Document:

EXHIBIT 10.1

 

 

 

February 10, 2017

John J. Lynch, Jr.

131 Broad Street

Charleston, SC 29401

Dear John:

We are pleased to confirm our offer of employment with Houghton Mifflin Harcourt Publishing Company (the “Company”).  You will work as the President and Chief Executive Officer of the Company and Houghton Mifflin Harcourt Company (“Parent”), reporting to Parent’s Board of Directors (together, as applicable, with its committees, “Parent Board”), working out of the Company’s Boston office.  In connection therewith, you will be recommended to serve as member of Parent Board (subject to Parent Board approval).  This offer letter summarizes the compensation and benefits we are offering, subject to formal approval of Parent Board, and contains important information regarding employment with the Company.

Your employment will begin on a mutually agreed date no later than sixty (60) days from the date hereof.  You will be compensated with a salary at the rate of $900,000 per annum, subject to applicable payroll taxes and withholdings.  Your base salary shall be subject to annual review for increases (but not decreases unless mutually agreed) by Parent Board in its sole discretion.  Currently, paydays are every other Friday.

You will be eligible to participate in the bonus plan applicable to executive level employees of the Company commencing in 2017, subject to the terms and conditions of the Company’s bonus plan, if any, as it may exist from time to time.  Your target bonus will be 125% of your base salary paid during each year of employment.  If your employment ceases as a result of your death or Disability (as defined in the HMH Holdings (Delaware), Inc. Change in Control Severance Plan (the “CIC-Severance Plan”)), then you shall remain eligible to receive a prorated bonus for the year in which such termination occurs based on actual Company or individual performance, payable in accordance with the terms of the bonus plan as then in effect for such year.  The Company’s/Parent’s bonus plans, and payment under such plans, are operated at the discretion of Parent Board and the plan administrators and are subject to change from year to year.

Subject to approval of Parent Board, you will receive long-term incentive awards under the terms of Parent’s then existing annual long-term incentive program for 2017 (“2017 LTIP”) (subject to Parent Board approval of such plan) and Parent’s 2015 Omnibus Incentive Plan (the “Equity Plan”) in the form of:  (a) time-based restricted stock units (“LTIP RSUs”) and (b) performance-based restricted stock units (“LTIP PSUs”) with respect to that number of shares of Parent common stock having an aggregate fair market value of $2,200,000 on the date that such awards are granted to other executives of the Company.  For purposes of illustration, Parent’s 2015 and 2016 long-term incentive programs each provided for a 40/60 split of time-based and performance-based restricted stock units, respectively.  The specific vesting schedule and other terms of the LTIP RSUs and LTIP PSUs will be set forth in award 

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agreements substantially in the form used for the other executives of the Company and be subject to the terms and conditions of such agreements and the Equity Plan.  In accordance with Parent’s Equity Grant Policy, the grant date for the LTIP RSUs and LTIP PSUs will be the business day that is three (3) business days following the date on which Parent first releases quarterly earnings information following both your first day of employment and the approval of the award.

You will also be eligible for future long-term incentive awards under Parent’s annual long-term incentive program applicable to executive level employees of the Company, subject to Parent Board discretion and the terms and conditions of such program, if any, as it may exist from time to time.  Parent’s long-term incentive programs, and awards under such programs, are operated at the discretion of Parent Board and the Equity Plan administrator and are subject to change from year to year.

Additionally, you will receive equity awards under the terms of the Equity Plan in the form of:  (a) restricted stock units (“New Hire RSUs”) with respect to that number of shares of Parent common stock having a fair market value equal to $500,000 on the date of grant and (b) an option (“New Hire Option”) to purchase shares of Parent common stock having a Black-Scholes value equal to $2,000,000 on the date of grant at a strike price per share equal to the fair market value of a share of Parent common stock on the date of grant as determined under the terms of the Equity Plan.  The New Hire RSUs will vest in equal installments on each of the first three (3) anniversaries of the date of the grant, subject to your continued employment with the Company.  The New Hire Option will vest in equal installments on each of the first four (4) anniversaries of the date of grant, subject to your continued employment with the Company.  The specific vesting schedules and other terms of the New Hire RSUs and New Hire Option will be set forth in award agreements substantially in the forms attached hereto as Exhibits A-1 and A-2, respectively, and be subject to the terms and conditions of such agreements and the Equity Plan.  The Black-Scholes model utilized by Parent in calculating the value on the date of grant is subject to assumptions determined by Parent in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (disregarding any forfeiture assumptions).  In accordance with Parent’s Equity Grant Policy, the grant date for the New Hire RSUs and New Hire Option will be the business day that is three (3) business days following the date on which Parent first releases quarterly earnings information following both your first day of employment and the approval of the award.

You will be eligible to participate in the CIC Severance Plan at the Level of a Tier 1 Employee (as defined in such plan) and for the avoidance of doubt, if you become eligible to receive any severance payment under such plan (applying the definition of Cause below), then you will not be eligible to receive the payments described in the following sentence.  Subject to your execution and non-revocation of a release of claims substantially in the form set forth in the CIC Severance Plan within sixty (60) days following any termination of your employment by the Company without “Cause” (as defined below) or as a result of your resignation for “Good Reason” (as defined in the CIC Severance Plan), you will be eligible to receive cash severance pay in an amount equal to the sum of (x) 200% of your then current base salary and (y) target bonus, with half of such amount payable in equal installments paid over a twelve (12) month period in accordance with the Company’s standard payroll practices with the first installment to be paid on the first practicable payroll date following the date on which the release of claims has become effective and irrevocable and the remaining half of such payment shall be payable in a single lump sum cash payment on the first anniversary of the termination date, provided that if your termination of employment occurs in one taxable year and the deadline for providing the release occurs in another taxable year, payments will not begin until the beginning of the 

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second taxable year.  In addition, you will be entitled to a prorated bonus for the year in which such termination occurs based on actual Company or individual performance and calculated based on a fraction, the numerator of which is the number of full and partial months completed from the first day of the fiscal year in which such termination occurs through the termination date, and the denominator of which is twelve (12), payable in accordance with the terms of the bonus plan as then in effect for such year.

In addition, upon any termination of your employment you will be entitled to payment in respect of any earned but unpaid base salary and any accrued but unused vacation pay, in each case through the termination date, paid no later than 10 days thereafter, or sooner if required by law, and other than in the event of your termination by the Company for Cause, your annual bonus payable for the fiscal year immediately preceding the fiscal year in which your termination occurs to the extent unpaid, payable at the same time as annual bonuses are paid to other senior executives of the Company.

Notwithstanding any provision to the contrary in any agreement between you and the Company or Parent, for purposes of determining eligibility for any benefits under this agreement, the CIC Severance Plan, any Parent equity award agreement or other arrangement between you and the Company or Parent, the following definition of Cause shall apply and supercede any alternative definition in any such plan or agreement.  “Cause” shall mean (i) your guilty plea or plea of no contest to a felony (or its equivalent under applicable law) or any crime that involves moral turpitude, (ii) conduct by you that constitutes fraud or embezzlement or any acts of material dishonesty in relation to your duties with the Company or its affiliates that causes or is reasonably expected to cause material harm to the Company or its affiliates, (iii) your having engaged in gross negligence, bad faith or intentional misconduct which causes either material reputational or material economic harm to the Company or its affiliates, (iv) your continued refusal to substantially perform your essential duties with respect to the Company or its affiliates, which refusal is not remedied within ten (10) days after written notice from Parent Board (which notice specifies in reasonable detail the grounds constituting Cause under this subclause), or (v) your material breach of your obligations under any service contract you have with the Company or its affiliates or any written Company employment policy, including the Company’s formally adopted Code of Conduct, which is not cured, if curable, within ten (10) days after the Company notifies you of such breach (which notice specifies in reasonable detail the grounds constituting Cause under this subclause).

This is a Boston, Massachusetts based position, and requires relocation to the Boston area no later than six (6) months from your date of hire.  Enclosed is a relocation package describing the relocation benefits for which you will be eligible.  Your receipt of relocation benefits is contingent on your signing and returning the Relocation Repayment Agreement form included in the package.

You will be eligible for up to 20 vacation days annually, which will be pro-rated in 2017 based on your start date.  Vacation time is accrued on a monthly basis.  For a calculation of the exact amount of vacation time for which you are eligible this year, please refer to the HMH Employee Guide or contact your HR Business Partner.  In addition, you may be eligible for paid Company holidays and occasional absence days as described in the Employee Guide.

You will be eligible to participate in the Company’s employee benefit programs.  If you choose to enroll, unless otherwise described in the terms of any employee benefit plan, benefits coverage will commence on the first day of the month, following 30 days from your start date.  In order to 

3

participate in any of the Company’s employee benefit programs, you must complete the enrollment process for such programs within your first 30 days of employment.

The Company will reimburse you for the fees associated with your attorneys’ review of this letter agreement and related documents, not to exceed $25,000 within five business days following the commencement of your employment.

Notwithstanding anything to the contrary, if (i) on the date of your “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (a “Separation from Service”), any of the Company’s stock is publicly traded on an established securities market or otherwise (within the meaning of Section 409A(a)(2)(B)(i) of the Code), (ii) you are determined to be a “specified employee” within the meaning of Section 409A(a)(2)(B) of the Code, (iii) the payments or benefits provided to you from the Company on account of your Separation from Service, to the extent such payments or benefit (after taking into account all exclusions applicable to such payments or benefits under Section 409A of the Code) is properly treated as “deferred compensation” subject to Section 409A and (iv) such delay is required to avoid the imposition of the tax set forth in Section 409A(a)(1) of the Code, as a result of such Separation from Service, you would receive any payment that, absent the application of this provision, would be subject to interest and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the first business day after the earliest of (A) six (6) months after your termination date, (B) your death or (C) such other date as will cause such payment not to be subject to such interest and additional tax (with a catch-up payment equal to the sum of all amounts that have been delayed to be made as of the date of the initial payment).  Your right to receive severance payments or benefits hereunder will be treated as a right to receive a series of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii).  Each payment shall not be considered deferred compensation subject to Section 409A if qualifies as either a short-term deferral under Treasury Regulation Section 1.409A-1(b)(4) or as separation pay under Treasury Regulation Section 1.409A-1 (b)(9)(iii).  Notwithstanding anything herein to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment that are considered “deferred compensation” under Section 409A of the Code, references to your “termination of employment” (and corollary terms) will be construed to refer to your Separation from Service with the Company.

Your employment with the Company will be “At-Will,” meaning that either you or the Company may terminate the employment relationship for any reason or no reason, at any time, with or without notice.

Nothing in this letter should be interpreted as creating an employment contract between you and the Company.

Enclosed are:  (a) a Confidentiality and Intellectual Property Agreement and (b) a Non-Competition and Non-Solicitation Agreement, both of which you must complete and bring with you to Human Resources on your first day.  In addition, you and the Company will enter into an Indemnification Agreement in a form attached to this letter agreement.

You will be receiving a separate email with instructions on how to initiate the electronic I-9 work authorization process.  Your work authorization documentation will need to be reviewed within three days of your start date.  Your HR Representative will review these documents with you and complete the process.

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By accepting this offer of employment, you agree that during your employment with the Company, you will abide by all Company policies and standards of conduct.

By accepting this offer of employment, you represent that you are not bound by any employment contract, non-competition agreement, restrictive covenant or other restriction preventing you from entering employment with or performing your job responsibilities for the Company/Parent, or which is any way inconsistent with the terms of this letter.

The Company’s/Parent’s contemplated Chief Executive Officer transition as well as the existence of this letter and the terms and conditions of any offer and the matters contemplated hereby may represent material non-public information and are to be treated in the strictest confidence and, except as may be required by applicable law, should not be disclosed by you to any person whatsoever (other than your representatives who need to know such information and have been apprised of its confidential nature and agreed to treat such information in accordance herewith) without Parent’s prior written consent or until such information becomes publicly available.

This letter sets forth the terms of your employment with the Company and supersedes any prior oral or written communications.  To accept this offer of employment, please sign and return a copy of this letter to us by 4pm Eastern time on Friday February 10, 2017.  Your signature below indicates that you understand and agree to the terms set forth in this letter.  If you do not return this letter to us by such date and time, this offer will expire.  Please scan and e-mail this offer letter, with your signature, to Bill Bayers, EVP and General Counsel, attention at bill.bayers@hmhco.com.  Handwritten changes to this letter are not valid unless authorized and signed by me.  If you have any questions, please give Bill Bayers a call.

 

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We are very enthusiastic about you joining Houghton Mifflin Harcourt Publishing Company and Parent.  We look forward to working with you, and strongly believe that our relationship will prove to be mutually rewarding.”

Cordially,

/s/ Lawrence K. Fish

Lawrence K. Fish

Chairman of the Board of Directors of

Houghton Mifflin Harcourt Company

Accepted and Agreed on this 10th day of February 2017

By:  John J. Lynch, Jr.

	/s/ John J. Lynch, Jr.

 

6Exhibit

Exhibit 10.4
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Second Amended and Restated Employment Agreement (this “Agreement”) is entered into on November 2, 2016, by and among Tallgrass Management, LLC, a Delaware limited liability company (the “Company”), Tallgrass Energy Holdings, LLC, a Delaware limited liability company formerly known as Tallgrass Development GP, LLC (“Holdings”), Tallgrass Equity, LLC, a Delaware limited liability company formerly known as Tallgrass GP Holdings, LLC (“Tallgrass Equity”), Tallgrass MLP GP, LLC, a Delaware limited liability company (“MLP GP”), TEGP Management, LLC, a Delaware limited liability company (“TEGP Management,” and together with Holdings, Tallgrass Equity, and MLP GP, the “Partnership Entities”) and David G. Dehaemers, Jr., an individual (“Dehaemers”).
RECITALS
WHEREAS, the Company, Holdings, Tallgrass Equity, MLP GP and Dehaemers are parties to that certain Amended and Restated Employment Agreement, dated May 17, 2013 (the “Prior Agreement”); and
WHEREAS, the Company is a subsidiary of Holdings, which is the general partner of Tallgrass Development, LP, a Delaware limited liability company (“Development”), and the sole member of TEGP Management, the general partner of Tallgrass Energy GP, LP, a Delaware limited partnership (“TEGP Partnership”); and
WHEREAS, TEGP Management and TEGP Partnership were formed by Holdings for the purposes of effecting an initial public offering of Class A Shares representing limited partner interests of TEGP Partnership that closed in May 2015 (the “Offering”); and
WHEREAS, in connection with the reorganization transactions necessary for purposes of effecting the Offering, (i) Tallgrass Equity distributed its membership interest in Holdings to the then-current members of Tallgrass Equity, pro rata, and (ii) Tallgrass Equity’s members amended and restated Tallgrass Equity’s limited liability company agreement making TEGP Partnership the managing member; and
WHEREAS, Tallgrass Equity owns 100% of MLP GP, and MLP GP is the general partner of Tallgrass Energy Partners, LP (the “MLP”); and
WHEREAS, the Company, the Partnership Entities and Dehaemers wish to amend and restate the Prior Agreement to reflect, among other items, the entity name changes and structure changes above and it is the parties’ intention and agreement for Dehaemers to be employed by the Company and to serve as the President and Chief Executive Officer of the Company and each of the Partnership Entities pursuant to this Agreement; and 
WHEREAS, pursuant to Section 11 of the Prior Agreement, amendment of the Prior Agreement requires a writing signed by the parties thereto.
NOW, THEREFORE, the Prior Agreement is amended and restated in its entirety as follows:
		
	1.
	Employment.  The Company agrees to continue to employ Dehaemers and Dehaemers agrees to continue to be employed by the Company as President and Chief Executive Officer upon the terms and conditions of this Agreement until such employment is terminated as provided in Section 7.  So long as Dehaemers is employed by the Company as its President and Chief Executive Officer, each of the Partnership Entities agrees that Dehaemers will also serve as and be appointed President and Chief Executive Officer of each of the Partnership Entities.

		
	2.
	Compensation.  For all services rendered by Dehaemers to the Company, the Partnership Entities and each of the downstream affiliates of the Partnership Entities (the Partnership Entities and such downstream affiliates, the “Constituent Companies”), the Company will pay Dehaemers a base monthly salary of $25,000 ($300,000 if annualized), which will accrue and be payable monthly in arrears in accordance with the Company’s general payroll practices.  All payments made and benefits provided by the Company to Dehaemers under this Agreement are subject to any applicable withholding and other applicable taxes.

		
	3.
	Additional Benefits; Expenses; Liability Insurance.

		
	(a)
	Dehaemers will be eligible for additional benefits, by way of insurance, hospitalization and vacations normally provided to senior executives of the Company, pursuant to the terms of those plans, programs and policies of the Company in effect during his employment by the Company, and such additional benefits, if any, as determined by the Board of Managers of Holdings.

		
	(b)
	The Company will reimburse Dehaemers for all ordinary and necessary out-of-pocket expenses incurred and paid by Dehaemers in the course of the performance of his duties pursuant to this Agreement and 

consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, and subject to the Company’s requirements with respect to the manner of approval and reporting of these expenses.
		
	(c)
	So long as Dehaemers is employed under this Agreement and thereafter so long as Dehaemers is subject to any possible claim, the Company and the Partnership Entities will purchase and maintain in effect for the benefit of Dehaemers one or more valid and enforceable policies of directors and officers liability insurance providing, in all respects, coverage at least as beneficial to Dehaemers as that provided pursuant to the insurance policies in place on the date hereof.

		
	4.
	Duties.  So long as Dehaemers is employed under this Agreement, Dehaemers will (a) devote his best efforts and his entire business time (other than as a result of illness or disability) to further the interests of the Company and the Constituent Companies, (b) carry out the reasonable and lawful instructions of the Board of Managers of Holdings (other than as a result of illness or disability) with respect to those matters reserved to the Board of Managers of Holdings pursuant to Section 8.1 of the Second Amended and Restated Limited Liability Company Agreement of Holdings, dated May 11, 2015 (as amended, restated or otherwise modified from time to time, the “Holdings LLC Agreement”), (c) truthfully and accurately maintain and preserve the records of the Company and the Constituent Companies and make all reports reasonably required by the Board of Managers of Holdings, and (d) fully account for all monies and other property of the Company or any of the Constituent Companies that he may from time to time have in his custody and deliver the same to the Company or its designee to the extent reasonably directed to do so; provided that, so long as it does not materially interfere with his duties, nothing herein will preclude Dehaemers from accepting appointment to or continuing to serve on any board of directors (or similar governing body) or as trustee of any business (not competing with any of the Constituent Companies) or any charitable organization, from engaging in charitable and community activities, from delivering lectures and fulfilling speaking engagements, or from directing and managing his personal investments and those of his family.

		
	5.
	Covenant Not to Compete.  Dehaemers acknowledges that, during his employment with the Company, he, at the expense of the Company and the Constituent Companies, will establish favorable relations with the customers to, and regulators of, the Company and the Constituent Companies and will receive and have access to the intellectual property and confidential information of the Company and the Constituent Companies.  Therefore, in consideration of these relationships, his employment with the Company, and to further protect the intellectual property and confidential information of the Company and the Constituent Companies, Dehaemers agrees that, during the term of his employment by the Company and for a period of one year from and after the voluntary or involuntary termination of employment for any or no reason, he will not, directly or indirectly, without the express written consent of the Board of Managers of Holdings except when and as requested to do in and about the performance of his duties under this Agreement:

		
	(a)
	own, manage, operate, control or participate in the ownership, management, operation or control of, or have any interest, financial or otherwise, in or act as an officer, director, partner, principal, member, manager, shareholder, employee, agent, representative, consultant or independent contractor of, or in any way assist any person or entity in the conduct of, any business located in or doing business in the area where a Constituent Company is engaged or becomes engaged in any business competitive to any business engaged in by a Constituent Company during the term of his employment by the Company, including, but not limited to, any business that is engaged in the interstate transportation via pipeline of natural gas, petroleum or petroleum byproducts; provided, however, that notwithstanding the foregoing, Dehaemers may own up to 5% of the outstanding equity securities in any corporation or entity that is listed upon a national stock exchange or actively traded in the over-the-counter market; provided, further, that notwithstanding the foregoing, Dehaemers may own, directly or indirectly, an ownership interest in the general partner of Plains All American Pipeline, L.P. or their affiliates or successors; provided, further, that notwithstanding the foregoing, Dehaemers may place or invest money with one or more private equity firms (or related investment funds or vehicles) that compete (or own or invest in companies that compete) with a Constituent Company so long as Dehaemers does not control or otherwise direct the activities of the private equity firm (or related investment funds or vehicles) or control or otherwise direct the investment in the competing portfolio company; or

		
	(b)
	entice, induce or in any manner influence any person who has an employee or independent contractor relationship with the Company or any Constituent Company and with whom Dehaemers had contact, directly or indirectly, during the term of his employment to change or end such relationship for the purpose of engaging in a business in competition with any business engaged in by the Company or any Constituent Company during the term of his employment by the Company or hire any such person.

		
	6.
	Specific Performance.  Recognizing that irreparable damage will result to the Company and the Constituent Companies in the event of the breach of any of the foregoing covenants and assurances by Dehaemers contained in Section 5, and that the Company’s remedies at law for any such breach or threatened breach will be inadequate, the Company, in addition to such other remedies that may be available to it, will be entitled to an injunction, including a mandatory injunction, to be issued by any court of competent jurisdiction ordering compliance with this Agreement or enjoining and restraining Dehaemers, and each and every person and entity acting in concert or participation with him, from the continuation of the breach.  The Company will not be required to obtain a bond in an amount greater than $1,000.  The covenants and obligations of Dehaemers set forth in Section 5 are in addition to and not in lieu of or exclusive of any other obligations and duties of Dehaemers to the Company, whether express or implied in fact or in law.

		
	7.
	Termination.

		
	(a)
	Dehaemers’s employment by the Company will terminate immediately (unless otherwise determined by the Board of Managers of Holdings) upon the occurrence of any of the following: (1) the death, mental or physical incapacity or inability to perform the essential functions of his job for a consecutive period of 90 days or a non-consecutive period of 120 days during any 12-month period, as reasonably determined by the Board of Managers of Holdings after consultation with an independent physician selected by the Company (such periods to be extended if appropriate as a reasonable accommodation for a disability); or (2) the winding up and final distribution of the assets of each of Development, the MLP and TEGP Partnership.

		
	(b)
	Dehaemers’s employment by the Company will terminate on the date specified in a notice of termination (which may not be less than 30 days after the date of the notice) from a majority of the members of the Board of Managers of Holdings (excluding Dehaemers or any of his designees), which may be sent at the discretion of a majority of the members of the Board of Managers of Holdings (excluding Dehaemers or any of his designees), as a result of the occurrence of any of the following: (1) Dehaemers and his Permitted Transferees (as defined in the Holdings LLC Agreement) cease to control Tallgrass KC, LLC; or (2) Dehaemers and his Permitted Transferees cease to have direct or indirect beneficial ownership of at least 12.5% of the total Common GP Interests (as such term is defined in the Holdings LLC Agreement).

		
	(c)
	The Company may terminate Dehaemers’s employment for Cause or without Cause.  “Cause” means: (1) his conviction of, or plea of nolo contendere to, any crime or offense constituting a felony under applicable law, other than any motor vehicle violations for which no custodial penalty is imposed; (2) his commission of fraud or embezzlement against the Company or any Constituent Company; (3) gross neglect by Dehaemers of, or gross or willful misconduct by Dehaemers in connection with the performance of, his duties to the Company that, if curable, is not cured within 30 days after a written notice of such gross neglect, or gross or willful misconduct, specifically identifying the gross neglect or misconduct, is delivered by a majority of the members of the Board of Managers of Holdings (excluding Dehaemers or any of his designees) to Dehaemers; (4) Dehaemers willfully fails or refuses to carry out the reasonable and lawful instructions of the Board of Managers of Holdings (other than as a result of illness or disability) with respect to those matters reserved to the Board of Managers of Holdings pursuant to Section 8.1 of the Holdings LLC Agreement, and, in each case, such failure or refusal has continued for a period of 30 calendar days following written notice from the majority of the members of the Board of Managers of Holdings (excluding Dehaemers or any of his designees); (5) his failure to perform the duties and responsibilities of his office as his primary business activity, provided that, so long as it does not materially interfere with his duties on behalf of the Company, nothing herein will preclude Dehaemers from accepting appointment to or continuing to serve on any board of directors (or similar governing body) or as trustee of any business corporation (not competing with any Constituent Company) or any charitable organization, from engaging in charitable and community activities, from delivering lectures and fulfilling speaking engagements, or from directing and managing his personal investments and those of his family; (6) a judicial determination that he has breached his fiduciary duties with respect to the Company or any Constituent Company; or (7) his willful and material breach of his obligations in the Holdings LLC Agreement (in his capacity as an officer and not in his capacity as a Member), his obligations in the Second Amended and Restated Limited Liability Company Agreement of Tallgrass Equity, dated as of May 12, 2015, as amended, restated or otherwise modified from time to time (in his capacity as an officer and not in his capacity as a Member), his obligations in the Second Amended and Restated Limited Liability Company Agreement of MLP GP, dated as of May 17, 2013, as amended, restated or otherwise modified from time to time (in his capacity as an officer and not in his capacity as a Member), or his obligations in the Amended and Restated Limited Liability Company Agreement of TEGP Management, dated May 12, 2015, as amended, restated or otherwise modified from time to time (in his capacity as an officer and not in his capacity as a Member) (such agreements, collectively, the “Organizational Documents”), including 

willfully causing any Partnership Entity to take any material action prohibited by the Organizational Documents, that Dehaemers failed to cure, if curable, within 30 days following written notice thereof, specifically identifying such willful and material breach, having been delivered to Dehaemers by a majority of the members of the Board of Managers of Holdings (excluding Dehaemers or any of his designees).
		
	(d)
	Dehaemers may terminate his employment with the Company with good reason or without good reason. A “Resignation for Good Reason” means his resignation for good reason (as defined below) if (x) he provides written notice to the Company describing in reasonable detail the event and stating that his employment will terminate upon a specified date in such notice (“Good Reason Termination Date”), which date is not earlier than 30 days after the date such notice is provided to the Company (“Notice Delivery Date”) and not later than 90 days after the Notice Delivery Date and (y) the Company does not remedy the event prior to the Good Reason Termination Date.  For purposes of this Agreement, Dehaemers has “good reason” if there occurs without his prior written consent:

		
	(1)
	a material diminution of his duties and responsibilities to the Company or any Constituent Company to a level inconsistent with those of a chief executive officer;

		
	(2)
	a material reduction in his cash compensation or a material reduction in the aggregate welfare benefits provided to him (not including any reduction related to a broader compensation or benefit reduction that is not limited to him specifically);

		
	(3)
	a willful or intentional breach of this Agreement by the Company; or

		
	(4)
	a willful or intentional breach of a material provision of any of the Organizational Documents by any Partnership Entity or the Primary Investors (as defined in the Holdings LLC Agreement) that has a material and adverse effect on Dehaemers.

		
	(e)
	If (1) Dehaemers’s employment with the Company is terminated pursuant to Sections 7(a) or 7(b), (2) the Company terminates his employment for Cause or (3) Dehaemers terminates his employment other than as a result of a Resignation for Good Reason, the Company will pay or provide to him:

		
	(i)
	such unpaid salary as Dehaemers has earned up to the date of his termination; and

		
	(ii)
	the other benefits and other amounts due him under Section 3 or as otherwise required by applicable law, as he has earned up to the date of his termination.

		
	(f)
	If (1) the Company terminates Dehaemers’s employment without Cause or (2) Dehaemers terminates his employment as a result of a Resignation for Good Reason, the Company will pay or provide to him:

		
	(i)
	such unpaid salary as Dehaemers has earned up to the date of his termination;

		
	(ii)
	an amount equal to $900,000, payable as a lump sum within 60 days after the termination of employment; and

		
	(iii)
	such other benefits and other amounts due him under Section 3 or as otherwise required by applicable law, as he has earned up to the date of his termination.

Except as provided in Section 7(i), any payment under this Section 7(f) must be made within 60 days after the termination of his employment; provided, however, if the termination of his employment is not a “separation from service” as described in Treas. Reg. § 1 .409A- 1(h) (a “Section 409A Separation”), such payment will be delayed until his Section 409A Separation.
		
	(g)
	As a condition to receiving the termination payments and benefits provided in this Section 7, Dehaemers will execute and deliver to the Company a release, in a form reasonably satisfactory to the Company, releasing all claims arising out of his employment (other than enforcement of this Agreement, his rights under any of the Company’s incentive compensation and employee benefit plans and programs to which Dehaemers is entitled under this Agreement, and any claim for any tort for personal injury not arising out of or related to this termination).

		
	(h)
	So long as Dehaemers is an employee of the Company and thereafter (including after the termination of his employment), he will not make any disparaging comment in any format, whether written, electronic or oral, to any client, customer, account, supplier, service provider, agency, regulator, employee, the media, or any other person or entity regarding the Company or any Constituent Company or any of their clients, customers, accounts, suppliers, service providers, employees, agents, regulators, officers or directors or otherwise relating to the business of the Company or any Constituent Company.

		
	(i)
	If Dehaemers is a “Specified Employee” (as defined under Section 409A of the Internal Revenue Code of 1986, as amended (“Code”)) as of the date of his termination of employment, as determined by the Company, and any equity security of the Company or any Constituent Company is publicly traded on an established securities market or otherwise, the payment of any amount under this Agreement on account of his Section 409A Separation that is deferred compensation subject to the provisions of Code Section 409A and not otherwise excluded from Code Section 409A, will not be paid until the later of the first business day that is six months after the date after his Section 409A Separation or the date the payment is otherwise payable under this Agreement (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed will be paid or reimbursed to Dehaemers in a lump sum, without interest, and any remaining payments due under this Agreement will be paid or provided in accordance with the normal payment dates specified herein.

		
	(j)
	All reimbursement and in-kind benefits provided pursuant to this Agreement will be made in accordance with Treas. Reg. § 1 .409A-3(i)(1)(iv) such that any reimbursement or in-kind benefits will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event.  Specifically, (1) the amounts reimbursed and in-kind benefits provided under this Agreement, other than with respect to medical benefits, during Dehaemers’s taxable year may not affect the amount reimbursed or in-kind benefit provided in any other taxable year, (2) the reimbursement of an eligible expense will be made on or before the last day of his taxable year following the taxable year in which the expense was incurred, and (3) the right to reimbursement or an in-kind benefit is not subject to liquidation or exchange for another benefit.

		
	8.
	Cooperation Regarding Litigation.  So long as Dehaemers is an employee of the Company and thereafter for a period of five years (including after the termination of his employment), Dehaemers will reasonably cooperate with the Company and any Constituent Company by making himself available to testify on behalf of the Company or any Constituent Company, in any action, suit, or proceeding (whether civil, criminal, administrative or investigative) and reasonably assist the Company or any Constituent Company in any such action, suit, or proceeding, by providing information and meeting and consulting with the Board of Managers of Holdings or its representatives or counsel, or representatives or counsel to the Company or any Constituent Company, as requested.  The Company will promptly reimburse Dehaemers for all reasonable expenses incurred by Dehaemers in connection with his provision of testimony or assistance.

		
	9.
	No Conflict.  Dehaemers represents and warrants to the Company and each Partnership Entity that neither the execution nor delivery of this Agreement, nor the performance of his obligations under this Agreement will conflict with, or result in a breach of, any term, condition, or provision of, or constitute a default under, any obligation, contract, agreement, covenant or instrument to which he is a party or under which he is bound, including, without limitation, the breach by Dehaemers of a fiduciary duty to any former employers.

		
	10.
	Waiver of Breach.  Failure of the Company or any Partnership Entity to demand strict compliance with any of the terms, covenants or conditions hereof will not be deemed a waiver of the term, covenant or condition, nor will any waiver or relinquishment by the Company or any Partnership Entity of any right or power under this Agreement at any one time or more times be deemed a waiver or relinquishment of the right or power at any other time or times.

		
	11.
	Entire Agreement; Amendment.  This Agreement cancels and supersedes all previous agreements other than the Confidentiality Agreement and Assignment of Inventions, by and between Dehaemers and the Company, entered into in connection with his employment by the Company (the “Confidentiality Agreement”) relating to the subject matter of this Agreement, written or oral, between the parties, including, without limitation, the Prior Agreement. This Agreement and the Confidentiality Agreement contain the entire understanding of the parties with respect to the subject matter hereof and may not be amended, modified or supplemented in any manner whatsoever except as otherwise provided herein or in writing signed by each of the parties.

		
	12.
	Potential Unenforceability of any Provision.  If a final judicial determination is made that any provision of this Agreement is an unenforceable restriction against Dehaemers, the provisions of this Agreement will be rendered void only to the extent that a judicial determination finds the provisions unenforceable, and the unenforceable provisions will automatically be reconstituted and become a part of this Agreement, effective as of the date of this Agreement, to the maximum extent in favor of the Company and the Partnership Entities that is lawfully enforceable.  A judicial determination that any provision of this Agreement is unenforceable will not render the entire Agreement unenforceable, but rather this Agreement will continue in full force and effect absent any unenforceable provision to the maximum extent permitted by law.

		
	13.
	Headings.  The headings of the sections of this Agreement have been inserted for convenience of reference only and do not restrict or otherwise modify any of the terms or provisions of this Agreement.

		
	14.
	Governing Law.  This Agreement is governed by the laws of the State of Kansas applicable to agreements made and to be performed entirely within the State, including all matters of enforcement, validity and performance.

		
	15.
	Notice.  Any notice, request, consent or communication under this Agreement is effective only if it is in writing any (a) personally delivered or (b) sent by a nationally recognized overnight delivery service, with delivery confirmed, addressed as follows:

If to the Company:

Tallgrass Management, LLC
4200 W. 115th Street, Suite 350
Leawood, Kansas 66211
Attn: General Counsel

If to Holdings:

Tallgrass Energy Holdings, LLC
4200 W. 115th Street, Suite 350
Leawood, Kansas 66211
Attn: General Counsel

If to Tallgrass Equity:

Tallgrass Equity, LLC
4200 W. 115th Street, Suite 350
Leawood, Kansas 66211
Attn: General Counsel

If to MLP GP: 

Tallgrass MLP GP, LLC
4200 W. 115th Street, Suite 350
Leawood, Kansas 66211
Attn: General Counsel

If to TEGP Management: 

TEGP Management, LLC
4200 W. 115th Street, Suite 350
Leawood, Kansas 66211
Attn: General Counsel

If to Dehaemers:

David G. Dehaemers, Jr. 
c/o Tallgrass Energy Partners, LP
4200 W. 115th Street, Suite 350
Leawood, Kansas 66211
or such other persons or to such other addresses as may be furnished in writing by any party to the other party, and will be deemed to have been given only upon its delivery in accordance with this Section 15.
		
	16.
	Assignment.  This Agreement is personal and not assignable by Dehaemers. This Agreement may be assigned by the Company or any Partnership Entity without notice to or consent of any other party of this Agreement; provided that, such assignment must be to a Constituent Company. Except as described in the preceding sentence, this Agreement is not assignable by any party hereto without the consent of all the parties to this Agreement. 

		
	17.
	Survival of Obligations.  All obligations of Dehaemers that by their nature involve performance, in any particular, after the expiration or termination of this Agreement, or that cannot be ascertained to have been fully performed until after the expiration or termination of this Agreement, will survive the expiration or termination of this Agreement.

		
	18.
	Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which constitute one agreement that is binding upon each of the parties, notwithstanding that all parties are not signatories to the same counterpart.

		
	19.
	Consent to Jurisdiction and Venue.  The parties hereby submit to the exclusive jurisdiction of the District Court for Johnson County, Kansas or the United States District Court for the District of Kansas in any action or proceeding arising out of or relating to this Agreement, including any appeal and any action for enforcement or recognition of any judgment relating thereto, and the parties hereby irrevocably agree that all claims in respect of such action or proceeding may not be heard or determined in any court or before any panel other than the District Court for Johnson County, Kansas or the United States District Court for the District of Kansas.  A final judgment in any such action or proceeding will be conclusive and may be enforced in any other jurisdictions by suit on the judgment or in any manner provided by law.  The parties hereby irrevocably waive, to the fullest extent they may legally and effectively do so, any objection they may have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in the District Court for Johnson County, Kansas or the United States District Court for the District of Kansas.  The parties hereby irrevocably waive, to the fullest extent they may legally and effectively do so, the defense of an inconvenient forum to the maintenance of any suit, action or proceeding in any such court.  The parties irrevocably consent to service of process in any suit, action or proceeding in any manner provided by law.

		
	20.
	Expenses.  If either party brings any legal action or other proceeding to enforce or interpret any of the rights, obligations or provisions of this Agreement, or because of a dispute, breach or default in connection with any of the provisions of this Agreement, the prevailing party is entitled to recover from the non-prevailing party reasonable attorneys’ fees and all other costs in such action or proceeding in addition to, but without duplication, any other relief to which the prevailing party may be entitled.

		
	21.
	No Mitigation; No Offset.  If Dehaemers’s employment is terminated, he will be under no obligation to seek other employment and amounts due him under this Agreement will not be offset by any remuneration attributable to any subsequent employment that he may obtain.

		
	22.
	Deferred Compensation.  This Agreement is intended to meet the requirements of Section 409A of the Code and will be administered in a manner that is intended to meet those requirements and will be construed and interpreted in accordance with such intent.  To the extent that an award or payment, or the settlement or deferral thereof, is subject to Section 409A of the Code, except as Dehaemers and the Board of Managers of Holdings otherwise determine in writing, the award will be granted, paid, settled or deferred in a manner that will meet the requirements of Section 409A of the Code, including regulations or other guidance issued with respect thereto, such that the grant, payment, settlement or deferral will not be subject to the excise tax applicable under Section 409A of the Code.  Any provision of this Agreement that would cause the award or the payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code will be amended to comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis, in accordance with regulations and other guidance issued under Section 409A of the Code.

[Signature page follows.]

The parties have executed this Employment Agreement on the date set forth in the introductory clause.    
TALLGRASS MANAGEMENT, LLC

By:    /s/ William R. Moler________________
Name:     William R. Moler
Title:     Executive Vice President and 
Chief Operating Officer

TALLGRASS ENERGY HOLDINGS, LLC

By:    /s/ William R. Moler________________
Name:     William R. Moler
Title:     Executive Vice President and 
Chief Operating Officer

TALLGRASS EQUITY, LLC

By:    /s/ William R. Moler________________
Name:     William R. Moler
Title:     Executive Vice President and 
Chief Operating Officer

TALLGRASS MLP GP, LLC

By:    /s/ William R. Moler________________
Name:     William R. Moler
Title:     Executive Vice President and 
Chief Operating Officer

TEGP MANAGEMENT, LLC

By:    /s/ William R. Moler________________
Name:     William R. Moler
Title:     Executive Vice President and 
Chief Operating Officer

/s/ David G. Dehaemers, Jr.        
David G. Dehaemers, Jr.

Signature Page to Employment Agreement

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