 

9.. .         Indemnification. The Company shall indemnify Executive to the same extent with respect to each aspect of the indemnification that it indemnifies similarly situated executives of the Company against costs, charges and expenses incurred or sustained by Executive in connection with any action, suit or proceeding to which Executive may be made a party, brought by any shareholder of the Company directly or derivatively or by any third party by reason of any act or omission of Executive as an officer, director or employee of the Company or of any subsidiary or affiliate of the Company.

 

10.Assignment. This Agreement will be binding upon and inure to the benefit of: (a) the heirs, executors and legal representatives of Executive upon Executive’s death, and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

 

11.Notices. All notices, requests, demands and other communications called for under this Agreement shall be in writing and shall be delivered personally by hand or by courier, mailed by United States first-class mail, postage prepaid, or sent by facsimile or email directed to the party to be notified at following address, facsimile number or email address:

 

	
 
	
(a)
	
If to the Company:

Tilray, Inc.

Att: General Counsel

2701 Eastlake Ave E

Seattle, WA  98102

 

 

 

(b)If to Executive: 

 

Kathryn P. Dickson

1245 Cedar Lake Rd S.

Minneapolis MN 55416  

email address: KatyPDickson@gmail.com Phone number: 763-370-8772

 

Either party may designate an alternative address, facsimile number or email address notifying the other 

 

party in accordance with this Section 11. All such notices and other communications shall be deemed given upon personal delivery, three (3) days after the date of mailing, or upon confirmation of facsimile or email transfer.

 

12.Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

 

	
 
	
13.
	
Company Matters.

 

(a)Proprietary Information and Inventions. Executive acknowledges and agrees to be bound and abide by the terms of the Tilray, Inc. Proprietary Information and Inventions Agreement that Executive is required to execute as a precondition to Executive’s employment with the Company (the “Confidentiality Agreement”), including the provisions governing non-competition and the non-disclosure of confidential information and restrictive covenants contained therein.

 

	
(b)
	
Arbitration Agreement. Executive acknowledges and agrees to be bound and abide by the terms of the Tilray, Inc. Arbitration Agreement that Executive is required to execute as a precondition to Executive’s employment with the Company (the “Arbitration Agreement”).
	
 

 

	
(c)
	
Resignation on Termination. On termination of employment, regardless of the reason for such termination, Executive shall immediately (and with contemporaneous effect) resign any directorships, offices or other positions held in the Company or any affiliate, unless otherwise agreed in writing by the parties.
	
 

 

14.Integration. This Agreement, together with the Confidentiality Agreement and the Arbitration Agreement represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral (including, without limitation, the Prior Agreement). No waiver, alteration or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto.

 

15.Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

 

16.Waiver. No party shall be deemed to have waived any right, power or privilege under this Agreement or any provisions hereof unless such waiver shall have been duly executed in writing and acknowledged by the party to be charged with such waiver. The failure of any party at any time to insist on performance of any of the provisions of this Agreement shall in no way be construed to be a waiver of such provisions, nor in any way to affect the validity of this Agreement or any part hereof. No waiver of any breach of this Agreement shall be held to be a waiver of any other subsequent breach.

 

17.Governing Law. This Agreement will be governed by the laws of the State of Washington without regard for conflict of law provisions.

 

18.No Duty to Mitigate. 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 provisions of this Agreement and such amounts shall not be reduced regardless of whether the Executive obtains other employment.

 

19.Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, and all such counterparts shall constitute but one instrument.

 

20.Effect of Headings. The section and subsection headings contained herein are for convenience only and shall not affect the construction hereof.

 

 

21.Construction of Agreement. This Agreement has been negotiated by the respective parties, and the language shall not be construed for or against either party.

 

22.Section 409A. It is intended that the provisions of this Agreement are either exempt from or comply with the terms and conditions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the final regulations and any guidance promulgated thereunder (collectively, “Section 409A”), and to the extent that the requirements of Code Section 409A are applicable thereto, all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. Executive agrees and acknowledges that the Company makes no representations or warranties with respect to the application of Section 409A and other tax consequences to any payments hereunder and, by the acceptance of any such payments, Executive agrees to accept the potential application of Section 409A and the other tax consequences of any payments made hereunder.

 

	
(a)
	
Notwithstanding anything to the contrary in this Agreement, references herein to “termination of employment” or any words to similar effect shall be construed to mean a “separation from service” as defined in Treasury Regulation 1.409A-1(h). No severance pay or benefits to be paid or provided to Executive pursuant to this Agreement that, when considered together with any other severance payments or separation benefits or other compensation payable to Executive upon termination of employment or separation from service, are deemed to constitute deferred compensation under Section 409A (together, the “Deferred Payments”) will be paid or otherwise provided until Executive has a separation from service. Similarly, no severance pay or benefits to be paid or provided to Executive pursuant to this Agreement or otherwise upon termination of employment or separation from service that is exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(4) or -1(b)(9) will be payable until Executive has a separation from service.
	
 

 

	
(b)
	
Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination (other than due to death), then the Deferred Payments, if any, that are payable within the first six (6) months following Executive’s separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but before the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. If under this Agreement, any payment or series of payments is to be paid in two or more installments, for purposes of Code Section 409A, each such installment is intended to constitute a separate payment for purposes of Section 409A. It is intended that any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) or that constitutes exempt separation pay described in Treasury Regulation Section 1.409A-1(b)(9) will not constitute Deferred Payments for purposes of this Section 22.
	
 

 

	
(c)
	
It is intended that any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Payments for purposes of clause (a) above. “Section 409A Limit” will mean two (2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Executive’s taxable year preceding the Executive’s taxable year of Executive’s termination of employment as determined under, and with such adjustments as are set forth in, Treasury Regulation 1.409A- 1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.
	
 

 

 

	
(d)
	
To the extent any reimbursements or in-kind benefits provided under this Agreement constitute nonqualified deferred compensation subject to Code Section 409A, all such reimbursements and in- kind benefits shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (1) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement); (2) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year; (3) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (4) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.
	
 

 

	
 
	
23.
	
Parachute Payments.

 

	
(a)
	
Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (including any acceleration) by the Company or any entity which effectuates a transaction described in Section 280G(b)(2)(A)(i) of the Code to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise, but determined before application of any reductions required pursuant to this Section 23) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred with respect to such excise tax by the Executive (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company will automatically reduce such Payments to the extent, but only to the extent, necessary so that no portion of the remaining Payments will be subject to the Excise Tax, unless the amount of such Payments that the Executive would retain after payment of the Excise Tax and all applicable Federal, state and local income taxes without such reduction would exceed the amount of such Payments that the Executive would retain after payment of all applicable Federal, state and local taxes after applying such reduction. Unless otherwise elected by the Executive, to the extent permitted under Code Section 409A, such reduction shall first be applied to any severance payments payable to the Executive under this Agreement, then to the accelerated vesting on any equity-based compensation awards, starting with stock options and stock appreciation rights reversing accelerated vesting of those options and stock appreciation rights with the smallest spread between fair market value and exercise price first and after reversing the accelerated vesting of all stock options and stock appreciation rights, thereafter reversing accelerated vesting of restricted stock, restricted stock units, performance shares, performance units or other similar equity awards on a pro rata basis.
	
 

 

	
(b)
	
All determinations required to be made under this Section 23, including the assumptions to be utilized in arriving at such determination, shall be made by an independent and certified public accounting firm of national standing mutually agreed upon by the Company and Executive (the “Accounting Firm”). All fees and expenses of the Accounting Firm shall be borne solely by the Company.
	
 

 

(c)If the Executive receives a Payment after taking into account any reductions pursuant to Section 23(a) and the Internal Revenue Service determines, that some portion of the Payment is subject to additional Excise Tax, the provisions of this Section 23 shall be applied to the total amount of the Payments as determined by the Internal Revenue Service and the Executive shall promptly return to the Company a sufficient amount of the Payment so that no portion of any Payment is subject to the Excise Tax; provided, however, that if the amount of such Payments (as redetermined) that the Executive would retain after payment of the Excise Tax and all applicable Federal, state and local income taxes without any reduction under Section 23(a) would exceed the amount of such Payments that the Executive would retain after payment of all applicable Federal, state and local taxes after applying such reduction, the Company shall restore any Payments previously reduced pursuant to Section 23(a).

 

24.Executive’s employment under this Agreement is conditional upon the satisfactory completion by the Company or its agent(s) of a background check, a criminal record check, consumer credit report, reference check and verification of education. By returning a signed copy of this Agreement, Executive consents to these checks and verifications being conducted, and to the collection, use and disclosure of personal 

 

information as required for conducting these checks and verifications. In the event the results of these checks are not satisfactory to the Company, this offer of employment will be withdrawn, this Agreement will be void and the Company will have no further obligations to Executive.

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year first above written.

 

 

“COMPANY”

 

TILRAY, INC.

 

 

By: 

 

 

 

“EXECUTIVE”

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