Document:

Exhibit 10.30

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), is entered into this 3rd day of December, 2015, by and between Vertical/Trigen Holdings, LLC, a Delaware limited liability company, and its successors and assigns (“Vertical/Trigen” or the “Company”) and Brian A.  Markison (the “Executive”).

 

WHEREAS, this Agreement is being entered into in connection with the entering into of the Business Combination Agreement, dated as of the date hereof (the “Transaction Agreement”) by and among each of the persons designated as an “Osmotica Shareholder” in the Transaction Agreement, Osmotica Holdings Corp Limited, a company organized under the laws of Cyprus, Altchem Limited, solely in its capacity as representative for the Osmotica Shareholders, each of the persons designated as a “Vertical/Trigen Shareholder” in the Transaction Agreement, Vertical/Trigen, Avista Capital Partners III GP, LP, solely in its capacity as representative for the Vertical/Trigen Shareholders, and Osmotica Holdings S.C.Sp., a special limited partnership organized under the laws of Luxembourg (“New HoldCo”) (the transactions contemplated by the Transaction Agreement, the “Transaction”);

 

WHEREAS, the Executive is currently serving as the executive chairman of the Company pursuant to an appointment letter entered into between the Executive and the Company on December 13, 2013 (the “Appointment Letter”), and, in furtherance of this Agreement, the Executive and the Company desire to terminate the Appointment Letter effective as of the consummation of the transactions contemplated by the Transaction Agreement (the “Closing”, and the date on which the Closing occurs, the “Effective Date”);

 

WHEREAS, Vertical/Trigen desires that, from and after the Effective Date, the Executive be employed by the Company, and the Executive desires to be employed by the Company pursuant to the terms of this Agreement effective, subject to, and as of the Effective Date; and

 

WHEREAS, in connection with the execution of the Transaction Agreement and the consummation of the Transaction, New HoldCo will become the indirect parent entity of Vertical/Trigen

 

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereto agree as follows:

 

1.                                      Employment and Duties.

 

(a)                                 General.  Effective as of the Effective Date, the Company hereby agrees to employ and the Executive hereby agrees to accept employment with and serve as President and Chief Executive Officer (the “CEO”) of the Company and each of its parent entities, including New HoldCo and its subsidiaries, and will report to the Board of Managers of New HoldCo (the “Board”).  Upon the Closing (as such term is defined in the Transaction Agreement), Avista Capital Partners III, LP, or one of its affiliated investment funds (the “Avista LP”), shall designate the Executive as one of the three initial managers on the Board that the Avista LP is entitled to designate.  At the request of the Board, the Executive shall also serve as a manager or director on

 

 

the Board of Managers or Board of Directors of each of New HoldCo’s subsidiaries, and as chairman of the Board of Managers or Board of Directors of each of New HoldCo’s subsidiaries.  In these capacities, the Executive shall render such executive, managerial, administrative and other services as customarily are associated and incident to such positions, and as the Company or New HoldCo may, from time to time, reasonably require of him consistent with such position.  Commensurate with the Executive performing his duties as CEO, the Executive will be expected to work at the Company’s headquarters in Bridgewater or Sayreville, New Jersey as necessitated by business demands or as reasonably requested by the Board of the Company.

 

(b)                                 Exclusive Services.  For so long as the Executive is employed by the Company, the Executive shall devote his full time, energies and talents to serving as the CEO of New HoldCo and its subsidiaries (including the Company, collectively, the “Company Group”).  Notwithstanding the forgoing, the Executive may devote reasonable time to activities other than those required under this Agreement, including activities involving professional, charitable, community, educational, religious and similar types of organizations, speaking engagements, and similar types of activities, to the extent that such activities do not individually or in the aggregate, conflict materially with the performance of the Executive’s duties under this agreement; provided, however, that the Executive shall not serve on the board of any business or charitable organization, or hold any other position with any business, without the consent of the Board.  Such advance Board approval has been obtained for the Executive to serve as (i) a director of the following public and private companies and not for profit organizations during his employment with the Company: Lantheus Medical Imaging, the College of New Jersey, Alere, Rosetta Genomics, LTD and Immunomedics, Inc., and (ii) an operating industry advisor to Avista Capital Holdings L.P.  and any of its current or future affiliated investment funds (collectively, “Avista”) and as a director of any portfolio company of Avista or of any other entity that is affiliated with Avista or with some or all of the partners of the ultimate general partner or management company of Avista; provided that (I) all service described in clauses (i) and (ii) shall be performed on the Executive’s personal time and no such service interfere with the Executive’s full-time commitment to serve as CEO of the Company Group for so long as Executive remains employed as such, and (II) the Executive shall immediately disclose to the Board any involvement with a business that reasonably might be expected to be competitive with a business of the Company Group.

 

2.                                      Employment “At-Will”.  The Executive’s employment with the Company shall commence on the Effective Date.  The Executive’s employment with the Company shall, at all times, be treated as “at will,” meaning that the Executive’s employment may be terminated by the Company and the Executive may resign for any reason or no reason at all, unless otherwise prohibited by law.

 

3.                                      Compensation and Other Benefits.  Subject to the terms of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Executive as compensation for services rendered hereunder:

 

(a)                                 Base Salary.  The Company shall pay to the Executive an annual base salary of not less than $600,000 (the “Base Salary”), subject to applicable tax withholdings, payable in accordance with the regular payroll practices of the Company.  Salary increases, if any, may occur from time to time in the Company’s sole discretion.  Such salary increases will depend upon a

 

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number of factors, including but not limited to the Executive’s performance, the Company’s financial performance, and the general economic environment.

 

(b)                                 Equity Participation.  At or promptly following the Closing, the Executive will be granted an amount of options exercisable for units of New HoldCo representing 3% of the basic units of New HoldCo outstanding upon the Closing pursuant to grant documentation and on terms that are consistent with those described in Exhibit A hereto and, to the extent not inconsistent with such terms, are otherwise reasonably satisfactory to the Board.  In addition, the Executive shall make a cash investment in accordance with that certain Reorganization Agreement entered into on the date hereof between the Executive, the Company and the other members of the Company party thereto.

 

(c)                                  Annual Cash Bonus.  The Executive shall be eligible to receive an annual, discretionary cash bonus (“Annual Cash Bonus”) less taxes and withholdings, with a target bonus opportunity of 100% of the Executive’s Base Salary for the applicable calendar year (the “Target Bonus”).  Annual Cash Bonuses shall be subject to, and shall only be earned and payable upon, the achievement of one or more reasonable and objective annual performance targets established no later than March 30 of each performance year by the Board of Directors of the Company (the “Company Board”).  The performance targets for Executive’s first partial year of service after the Effective Date shall be established by the Company Board within ninety (90) calendar days following the Effective Date and shall be prorated for the Executive’s first partial year of service.  Annual Cash Bonuses, if any, are generally to be paid in the year immediately following the performance year after the finalization of the performance years’ audit, on approximately the 15th of the month that such annual audit is finalized and will only be paid to the extent the same is earned and in the amount determined based on actual achievement of the performance targets, subject to the Executive’s continued employment on such payment date, except as otherwise provided in Section 4 hereof.

 

(d)                                 Employee Benefit Plans.  The Executive shall be entitled to participate in employee benefit plans and programs of the Company, in accordance with their respective terms, as may be amended from time to time, on a basis no less favorable than those made available to other senior executives of the Company.  Coverage under such plans is governed by the applicable plan documents which shall be provided to the Executive.

 

(e)                                  Expenses.  The Company shall reimburse the Executive for reasonable travel and other business-related expenses incurred by the Executive in connection with the fulfillment of his duties hereunder, upon presentation of proper receipts or other proof of expenditure and subject to the applicable expense reimbursement policies and procedures of the Company as in effect from time to time.  The Executive shall comply with such expense reimbursement policies and procedures as may be in effect from time to time.

 

(f)                                   Vacation.  The Executive shall be entitled to twenty-five working days of paid vacation per year, which shall be accrued in accordance with the Company’s vacation policy for senior executives (it being understood that vacation days accrued for the calendar in which the Effective Date occurs will be pro-rated for the Executive’s first partial year of service).  Such vacations shall extend for such periods and be taken at such intervals as shall be appropriate and consistent with the proper performance of the Executive’s duties hereunder.  Carryover of unused

 

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vacation days shall be permitted to the extent permitted by the Company’s vacation policy for other senior executives, as in effect and amended from time to time.

 

(g)                                  Reimbursement of Legal Fees.  The Company shall promptly reimburse the Executive for all reasonable and documented legal fees and expenses incurred by the Executive in connection with the preparation and negotiation of this Agreement; provided, that, the Company shall not be required to reimburse the Executive for any such reasonable and documented legal fees and expenses in excess of $25,000 in the aggregate.

 

4.                                      Termination of Employment and Change of Control.

 

(a)                                 Termination By the Company Without Cause or By the Executive With Good Reason.  If the Executive’s employment is terminated by the Company without “Cause,” as that term is defined in Section 4(d) below, or the Executive terminates his employment for “Good Reason,” as that term is defined in Section 4(e) below, the Executive shall receive the following, subject to Section 4(g):

 

(i)                                     a lump sum payment equal to the Executive’s Base Salary on the date of termination for 12 months, less taxes and withholdings, payable on the sixtieth (60th) day following the date of Executive’s termination of employment;

 

(ii)                                  a lump sum payment equal to the full Target Bonus for the year of termination, less taxes and withholdings, payable on the sixtieth (60th) day following the date of the Executive’s termination of employment;

 

(b)                                 continued payment by the Company, for a period of 24 months, of the Company’s portion of the premium for medical and dental benefits under the Company’s group medical and dental plans that the Company was paying on the Executive’s behalf on the date of termination (which subsidy will be treated as imputed income); provided, that the Executive elects to purchase continued healthcare coverage under COBRA, and the period of subsidized coverage shall count toward the Executive’s period of COBRA coverage; and provided, further, that, in the event the Company determines that the benefits set forth in this clause (iii) would result in adverse tax consequences for the Company, any affiliate, or any individual, or otherwise violate applicable law at the time such payments are due, the Company shall provide, in lieu of such benefits, a cash payment equal to the subsidy described in this clause iii that does not result in such adverse tax consequences or otherwise violate applicable law;

 

(i)                                     a lump sum payment equal to any earned, but unpaid, Annual Cash Bonus, if any, for the year prior to the year of termination, notwithstanding the failure of the Executive to be employed by the Company on such Annual Cash Bonus payment date; and

 

(ii)                                  a lump sum payment equal to (A) any earned, but unpaid, Base Salary through the date of termination, (B) any accrued but unreimbursed business expenses incurred by the Executive prior to such termination, subject to compliance with the Company’s expense reimbursement policy, and (C) the cash value of any unused vacation days accrued by the Executive as of the date of termination, subject to applicable tax withholding, which shall be payable on the sixtieth (60th) day following the Executive’s termination of employment (the “Accrued Amounts”).

 

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In view of the benefits to which the Executive may be entitled under this Section 4(a) or Section 4(f), as applicable, the Executive may not participate in and shall not receive any benefits under any severance plan or policy of the Company (or any successor, affiliate, or similar severance plan) (a “Company Severance Policy”) and the severance arrangements provided under this Section 4(a) or Section 4(f), as applicable, shall constitute the entire obligation of the Company and its affiliates to the Executive in connection with any termination by the Company without Cause or termination by the Executive for Good Reason; provided, that this paragraph shall not alter the Executive’s rights or obligations he may have or be subject to in connection with or with respect to his direct or indirect equity interests in New HoldCo, and the Executive’s indemnification rights shall continue to be governed in accordance with any Directors and Officers Liability Insurance Policy that New HoldCo or any of its subsidiaries may maintain and/or with New HoldCo’s or any of its subsidiaries’ certificate of incorporation or by-laws or similar governing document, and otherwise in accordance with Section 7; and further provided, that to the extent that any Company Severance Policy would provide the Executive with a greater severance benefit upon any applicable termination than provided hereunder, the Executive shall be entitled to participate in such Company Severance Policy to the extent of any such excess.  The Executive expressly acknowledges and agrees that he shall not be entitled to receive any payments, benefits or other compensation under this Section 4(a) in the event he receives any payment as a result of a Change of Control circumstance as set forth in Section 4(f) below.

 

(c)                                  Other Terminations.  The Executive shall not be entitled to the post-termination benefits set forth in Section 4(a) above or Section 4(f) below, as and if applicable, other than the Accrued Amounts if his employment with the Company ceases for any reason other than his termination by the Company without Cause or his resignation for Good Reason; it being understood that if the Executive’s employment with the Company ceases or terminates for any other reason, he will not be entitled to any severance or post-termination benefits or payments, whether hereunder or pursuant to any policy of the Company; provided, that this paragraph shall not alter the Executive’s rights or obligations he may have or be subject to in connection with or with respect to his direct or indirect equity interests in New HoldCo, and the Executive’s indemnification rights shall continue to be governed in accordance with any Directors and Officers Liability Insurance Policy that New HoldCo or any of its subsidiaries may maintain and/or with New HoldCo’s or any of its subsidiaries’ certificate of incorporation or by-laws or similar governing document, and otherwise in accordance with Section 7.  In the event that the Executive’s employment is terminated other than by the Company without Cause or by the Executive for Good Reason, the Executive shall be entitled to a lump sum payment equal to the Accrued Amounts, subject to applicable tax withholding, payable no later than the sixtieth (60th) day following the Executive’s termination of employment.  The Executive shall provide at least 90 days’ advance notice of any resignation without Good Reason.  During such 90-day period, the Executive shall continue to perform all duties requested of him, including but not limited to assisting in transition; provided that the Board shall have discretion to release the Executive from his responsibilities before the end of such 90-day notice period, without any obligation for the Company to provide any payments or benefits other than payment of the Accrued Amounts for service through his termination date, as described above; it being understood that such 90-day notice period shall count towards the Restriction Period.

 

(d)                                 Termination Due to Death or Permanent Disability.  The Executive’s employment with the Company shall terminate automatically on the Executive’s death.  In the

 

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event of the Executive’s Permanent Disability, the Company shall be entitled to terminate his employment.  For purposes of this Agreement, the “Permanent Disability” of the Executive shall mean the Executive’s inability, because of mental or physical illness or incapacity, whether total or partial, to perform one or more of the material functions of the Executive’s position with or without reasonable accommodation, for a period of: (i) one hundred eighty (180) consecutive days; or (ii) one hundred eighty (180) days during any twelve (12) month period, and which entitles the Executive to receive benefits under a disability plan provided by the Company.  In the event of a termination of employment under this section, the Executive shall be entitled to a lump sum payment equal to (A) any earned, but unpaid, Annual Cash Bonus, if any, for the year prior to the year of termination, (B) a portion of the Annual Cash Bonus for the year of termination, but only to the extent that the performance targets are achieved at year end and pro-rated for the number of days of employment during the year of termination, and (C) the Accrued Amounts in the case of each of clauses (A), (B) and (C), subject to applicable tax withholding, in the case of each of clauses (A) and (C), payable no later than the sixtieth (60th) day following the Executive’s termination of employment, and in the case of clause (B), payable on the normal Annual Cash Bonus payment date following the year in which such termination occurs.

 

(e)                                  Cause Definition.  For purposes of this Agreement, “Cause” means (i) any material failure on the part of the Executive to perform the Executive’s employment duties (not as a consequence of any illness, accident or disability and not relating to any corporate or individual performance targets), (ii) the Executive’s continued failure to carry out any reasonable lawful direction of the Company or the Board that is consistent with his position as CEO, (iii) the Executive’s material failure to comply with any of the applicable material rules of the Company contained in its Employee Handbook or any other Company policy, (iv) the Executive’s failure to comply with any of the material terms of this Agreement, (v) the Executive’s fraud, willful malfeasance, gross negligence or willful misconduct in the performance of his employment duties, which causes material injury to the Company Group or its reputation, including, but not limited to, willful or gross misconduct toward any of the Company Group’s other employees and intentional falsification of Company data to be submitted to any governmental authority, and (vi) the Executive’s conviction of a felony or other crime involving moral turpitude (or a pleading of guilty or nolo contendere thereto), other than one which in the reasonable opinion of the Board does not affect the Executive’s position as an employee of the Company; provided, however, that, with respect to each of items (i) through (iv) in this Section 4(d), the Company must notify the Executive in writing within ten (10) days of the Board becoming aware of the occurrence of such event, delineating with specificity the facts constituting the Cause, requesting that the Executive remedy the situation, and stating that if the Executive fails to remedy the situation he will be terminated for Cause (an “Executive Notice to Cure”), and the Executive shall be given ten (10) days from the date of receipt of the Executive Notice to Cure to remedy the alleged occurrence, in which case if remedied within such ten (10) day period, such action or inaction shall not constitute Cause.

 

(f)                                   Good Reason Definition.  For purposes of this Agreement, “Good Reason” means (i) a material and adverse reduction in the nature or scope of the responsibilities of, or title held by, the Executive, including, for the avoidance of doubt, any action as a result of which the Executive no longer has the title of Chief Executive Officer of the Company or New HoldCo or, following a Change of Control, any entity that directly or indirectly owns more than fifty percent (50%) of the Company or New HoldCo; (ii) a material breach by the Company of this Agreement; (iii) the transfer or relocation of the Executive’s principal place of employment to a location that

 

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is more than 50 miles from the Company’s office in Bridgewater or Sayreville, New Jersey, without the Executive’s prior consent; or (iv) if the Company is not a public company, the removal (without the Executive’s consent or approval) of the Executive from the Board or any failure (without the Executive’s consent or approval) to elect the Executive to the Board; provided, however, that, with respect to each of items (i) - (iv) in this Section 4(e), the Executive must notify the Company in writing within ten (10) days of the occurrence of such event, delineating with specificity the facts constituting the Good Reason and requesting that the Company remedy the situation (“Company Notice to Cure”), the Company shall be given ten (10) days from the date of receipt of the Company Notice to Cure to remedy the alleged occurrence and the Executive’s employment must terminate within ten (10) days after the Company’s failure to cure.  For the avoidance of doubt, (x) a change in the number of direct or indirect reports to the Executive, or upon the consummation of an IPO, a change in the Executive’s reporting relationships (including to a Chairman of the Board, but subject, however, to the Executive continuing to be the CEO of the Company, New HoldCo and the entity subject to such IPO), in each case, shall not by itself constitute a material and adverse reduction in the nature or scope of the responsibilities of the Executive, and (y) “Good Reason” shall not include if, with his consent, the Executive ceases to be the Chief Executive Officer of New HoldCo and becomes Chairman of the Board of Managers of New HoldCo.

 

(g)                                  Change of Control.

 

a.                                      Definitions.  For purposes of this Agreement,

 

i.                                          a “Sale of the Company” means (A) the acquisition by any person or entity, or any two or more persons or entities deemed to be one person or a group, as the terms “person” and “group” are used in Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (a “Person”), (other than a Permitted Holder), of the direct or indirect “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the voting securities of the Company (or of any member of the Company Group which beneficially owns or controls more than 50% of the voting securities of the Company) in one or a series of related transactions, (i) through a sale of securities, or (ii) a merger, consolidation or similar transaction involving the Company or New HoldCo, immediately following which, any member or members of the Company Group or a Permitted Holder fails to own, individually or collectively, more than fifty percent (50%) of the voting power of the successor entity, or (B) a sale or other disposition for value to any Person other than a Permitted Holder of all or substantially all of the assets of the Company or New HoldCo.  For the avoidance of doubt, a Sale of the Company shall not be deemed to occur in connection with a sale, disposition or transfer of assets or stock (including by merger, recapitalization, consolidation or similar transaction) of any member of the Company Group (other than the Company or any member of the Company Group which beneficially owns or controls more than 50% of the voting stock of the Company).

 

ii.                                       an “IPO” means the closing of the first sale of securities of any member of the Company Group, or any entity that beneficially owns more than fifty percent (50%) of any member of the Company Group, to the general public (including a public offering of the Company’s or New HoldCo’s securities) pursuant to an effective registration statement filed with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, or some

 

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other some other securities regulator in another jurisdiction or is effected under otherwise applicable law.

 

iii.                                    a “Change of Control” shall be deemed to have occurred once (and only once) upon a Sale of the Company.  For the avoidance of doubt, following the first Sale of the Company after the date hereof, no subsequent Sale of the Company shall constitute a Change of Control.

 

iv.                                   “Permitted Holder” means: (i) any entity within the Company Group, (ii) a Person or group affiliated with the Company or any member of the Company Group or (iii) any beneficial owner of the Company Group (including Altchem Limited and Avista Capital Holdings, L.P.) or any of such beneficial owner’s affiliates.

 

b.                                      Termination Without Cause or For Good Reason following a Change of Control.  If, within twelve (12) months following the occurrence of a Change of Control (the “Change of Control Period”), the Executive resigns for Good Reason or the Company terminates the Executive’s employment with the Company without Cause, the Executive shall receive the following, subject to Section 4(g):

 

i.                                          a lump sum payment, equal to a multiple of Executive’s Base Salary as of (A) the date of such of termination or (B) the day immediately prior to the date of the Change of Control, whichever is greater, subject to applicable tax withholding, payable on the sixtieth (60th) day following the date of Executive’s termination of employment, which multiple shall vary based on the timing of the occurrence of the Executive’s termination of employment in relation to the Change of Control as determined as specified below (such applicable multiple, the “Change of Control Multiple”):

 

1)                                     if the Change of Control occurs within 12 months following the Effective Date, the Change of Control Multiple shall be 2,

 

2)                                     if the Change of Control occurs between 12 and 24 months following the Effective Date, the Change of Control Multiple shall be 1.5, and

 

3)                                     if the Change of Control occurs 24 or more months following the Effective Date, the Change of Control multiple shall be 1.

 

ii.                                       a lump sum payment, equal to the greater of (A) the full Target Bonus for the year of termination or (B) the full Target Bonus applicable for the year in which the Change of Control occurred, multiplied by the applicable Change of Control Multiple, based on the timing of the occurrence of the Executive’s termination of employment in relation to the Change of Control, subject to applicable tax withholding, payable on the sixtieth (60th) day following the date of Executive’s termination of employment;

 

iii.                                    continued payment by the Company, for a period of 24 months, of the Company’s portion of the premium for medical and dental benefits under the Company’s group medical and dental plans that the Company was paying on the Executive’s behalf on the date of termination (which subsidy will be treated as imputed income), provided that the Executive elects to purchase continued healthcare coverage under COBRA, and the period of

 

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subsidized coverage shall count toward the Executive’s period of COBRA coverage; provided, that, in the event the Company determines that the benefits set forth in this clause iii would result in adverse tax consequences for the Company, any affiliate, or any individual, or otherwise violate applicable law at the time such payments are due, the Company shall provide, in lieu of such benefits, a cash payment equal to the subsidy described in this clause iii that does not result in such adverse tax consequences or otherwise violate applicable law;

 

iv.                                   a lump sum payment equal to any earned, but unpaid, Annual Cash Bonus, if any, for the year prior to the year of termination, notwithstanding the failure of the Executive to be employed by the Company on such Annual Cash Bonus payment date, subject to applicable tax withholding, payable on the sixtieth (60th) day following the date of Executive’s termination of employment; and

 

v.                                      a lump sum payment equal to the Accrued Amounts.

 

The parties agree and acknowledge that if the Executive is entitled to and receives payments and benefits under this Section 4(f), such payments and benefits are in lieu of and not in addition to any payments or benefits amounts payable or subject to Section 4(a).

 

(h)                                 Separation Agreement and General Release.  The payments and benefits set forth in Sections 4(a) and 4(f) above are expressly conditioned upon the Executive’s execution and delivery to the Company of a General Release substantially in a form of Exhibit B, attached hereto, (the “General Release”) and such General Release’s becoming irrevocable within sixty (60) days following the Executive’s termination of employment; provided that any payments or benefits otherwise due prior to such sixtieth (60th) day shall be paid on such sixtieth (60th) day; provided, further, that if such sixty (60) day period spans two taxable years, any payments or benefits shall be paid or commence, as applicable, in the second taxable year.  For the avoidance of doubt, the payments and benefits set forth in Sections 4(a) and 4(f) above shall be forfeited if such General Release has not been executed, delivered and become irrevocable within such sixty (60) day period.

 

(i)                                     Section 280G.  If, immediately prior to a “change in ownership or control” of the Company (within the meaning of Section 280G of the Code (“Section 280G”)), no stock in the Company or New HoldCo is readily tradeable on an established securities market, then as soon as reasonably practicable following the execution of any definitive agreement pursuant to which such “change in ownership or control” transaction would be effected, but in no event later than five (5) business days prior to the consummation of such change in ownership or control, the Company or New HoldCo shall (i) solicit a waiver from the Executive pursuant to which the Executive may waive his right to some or all of any payments and/or benefits payable hereunder or otherwise that as a result of or in connection with the change in ownership or control would be deemed to constitute “parachute payments” within the meaning of Section 280G (the “Waived 280G Benefits”) such that all remaining payments and/or benefits applicable to him shall not be deemed to be “excess parachute payments” (within the meaning of Section 280G), and (ii) solicit the approval of the stockholders of the Company or New HoldCo, as applicable, (to the extent and in the manner required under Sections 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code) for the payment of any Waived 280G Benefits, so that if so approved, such Waived 280G Benefits shall not be considered “parachute payments” within the meaning of Section 280G.  To the extent any

 

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of the Waived 280G Benefits are not so approved by the stockholders as contemplated above, such Waived 280G Benefits shall not be made or provided.

 

5.                                      Restrictive Covenants.

 

(a)                                 Confidential Information.  On the Effective Date, the Executive will enter into and agree to be bound by and subject to an agreement with the Company relating to the protection of confidential information and developments and assignment of intellectual property and development rights, substantially in the form of Exhibit C, attached hereto (the “Confidentiality Agreement”).  Notwithstanding the foregoing, in the event of any overlap between the terms contained in Sections 5(c) and 5(d) immediately below and any terms in the Confidentiality Agreement that relate to the same subject matter, the most restrictive of such terms shall apply.

 

(b)                                 Covenant Against Competition.  During the Executive’s employment with the Company and for the greater period of (i) one year following the Executive’s termination of employment with the Company, (ii) eighteen (18) months following the Executive’s termination of employment by the Company without Cause or by the Executive for Good Reason if such termination occurs within twelve (12) months following a Change of Control that occurs more than twelve (12) months following the Effective Date but prior to the beginning of the twenty-fourth (24th) month following the Effective Date, and (iii) twenty-four (24) months following the Executive’s termination of employment by the Company without Cause or by the Executive for Good Reason if such termination occurs within twelve (12) months following a Change of Control that occurs within twelve (12) months following the Effective Date (in each case, as applicable, the “Restriction Period”), the Executive will not, directly or indirectly, be involved as an owner, officer, director, employee, consultant, contractor or agent of any business, company or entity which, competes with the Company Group, which would include any company or business engaged, directly or indirectly, in the marketing, distribution, manufacturing or sale of branded and generic pharmaceutical products that compete with the branded or generic pharmaceutical products that the Company and its subsidiaries licenses, owns, markets, distributes, manufactures or sells at such time or any such products that have been presented to the Board of Managers for future development, licensing, marketing, distribution, manufacturing or sale at prior to such time (any such competing products, “Competing Products”).  For the limited purpose of determining whether a business, company or entity “competes” with the Company Group following a Change of Control pursuant to the foregoing sentence, the term “Company Group” shall not include the businesses of any acquirer or successor of the Company which are different from the business of the Company Group at the time of such Change of Control.  Notwithstanding the foregoing, the Executive, during the covenant not to compete period, may be employed by or otherwise work for a pharmaceutical company whose gross revenues from the sale of Competing Products for the most recent fiscal year prior to the date of the Executive’s affiliation is less than twenty (20) percent of the pharmaceutical company’s total gross revenues, provided that he is entirely screened from, and has no role or involvement in, that company’s business that relates to or is involved with any Competing Product during the restrictive covenant period.  The Executive understands and acknowledges that his obligations hereunder shall apply anywhere that the Company’s or any of its subsidiaries’ products are marketed, distributed or sold because the Company and its subsidiaries are engaged in a global business.

 

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(c)                                  Covenant Against Solicitation of Employees.  During the Restriction Period, the Executive will not, directly or indirectly, solicit, attempt to solicit, entice, encourage or induce any employee of the Company Group to terminate his or her relationship with the Company Group, or employ or attempt to employ or otherwise retain on an independent contractor basis, any person who was an employee of the Company Group during the Executive’s employment with the Company.  Notwithstanding the foregoing, this covenant does not preclude any successor employer of the Executive from hiring any employees of the Company Group, provided the Executive has no involvement, direct or indirect, in their solicitation, recruitment or hire.

 

(d)                                 Covenant Against Solicitation of Clients/Customers.  During the Restriction Period, the Executive will not, directly or indirectly, solicit, contact, or have any contact, other than in connection with his employment with the Company, for the purpose of transacting business with any person or entity who is or was a customer or client of the Company Group during the Executive’s employment with the Company, where such solicitation or contact interferes with or otherwise negatively impacts the Company Group.

 

(e)                                  Reasonable Restrictions; Right to Equitable Relief.  The Executive acknowledges and agrees that the restrictions and covenants set forth in Section 5 of this Agreement are reasonable in geographic and temporal scope and in all other respects and necessary to protect the Company and its legitimate business interests.  The Executive understands and agrees that the Company will be irreparably injured by any breach of Section 5 and damages would be an inadequate remedy.  Accordingly, the Executive acknowledges that, in the event of the Executive’s breach or threatened breach of Section 5, the Company shall be entitled to a restraining order in addition to preliminary, temporary and permanent injunctive relief or other equitable relief, without the requirement of posting a bond or other security; provided, however, that the granting of any such injunctive relief shall not prejudice the Company’s right to seek monetary damages for any breach of Section 5 of this Agreement and any damage that the Company Group has suffered thereby, and that the Company shall be entitled to attorneys’ fees and costs incurred by the Company Group in enforcing the terms of Section 5 of this Agreement.  Any right to obtain an injunction, restraining order, or other equitable relief under this Section 5 shall not be deemed to be a waiver of any right to any other remedy that the Company may have at law or in equity.  Notwithstanding anything else to the contrary herein, in the event of any violation by the Executive of Section 5 of this Agreement, the Company shall immediately have no obligation thereafter to make any payments to or confer any benefits on the Executive that are set forth in this Agreement.

 

6.                                      Confidentiality of This Agreement.  The Executive agrees to keep the terms of this Agreement, to the extent permitted by law, completely confidential and to not disclose information about this Agreement to anyone other than the Executive’s spouse or domestic partner, attorneys and licensed tax and/or professional investment advisors, all of whom the Executive will inform of and obtain their advance agreement to be bound by this confidentiality provision.

 

7.                                      Indemnification.  The Executive shall be indemnified pursuant to and in accordance with the terms and conditions set forth in New HoldCo’s or its subsidiaries’ Directors and Officers Liability Insurance Policy then in effect, which policy shall provide the Executive coverage, during and after his employment with the Company, on the same basis as the Company’s other directors and officers.

 

11

 

8.                                      Successors and Assigns.  This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns and may be assigned by the Company without the Executive’s consent in connection with any person acquiring, whether by merger, consolidation, purchase of stock, assets or otherwise, all or substantially all of the Company’s assets and business, and the successor shall be substituted for the Company under this Agreement.

 

9.                                      Withholding.  Any payments made or benefits provided to the Executive under this Agreement shall be reduced by any applicable withholding taxes or other amounts required to be withheld by law or contract.

 

10.                               Cooperation.  The Executive agrees to cooperate fully and in good faith with the Company and its legal counsel, both during and after his employment with the Company, in connection with any defense, prosecution or investigation of any and all actual, threatened, potential or pending court or administrative proceedings or other legal matters in which the Executive may be involved as a party and/or in which the Company determines, in its sole discretion, that the Executive is a relevant witness or has relevant knowledge or information; provided, that any such cooperation shall not unreasonably interfere with the Executive’s employment with a future employer following the Executive’s termination of employment with the Company.  In connection with such matters, the Executive agrees to notify, communicate and be represented by counsel of the Company’s choosing, to fully cooperate and work with such counsel with respect to, and in preparation for, any depositions, interviews, responses, appearances, or other legal matters, and to testify honestly with respect to all matters.  The Executive is also entitled to appoint, at his request, his own legal counsel in addition to the Company’s counsel in connection with any legal matters covered by this Agreement; provided, that, unless such legal matters relate to claims for which the Executive is seeking indemnification, in which case the relevant insurance policy or other document, agreement or instrument governing the Executive’s to right to seek indemnification shall apply, the Company will pay the reasonable and documented expenses of the Executive’s own legal counsel if it is determined that the Executive’s interests are adverse to or in conflict with those of the Company and/or that providing counsel to the Executive would be a conflict of interest.

 

11.                               Acknowledgement by the Executive.  The Executive represents and warrants that (i) he is not, and will not become, a party to any agreement, contract, arrangement, understanding, covenant or restriction contained in any agreement that in any way restricts or prohibits him from undertaking or performing his duties in accordance with this Agreement or that restricts his ability to be employed by the Company in accordance with this Agreement; (ii) his employment by the Company will not violate the terms of any policy of any prior employer of the Executive regarding competition or solicitation; and (iii) his position with the Company will not require him to improperly use any trade secrets or confidential information of any prior employer, or any other person or entity for whom he has performed services, and that he has not taken with him or disclosed to the Company any confidential information from any prior employment or any other entity for whom he has performed services.

 

12.                               Section 409A

 

(a)                                 The intent of the parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A and, accordingly, to the maximum extent

 

12

 

permitted by applicable law, this Agreement shall be interpreted to be in compliance therewith.  To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Section 409A.

 

(b)                                 If any payment, compensation or other benefit provided to the Executive under this Agreement in connection with the Executive’s “separation from service” (within the meaning of Section 409A) is determined, in whole or in part, to constitute “nonqualified deferred compensation” (within the meaning of Section 409A) and the Executive is a specified employee (as defined in Section 409A(a)(2)(B)(i)) at the time of separation from service, no part of such payments shall be paid before the day that is six months plus one day after the date of separation or, if earlier, ten business days following the Executive’s death (the “New Payment Date”).  The aggregate of any payments and benefits that otherwise would have been paid and/or provided to the Executive during the period between the date of separation from service and the New Payment Date shall be paid to the Executive in a lump sum on such New Payment Date.  Thereafter, any payments and/or benefits that remain outstanding as of or following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement.

 

(c)                                  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” (within the meaning of Section 409A), and for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “terminate,” “termination of employment” or like terms shall mean separation from service (within the meaning of Section 409A).

 

(d)                                 All expenses or other reimbursements as provided herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive.  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; and (ii) the amount of expenses eligible for reimbursements or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year.

 

(e)                                  For purposes of Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made within 30 days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

13.                               Amendment; Waiver.  This Agreement may not be modified, amended or waived in any manner, except by an instrument in writing signed by both parties hereto.  The waiver by

 

13

 

either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

 

14.                               Governing Law and Forum Selection.  This Agreement (including any, action, litigation or proceeding that may be based upon, arise out of or relate to this Agreement) shall be subject to, and governed by, the laws of the State of New York applicable to contracts made and to be performed therein, without regard to conflict of law principles.  With respect to any dispute arising out of or related to this Agreement, the Executive hereby consents to the exclusive jurisdiction of the of the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, and expressly agrees not to challenge venue or forum in the event of any litigation.

 

15.                               Entire Agreement.  Subject to Section 5(a), this Agreement between the Company and the Executive, as amended from time to time, contains the entire agreement and understanding of the parties hereto with respect to the matters covered herein and supersedes all prior or contemporaneous negotiations, commitments, agreements and writings with respect to the subject matter hereof, all such other negotiations, commitments, agreements and writings shall have no further force or effect, and the parties to any such other negotiation, commitment, agreement or writing shall have no further rights or obligations there-under.  The Appointment Letter shall be terminated effective as of the Effective Date and, notwithstanding anything to the contrary in this Section 15, any confidentiality undertakings contained in the Appointment Letter shall survive such termination.

 

16.                               Counterparts.  This Agreement may be executed by either of the parties hereto in counterparts (including, by means of facsimile or PDF (portable document file)), each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

 

17.                               Headings.  The headings of sections herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

 

18.                               Severability.  The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, and this Agreement will be construed as if such invalid or unenforceable provision or portion of such provision were omitted (but only to the extent that such provision cannot be appropriately reformed or modified).

 

19.                               Notices.  All notices or communications hereunder shall be in writing and addressed as follows:

 

To the Company:

 

Vertical/Trigen Holdings, LLC.

c/o Avista Capital Partners

65 East 55th Street, 18th Floor

New York, NY 10022

 

14

 

Facsimile No.: +1 (212) 593 6959

Attention: General Counsel

 

With a copy to New HoldCo at its headquarters.

 

To the Executive:

 

Brian Markison

1742 Stuart Road West

Princeton, NJ 08540

Email:

Facsimile:

or, if the Executive moves, at his last address on record with the Company.

 

All such notices shall be conclusively deemed to be received and shall be effective (i) if sent by hand delivery, upon receipt, or (ii) if sent by electronic mail or facsimile, upon confirmation of receipt by the sender of such transmission, or (iii) if sent by courier or certified or registered U.S.  mail, upon receipt.

 

20.                               Termination of Transaction Agreement.  Notwithstanding anything to the contrary set forth in this Agreement, in the event that the Transaction Agreement is terminated, this Agreement shall be void ab initio and of no force or effect.

 

[Remainder of page intentionally left blank.]

 

15

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by an authorized officer pursuant to the authority of its Board of Managers, and the Executive has executed this Agreement, as of the day and year first written above.

 

	
 
    	
VERTICAL/TRIGEN   HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Chris   Klein
    
	
 
    	
Name:   Chris Klein
    
	
 
    	
Title:   Secretary
    

 

ACCEPTED AND AGREED:

 

	
/s/ Brian   A. Markison
    	
 
    
	
Brian A.   Markison
    	
 
    

 

[MARKISON EMPLOYMENT AGREEMENT]

 

 

Exhibit A

 

Project Orbit - Proposed Management Equity Program

 

 

Management Equity Program Terms And Conditions

 

Option Program

 

	
Size of Pool:
    	
 
    	
Total options representing up to 7.5% of the basic units   outstanding at Closing. Following the Closing, the CEO will recommend option   allocations to the Board of Orbit Holdco, which the Board will have   discretion to amend and/or approve. Brian Markison’s employment agreement   will provide for, and promptly following the Closing the Board shall approve,   a grant of options to Brian Markison representing 40% of the pool. In   addition, 0.5% of the pool (0.5% of the 7.5%) will be reserved for issuance   to individuals selected by Altchem, the names of which have been communicated   to Avista on or prior to the date of the Business Combination Agreement.
    
	
 
    	
 
    	
 
    
	
Strike Price:
    	
 
    	
Same cost per unit as Avista’s and Altchem’s equity investment   at Closing and fair market value therefrom.
    
	
 
    	
 
    	
 
    
	
Vesting:
    	
 
    	
1/2 of the option grant will vest based upon achieving   performance targets (the “Performance Plan”). The remaining 1/2 of the   option grant will vest ratably over four (4) years based upon the   passage of time (the “Time Plan”).
    
	
 
    	
 
    	
 
    
	
Performance Plan:
    	
 
    	
One third of the options granted under the Performance Plan will   fully vest upon the original holders of units of Orbit Holdco (collectively,   the “Original Investors”) having received (on a cumulative basis)   aggregate net cash proceeds (excluding, for the avoidance of doubt, proceeds   from the Promissory Notes to be issued by Orbit Holdco to certain Original   Investors at the Closing and any transaction, advisory or monitoring fees)   with respect to its equity securities in an amount equal to 2.0 times their   Investment Amount (as defined below) (the “Tier 1 ROI”); one third of   the options granted under the Performance Plan will fully vest upon the   Original Investors having received (on a cumulative basis) aggregate net cash   proceeds (excluding, for the avoidance of doubt, proceeds from the Promissory   Notes to be issued by Orbit Holdco to certain Original Investors at the   Closing and any transaction, advisory or monitoring fees) with respect to its   equity securities in an amount equal to 2.5 times their Investment Amount   (the “Tier 2 ROI”); and one third of the options granted under the   Performance Plan will fully vest upon the Original Investors having received   (on a cumulative basis) aggregate net cash proceeds (excluding, for the   avoidance of doubt, proceeds from the Promissory Notes to be issued by Orbit   Holdco to certain Original Investors at the Closing and any transaction,   advisory or monitoring fees) with respect to its equity securities in an   amount equal to 3.0 times their Investment Amount (the “Tier 3 ROI”).

 

All dividends paid to the Original Investors (including in   connection with any dividend recapitalization) shall be included in aggregate   net proceeds (other than the dividend made to the shareholders of Osmotica   Holdings Corp. Limited in connection with the Closing). The Board will have   discretion to accelerate vesting in the event of an initial public offering   or a transaction in which the Original Investors receive non-cash proceeds.

 

“Investment Amount” means an amount equal to $640 million,   increased from time to time for any cash or other consideration contributed   by the Original Investors to Orbit Holdco after the date of grant and prior   to the 
    

 

 

	
 
    	
 
    	
date on which a “Change of Control” (to be defined) transaction   is consummated.

 

In the event of a “Change of Control”, unvested options under   the Performance Plan will accelerate immediately prior to the “Change in   Control” event to the extent the “Return of Capital” thresholds set forth   above are satisfied.
    
	
 
    	
 
    	
 
    
	
Time Plan:
    	
 
    	
Vesting over four (4) years subject to continued   employment. Options under the Time Plan granted in connection with the   Closing will vest on the first anniversary of the Closing of the transaction,   and in annual amounts thereafter.

 

In the event of a “Change of Control” the unvested portion of   the options under the Time Plan will accelerate immediately prior to the   “Change in Control” event.
    
	
 
    	
 
    	
 
    
	
Exercise of Options:
    	
 
    	
Upon termination of employment, the terminated holder of options   will be able to exercise his/her then vested options by delivering the   exercise price in cash within agreed upon time periods.

 

Any vested options that are not exercised within the applicable   time periods following any such termination shall automatically forfeit and terminate.   Unvested options automatically terminate upon any termination of employment.

 

Orbit Holdco will have certain repurchase rights under certain   circumstances upon termination of employment (see “Repurchase Rights” below   and Schedule A).
    
	
 
    	
 
    	
 
    
	
Transfer Restrictions
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Transfer Restrictions:
    	
 
    	
Units of Orbit Holdco held by members of management and other   employees (the “Management Holders”) may not be transferred unless the   transfer is (i) to a permitted transferee (i.e., for estate   planning purposes), (ii) made in connection with the exercise of   drag-along rights, (iii) made in connection with the exercise of a   tag-along right or (iv) made to Orbit Holdco, Avista or Altchem in   connection with their respective repurchase rights (see “Repurchase Rights”   below and Schedule A).

 

Following an IPO, until such time as the Major Limited Partners   have sold at least 50% of the equity interests they own immediately prior to   the IPO, each Management Holder will be permitted to transfer common shares   in an amount such that its “relative ownership percentage” (measured as the   number of unrestricted shares owned after such transfer as a percentage of   the sum of the number of unrestricted shares owned immediately after the   consummation of the IPO and the number of unvested shares owned immediately   after the consummation of the IPO which have vested as of the date of   calculation) is equal to or greater than the aggregate “relative ownership   percentage” of the Major Limited Partners.
    
	
 
    	
 
    	
 
    
	
Tag-Along Rights:
    	
 
    	
Management Holders will be afforded customary tag-along rights   to sell a pro rata portion of their units (whether rolled over, purchased or   issued 
    

 

19

 

	
 
    	
 
    	
upon exercise of vested options) in certain transfers of units   by Avista and Altchem, subject to customary exceptions.
    
	
 
    	
 
    	
 
    
	
Drag-Along Rights:
    	
 
    	
Management Holders will be subject to customary drag-along   rights in favor of Avista, pursuant to which they will be required to   participate on a pro rata basis in certain transfers of units by Avista.
    
	
 
    	
 
    	
 
    
	
Cooperation with Transfers:
    	
 
    	
If drag-along or tag-along rights are exercised or if Avista or   Altchem proposes a sale transaction, then Management Holders must take   actions reasonably requested by Avista or Altchem in furtherance of such   transaction.
    
	
 
    	
 
    	
 
    
	
Preemptive Rights:
    	
 
    	
Management Holders who are also accredited investors (as defined   in Rule 501(a) of the Securities Act) will have preemptive rights   entitling them to participate pro rata (with respect to their   reinvestment/purchased units and exercised vested options) in additional   issuances of units or other equity securities of Orbit Holdco, subject to   customary exceptions.
    
	
 
    	
 
    	
 
    
	
Repurchase Rights:
    	
 
    	
Orbit Holdco will have the right to repurchase (i) units   issued upon the exercise of options (or similar securities or other incentive   equity) and (ii) units issued after the Closing in transactions not   subject to pre-emptive rights, in each case, under certain circumstances upon   termination of employment of an employee shareholder or Management Holder as   set forth on Schedule A.

 

Altchem and Avista will have the right to repurchase certain   units attributable to them, to the extent provided in the limited partnership   agreement.

 

Repurchase rights will also apply in the event an employee   shareholder breaches restrictive covenants by which it is bound following   termination (same price as termination for cause).
    

 

20

 

Schedule A

 

Repurchase Rights upon Employee Termination

 

Repurchase Rights Upon Termination for Rollover or Purchased Units

 

	
Employee Terminates
    	
 
    	
Company Terminates
    	
 
    	
 
    
	
With Good Reason
    	
 
    	
Without Good Reason
    	
 
    	
Not for Cause
    	
 
    	
For Cause
    	
 
    	
Death/Disability
    
	
Call @ FMV
    	
 
    	
Call @ FMV
    	
 
    	
Call @ FMV
    	
 
    	
Call @ Lower of cost or FMV
    	
 
    	
Call @ FMV
    

 

Repurchase Rights Upon Termination for Options

 

	
 
    	
 
    	
Employee Terminates
    	
 
    	
Company Terminates
    	
 
    	
 
    
	
 
    	
 
    	
With Good
   Reason
    	
 
    	
Without Good Reason
    	
 
    	
Not for Cause
    	
 
    	
For Cause
    	
 
    	
Death/Disability
    
	
Unvested Options
    	
 
    	
Forfeited
    	
 
    	
Forfeited
    	
 
    	
Forfeited
    	
 
    	
Forfeited
    	
 
    	
Forfeited
    
	
Units purchased from exercise of   vested options
    	
 
    	
Call @ FMV
    	
 
    	
Call @ Lower of cost or FMV
    	
 
    	
Call @ FMV
    	
 
    	
Call @ Lower of cost or FMV
    	
 
    	
Call @ FMV
    

 

Definitions

 

Definitions of “Cause” and “Good Reason” will be customary definitions set forth in the management equity plan.

 

“Fair Market Value” or “FMV” means a good faith determination by the board of directors through a reasonable application of a reasonable valuation method.  Such determination shall be conclusive and binding on all persons.

 

21

 

Exhibit B

 

Separation Agreement Release Language

 

Release of Claims.  The Executive, individually and on behalf of his heirs, executors, personal representatives, administrators, agents and assigns, forever waives, releases, gives up and discharges all waivable claims, real or perceived, whether now known or unknown, against the Company, all direct and indirect parent entities, subsidiaries, and other related and affiliated companies, their employee benefit plans and trustees, fiduciaries, administrators, sponsors and parties-in-interest of those plans, and all of their past and present employees, managers, directors, officers, administrators, shareholders, members, agents, attorneys, insurers, re-insurers and contractors acting in any capacity whatsoever, and all of their respective predecessors, heirs, personal representatives, successors and assigns (collectively, the “Released Parties”), arising out of and in any way concerning the Executive’s employment with the Company, any terms, conditions or privileges related to the Executive’s employment with the Company, the termination of the Executive’s employment by the Company, and all alleged violations of federal, state or local fair employment practices or laws by any of the Released Parties for any reason and under any legal theory including, but not limited to, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e), et seq. (“Title VII”), the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. (“ADA”), the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), the Older Worker Benefits Protection Act, 29 U.S.C. § 626(f), et seq. (“OWBPA”), the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1001, et seq. (“ERISA”), the Civil Rights Act of 1991, 42 U.S.C. §§ 1981, 1983, 1985, 1986 and 1988, the Family and Medical Leave Act, 29 U.S.C. § 2601, et seq. (“FMLA”), the Equal Pay Act of 1963, 29 U.S.C. § 206, et seq. (“EPA”), the Lilly Ledbetter Fair Pay Act of 2009, H.R. 11 (“Fair Pay Act”), the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. § 1161, et seq. (“COBRA”), the Occupational Safety and Health Act, 29 U.S.C. 651 et seq. (“OSHA”), the New York State Civil Rights Law, N.Y. Exec. Law § 291, et seq., the New York State Human Rights Law, N.Y. Exec. Law § 296(1)(a), et seq., the New York City Civil Rights Law, N.Y.C. Admin. Code § 8-102(5), et seq., the New York State Wage Payment Law, N.Y. Lab. Law § 190(1), et seq., the New York State Whistleblower Law, N.Y. Lab. Law § 740, et seq., the NJ WARN Act, N.J.S.A.  §21 et seq., the New Jersey Law Against Discrimination, the Conscientious Employee Protection Act, the New Jersey Wage Payment Law, the New Jersey Family Leave Act, all as amended; the common law of the States of New Jersey and New York; and all other federal or state or local laws, regulations, rules, ordinances, or orders, as they may be amended.  The Executive also forever waives, releases, discharges and gives up all claims, real or perceived and now known or unknown, for breach of implied or express contract, including but not limited to breach of promise, breach of the covenant of good faith and fair dealing, misrepresentation, negligence, fraud, estoppel, defamation, libel, misrepresentation, intentional infliction of emotional distress, violation of public policy, wrongful, retaliatory or constructive discharge, assault, battery, false imprisonment, negligence, and all other claims or torts arising under any federal, state, or local law, regulation, ordinance or judicial decision, or under the United States, New York and New Jersey Constitutions.  The Executive has agreed to and does waive any and all claims he may have for employment or reinstatement by the Company or any of the Released Parties and has agreed not to seek such employment or reemployment by the Company or any of the Released Parties in the future.

 

 

Covenant Not to Sue.  The Executive warrants that he does not have any complaint, charge or grievance against any Released Party pending before any federal, state or local court or administrative or arbitral agency, and the Executive further agrees and covenants not to sue, file a lawsuit, or commence any other proceeding, arbitral, administrative or judicial, against any of the Released Parties in any court of law or equity, or before any arbitral body or administrative agency, with respect to any matter arising from or relating to the Executive’s employment with the Released Parties, the Executive’s separation thereof, or otherwise.  Should the Executive file a lawsuit with any court or arbitration panel concerning any claim, demand, issue, or cause of action waived through this Agreement, the Executive agrees that he will be responsible to pay the legal fees and costs that the Released Parties incur defending that lawsuit.  Further, the Executive agrees that nothing in this Agreement shall limit the right of a court to determine, in its sole discretion, that the Released Parties are entitled to restitution, recoupment or set off of any monies paid should the release of any claims under this Agreement subsequently be found to be invalid.

 

Release of Claims and Covenant Not to Sue Carve Outs.  In connection with the foregoing release of claims and covenant not to sue, the Executive does not waive his right to file a charge with the EEOC or participate in an investigation conducted by the EEOC; however, the Executive expressly waives his right to monetary or other relief should any administrative agency, including but not limited to the EEOC, pursue any claim on his behalf.  The Executive understands and agrees that nothing in this Agreement limits his or the Company’s right to bring an action to enforce the terms of this Agreement.  The foregoing release of claims and covenant not to sue shall not alter the Executive’s rights or obligations he may have or be subject to in connection with or with respect to his direct or indirect equity interests in New HoldCo, and the Executive’s indemnification rights shall continue to be governed in accordance with any Directors and Officers Liability Insurance Policy that New HoldCo or any of its subsidiaries may maintain and/or with New HoldCo’s or any of its subsidiaries’ certificate of incorporation or bylaws or similar governing document, and otherwise in accordance with Section 7 of the Employment Agreement.

 

2

 

Exhibit C

 

Confidentiality Agreement

 

 

[FORM OF]

 

PROPRIETARY INFORMATION
 AND
 ASSIGNMENT OF INVENTIONS AGREEMENT

 

This PROPRIETARY INFORMATION AND ASSIGNMENT OF INVENTIONS AGREEMENT (this “Agreement”) between the undersigned (“Employee”) and [New HoldCo], a Luxembourg société en commandite spéciale (“Holdings”), sets forth the terms and conditions regarding Employee’s receipt, use, and disclosure of Proprietary Information (as defined below) belonging to Holdings and its direct and indirect subsidiaries (collectively, the “Company”).

 

1.                                      Term of Agreement.  This Agreement is in consideration of, among other things, Employee’s employment with the Company.  This Agreement: (a) will survive the termination of Employee’s relationship with the Company; (b) inures to the benefit of successors and assigns of the Company; (c) is binding upon Employee’s heirs, executors, administrators, or other legal representatives; and (d) shall inure to the benefit of, and be enforceable by, all parent, subsidiary, or other affiliated entities of the Company.

 

2.                                      Protection of Proprietary Information.  Employee agrees that his or her employment creates a relationship of confidence and trust with the Company with respect to Proprietary Information of the Company learned or used by Employee during the period of Employee’s employment with the Company.  “Proprietary Information” shall mean all trade secrets, confidential information, data, or any other proprietary information of the Company.  “Proprietary Information” shall not include any information which is known in the industry or available to the public through lawful means; provided, however, that publicly known or available information may constitute “Proprietary Information” if it is being used by the Company in a fashion, manner, or in connection with other information, that is not publicly known.  By way of illustration, but not limitation, “Proprietary Information” includes: (i) financial information provided to Employee by the Company; (ii) non-public information pertaining to the Company’s existing, future, or contemplated products; (iii) proprietary software programs or proprietary alterations to non-proprietary software programs; (iv) trade secrets as defined under [New Jersey] law; (v) non-public marketing information such as marketing strategies, pricing information, cost information and distribution strategies; (vi) future product plans or information which are treated as confidential or proprietary by the Company; (vii) personnel information including employee compensation, except where such information is publicly disclosed or where the applicable employee consents to its disclosure; and (viii) non-public information pertaining to the Company’s vendors, or third parties with whom the Company has business relationships, including the terms of those relationships.

 

(a)                                 Employee agrees that during the term of his or her employment, and thereafter, Employee will keep in confidence and trust all Proprietary Information and will not directly or indirectly use or disclose any Proprietary Information without the written consent of the Company, except, during the period of Employee’s employment with the Company, as may be necessary in the ordinary course of performing Employee’s duties for the Company.

 

 

(b)                                 All Company property, including, but not limited to, Proprietary Information, documents, data, records, equipment and other tangible or intangible property, whether or not pertaining to Proprietary Information, provided to Employee by the Company or used or produced by Employee or others in connection with Employee providing services to the Company shall be and remain the sole property of the Company, and shall be returned promptly to the Company as and when requested by the Company.  Employee shall return and deliver all such property to the Company upon termination of his or her employment.  Employee will not keep or remove any such property or any reproduction of such property upon such termination or at any time.

 

(c)                                  Employee recognizes that the Company may receive from third parties information which is not publicly known or is private, proprietary or confidential, in each case, subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain purposes.  Employee agrees that during the term of his or her employment, and thereafter, Employee: (i) owes the Company and such third parties a duty to hold all such information received from third parties in confidence and not to disclose it, except as necessary in carrying out Employee’s work for the Company consistent with the Company’s agreement with such third party; and (ii) will not use it for the benefit of anyone, other than for the Company or such third party, consistent with the Company’s agreement with such third party.

 

(d)                                 The obligations of Employee with respect to Proprietary Information shall continue until such time as the Proprietary Information is publicly known, through lawful means or until such time as the Company advises Employee in writing to disclose the Proprietary Information.

 

3.                                      Non-Solicitation of Employees.  [Unless otherwise set forth in Employee’s employment agreement with the Company,] Employee hereby agrees that during the term of Employee’s employment with the Company and for a period of eighteen (18) months following the date of termination of Employee’s employment, Employee shall not, individually or in conjunction with any other Person, and shall cause Employee’s affiliates not to, directly or indirectly, cause, solicit or encourage any Person who is an employee or consultant of the Company and whose services relate to the Company’s business or with whom Employee had contact, to leave his or her employment with the Company, or hire, employ or otherwise engage any employee of the Company.  Nothing contained in this Section 3 shall prohibit Employee or its affiliates from soliciting any employee of the Company who shall have responded to a general solicitation for employment not otherwise aimed or targeted at the employees of the Company.  The parties agree that, if any court of competent jurisdiction determines that a specified time period, a specified business limitation or any other relevant feature of this Section 3 is unreasonable, arbitrary or against public policy, then a lesser period of time, business limitation or other relevant feature which is determined by such court to be reasonable, not arbitrary and not against public policy may be enforced against the applicable party.  As used herein, “Person” shall be constructed broadly and include any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or governmental authority (whether federal, state, county, city or otherwise and including, without limitation, any instrumentality, division, agency or department thereof).

 

4.                                      Non-Solicitation of Customers.  [Unless otherwise set forth in Employee’s employment agreement with the Company,] Employee hereby agrees that during the term of Employee’s employment with the Company and for a period of eighteen (18) months following

 

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the date of termination of Employee’s employment, Employee shall not, individually or in conjunction with any other Person, directly or indirectly, take any of the following actions, except if such actions are taken within the scope of Employee’s employment:

 

(a)                                 cause, induce or encourage, or attempt to cause, induce or encourage (i) any actual or prospective customer, client or account of the Company or (ii) any other Person who has a material business relationship with the Company or who is or was engaged in any substantive business discussion with the Company (each, a “Customer”), to terminate or modify any such actual or prospective relationship with the Company; and

 

(b)                                 perform or attempt to perform services for any Customer, accept business from any Customer or otherwise interfere with the relationship between the Company and any Customer.

 

The parties agree that, if any court of competent jurisdiction determines that a specified time period, a specified business limitation or any other relevant feature of this Section 4 is unreasonable, arbitrary or against public policy, then a lesser period of time, business limitation or other relevant feature which is determined by such court to be reasonable, not arbitrary and not against public policy may be enforced against the applicable party.

 

5.                                      Non-Competition.  [Unless otherwise set forth in Employee’s employment agreement with the Company,] Employee hereby agrees that during the term of Employee’s employment with the Company and for a period of eighteen (18) months following the date of termination of Employee’s employment, Employee shall not, individually or in conjunction with any other Person, directly or indirectly, take any of the following actions anywhere in [the United States], except if such actions are taken within the scope of Employee’s employment:

 

(a)                                 own, manage, control or participate in the ownership, management or control of, or consult with, or be a director or affiliate of, any entity, individual or group of individuals which engages in any manner in the business of providing some or all of the services that are part of the Company’s business;

 

(b)                                 solicit, employ, or attempt to entice away any person who is an employee or officer of the Company other than any employee that has been terminated by the Company after the date hereof; and

 

(c)                                  unless compelled by applicable law, disparage, criticize, seek to embarrass or defame the Company, the members of its governing boards, its officers or employees in their capacities as such, or knowingly or willfully harm the business interests, reputation or goodwill of the Company.

 

Executive acknowledges that the Company distributes and sells its products throughout [the United States] and has customers located throughout [the United States], and that the scope of this restriction is appropriate and reasonable to protect the Company’s business interests.  The parties further agree that, if any court of competent jurisdiction determines that a specified time period, a specified geographical area, a specified business limitation or any other relevant feature of this Section 5 is unreasonable, arbitrary or against public policy, then a lesser period of time, geographical area, business limitation or other relevant feature which is determined by such court

 

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to be reasonable, not arbitrary and not against public policy may be enforced against the applicable party.

 

6.                                      Developed Information.

 

(a)                                 Employee agrees to promptly disclose to the Company, or any persons designated by it, all improvements, inventions, programs, processes, techniques, or trade secrets, whether or not patentable or registrable under copyright or similar statutes, and all designs, trademarks and copyrightable works that Employee may solely or jointly make or conceive or reduce to practice or learn during the period of his or her employment with the Company which: (i) are within the scope of the services to be provided by Employee to the Company and are related to or useful in the business of the Company or to the Company’s actual or demonstrably anticipated activities; or (ii) result from tasks assigned Employee by the Company; or (iii) are funded by the Company; or (iv) result from the use of premises, facilities or equipment owned, leased or contracted for by the Company (collectively, the “Developed Information”).

 

(b)                                 Employee agrees that all Developed Information shall be the sole property of the Company, its successors and its assigns.  The Company, its successors and its assigns shall be the sole owner of all patents, trademarks, copyrights and other rights in connection therewith.  Employee hereby assigns to the Company any rights Employee may have or acquire in all Developed Information.  In addition, to the extent permitted by federal copyright law, the parties agree that any works resulting from Employee’s work under this Agreement shall be “works for hire” as defined in the federal copyright law.  Employee hereby assigns to the Company all of Employee’s works of authorship and all rights of copyright and patent in such works to the extent such works result from Employee’s work under this Agreement.  Employee further agrees as to all Developed Information to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, trademarks, copyrights and other rights to or in the Developed Information in any and all countries.  Employee will perform any further acts and execute and deliver all documents for use in applying for and obtaining such patents and copyrights thereon and enforcing same, as the Company may desire, together with any assignments thereof to the Company or persons designated by it.  Employee’s obligation to assist the Company in obtaining and enforcing patents, trademarks, copyrights and other rights to or in the Developed Information in any and all countries shall continue beyond the termination of this Agreement, but the Company shall compensate Employee at a reasonable rate commensurate with rates paid by others for comparable services after such termination of this Agreement for time actually spent by Employee at the Company’s request on such assistance.  In the event that the Company is unable for any reason whatsoever to secure Employee’s signature to any lawful and necessary document required to apply for or prosecute any patent, trademark, or copyright or other right or protection with respect to Developed Information (including renewals, extensions, continuations, divisions or continuations in part thereto), Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agents and attorneys-in-fact to act for and on Employee’s behalf and instead of Employee, to execute and file any such application(s) and to do all other lawfully permitted acts to further the prosecution and issuance of patents, trademarks, copyrights, or similar protections thereon with the same legal force and effect as if executed by Employee.  The Company shall also have the right to keep and maintain any and all Developed Information as trade secrets.

 

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(c)                                  As a matter of record, Employee must notify management of the Company in writing of any and all inventions, discoveries, developments, improvements, and trade secrets which have been made or conceived or first reduced to practice by Employee alone or jointly with others prior to employment with the Company which Employee desires to remove from the operation of this Agreement.  If Employee does not so notify management, Employee represents that he or she has made no inventions, improvements, developments, or improvements at or prior to the time of signing this Agreement that are to be removed from the operation of this Agreement.

 

7.                                      Property of Others.

 

(a)                                 Employee represents that Employee’s performance under this Agreement does not and will not breach any obligation to keep in confidence any proprietary or confidential information (including, without limitation, trade secrets) of others, if any, acquired by Employee in confidence or in trust prior to the date of this Agreement.  Employee has not entered into, and Employee agrees Employee will not enter into, any agreement either written or oral in conflict with the terms and conditions of this Agreement.

 

(b)                                 Employee represents, as part of the consideration for entering into this Agreement, that Employee has not brought and will not bring to the Company or use in the performance of Employee’s responsibilities as an employee of the Company any equipment, supplies, property or proprietary or confidential information (including, without limitation, trade secrets) of any current or former employer or other organization to which Employee previously provided services, unless Employee has obtained written authorization for their possession and use.

 

8.                                      Conflict of Interest.  During the term of employment with the Company, Employee shall inform the Company before accepting any employment or consulting relationship with another person or entity: (a) in any field related to the Company’s line of business; or (b) in a position that requires significant time commitment.  Lack of objection by the Company regarding any particular outside activities does not alter or reduce the Employee’s obligations under this Agreement.

 

9.                                      Equitable Relief.  Employee acknowledges that any breach or threatened breach by Employee of the provisions of Sections 2, 3, 4, 5, 6 or 8 of this Agreement will result in immediate and irreparable harm to the Company, for which there will be no adequate remedy at law, and that the Company will be entitled to equitable relief to restrain or enjoin Employee from violating the terms of these sections, or to compel Employee to cease and desist all unauthorized use and disclosure of the Proprietary Information.  Nothing in this section shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including recovery of damages from Employee.

 

10.                               Modifications.  No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto.

 

11.                               Severability.  If one or more of the provisions in this Agreement is deemed unenforceable by law, the remaining provisions will nevertheless continue in full force and effect.

 

12.                               Integrated Agreement.  This Agreement, together with [the Business Combination Agreement entered into by Holdings as of [  ], 2015,] the Amended and Restated Limited

 

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Partnership Agreement of the Company, dated as of [            ], 2016, and all agreements referenced herein or therein, and any schedules, exhibits and other documents referred to herein or therein (including Employee’s employment agreement with the Company), constitutes the entire agreement and understanding between Employee and the Company with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.  This Agreement, and any other written agreement signed by Employee on the subject of his or her employment, including the Employee’s employment agreement, if any, shall not affect or supersede the Employee Handbook, if any, of the Company; provided, however, that in the case of any conflict between the Employee Handbook and this Agreement, the terms of this Agreement will supersede any conflicting personnel policy in the Employee Handbook.

 

13.                               Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of [New Jersey], without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of [New Jersey] or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of [New Jersey].

 

[Remainder of Page Intentionally Left Blank]

 

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Please confirm your agreement with the foregoing by signing and returning to the undersigned a duplicate copy of this Agreement.

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
VERTICAL/TRIGEN   HOLDINGS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[PROPRIETARY INFORMATION AND ASSIGNMENT OF INVENTIONS AGREEMENT]

 

 

EMPLOYEE CERTIFIES AND ACKNOWLEDGES THAT EMPLOYEE HAS CAREFULLY READ ALL OF THE PROVISIONS OF THIS AGREEMENT AND THAT EMPLOYEE UNDERSTANDS AND WILL FULLY AND FAITHFULLY COMPLY WITH SUCH PROVISIONS.

 

Dated:

 

	
EMPLOYEE
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    

 

[PROPRIETARY INFORMATION AND ASSIGNMENT OF INVENTIONS AGREEMENT]Exhibit 10.31

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”), dated December 16, 2013, is entered into by and between Vertical/Trigen Opco, LLC (the “Company”), which is a wholly-owned subsidiary of Vertical/Trigen Holdings, LLC (“Holdings”), and James Schaub (the “Executive”).

 

WHEREAS, the Company desires that Executive become employed by, and Executive desires to be employed by, the Company effective as of the date of this Agreement (the “Effective Date”).

 

NOW, THEREFORE, in consideration of such employment and the mutual covenants and promises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree as follows:

 

1.                                      Effectiveness; Employment “At Will”.  The Company hereby agrees to employ Executive, and Executive hereby agrees to accept employment with the Company, upon the terms and conditions contained in this Agreement.  Executive’s employment with the Company shall commence on the Effective Date.  Executive’s employment with the Company shall, at all times, be treated as “at will”, meaning that Executive’s employment may be terminated by the Company for any reason or no reason at all, unless otherwise prohibited by law.

 

2.                                      Duties.  During Executive’s employment with the Company, Executive shall have the title of Chief Operating Officer of Trigen and shall have such duties, authorities and responsibilities as are consistent with such position, as the Board of Directors of Holdings (the “Board”) and the Chief Executive Officer of the Company may designate from time to time.  Executive will report directly to the Chief Executive Officer and the Board.  Executive shall devote Executive’s entire business time and attention and Executive’s best efforts (excepting vacation time, holidays, sick days and periods of disability) to Executive’s employment and service with the Company and its Affiliates (defined below); provided, however, that this Section 2 shall not be interpreted as prohibiting Executive from managing Executive’s personal investments (so long as such investment activities are of a passive nature) or engaging in charitable or civic activities, so long as such activities in the aggregate do not (i) materially interfere with the performance of Executive’s duties and responsibilities hereunder or (ii) create a fiduciary conflict.  If requested.  Executive shall also serve as an executive officer and/or member of the board of directors, without additional compensation, of any entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company (an “Affiliate”).

 

3.                                      Location of Employment.  Executive’s principal place of employment shall be in Sayreville, New Jersey, subject to reasonable business travel consistent with Executive’s duties and responsibilities.

 

 

4.                                      Compensation

 

4.1                               Base Salary.

 

(a)                                 In consideration of all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary (the “Base Salary”) at an annual rate of $250,000.  Changes to Executive’s Base Salary, if any, may occur from time to time in the Company’s sole discretion.  Such changes to Executive’s Base Salary will depend upon a number of factors, including but not limited to Executive’s performance, the Company’s financial performance, and the general economic environment.

 

(b)                                 The Base Salary shall be paid in such installments and at such times as the Company pays its regularly salaried employees and shall be subject to all required withholding taxes, FICA and FUTA contributions and similar deductions.

 

4.2                               Annual Cash Bonus.  Executive shall be eligible for an annual, discretionary cash bonus (the “Cash Bonus”), with a target Cash Bonus amount equal to fifty percent (50%) of Executive’s Base Salary (the “Target Cash Bonus”), subject to the satisfaction of performance criteria set by the Board within the first quarter of each fiscal year.  Any such Cash Bonus for calendar year 2013 shall be prorated based on the date of commencement of Executive’s employment.  Cash Bonuses are not guaranteed and are granted in the Company’s sole discretion, with the amount variable, based on individual and Company performance, and/or will be calculated in accordance with an applicable short-term incentive program, should the Company, in its discretion, adopt such a program in regards to Executive, in the event of which vesting and participation will be governed by and subject to the applicable plan documentation.  The Cash Bonus, if any, shall be paid to Executive in the calendar year following the year of performance, as soon as reasonably practicable following the issuance of the audited financial statements, and shall only be paid to the extent the same is earned, subject to Executive’s continued employment on such payment date (except as otherwise provided in Section 6).  To the extent any management or advisory fees are payable to any shareholder(s), such fees shall be excluded for the purpose of determining whether the Company’s financial performance criteria were satisfied in determining the amount, if any, of Executive’s Annual Cash Bonus.

 

4.3                               Equity Incentive Plan.  Executive shall be eligible to participate in Holdings’ equity incentive plan for management employees of Holdings (the “Management Equity Incentive Plan”) and receive grants thereunder as determined by the Board in its sole discretion.

 

4.4                               Vacation.  Executive shall be entitled to four (4) weeks of annual paid vacation days, which shall accrue and be useable by Executive in accordance with Company policy, as may be in effect from time to time.

 

4.5                               Benefits.  During Executive’s employment with the Company, Executive shall be entitled to participate in any benefit plans, including medical, disability and life insurance (but excluding any severance or bonus plans unless specifically referenced in this Agreement) offered by Holdings, the Company or their subsidiaries, as in effect from time to time (collectively, “Benefit Plans”), on the same basis as those generally made available to other senior employees of the Company and its subsidiaries, to the extent Executive may be eligible to do so under the terms of any such Benefit Plan.  Executive understands that any such Benefit Plans may be terminated or amended from time to time by the Company in its sole discretion.

 

 

5.                                      Termination.  Executive’s employment hereunder may be terminated as follows:

 

5.1                               Automatically in the event of the death of Executive;

 

5.2                               At the option of the Company, by written notice to Executive or Executive’s personal representative in the event of the Disability of Executive.  As used herein, the term Disability shall mean a physical or mental incapacity or disability that has rendered, or is likely to render, Executive unable to perform Executive’s material duties for a period of 180 days in any twelve-month period as determined by a medical physician;

 

5.3                               At the option of the Company for Cause (as defined in Section 6.4), on prior written notice to Executive;

 

5.4                               At the option of the Company at any time without Cause (provided that the assignment of this Agreement to, and assumption of this Agreement by, a purchaser of all or substantially all of the assets of the Company shall not be treated as a termination without Cause under this Section 5.4):

 

5.5                               At the option of Executive for Good Reason (as defined in Section 6.5) subject to Section 6.5 hereof; or

 

5.6                               At the option of Executive for any reason other than Good Reason on thirty (30) days prior written notice to the Company (which the Company may, in its sole discretion, make effective as a resignation earlier than the termination date provided in such notice.

 

6.                                      Severance Payments.

 

6.1                               Termination Without Cause or Termination by Executive for Good Reason.  If Executive’s employment is terminated at any time by the Company without Cause (and not for death or Disability) or by Executive for Good Reason, subject to Section 6.6 hereof, Executive shall be entitled to:

 

(a)                                 within thirty (30) days following such termination, payment of Executive’s accrued and unpaid Base Salary and reimbursement of expenses under Section 7 hereof in each case accrued through the date of termination;

 

(b)                                 subject to Section 12.7(b) hereof, an amount equal to Executive’s monthly Base Salary through the end of the Restriction Period (as defined in Section 8.1) payable at the same time such Base Salary would have otherwise been payable if Executive had remained employed with the Company; provided that the first payment shall be made on the next regularly scheduled payroll date following the sixtieth (60th) day after Executive’s “termination of employment” and shall include payment of any amounts that would otherwise be due prior thereto;

 

(c)                                  any Cash Bonus actually earned with respect to a full fiscal year ending prior to the date of such termination but unpaid as of such date, payable at the same time in the year of termination as such payment would be made if Executive continued to be employed by the Company;

 

 

(d)                                 subject to the satisfaction of performance criteria set by the Company in accordance with Section 4.2, a pro-rata portion of Executive’s Cash Bonus actually earned for the fiscal year in which Executive’s termination occurs (determined by multiplying the amount of the Cash Bonus that would be due for the full fiscal year by a fraction, the numerator of which is the number of days during the fiscal year of termination that Executive is employed with the Company and the denominator of which is 365), payable at the same time during the following calendar year as such payment would have been made if Executive continued to be employed with the Company;

 

(e)                                  subject to Section 12.7(b) hereof and Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay to Executive each month an amount equal to the monthly amount of the COBRA continuation coverage premium under the Company’s group medical plans as in effect from time to time until the earliest of: (i) the expiration of the Restriction Period; (ii) the date Executive is no longer eligible for benefits under COBRA; or (iii) the date Executive first becomes eligible for coverage of the same general category under another plan, program or other arrangement of any type or description, without regard to whether the Executive neglects, refuses or otherwise fails to take any action required for enrollment in such other plan, program or other arrangement, provided, that the first payment of any amount described in this Section 6.1(e) shall be paid on the sixtieth (60th) day following Executive’s termination of employment and shall include any amounts due prior thereto.

 

6.2                               Termination due to Death or Disability.  Upon the termination of Executive’s employment due to Executive’s death or Disability pursuant to Section 5.1 and Section 5.2 respectively, Executive or Executive’s legal representatives shall be entitled to receive the payments and benefits described under Sections 6.1(a), (c) and (d) hereof.

 

6.3                               Termination by the Company for Cause or Termination by Executive for any reason other than Good Reason.  Except for the payments and benefits described in Sections 6.1(a) and 6.1(c),  Executive shall not be entitled to receive severance payments or benefits after the last date of employment with the Company upon the termination of Executive’s employment hereunder by the Company for Cause pursuant to Section 5.3 or by Executive for any reason other than Good Reason pursuant to Section 5.6.

 

6.4                               Cause Defined.  For purposes of this Agreement, the term “Cause” shall mean:

 

(a)                                 Executive’s willful and continued failure or refusal to perform his employment duties after a written demand by the Board for substantial performance is delivered to Executive by the Company, which specifically identifies the manner in which the Board believes that Executive has not substantially performed his duties, which willful and continued failure is not cured by Executive within thirty (30) days;

 

(b)                                 Executive’s conviction of, or a plea of guilty or no contest to, any felony or other criminal offense involving fraud, dishonesty, misappropriation or moral turpitude;

 

(c)                                  Executive’s fraud, dishonesty or gross misconduct that is materially and demonstrably injurious to the Company or its Affiliates;

 

 

(d)                                 the violation by Executive of any material written policies of the Company or its Affiliates known or provided to Executive in written (including electronic) form;

 

(e)                                  Executive’s breach of any confidentiality, non-solicitation or non-competition obligations to the Company or its Affiliates; or

 

(f)                                   as provided in Section 12.1 hereof;

 

provided, that prior to any termination for Cause, Executive shall be given five (5) business days prior written notice specifying the alleged Cause event and will be entitled to appear (with counsel) before the full Board to present information regarding his views on the Cause event and, after such hearing, there is at least a majority vote of the full Board (other than Executive) to terminate Executive for Cause.

 

6.5                               Good Reason Defined.  For purposes of this Agreement, the term “Good Reason” shall mean:

 

(a)                                 a material breach of this Agreement;

 

(b)                                 a material and adverse diminution in Executive’s title, duties and responsibilities hereunder without his prior written consent; or

 

(c)                                  the relocation by the Company of Executive’s primary place of employment to a location that is greater than fifty (50) miles from both (i) the current location of Executive’s primary’ place of employment and (ii) Executive’s principal residence;

 

provided, that, in any such case, (i) the Company has been given written notice that identifies the alleged Good Reason event within 90 days of the initial existence of the alleged Good Reason event, (ii) Holdings or the Company has not remedied the alleged Good Reason within 30 days after the receipt of such notice and (iii) Executive terminates employment within 5 days of the end of the 30-day cure period; provided, further, that if Executive is indicted for a criminal offense,  Executive may be suspended from his duties without pay, and (i) during such period of suspension, shall not have the right to terminate this Agreement for Good Reason, and (ii) such suspension without pay shall not constitute Good Reason.

 

6.6                               Conditions to Payment.  All payments and benefits due to Executive under this Section 6 that are not otherwise required by law shall only be payable if (i) Executive (or Executive’s beneficiary or estate) delivers to the Company and does not revoke (under the terms of applicable law) a general release of all claims in the form attached hereto as Exhibit 6.6 (the “General Release”), provided, if necessary, such General Release may be updated and revised to comply with applicable law to achieve its intent and (ii) such General Release shall be executed and delivered (and no longer subject to revocation) within sixty (60) days following termination.  Failure to timely execute and return such General Release, or revocation thereof, shall be a waiver by Executive of Executive’s right to severance.  In addition, severance shall be conditioned on Executive’s compliance with Section 8 hereof as provided in Section 9 below.

 

6.7                               No Other Severance.  Executive hereby acknowledges and agrees that, other than the severance payments described in this Section 6, upon termination of employment Executive

 

 

shall not be entitled to any other severance under any Company benefit plan or severance policy generally available to the Company’s or its subsidiaries’ employees or otherwise.

 

7.                                      Reimbursement of Expenses.  The Company shall reimburse Executive for all reasonable travel and other expenses actually incurred by Executive in connection with the performance of his duties under this Agreement, subject to compliance with such reasonable limitations, policies and reporting requirements with respect to expenses (including the presentation of receipts or other appropriate documentation) as may currently exist or be established by the Company or the Board from time to time.

 

8.                                      Restrictions on Activities of Executive.

 

8.1                               Non-Competition.  Executive covenants and agrees that during Executive’s employment and for the one (1) year period commencing on the date of termination of Executive’s employment with the Company (the “Restriction Period”), Executive shall not, without the prior consent of the Company, directly or indirectly, be involved as an owner, officer, director, employee or consultant of any business, company or entity which directly competes with any of the Company’s material products promoted as of the date of termination of Executive’s employment, in any geographic area in which said products are promoted.

 

8.2                               Non-Solicitation.  Executive covenants and agrees that, during the Restriction Period, Executive shall not directly or indirectly (i) induce or attempt to induce, including through the use of social media, any customer, supplier or other party with whom the Company or its Affiliates do business to cease doing business with the Company or its Affiliates, or in any way interfere with or attempt to interfere with the relationship between the Company and its Affiliates and any existing customer, supplier or other party with whom the Company or its Affiliates do business, (ii) influence or attempt to influence or solicit, including through the use of social media, any employees, officers or independent contractors of the Company or any of its Affiliates to restrict, reduce, sever or otherwise alter their relationship with the Company or such Affiliates or assist any other person to do so, or (iii) knowingly hire or attempt to hire or otherwise retain on an independent contractor basis, any person who is then a current employee of the Company or one of its subsidiaries.  The restrictions in this Section 8.2 shall not apply with regard to (i) general solicitations that are not specifically directed to employees of the Company or any Affiliate, or (ii) serving as a reference at the request of an employee.

 

8.3                               Confidentiality.

 

(a)                                 Executive shall not, during Executive’s employment with the Company or at any time thereafter directly or indirectly, disclose, reveal, divulge or communicate to any person other than authorized officers, directors and employees of the Company or use or otherwise exploit for Executive’s own benefit or for the benefit of anyone other than the Company, any Confidential Information (as defined below).  Executive shall not have any obligation to keep confidential any Confidential Information if and to the extent disclosure thereof is specifically required by applicable law, court order or other legal process; provided, however, that in the event disclosure is required by applicable law, court order or other legal process, Executive shall provide the Company with prompt notice, to the extent reasonably possible, of such requirement prior to making any disclosure so that the Company may seek an appropriate protective order.

 

 

(b)                                 “Confidential Information” means any information with respect to the Company or any of its Affiliates, including methods of operation, customer lists, products, prices, fees, costs, technology, formulas, inventions, trade secrets as defined under New Jersey law, know-how, software, marketing methods, plans, personnel, suppliers, competitors, markets or other specialized information or proprietary matters; provided, that, there shall be no obligation hereunder with respect to, information that (i) is generally available to the public on the Effective Date or (ii) becomes generally available to the public other than as a result of a disclosure not otherwise permissible hereunder.

 

8.4                               Assignment of Inventions.

 

(a)                                 Executive agrees that during Executive’s employment with the Company, any and all inventions, discoveries, innovations, writings, domain names, improvements, trade secrets, designs, drawings, formulas, business processes, secret processes and know-how, whether or not patentable or a copyright or trademark, which Executive may create, conceive, develop or make, either alone or in conjunction with others and related or in any way connected with the Company’s strategic plans, products, processes or apparatus or the business (collectively, “Inventions”), shall be fully and promptly disclosed to the Company and shall be the sole and exclusive properly of the Company as against Executive or any of Executive’s assignees.  Regardless of the status of Executive’s employment by the Company, Executive and Executive’s heirs, assigns and representatives shall promptly assign to the Company, and Executive hereby does assign to the Company, any and all right, title and interest in and to such Inventions made during employment with the Company.

 

(b)                                 Whether during Executive’s employment with the Company or at any time thereafter.  Executive further agrees to execute and acknowledge all papers and to do, at the Company’s expense, any and all other things necessary for or incident to the applying for, obtaining and maintaining of such letters patent, copyrights, trademarks or other intellectual property rights, as the case may be, and to execute, on request, all papers necessary to assign and transfer such Inventions, copyrights, patents, patent applications and other intellectual property rights to the Company and its successors and assigns.  In the event that the Company is unable, after reasonable efforts and, in any event, after ten (10) business days, to secure Executive’s signature on a written assignment to the Company, of any application for letters patent, trademark registration or to any common law or statutory copyright or other property right therein, whether because of Executive’s physical or mental incapacity, or for any other reason whatsoever, Executive irrevocably designates and appoints the Secretary of the Company as Executive’s attorney-in-fact to act on Executive’s behalf to execute and file any such applications and to do all lawfully permitted acts to further the prosecution or issuance of such assignments, letters patent, copyright or trademark.

 

8.5                               Return of Company Property.  Within ten (10) days following the date of any termination of Executive’s employment, Executive or Executive’s personal representative shall return all property of the Company and its Affiliates in Executive’s possession, including but not limited to all Company-owned computer equipment (hardware and software), telephones, facsimile machines, computer tablets and other communication devices, credit cards, office keys, security access cards, badges, identification cards and all copies (including drafts) of any documentation or information (however stored) relating to the business of the Company and its

 

 

Affiliates, its customers and clients or its prospective customers and clients.  Anything to the contrary notwithstanding, Executive shall be entitled to retain (i) personal papers and other materials of a personal nature, provided that such papers or materials do not include Confidential Information, (ii) information showing Executive’s compensation or relating to reimbursement of expenses, and (iii) copies of plans, programs and agreements relating to Executive’s employment, or termination thereof, with the Company that he received in Executive’s capacity as a participant in such plans, programs or agreements.

 

8.6                               Resignation as an Officer and Director.  Upon any termination of Executive’s employment, Executive shall be deemed to have resigned, to the extent applicable, as an officer of the Company and any of its Affiliates, as a member of the board of directors of any of the Company’s Affiliates and as a fiduciary of any Company or Affiliate benefit plan.  On or immediately following the date of any termination of Executive’s employment, Executive shall confirm the foregoing by submitting to the Company in writing a confirmation of Executive’s resignations(s).

 

8.7                               Cooperation.  During Executive’s employment with the Company or at any time thereafter, Executive shall assist and cooperate willingly, upon reasonable advance notice (which shall include due regard to the extent reasonably feasible for Executive’s prior commitments), in any matter relating to Executive’s position with the Company and its Affiliates, or Executive’s knowledge as a result thereof as the Company may reasonably request, including Executive’s attendance and truthful testimony where deemed appropriate by the Company, with respect to any investigation or the Company’s (or an Affiliate’s) defense or prosecution of any existing or future claims or litigations or other proceeding relating to matters in which Executive was involved or had knowledge by virtue of Executive’s employment with the Company.  The Company shall reimburse Executive for reasonable out-of-pocket travel costs and expenses incurred by Executive (in accordance with Company policy) as a result of providing such assistance, upon the submission of the appropriate documentation to the Company.

 

8.8                               Non-Disparagement.  During Executive’s employment with the Company and its Affiliates and at any time thereafter, Executive agrees not to disparage or encourage or induce others to disparage the Company, any Affiliate, any of their respective employees that were employed during Executive’s employment with the Company or its affiliates or any of their respective past and present, partners, members, officers, directors, managers, products or services (the “Company Parties”).  For purposes of this Section 8.8, the term “disparage” includes, without limitation, comments or statements to the press, to the Company’s or any Affiliate’s employees or to any individual or entity with whom the Company or any Affiliate has a business relationship (including, without limitation, any vendor, supplier, customer or distributor), or any public statement, that in each case is intended to, or can be reasonably expected to, damage any of the Company Parties.  Upon termination of Executive’s employment, the Company shall instruct its directors and its chief executive officer, chief financial officer and chief operating officer not to disparage or encourage or induce others to disparage Executive while such senior executives are employed by the Company.  Notwithstanding the foregoing, nothing in this Section 8.8 shall prevent Executive or the directors, chief executive officer, chief financial officer and chief operating officer of the Company from making any truthful statement to the extent, but only to the extent (A) necessary with respect to any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement, in the forum in which

 

 

such litigation, arbitration or mediation properly takes place or (B) required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction over Executive.

 

8.9                               Tolling.  In the event of any violation of the provisions of this Section 8, Executive acknowledges and agrees that the post-termination restrictions contained in this Section 8 shall be extended by a period of time equal to the period of such violation, it being the intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.

 

8.10                        Survival.  This Section 8 shall survive any termination or expiration of this Agreement or employment of Executive.

 

9.                                      Remedies.  It is specifically understood and agreed that any breach of the provisions of Section 8 of this Agreement is likely to result in irreparable injury to the Company and that the remedy at law alone will be an inadequate remedy for such breach, and that in addition to any other remedy it may have in the event of a breach or threatened breach of Section 8 above, the Company shall be entitled to enforce the specific performance of this Agreement by Executive and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without bond and without liability should such relief be denied, modified or violated.  Furthermore, in the event of any breach of the provisions of Section 8.1 or 8.2 above or a material and willful breach of any other provision in Section 8 above (the “Forfeiture Criteria”), the Company shall be entitled to cease making any severance payments being made hereunder and in the event of a breach of any provision of Section 8 above that satisfies the Forfeiture Criteria and that occurs while Executive is receiving severance payments in accordance with Section 6 above (regardless whether the Company discovers such breach during such period of severance payment or anytime thereafter), notwithstanding anything to the contrary herein, the Company’s obligations under this Agreement shall be deemed modified such that the Company’s obligations pursuant to Section 6 shall be limited to five hundred dollars ($500); it being understood, that, of those five hundred dollars ($500), two hundred and fifty dollars ($250) shall be deemed to be consideration for the release by Executive of any claim under the Age Discrimination in Employment Act of 1967, and two hundred and fifty dollars ($250) shall be deemed to be consideration for the release by Executive of all other claims released by the General Release.

 

10.                               Severable Provisions.  Except as otherwise provided in Section 12.8(c), the provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other provision.  In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the duration or scope thereof, except as otherwise provided in Section 12.8(e), the parties hereto agree that said court in making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full extent permitted by law.

 

11.                               Notices.  All notices hereunder, to be effective, shall be in writing and shall be deemed effective when delivered by hand or mailed by (a) certified mail, postage and fees prepaid, or (b) nationally recognized overnight express mail service, as follows:

 

 

If to the Company, to:

 

Vertical/Trigen Opco, LLC

c/o Vertical Pharmaceuticals, LLC

2500 Main Street Extension, Ste 6

Sayreville, NJ 08872

Attn: General Counsel

 

If to Executive, to:

 

the last address shown on records of the Company,

 

or to such other address as a party may notify the other pursuant to a notice given in accordance with this Section 11.

 

12.                               Miscellaneous.

 

12.1                        Executive Representation.  Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, or be prevented, interfered with or hindered by, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound, and further that Executive is not subject to any limitation on his activities on behalf of the Company as a result of agreements into which Executive has entered.  To the extent this representation and warranty is not true and accurate, it shall be treated as a Cause event and the Company may terminate Executive for Cause or not permit Executive to commence employment.

 

12.2                        No Mitigation or Offset.  In the event of any termination of Executive’s employment hereunder, Executive shall be under no obligation to seek other employment or otherwise mitigate the obligations of the Company under this Agreement, and there shall be no offset against amounts due to Executive under this Agreement on account of future earnings by Executive, except as provided in Section 6.1(e) hereof.

 

12.3                        Entire Agreement; Amendment.  Except as otherwise expressly provided herein and as further set forth in the grant agreement of any equity awards, this Agreement constitutes the entire Agreement between the parties hereto with regard to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral.  This Agreement may not be amended or revised except by a writing signed by the parties.

 

12.4                        Assignment and Transfer.  The provisions of this Agreement shall be binding on and shall inure to the benefit of the Company and any successor in interest to the Company who acquires all or substantially all of the Company’s assets.  Neither this Agreement nor any of the rights, duties or obligations of Executive shall be assignable by Executive, nor shall any of the payments required or permitted to be made to Executive by this Agreement be encumbered, transferred or in any way anticipated, except as required by applicable laws.  All rights of Executive under this Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, estates, executors, administrators, heirs and beneficiaries.

 

 

12.5                        Waiver of Breach.  A waiver by either party of any breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other or subsequent breach by the other party.

 

12.6                        Withholding.  The Company shall be entitled to withhold from any amounts to be paid or benefits provided to Executive hereunder any federal, state, local or foreign withholding, FICA contributions, or other taxes, charges or deductions which it is from time to time required to withhold.  The Company shall be entitled to rely on an opinion of counsel if any question as to the amount or requirement of any such withholding shall arise.

 

12.7                        Code Section 409A.

 

(a)                                 The parties agree that this Agreement shall be interpreted to comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance promulgated thereunder to the extent applicable (collectively “Code Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A.  In no event whatsoever will the Company be liable for any additional tax, interest or penalties that may be imposed on Executive under Code Section 409A or any damages for failing to comply with Code Section 409A.

 

(b)                                 A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits considered “nonqualified deferred compensation” under Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination”, “termination of employment” or like terms shall mean “separation from service”.  If Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Code Section 409A payable on account of a “separation from service”, such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (ii) the date of Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 12.7(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed on the first business day following the expiration of the Delay Period to Executive in a lump sum, increased by an amount equal to interest on such payments for the Delay Period at a rate equal to the prime rate in effect as of the date the payment was first due (for this purpose, the prime rate will be based on the rate published from time to time in The Wall Street Journal), and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(c)                                  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided

 

 

during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits, to be provided in any other taxable year, provided, that, this clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred.

 

(d)                                 For purposes of Code Section 409A, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

12.8                        Arbitration.

 

(a)                                 In consideration of Executive’s employment with the Company, to the fullest extent allowed by law and except as set forth in Section 12(d), any controversy or claim arising out of or relating to Executive’s employment or the termination of such employment, other than injunctive and equitable relief with regard to Section 9 hereof, whether asserted by the Company against Executive or by Executive against the Company or any of its agents or employees, shall be finally settled by binding arbitration, employing a single, neutral arbitrator, and administered by JAMS, Inc. (“JAMS”), under its Employment Arbitration Rules and Procedures (available at http:/www.jamsadr.com), if JAMS has an office within 100 miles of where Executive is located or most recently was employed with the Company, or, if JAMS does not have an office within that 100 mile radius, by the American Arbitration Association (“AAA”) under its Employment Arbitration Rules and Mediation Procedures (available at http:/www.adr.org).  Claims subject to arbitration shall include, but are not limited to, any claims under (as amended) Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, and any other federal, state or local statute, regulation or common law doctrine, including contract or tort, regarding employment discrimination, the terms and conditions of employment or termination of employment.

 

(b)                                 The parties acknowledge that this Agreement involves interstate commerce, and is governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq. (the “FAA”).  The arbitrators may construe or interpret but shall not vary or ignore, the terms of this arbitration provision, and shall be bound by controlling law, including the FAA and federal law construing the FAA.  In the event of any conflict between state law and federal law under the FAA, federal law shall apply.  Prior to invoking arbitration, Executive understands that Executive is encouraged, but not required, to exhaust all remedies set forth in any Company policies or procedures which may exist from time to time.  Both the Company and Executive are waiving their rights to proceed in a court of law, including a trial by jury, in exchange for arbitration.

 

(c)                                  The arbitration will be conducted in the city with a JAMS or AAA office (as applicable) nearest to where Executive is located or most recently was employed with the

 

 

Company.  Judgment upon any award rendered in an arbitration proceeding may be entered in any court having jurisdiction of the matter.  Any controversy or claim subject to arbitration by either Executive or the Company shall be deemed waived, and shall be forever barred, if arbitration is not initiated within the time limit established by the applicable statute(s) of limitations in the state where the arbitration is to be conducted.  The Company and Executive will have the same remedies in arbitration as the parties would otherwise have had if the claim had been filed in a court of law, including, where authorized by law, compensatory and punitive damages, injunctive relief, and attorneys’ fees.

 

(d)                                 Each party shall bear its own costs for legal representation at any arbitration.  The cost of the arbitrator, court reporter (if any), and any incidental costs of arbitration, shall be borne equally by the parties.

 

(e)                                  The parties intend that any arbitration conducted hereunder be resolved on an individual basis and agree that the arbitrator lacks the power and/or authority to join the disputes of any third party(ies) in any class or consolidated arbitration.  This provision may not be severed from Section 12 of this Agreement.  In the event this provision is deemed to be unlawful, invalid or unenforceable, the parties agree that the entirety of Section 12 of this Agreement shall be severed from the Agreement and rendered void.

 

(f)                                   In any arbitration commenced pursuant to this policy, depositions may be taken and discovery obtained to the reasonable amount necessary’ for both parties to be able to present their claims and defenses.  The arbitrator shall determine and apply reasonable discovery limits in the arbitrator’s discretion.  Any award by the arbitrator(s) shall be reasoned and accompanied by a statement of the factual and legal bases for the award.

 

(g)                                  This agreement to arbitrate shall not apply to claims for workers’ compensation or unemployment compensation or to claims for emergency, provisional relief, including temporary restraining orders, temporary protective orders, and preliminary injunctive relief, from a court of competent jurisdiction pending arbitration if the award to which either party may be entitled would be rendered ineffectual without provisional relief.  Nothing in this agreement will preclude Executive from filing a charge or complaint or otherwise communicating with any responsible governmental official, office, or agency, provided that this agreement may, under applicable law, require any request by Executive for individual relief to be arbitrated.

 

12.9                        Directors and Officers Liability Insurance.  Executive shall be indemnified and covered under a directors and officers liability insurance policy with an aggregate coverage limit not less than $5,000,000.

 

12.10                 Governing Law.  Except as otherwise provided in Section 12.8(b), this Agreement shall be construed under and enforced in accordance with the laws of the State of New York, without regard to the conflicts of law provisions thereof.

 

12.11                 Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and shall have the same effect as if the signatures hereto and thereto were on the same instrument.

 

 

12.12                 Compliance with Dodd-Frank.  All payments under this Agreement, if and to the extent subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act, shall be subject to any incentive compensation policy established from time to time by the Company to comply with such Act.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

	
 
    	
VERTICAL/TRIGEN   OPCO, LLC
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/   Steven Squashic
    
	
 
    	
Name:
    	
Steven   Squashic
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
/s/ James   Schaub
    
	
 
    	
 
    
	
 
    	
James   Schaub
    

 

[SIGNATURE PAGE TO T.  DEVRIES EMPLOYMENT AGREEMENT]

 

 

EXHIBIT 6.6

 

Release of Claims

 

This release of claims (this “Release”) is required as a condition for your receipt of the benefits described in Section 6 of that certain Employment Agreement (the “Agreement”), dated December 16, 2013, entered into by and between Vertical/Trigen Opco, LLC (the “Company”), and James Schaub (“you”).

 

1.                                      Release.

 

a.                                      In consideration of the terms of the Agreement, you have agreed to and do waive any claims you may have for employment by the Company and you have agreed not to seek such employment or reemployment by the Company in the future.  You have further agreed to and do release and forever discharge the Company, its predecessors, successors or assigns, affiliates, shareholders or members and each of their respective officers, directors, agents and employees (collectively, the “Releasees”) from all claims, demands, liabilities and causes of action of every kind, nature and description whatsoever, whether known, unknown or suspected to exist, which you ever had or may now have against the Releasees, including, without limitation, any claims, demands, liabilities and causes of action arising from your employment with the Company and the termination of that employment and/or pursuant to any federal, state, county, or local employment laws, regulations, executive orders, or other requirements, including, but not limited to, wrongful discharge, breach of contract, tort, fraud, Title VII of the 1964 Civil Rights Act, [the 1866 Civil Rights Act, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the New Jersey Law Against Discrimination, the New Jersey Conscientious Employee Protection Act, the New Jersey Family Leave Act, the New Jersey Wage Payment Law, the New Jersey Wage and Hour Law and retaliation claims under the New Jersey Workers’ Compensation Law, or any other federal, state or local law relating to employment or discrimination in employment, or otherwise.

 

b.                                      By executing this Release, you do not waive your right to enforce any obligation of the Company pursuant to Section 6 of the Agreement (subject to Section 9 of the Agreement), any rights you may have under equity award agreements between you and the Company, any rights to indemnification from the Company that you may have, any rights to continuing directors’ and officers’ liability insurance to the same extent as the Company covers its other officers and directors, COBRA continuation coverage benefits, or vested benefits under benefit plans of the Company or its affiliates.

 

2.                                      Consultation with Attorney: Voluntary Agreement.  The Company advises you to consult with an attorney of your choosing prior to signing this Release.  You understand and agree that you have the right and have been given the opportunity to review this Release with an attorney.  You also understand and agree that you are under no obligation to consent to this Release.  You acknowledge and agree that the payments to be made to you pursuant to Section 6 of the Agreement offer you consideration greater than that to which you would otherwise be entitled.  You represent that you have read this Release and understand its terms, and that you enter into this Release freely, voluntarily, and without coercion.

 

 

3.                                      Effective Date: Revocation.  You acknowledge and represent that you have been given at least twenty-one (21) days during which to review and consider the provisions of this Release.  You further acknowledge and represent that you have been advised by the Company that you have the right to revoke this Release for a period of seven (7) days after signing it (the “Revocation Period”).  You acknowledge and agree that, if you wish to revoke this Release, you must do so in writing, signed by you and received by the Company no later than the seventh (7th) day of the Revocation Period.  If no such revocation occurs, the Release shall become effective on the eighth (8th) day following your execution of this Release.

 

If your employment is terminated in connection with an exit incentive or other employment termination program, you will be afforded forty-five (45) days instead of twenty-one (21) days during which to review and consider the provisions of this Release as well as other information regarding the exit incentive or employment termination program.

 

	
 
    	
VERTICAL/TRIGEN   OPCO, LLC
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
ACCEPTED AND   AGREED:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
James   Schaub
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date   Signed

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