1037-00006 · Solstice Biomedical Devices Ltd · Transaction Documents

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EMPLOYMENT AGREEMENT

by and between

SOLSTICE BIOMEDICAL, INC.

and

CATHERINE PRYOR

Dated as of October 31, 2024

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of October 31, 2024 (the "Effective Date"), by and between Solstice Biomedical, Inc., a Delaware corporation (the "Company" or "Employer"), and Catherine Pryor, an individual residing in the Commonwealth of Pennsylvania ("Executive"). The Company and Executive are each referred to herein individually as a "Party" and collectively as the "Parties."

The Effective Date of this Agreement is the Closing Date (as defined below) under that certain Stock Purchase Agreement, dated as of August 20, 2024 (the "Purchase Agreement"), by and among Solstice Biomedical, Inc., Meridian Surgical Technologies, Inc., a Delaware corporation ("Meridian"), Dr. Marcus Ellsworth, in his capacity as the Sellers' Representative, and the Sellers named therein.

RECITALS

WHEREAS, the Company is a wholly owned subsidiary of Solstice Biomedical Devices Ltd., an Irish private limited company (CRO Number 648217), headquartered at Solstice House, 14 Fitzwilliam Place, Dublin 2, D02 YF82, Ireland ("Parent"), and the Company has, on the date hereof, acquired one hundred percent (100%) of the outstanding common stock of Meridian Surgical Technologies, Inc., a Delaware corporation, pursuant to and in accordance with the terms and conditions of the Purchase Agreement;

WHEREAS, Executive previously served as President and Chief Operating Officer of Meridian and holds 372,500 shares of Meridian common stock, representing approximately five percent (5.0%) of the 7,450,000 shares of Meridian common stock outstanding immediately prior to the closing of the transactions contemplated by the Purchase Agreement (the "Closing");

WHEREAS, as a condition to and in consideration of the Closing of the transactions contemplated by the Purchase Agreement, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions set forth herein;

WHEREAS, Executive acknowledges that she has received substantial consideration in connection with the transactions contemplated by the Purchase Agreement, including per-share merger consideration payable at and following the Closing, and that this Agreement and the Non-Competition and Non-Solicitation Agreement executed concurrently herewith are material inducements to the Company's willingness to consummate the transactions contemplated by the Purchase Agreement; and

WHEREAS, this Agreement is being executed and delivered by the Parties on the Closing Date as contemplated by the Purchase Agreement and the ancillary agreements described therein.

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

ARTICLE 1 — EMPLOYMENT AND DUTIES

Section 1.1 — Position and Title

Effective as of the Effective Date, the Company hereby employs Executive, and Executive hereby accepts employment with the Company, as Senior Vice President, Operations ("SVP Operations") of the Company. In her capacity as SVP Operations, Executive shall report directly to the Division President, Orthopedic Instruments (currently Dr. Marcus Ellsworth) or to such other senior executive of the Company or Parent as may be designated by the Company from time to time. Executive's position within the organizational structure of the Company and Parent shall be commensurate with that of a senior vice president, and Executive shall be afforded the authority, responsibilities, and resources reasonably necessary to discharge the duties and obligations associated with such position.

Executive's principal office shall be located at Meridian's headquarters at 780 Keystone Boulevard, Suite 200, King of Prussia, Pennsylvania 19406, or at the manufacturing facility located at 45 Forge Creek Road, Exton, Pennsylvania 19341, as operational needs may require from time to time. The Company and Executive may mutually agree upon an alternative location for Executive's principal office; provided, however, that any relocation of Executive's principal place of employment shall be subject to the provisions of Section 5.3 of this Agreement.

Section 1.2 — Duties and Responsibilities

Executive shall have such duties and responsibilities as are consistent with her position as SVP Operations, including, without limitation, oversight of manufacturing operations, supply chain management, quality systems, and operational integration matters arising from or relating to the Company's acquisition of Meridian. Executive's specific duties and responsibilities are further described in Schedule 1 attached hereto, which is incorporated herein by reference. The Company may, from time to time, modify, expand, or reassign Executive's duties and responsibilities; provided, however, that any such modification, expansion, or reassignment shall be consistent with Executive's position as a senior vice president of the Company and shall not constitute a material diminution of Executive's title, duties, or responsibilities for purposes of Section 5.3 of this Agreement unless such modification would objectively constitute such a diminution.

Executive shall devote substantially all of her business time, attention, skill, and energy to the faithful and diligent performance of her duties and responsibilities hereunder and shall use her best efforts to promote the interests and goodwill of the Company and its affiliates. Executive shall perform her duties in a professional manner and in compliance with all applicable laws, rules, and regulations.

Executive shall comply with all policies, procedures, codes of conduct, and directives of the Company and Parent as may be established, amended, or supplemented from time to time, including, without limitation, the Company's Employee Handbook, Code of Business Ethics, Insider Trading Policy, and any policies adopted by Parent and made applicable to the Company's employees.

Section 1.3 — Exclusive Service

During the Employment Term (as defined in Section 2.1 below), Executive shall not engage in any other business activity, whether or not such activity is pursued for compensation or profit, that would materially interfere with the performance of Executive's duties and responsibilities hereunder, without the prior written consent of the Company (which consent may be granted or withheld in the Company's sole discretion).

Notwithstanding the foregoing, Executive may, without the prior written consent of the Company:

(a) serve on the boards of directors or advisory boards of civic, charitable, educational, or industry organizations, provided that Executive shall obtain the prior written consent of the Company before accepting any such position (such consent not to be unreasonably withheld, conditioned, or delayed);

(b) manage Executive's personal investments and financial affairs; and

(c) engage in passive investment activities, including ownership of not more than two percent (2%) of the outstanding equity securities of any publicly traded company;

in each case, only to the extent that such activities do not, individually or in the aggregate, materially interfere with the performance of Executive's duties and responsibilities hereunder, create a conflict of interest with the Company's business, or violate any provision of this Agreement, the Non-Competition and Non-Solicitation Agreement, or any applicable Company policy.

ARTICLE 2 — TERM OF EMPLOYMENT

Section 2.1 — Employment Term

The term of Executive's employment under this Agreement (the "Employment Term") shall commence on the Effective Date and shall continue for an initial period of three (3) years, ending on October 31, 2027, unless earlier terminated in accordance with the provisions of Article 5 hereof (the "Initial Term"). The Parties acknowledge that the Employment Term encompasses key post-closing periods, including the earnout period established under the Purchase Agreement, and that the continuity of Executive's employment during the Initial Term is of particular importance to the Company and its integration of the Meridian business operations.

Section 2.2 — Renewal

Following the expiration of the Initial Term, Executive's employment with the Company shall continue on an at-will basis, terminable by either Party upon not less than thirty (30) days' prior written notice to the other Party, unless the Parties shall have executed a written extension, renewal, or successor employment agreement prior to the expiration of the Initial Term. For the avoidance of doubt, during any period of at-will employment following the expiration of the Initial Term, the terms and conditions of this Agreement (other than the provisions relating to the fixed duration of the Initial Term) shall remain in full force and effect, including, without limitation, the provisions of Article 4 relating to confidentiality, intellectual property, and restrictive covenants. Nothing in this Section 2.2 shall be construed to limit the right of either Party to terminate Executive's employment during the Initial Term in accordance with the provisions of Article 5.

ARTICLE 3 — COMPENSATION AND BENEFITS

Section 3.1 — Base Salary

During the Employment Term, the Company shall pay Executive an annual base salary of Three Hundred Seventy-Five Thousand Dollars ($375,000) (the "Base Salary"), payable in accordance with the Company's standard payroll practices as in effect from time to time (currently on a bi-weekly basis), and subject to all applicable withholdings and deductions required by law.

The Base Salary shall be reviewed annually by the Company's compensation committee (or, if no compensation committee has been established, by the Company's board of directors or the authorized compensation authority of Parent) in connection with the Company's annual performance review process. Upon such review, the Base Salary may be increased at the sole discretion of the Company; provided, however, that during the Initial Term, the Base Salary shall not be decreased below the amount of $375,000 per annum. Any increase in Base Salary shall not serve to limit or reduce any other obligation of the Company under this Agreement. After any such increase, the term "Base Salary" as used in this Agreement shall refer to the Base Salary as so increased.

Section 3.2 — Annual Bonus

During the Employment Term, Executive shall be eligible to participate in the Company's annual performance bonus program, as such program may be established, modified, or discontinued from time to time by the Company. Executive's target annual bonus opportunity shall be equal to forty percent (40%) of her then-current Base Salary (the "Target Bonus"), which, as of the Effective Date, represents a target annual bonus of One Hundred Fifty Thousand Dollars ($150,000). The actual amount of any annual bonus earned by Executive shall be determined based on the achievement of individual and Company performance metrics and objectives established by the Company or its compensation committee for the applicable performance year.

With respect to the Company's first partial fiscal year in which the Effective Date falls (i.e., the period commencing November 1, 2024 through the end of the Company's fiscal year), Executive's Target Bonus shall be prorated based on the number of days of Executive's employment during such partial fiscal year relative to the total number of days in the applicable performance year. The Company shall establish performance metrics and objectives applicable to Executive's bonus opportunity for such partial fiscal year within a reasonable period following the Effective Date.

Any annual bonus earned by Executive pursuant to this Section 3.2 shall be paid to Executive in a lump sum cash payment no later than March 15 of the calendar year following the calendar year to which the bonus relates, subject to Executive's continued employment through the date on which the bonus is paid (except as otherwise expressly provided in Section 5.6 of this Agreement). Participation in the annual bonus program does not guarantee the payment of any bonus, and except as otherwise provided in Section 5.6, Executive must be actively employed by the Company on the date any bonus is paid in order to earn and receive such bonus.

Section 3.3 — Equity Compensation

During the Employment Term, Executive shall be eligible to participate in any equity incentive plan, long-term incentive program, or other equity-based compensation arrangement established by Parent, the Company, or any of their affiliates and made available to similarly situated senior executives of the Company, subject to the terms and conditions of any such plan or program and the approval of the board of directors of Parent, the compensation committee thereof, or such other body as may have authority to administer such plan or program. Any grants of equity awards to Executive shall be made at the sole discretion of the applicable granting authority and shall be subject to the terms and conditions of the applicable equity incentive plan and the individual award agreement evidencing such grant. Nothing in this Section 3.3 shall be construed as a guarantee that Executive will receive any equity compensation awards or a commitment by the Company or Parent to establish any particular equity incentive plan or program.

Section 3.4 — Retention Bonus

In addition to the compensation described in Sections 3.1 through 3.3 above, Executive shall be eligible to receive a retention bonus from the retention bonus pool in the aggregate amount of Three Million Five Hundred Thousand Dollars ($3,500,000) established by the Company for key Meridian employees pursuant to the Purchase Agreement (the "Retention Bonus Pool"), in such amount as shall be determined by the Company in its discretion (the "Retention Bonus").

The Retention Bonus, if any, shall be payable to Executive in two (2) equal installments, as follows:

(a) First Installment. The first installment of the Retention Bonus shall be payable on the six (6) month anniversary of the Closing Date (i.e., April 30, 2025), subject to Executive's continued employment with the Company through such date.

(b) Second Installment. The second installment of the Retention Bonus shall be payable on the twelve (12) month anniversary of the Closing Date (i.e., October 31, 2025), subject to Executive's continued employment with the Company through such date.

Each installment of the Retention Bonus shall be subject to Executive's continuous, active employment with the Company through the applicable payment date. In the event that Executive's employment with the Company terminates for any reason prior to an applicable payment date, Executive shall forfeit any unpaid installment of the Retention Bonus, except as may otherwise be required by applicable law. Payment of the Retention Bonus shall be subject to all applicable withholdings and deductions required by law.

Section 3.5 — Benefits

During the Employment Term, Executive shall be entitled to participate in all employee benefit plans, programs, and arrangements made available by the Company to its similarly situated senior executives, as such plans, programs, and arrangements may be established, modified, or terminated from time to time in the Company's sole discretion, including, without limitation, medical, dental, and vision insurance plans; group life insurance; short-term and long-term disability insurance; and retirement plans. Executive's participation in any such plan shall be subject to the terms and conditions of the applicable plan documents and the Company's eligibility requirements.

Without limiting the generality of the foregoing, Executive shall be eligible to participate in the Company's 401(k) retirement savings plan (as successor to the Meridian Surgical Technologies 401(k) Plan previously administered by Cornerstone Retirement Plan Services, Inc.), subject to the terms and conditions of such plan, including any applicable vesting schedules, contribution limits, and matching or employer contribution provisions.

The Company reserves the right to modify, amend, or terminate any employee benefit plan, program, or arrangement at any time and from time to time, in accordance with the terms of such plan and applicable law. Nothing in this Agreement shall be construed to require the Company to establish or maintain any particular benefit plan or to prevent the Company from modifying or terminating any such plan.

Section 3.6 — Vacation and Paid Time Off

During the Employment Term, Executive shall be entitled to four (4) weeks of paid vacation per calendar year (prorated for any partial year of employment), in addition to all Company-observed holidays and personal days, in accordance with the Company's vacation and paid time off policies as in effect from time to time. Vacation shall be scheduled and taken at such times as are consistent with the operational needs of the Company and Executive's duties and responsibilities hereunder. The accrual, carryover, and forfeiture of unused vacation days shall be governed by the Company's applicable policies.

Section 3.7 — Expense Reimbursement

The Company shall reimburse Executive for all reasonable and documented out-of-pocket business expenses actually incurred by Executive in the performance of her duties and responsibilities hereunder, in accordance with the Company's expense reimbursement policies and procedures as in effect from time to time. Executive shall submit expense reports and supporting documentation in a timely manner and in accordance with the Company's policies. All reimbursements shall be paid within a reasonable period following Executive's submission of a proper expense report and shall, in all events, be made no later than the last day of the calendar year following the calendar year in which the expense was incurred.

ARTICLE 4 — CONFIDENTIALITY, INTELLECTUAL PROPERTY, AND RESTRICTIVE COVENANTS

Section 4.1 — Confidential Information

(a) Definition. For purposes of this Agreement, "Confidential Information" means all trade secrets, proprietary information, and confidential data and materials of or relating to the Company, Parent, and their respective affiliates (including, following the Closing, Meridian), whether in written, oral, electronic, or any other form, that is not generally known to the public and that has been or may be disclosed to, obtained by, or developed by Executive in the course of, or as a result of, Executive's employment with the Company (or Executive's prior employment with Meridian). Confidential Information includes, without limitation:

(i) trade secrets, know-how, and proprietary technology;

(ii) business plans, strategies, forecasts, and projections;

(iii) customer lists, customer data, and customer relationship information;

(iv) supplier and vendor information, including pricing terms and contractual arrangements;

(v) financial information, including revenue data, cost structures, margins, and budgets;

(vi) technical data, product designs, engineering specifications, and manufacturing processes;

(vii) regulatory submissions, clinical data, and quality system documentation;

(viii) information concerning the ArthroNav robotic-assisted arthroscopy platform, including software architecture, control algorithms, and hardware specifications;

(ix) information concerning the PrecisionBlade product line, including design specifications, manufacturing tolerances, and distribution strategies;

(x) proprietary algorithms for real-time cartilage thickness mapping and any other proprietary analytical or diagnostic methodologies;

(xi) marketing strategies, pricing methodologies, and competitive intelligence;

(xii) personnel information, compensation data, and organizational plans; and

(xiii) any other information that the Company, Parent, or any affiliate designates as confidential or that a reasonable person would understand to be confidential given the nature of the information and the circumstances of disclosure.

Confidential Information shall not include information that: (A) was or becomes generally available to the public other than as a result of a disclosure by Executive in violation of this Agreement; (B) was lawfully in Executive's possession on a non-confidential basis prior to Executive's employment with Meridian, as evidenced by Executive's contemporaneous written records; or (C) is independently developed by Executive after termination of employment without reference to or use of any Confidential Information.

(b) Non-Disclosure. Executive shall not, during the Employment Term or at any time thereafter, directly or indirectly, disclose, publish, communicate, or make available any Confidential Information to any person, entity, or other third party, or use any Confidential Information for any purpose, except as required in the faithful and diligent performance of Executive's duties and responsibilities hereunder or as expressly authorized in writing by the Company. Executive shall use at least the same degree of care to protect the confidentiality of Confidential Information as she would use to protect her own confidential information of a similar nature, but in no event less than reasonable care.

(c) Required Disclosures. Nothing in this Section 4.1 shall prohibit Executive from disclosing Confidential Information to the extent required by applicable law, regulation, or valid legal process (including a subpoena, civil investigative demand, or similar process); provided, however, that Executive shall, to the extent legally permitted, (i) promptly notify the Company in writing of such requirement prior to making any such disclosure, (ii) cooperate with the Company in seeking a protective order or other appropriate remedy to prevent or limit such disclosure, and (iii) disclose only that portion of the Confidential Information that is legally required to be disclosed.

(d) Defend Trade Secrets Act Notice. Pursuant to the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1833(b), Executive is hereby notified that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

Section 4.2 — Intellectual Property Assignment

(a) Assignment. Executive hereby acknowledges and agrees that all inventions, discoveries, improvements, designs, processes, methods, techniques, formulas, works of authorship, software, firmware, algorithms, data, documentation, and other intellectual property, whether or not patentable or copyrightable (collectively, "Work Product"), that are conceived, created, developed, reduced to practice, or made by Executive, alone or jointly with others, during the Employment Term and that (i) relate to the actual or anticipated business, research, or development of the Company, Parent, or any of their affiliates, (ii) result from any work performed by Executive for or on behalf of the Company, or (iii) are created using the Company's resources, facilities, equipment, or Confidential Information, shall be and are hereby assigned to, and shall be the sole and exclusive property of, the Company (or such affiliate as the Company may designate).

(b) Assistance and Cooperation. Executive shall promptly and fully disclose all Work Product to the Company and shall execute all documents, instruments, and applications (including patent applications, copyright registrations, and assignments) and take all other actions as may be reasonably requested by the Company, at the Company's expense, to effectuate, evidence, perfect, register, or record the Company's ownership of and rights in any Work Product. Executive hereby irrevocably appoints the Company as Executive's attorney-in-fact, coupled with an interest, to execute such documents and take such actions on Executive's behalf if Executive fails or refuses to do so within a reasonable period following the Company's request.

(c) Moral Rights. To the fullest extent permitted by applicable law, Executive hereby irrevocably waives and agrees never to assert any and all moral rights Executive may have in or with respect to any Work Product, including any rights of attribution or integrity.

(d) Prior Inventions. Executive represents that there are no inventions, discoveries, or other intellectual property that Executive owns or has an interest in as of the Effective Date that relate to the Company's business and that Executive wishes to exclude from the scope of this Section 4.2. If Executive has any such prior inventions, Executive shall list them on a schedule to be delivered to the Company within ten (10) business days following the Effective Date; in the absence of such a schedule, Executive shall be deemed to have represented that no such prior inventions exist.

Section 4.3 — Non-Competition and Non-Solicitation

Executive acknowledges and agrees that, concurrently with the execution of this Agreement and as a condition to the Closing of the transactions contemplated by the Purchase Agreement, Executive has entered into a separate Non-Competition and Non-Solicitation Agreement with the Company dated as of the Effective Date (the "Restrictive Covenant Agreement"), a copy of which is attached as an exhibit to the Purchase Agreement and is incorporated herein by reference. The Restrictive Covenant Agreement contains, among other things, covenants restricting Executive's ability to compete with the Company and to solicit the Company's employees, customers, and business partners during Executive's employment and for a period of two (2) years following the termination of Executive's employment for any reason (the "Restricted Period"), as more fully described in the Restrictive Covenant Agreement. The Restrictive Covenant Agreement is governed by the laws of the State of Delaware.

Executive acknowledges and agrees that (a) the restrictive covenants set forth in the Restrictive Covenant Agreement are reasonable and necessary to protect the Company's legitimate business interests, including the goodwill acquired by the Company in connection with the transactions contemplated by the Purchase Agreement, the Confidential Information of the Company and its affiliates, and the Company's relationships with its customers, suppliers, and employees; (b) Executive has received adequate and independent consideration for such restrictive covenants, including the employment provided under this Agreement, the compensation and benefits described herein, and the substantial merger consideration received by Executive in connection with the Closing; and (c) the enforcement of such restrictive covenants would not impose an undue hardship on Executive.

Section 4.4 — Non-Disparagement

(a) Executive's Obligations. During the Employment Term and at all times thereafter, Executive shall not, directly or indirectly, make, publish, or communicate any disparaging, defamatory, or derogatory statements or comments, whether written, oral, or in any other form (including on social media platforms or through any electronic communication), about the Company, Parent, or any of their respective affiliates, subsidiaries, predecessors, successors, directors, officers, employees, agents, products, services, or business practices. Nothing in this Section 4.4(a) shall restrict Executive from (i) providing truthful testimony or information in connection with any legal proceeding, governmental investigation, or regulatory inquiry, or (ii) making truthful statements in the context of any legal claim or proceeding between Executive and the Company.

(b) Company's Obligations. The Company shall instruct its senior executives (meaning its officers at the level of vice president and above) not to make, publish, or communicate any disparaging, defamatory, or derogatory statements or comments about Executive, whether written, oral, or in any other form. The Company's obligations under this Section 4.4(b) are limited to such instruction and do not extend to statements made by individuals outside of their capacity as officers of the Company or statements required by law or legal process.

Section 4.5 — Return of Property

Upon the termination of Executive's employment for any reason, or at any time upon the written request of the Company, Executive shall immediately return to the Company all property of the Company, Parent, and their affiliates in Executive's possession or control, including, without limitation, all documents, files, records, reports, correspondence, manuals, notebooks, computer equipment (including laptops, tablets, and mobile devices), access cards, keys, identification badges, software, data, and all copies, excerpts, summaries, or other reproductions thereof, in any form or medium. Executive shall not retain any copies of any Confidential Information or other Company property following such return, and Executive shall, upon the Company's request, certify in writing that all such materials have been returned and that no copies have been retained.

ARTICLE 5 — TERMINATION

Section 5.1 — Termination by the Company for Cause

The Company may terminate Executive's employment for "Cause" at any time upon written notice to Executive specifying the grounds therefor. For purposes of this Agreement, "Cause" shall mean the occurrence of any of the following:

(a) a material breach by Executive of this Agreement or the Restrictive Covenant Agreement, which breach, if curable, remains uncured for a period of thirty (30) days after written notice from the Company specifying the nature of such breach;

(b) Executive's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud, or dishonesty;

(c) Executive's commission of fraud, embezzlement, misappropriation of funds or property, or other act of material dishonesty in connection with Executive's employment or the business of the Company or any of its affiliates;

(d) Executive's willful and continued failure or refusal to substantially perform her duties and responsibilities hereunder (other than any failure resulting from Executive's Disability), which failure or refusal continues for a period of thirty (30) days after written notice from the Company specifying the nature of such failure or refusal and demanding cure;

(e) a material violation by Executive of any written policy, code of conduct, or directive of the Company or Parent, including, without limitation, policies relating to harassment, discrimination, workplace safety, substance abuse, or securities trading; or

(f) Executive's breach of any fiduciary duty owed to the Company, Parent, or any of their affiliates, including, without limitation, any act of self-dealing, usurpation of corporate opportunity, or unauthorized disclosure of Confidential Information.

A determination of whether Cause exists shall be made in good faith by the Company's board of directors (or a designated committee thereof). The Company shall provide Executive with written notice setting forth in reasonable detail the specific facts and circumstances giving rise to the Cause determination prior to the effective date of termination, and, where a cure period is applicable, shall afford Executive the opportunity to cure as set forth above.

Section 5.2 — Termination by the Company Without Cause

The Company may terminate Executive's employment without Cause at any time during the Employment Term upon not less than thirty (30) days' prior written notice to Executive. The Company may, in its sole discretion, elect to provide Executive with payment in lieu of all or any portion of such notice period (based on Executive's Base Salary rate then in effect), in which case Executive's employment shall terminate on the date specified in the Company's notice or such earlier date as the Company may designate.

Section 5.3 — Termination by Executive for Good Reason

Executive may terminate her employment for "Good Reason" upon satisfaction of the conditions set forth below. For purposes of this Agreement, "Good Reason" shall mean the occurrence of any of the following events without Executive's prior written consent:

(a) a material diminution in Executive's Base Salary below Three Hundred Seventy-Five Thousand Dollars ($375,000) per annum during the Initial Term;

(b) a material diminution in Executive's title, duties, authority, or responsibilities, including a requirement that Executive report to a person or body other than a senior executive of the Company or Parent at the level of Division President or above (it being understood that a change in the identity of the individual to whom Executive reports shall not, by itself, constitute a material diminution so long as such individual holds a position at the level of Division President or above);

(c) a relocation of Executive's principal place of employment to a location more than fifty (50) miles from the location of Executive's principal place of employment as of the Effective Date (i.e., King of Prussia, Pennsylvania or Exton, Pennsylvania, as applicable) without Executive's prior written consent; or

(d) a material breach by the Company of any provision of this Agreement that remains uncured following the notice and cure procedure set forth below.

Notwithstanding the foregoing, Executive may not terminate her employment for Good Reason unless: (i) Executive provides written notice to the Company of the existence of the condition constituting Good Reason within sixty (60) days of the initial occurrence of such condition, specifying in reasonable detail the facts and circumstances giving rise to such condition; (ii) the Company fails to cure such condition within thirty (30) days following its receipt of such written notice (the "Cure Period"); and (iii) Executive actually terminates her employment within thirty (30) days following the expiration of the Cure Period if such condition has not been cured. If the Company cures the condition within the Cure Period, Executive shall not be entitled to terminate her employment for Good Reason on the basis of such cured condition.

Section 5.4 — Termination by Executive Without Good Reason

Executive may terminate her employment without Good Reason at any time upon not less than sixty (60) days' prior written notice to the Company. The Company may, upon receipt of such notice, elect to accelerate the effective date of Executive's termination to any date during such notice period, in which case the Company shall pay Executive her Base Salary through the accelerated termination date (but shall not be required to pay any additional Base Salary for the balance of the notice period unless the Company, in its sole discretion, elects to do so).

Section 5.5 — Termination Due to Death or Disability

(a) Death. Executive's employment shall automatically terminate upon Executive's death.

(b) Disability. The Company may terminate Executive's employment upon Executive's "Disability." For purposes of this Agreement, "Disability" shall mean Executive's inability to perform the essential functions of her position, with or without reasonable accommodation, due to a physical or mental condition, for a period of one hundred eighty (180) consecutive calendar days or for an aggregate of two hundred seventy (270) calendar days in any three hundred sixty-five (365) day period, as determined by a physician selected by the Company and reasonably acceptable to Executive (or Executive's legal representative). The Company's determination of Disability shall be made in good faith and in compliance with applicable law, including the Americans with Disabilities Act and any applicable state disability laws.

Section 5.6 — Effect of Termination

(a) Termination for Cause or by Executive Without Good Reason. If Executive's employment is terminated by the Company for Cause pursuant to Section 5.1 or by Executive without Good Reason pursuant to Section 5.4, Executive shall be entitled to receive only the following (collectively, the "Accrued Obligations"):

(i) any accrued and unpaid Base Salary through the date of termination, payable on the Company's next regular payroll date following the date of termination;

(ii) any accrued but unused vacation or paid time off, to the extent required by applicable law or Company policy;

(iii) reimbursement for any unreimbursed business expenses properly incurred and documented prior to the date of termination, in accordance with Section 3.7 and the Company's expense reimbursement policies; and

(iv) any vested benefits to which Executive is entitled under the terms of any employee benefit plan or program of the Company as of the date of termination, payable in accordance with the terms of such plan or program.

Upon payment of the Accrued Obligations, the Company shall have no further obligation to Executive under this Agreement, except as otherwise expressly provided herein (including, without limitation, the Company's obligations under Article 4 and Article 7).

(b) Termination Without Cause or by Executive for Good Reason. If Executive's employment is terminated by the Company without Cause pursuant to Section 5.2 or by Executive for Good Reason pursuant to Section 5.3, Executive shall be entitled to receive the Accrued Obligations and, subject to Executive's (x) execution and delivery to the Company of a general release of claims substantially in the form attached hereto as Exhibit A (the "Release") within the period specified therein (but in no event later than sixty (60) days following the date of termination) and (y) non-revocation of such Release within the applicable revocation period, the following additional severance benefits:

(i) Salary Continuation. Continued payment of Executive's Base Salary (at the rate in effect immediately prior to the date of termination) for a period of twelve (12) months following the date of termination (the "Severance Period"), payable in substantially equal installments in accordance with the Company's regular payroll schedule, commencing on the first payroll date following the date on which the Release becomes effective and irrevocable (with the first payment including any installments that would have been paid between the date of termination and the commencement of payments);

(ii) Prorated Annual Bonus. A prorated annual bonus for the fiscal year in which the termination occurs, calculated based on the actual level of achievement of the applicable performance metrics for such fiscal year (as determined by the Company or its compensation committee following the end of such fiscal year) and prorated based on the number of days Executive was employed during such fiscal year, payable at the same time annual bonuses are paid to other senior executives of the Company for such fiscal year (but in no event later than March 15 of the calendar year following the year to which the bonus relates); and

(iii) COBRA Continuation. Subject to Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall pay or reimburse Executive for the monthly cost of such COBRA continuation coverage (at the same level of coverage in effect immediately prior to the date of termination) for a period of up to twelve (12) months following the date of termination, or until such earlier date as Executive becomes eligible for comparable group health insurance coverage through a subsequent employer. Executive shall promptly notify the Company if Executive becomes eligible for such comparable coverage.

For the avoidance of doubt, Executive shall not be entitled to receive any severance benefits under this Section 5.6(b) unless and until the Release has been executed, delivered, and become effective and irrevocable. In the event that the sixty (60) day period following the date of termination spans two calendar years, the severance payments shall commence in the second calendar year to the extent required to comply with Section 409A of the Internal Revenue Code.

(c) Death or Disability. If Executive's employment is terminated due to Executive's death pursuant to Section 5.5(a) or the Company's termination of Executive's employment due to Disability pursuant to Section 5.5(b), Executive (or Executive's estate, surviving spouse, or designated beneficiary, as applicable) shall be entitled to receive:

(i) the Accrued Obligations; and

(ii) a prorated annual bonus for the fiscal year in which the termination occurs, calculated based on the actual level of achievement of the applicable performance metrics for such fiscal year (as determined by the Company or its compensation committee following the end of such fiscal year) and prorated based on the number of days Executive was employed during such fiscal year, payable at the same time annual bonuses are paid to other senior executives of the Company for such fiscal year (but in no event later than March 15 of the calendar year following the year to which the bonus relates).

(d) Exclusive Remedies. The payments and benefits set forth in this Section 5.6 shall constitute Executive's sole and exclusive remedies in connection with the termination of Executive's employment, and Executive shall not be entitled to any other payments, benefits, damages, or compensation of any kind from the Company, Parent, or any of their affiliates, except as otherwise expressly provided in this Agreement, the Restrictive Covenant Agreement, or the Purchase Agreement (including any rights Executive may have in her capacity as a Seller under the Purchase Agreement with respect to indemnity escrow amounts and earnout payments).

(e) No Mitigation. Executive shall not be required to mitigate the amount of any payment or benefit provided under this Section 5.6 by seeking other employment or otherwise, and the amount of any payment or benefit provided under this Section 5.6 shall not be reduced by any compensation earned by Executive as a result of employment with another employer or from any other source.

Section 5.7 — Section 409A Compliance

(a) General. The Parties intend that all payments and benefits provided under this Agreement shall be exempt from, or comply with, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations and other guidance promulgated thereunder (collectively, "Section 409A"), and this Agreement shall be construed and interpreted in a manner consistent with such intent. Notwithstanding any provision of this Agreement to the contrary, to the extent that any payment or benefit hereunder is subject to Section 409A, it shall be provided in a manner that complies with Section 409A.

(b) Separation from Service. For purposes of this Agreement, any reference to Executive's termination of employment, date of termination, or similar terms shall mean a "separation from service" within the meaning of Section 409A.

(c) Six-Month Delay. Notwithstanding any provision of this Agreement to the contrary, if Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the date of Executive's separation from service, then, to the extent that any payment or benefit under this Agreement constitutes "nonqualified deferred compensation" subject to Section 409A that is payable on account of Executive's separation from service, such payment or benefit shall not be paid or provided until the first business day following the six (6) month anniversary of Executive's separation from service (or, if earlier, Executive's death) (the "Delayed Payment Date"). Any payments that are delayed pursuant to this Section 5.7(c) shall be accumulated and paid in a lump sum on the Delayed Payment Date, together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code for the period of delay, and all remaining payments shall be made in accordance with their original schedule.

(d) Separate Payments. For purposes of Section 409A, each installment payment made under this Agreement shall be treated as a separate and distinct payment and shall not be treated as part of a series of payments.

(e) Expense Reimbursements. To the extent that any reimbursement of expenses or in-kind benefits provided under this Agreement constitutes "nonqualified deferred compensation" subject to Section 409A, (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during one calendar year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) all reimbursements shall be made no later than the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for any other benefit.

(f) No Tax Guarantee. Notwithstanding any provision of this Agreement to the contrary, the Company makes no representation or warranty and shall have no liability to Executive or any other person with respect to any taxes, penalties, or interest that may be imposed on Executive under Section 409A or otherwise.

ARTICLE 6 — REPRESENTATIONS AND WARRANTIES

Section 6.1 — Executive's Representations

Executive hereby represents and warrants to the Company as follows:

(a) Executive is not a party to or bound by any employment agreement, non-competition agreement, non-solicitation agreement, confidentiality agreement, or any other agreement or obligation (other than the Restrictive Covenant Agreement entered into in connection with this Agreement and the Purchase Agreement) that would prevent, restrict, or materially impair Executive's ability to accept employment with the Company, perform the duties and responsibilities contemplated by this Agreement, or comply with the terms and conditions hereof.

(b) Executive has disclosed to the Company all material facts known to Executive that could reasonably be expected to affect Executive's ability to perform the duties and responsibilities contemplated by this Agreement, including, without limitation, any pending or threatened claims, actions, proceedings, or investigations involving Executive.

(c) The execution, delivery, and performance of this Agreement by Executive does not and will not violate, conflict with, or result in a breach of any order, judgment, injunction, decree, or award of any court, governmental body, or arbitrator that is binding upon Executive.

(d) All information provided by Executive to the Company in connection with her employment, including information contained in any application, resume, or other submission, is true, accurate, and complete in all material respects.

Section 6.2 — Company's Representations

The Company hereby represents and warrants to Executive as follows:

(a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement.

(b) The execution, delivery, and performance of this Agreement by the Company have been duly authorized by all necessary corporate action, and this Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.

ARTICLE 7 — INDEMNIFICATION AND D&O COVERAGE

Section 7.1 — Indemnification

The Company shall indemnify, defend, and hold harmless Executive to the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company's certificate of incorporation, and the Company's bylaws, as each may be amended from time to time, against all losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and expenses) arising out of or in connection with Executive's service as an officer and director of Meridian prior to and following the Closing Date and as an officer of the Company following the Closing Date, including any acts or omissions occurring in the course of such service. The Company shall advance expenses to Executive in connection with any such indemnification obligation, subject to Executive's delivery of an undertaking to repay such advances if it is ultimately determined that Executive is not entitled to indemnification under applicable law.

The Company's obligations under this Section 7.1 shall survive the termination of this Agreement and Executive's employment for any reason and shall continue in full force and effect with respect to any claims or proceedings arising out of or relating to events or circumstances occurring during Executive's service, regardless of when such claims or proceedings are asserted or commenced.

Section 7.2 — D&O Insurance

The Parties acknowledge and agree that, pursuant to the Purchase Agreement, the Company (as Buyer thereunder) has procured a six (6) year directors' and officers' liability "tail" (run-off) insurance policy from Northbridge Specialty Insurance Co. (arranged through Caldwell Risk Advisors, Inc.), providing coverage of Ten Million Dollars ($10,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate for the benefit of Meridian's pre-closing directors and officers, including Executive, for claims arising out of or relating to acts or omissions occurring prior to the Closing Date. The premium for such tail policy in the amount of Three Hundred Eighty-Five Thousand Dollars ($385,000) has been prepaid by the Company at the Closing.

In addition to the foregoing tail policy, during the Employment Term, the Company shall maintain directors' and officers' liability insurance coverage for Executive on terms (including coverage amounts, deductibles, and scope of coverage) no less favorable than those provided to other similarly situated senior executives of the Company. The Company shall not take any action or fail to take any action that would materially diminish or impair Executive's coverage under any such policy without Executive's prior written consent.

ARTICLE 8 — MISCELLANEOUS

Section 8.1 — Governing Law

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

Section 8.2 — Dispute Resolution

(a) Arbitration. Except as expressly provided in Section 8.2(b) below, any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be resolved by final and binding arbitration administered by the American Arbitration Association (the "AAA") in Philadelphia, Pennsylvania, in accordance with the AAA's Employment Arbitration Rules and Mediation Procedures then in effect. The arbitration shall be conducted before a single arbitrator mutually selected by the Parties in accordance with the AAA's rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could award, including damages, injunctive relief, and attorneys' fees. The decision of the arbitrator shall be final, binding, and enforceable in any court of competent jurisdiction. Each Party shall bear its own costs and attorneys' fees in connection with any arbitration, unless the arbitrator determines that the award of attorneys' fees and costs to the prevailing party is appropriate under the circumstances. The Company shall bear the costs of the AAA's administrative fees and the arbitrator's fees and expenses.

(b) Injunctive Relief. Notwithstanding the foregoing, either Party may seek temporary, preliminary, or permanent injunctive relief, specific performance, or other equitable relief in any court of competent jurisdiction in connection with any actual or threatened breach of the confidentiality, intellectual property, non-competition, non-solicitation, non-disparagement, or return of property provisions of this Agreement or the Restrictive Covenant Agreement, without the requirement of posting a bond or other security and without the necessity of proving actual damages. The Parties agree that the pursuit of injunctive or equitable relief shall not constitute a waiver of the right to submit any dispute to arbitration under Section 8.2(a).

Section 8.3 — Entire Agreement

This Agreement, together with the Restrictive Covenant Agreement, the Purchase Agreement, and the other ancillary agreements and instruments referenced therein (including, without limitation, the schedules and exhibits hereto and thereto), constitutes the entire agreement between the Parties with respect to the subject matter hereof, including Executive's employment with the Company, and supersedes all prior and contemporaneous agreements, understandings, representations, warranties, and negotiations between the Parties, whether written or oral, relating to such subject matter.

For the avoidance of doubt, any and all prior employment agreements, offer letters, compensation arrangements, and other employment-related agreements between Executive and Meridian are hereby terminated as of the Effective Date and shall be of no further force or effect. Executive acknowledges and agrees that she has no rights or entitlements under any such prior agreements as of the Effective Date, except to the extent that any obligations of Meridian under such agreements have been expressly assumed by the Company under this Agreement or under the Purchase Agreement.

Section 8.4 — Amendment and Waiver

No amendment, modification, or supplement to this Agreement shall be effective unless made in writing and signed by both Parties. No waiver by either Party of any breach of or default under any provision of this Agreement shall be deemed a waiver of any other provision or of any subsequent breach or default of the same or any other provision, nor shall any single or partial exercise of any right, power, or remedy under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. All waivers must be in writing and signed by the waiving Party.

Section 8.5 — Severability

If any provision of this Agreement (or any portion thereof) is held to be invalid, illegal, or unenforceable by any court or tribunal of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement (or the remaining portions of such provision), and the remaining provisions of this Agreement shall continue in full force and effect. In the event that any provision is held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify such provision so as to give effect to the original intent of the Parties to the fullest extent permitted by applicable law.

Section 8.6 — Assignment

Executive may not assign, delegate, or otherwise transfer this Agreement or any of her rights or obligations hereunder without the prior written consent of the Company. Any purported assignment, delegation, or transfer in violation of this Section 8.6 shall be null and void and of no force or effect. The Company may freely assign this Agreement and its rights and obligations hereunder, in whole or in part, to any successor to all or substantially all of the Company's business or assets (whether by merger, consolidation, acquisition, reorganization, or otherwise) or to any affiliate of the Company, without the prior written consent of Executive. Upon any such assignment, the assignee shall assume all of the Company's obligations hereunder, and the Company shall be released from further liability to the extent of such assumption.

Section 8.7 — Notices

All notices, requests, demands, consents, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered personally, (b) sent by registered or certified mail, return receipt requested, postage prepaid, (c) sent by a nationally recognized overnight courier service, or (d) transmitted by electronic mail with confirmation of receipt, addressed as follows (or to such other address as either Party may designate by written notice to the other Party in accordance with this Section 8.7):

If to the Company:

Solstice Biomedical, Inc. 1200 Innovation Drive, Suite 400 Wilmington, Delaware 19801

Attention: Patrick Lennox, General Counsel

Email: plennox@solsticebiomedical.com

With a copy to (which shall not constitute notice):

Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, New York 10022

Attention: Beatrice Holloway

Email: bholloway@calderwoodharkness.com

If to Executive:

Catherine Pryor At the address on file with the Company's Human Resources Department

Any notice delivered personally or sent by overnight courier shall be deemed given on the date of delivery. Any notice sent by registered or certified mail shall be deemed given on the third business day following the date of mailing. Any notice transmitted by electronic mail shall be deemed given on the date of transmission, provided that a confirmation copy is sent by one of the other methods specified above within one (1) business day.

Section 8.8 — Withholding

The Company shall be entitled to withhold from any amounts payable to Executive under this Agreement all amounts required to be withheld under applicable federal, state, and local tax laws, Social Security and Medicare taxes, and any other withholdings required by applicable law, rule, or regulation. Executive shall be solely responsible for the payment of all taxes imposed on Executive with respect to the compensation and benefits provided under this Agreement.

Section 8.9 — Counterparts

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile, electronic mail (including .pdf format), or other electronic transmission shall be deemed to be, and shall have the same legal effect as, execution and delivery of an original signed copy.

Section 8.10 — Survival

The provisions of Article 4 (Confidentiality, intellectual Property, and Restrictive Covenants), Section 5.6 (Effect of Termination), Article 6 (Representations and Warranties), Article 7 (Indemnification and D&O Coverage), and Article 8 (Miscellaneous) shall survive the termination or expiration of this Agreement and Executive's employment hereunder, regardless of the reason for such termination or expiration, and shall remain in full force and effect in accordance with their respective terms.

Section 8.11 — Construction

The

EMPLOYMENT AGREEMENT
by and between
SOLSTICE BIOMEDICAL, INC.
and
CATHERINE PRYOR
Dated as of October 31, 2024
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of October 31, 2024 (the "Effective Date"), by and between Solstice Biomedical, Inc., a Delaware corporation (the "Company" or "Employer"), and Catherine Pryor, an individual residing in the Commonwealth of Pennsylvania ("Executive"). The Company and Executive are each referred to herein individually as a "Party" and collectively as the "Parties."
The Effective Date of this Agreement is the Closing Date (as defined below) under that certain Stock Purchase Agreement, dated as of August 20, 2024 (the "Purchase Agreement"), by and among Solstice Biomedical, Inc., Meridian Surgical Technologies, Inc., a Delaware corporation ("Meridian"), Dr. Marcus Ellsworth, in his capacity as the Sellers' Representative, and the Sellers named therein.
RECITALS
WHEREAS, the Company is a wholly owned subsidiary of Solstice Biomedical Devices Ltd., an Irish private limited company (CRO Number 648217), headquartered at Solstice House, 14 Fitzwilliam Place, Dublin 2, D02 YF82, Ireland ("Parent"), and the Company has, on the date hereof, acquired one hundred percent (100%) of the outstanding common stock of Meridian Surgical Technologies, Inc., a Delaware corporation, pursuant to and in accordance with the terms and conditions of the Purchase Agreement;
WHEREAS, Executive previously served as President and Chief Operating Officer of Meridian and holds 372,500 shares of Meridian common stock, representing approximately five percent (5.0%) of the 7,450,000 shares of Meridian common stock outstanding immediately prior to the closing of the transactions contemplated by the Purchase Agreement (the "Closing");
WHEREAS, as a condition to and in consideration of the Closing of the transactions contemplated by the Purchase Agreement, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions set forth herein;
WHEREAS, Executive acknowledges that she has received substantial consideration in connection with the transactions contemplated by the Purchase Agreement, including per-share merger consideration payable at and following the Closing, and that this Agreement and the Non-Competition and Non-Solicitation Agreement executed concurrently herewith are material inducements to the Company's willingness to consummate the transactions contemplated by the Purchase Agreement; and
WHEREAS, this Agreement is being executed and delivered by the Parties on the Closing Date as contemplated by the Purchase Agreement and the ancillary agreements described therein.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE 1 — EMPLOYMENT AND DUTIES
Section 1.1 — Position and Title
Effective as of the Effective Date, the Company hereby employs Executive, and Executive hereby accepts employment with the Company, as Senior Vice President, Operations ("SVP Operations") of the Company. In her capacity as SVP Operations, Executive shall report directly to the Division President, Orthopedic Instruments (currently Dr. Marcus Ellsworth) or to such other senior executive of the Company or Parent as may be designated by the Company from time to time. Executive's position within the organizational structure of the Company and Parent shall be commensurate with that of a senior vice president, and Executive shall be afforded the authority, responsibilities, and resources reasonably necessary to discharge the duties and obligations associated with such position.
Executive's principal office shall be located at Meridian's headquarters at 780 Keystone Boulevard, Suite 200, King of Prussia, Pennsylvania 19406, or at the manufacturing facility located at 45 Forge Creek Road, Exton, Pennsylvania 19341, as operational needs may require from time to time. The Company and Executive may mutually agree upon an alternative location for Executive's principal office; provided, however, that any relocation of Executive's principal place of employment shall be subject to the provisions of Section 5.3 of this Agreement.
Section 1.2 — Duties and Responsibilities
Executive shall have such duties and responsibilities as are consistent with her position as SVP Operations, including, without limitation, oversight of manufacturing operations, supply chain management, quality systems, and operational integration matters arising from or relating to the Company's acquisition of Meridian. Executive's specific duties and responsibilities are further described in Schedule 1 attached hereto, which is incorporated herein by reference. The Company may, from time to time, modify, expand, or reassign Executive's duties and responsibilities; provided, however, that any such modification, expansion, or reassignment shall be consistent with Executive's position as a senior vice president of the Company and shall not constitute a material diminution of Executive's title, duties, or responsibilities for purposes of Section 5.3 of this Agreement unless such modification would objectively constitute such a diminution.
Executive shall devote substantially all of her business time, attention, skill, and energy to the faithful and diligent performance of her duties and responsibilities hereunder and shall use her best efforts to promote the interests and goodwill of the Company and its affiliates. Executive shall perform her duties in a professional manner and in compliance with all applicable laws, rules, and regulations.
Executive shall comply with all policies, procedures, codes of conduct, and directives of the Company and Parent as may be established, amended, or supplemented from time to time, including, without limitation, the Company's Employee Handbook, Code of Business Ethics, Insider Trading Policy, and any policies adopted by Parent and made applicable to the Company's employees.
Section 1.3 — Exclusive Service
During the Employment Term (as defined in Section 2.1 below), Executive shall not engage in any other business activity, whether or not such activity is pursued for compensation or profit, that would materially interfere with the performance of Executive's duties and responsibilities hereunder, without the prior written consent of the Company (which consent may be granted or withheld in the Company's sole discretion).
Notwithstanding the foregoing, Executive may, without the prior written consent of the Company:
(a) serve on the boards of directors or advisory boards of civic, charitable, educational, or industry organizations, provided that Executive shall obtain the prior written consent of the Company before accepting any such position (such consent not to be unreasonably withheld, conditioned, or delayed);
(b) manage Executive's personal investments and financial affairs; and
(c) engage in passive investment activities, including ownership of not more than two percent (2%) of the outstanding equity securities of any publicly traded company;
in each case, only to the extent that such activities do not, individually or in the aggregate, materially interfere with the performance of Executive's duties and responsibilities hereunder, create a conflict of interest with the Company's business, or violate any provision of this Agreement, the Non-Competition and Non-Solicitation Agreement, or any applicable Company policy.
ARTICLE 2 — TERM OF EMPLOYMENT
Section 2.1 — Employment Term
The term of Executive's employment under this Agreement (the "Employment Term") shall commence on the Effective Date and shall continue for an initial period of three (3) years, ending on October 31, 2027, unless earlier terminated in accordance with the provisions of Article 5 hereof (the "Initial Term"). The Parties acknowledge that the Employment Term encompasses key post-closing periods, including the earnout period established under the Purchase Agreement, and that the continuity of Executive's employment during the Initial Term is of particular importance to the Company and its integration of the Meridian business operations.
Section 2.2 — Renewal
Following the expiration of the Initial Term, Executive's employment with the Company shall continue on an at-will basis, terminable by either Party upon not less than thirty (30) days' prior written notice to the other Party, unless the Parties shall have executed a written extension, renewal, or successor employment agreement prior to the expiration of the Initial Term. For the avoidance of doubt, during any period of at-will employment following the expiration of the Initial Term, the terms and conditions of this Agreement (other than the provisions relating to the fixed duration of the Initial Term) shall remain in full force and effect, including, without limitation, the provisions of Article 4 relating to confidentiality, intellectual property, and restrictive covenants. Nothing in this Section 2.2 shall be construed to limit the right of either Party to terminate Executive's employment during the Initial Term in accordance with the provisions of Article 5.
ARTICLE 3 — COMPENSATION AND BENEFITS
Section 3.1 — Base Salary
During the Employment Term, the Company shall pay Executive an annual base salary of Three Hundred Seventy-Five Thousand Dollars ($375,000) (the "Base Salary"), payable in accordance with the Company's standard payroll practices as in effect from time to time (currently on a bi-weekly basis), and subject to all applicable withholdings and deductions required by law.
The Base Salary shall be reviewed annually by the Company's compensation committee (or, if no compensation committee has been established, by the Company's board of directors or the authorized compensation authority of Parent) in connection with the Company's annual performance review process. Upon such review, the Base Salary may be increased at the sole discretion of the Company; provided, however, that during the Initial Term, the Base Salary shall not be decreased below the amount of $375,000 per annum. Any increase in Base Salary shall not serve to limit or reduce any other obligation of the Company under this Agreement. After any such increase, the term "Base Salary" as used in this Agreement shall refer to the Base Salary as so increased.
Section 3.2 — Annual Bonus
During the Employment Term, Executive shall be eligible to participate in the Company's annual performance bonus program, as such program may be established, modified, or discontinued from time to time by the Company. Executive's target annual bonus opportunity shall be equal to forty percent (40%) of her then-current Base Salary (the "Target Bonus"), which, as of the Effective Date, represents a target annual bonus of One Hundred Fifty Thousand Dollars ($150,000). The actual amount of any annual bonus earned by Executive shall be determined based on the achievement of individual and Company performance metrics and objectives established by the Company or its compensation committee for the applicable performance year.
With respect to the Company's first partial fiscal year in which the Effective Date falls (i.e., the period commencing November 1, 2024 through the end of the Company's fiscal year), Executive's Target Bonus shall be prorated based on the number of days of Executive's employment during such partial fiscal year relative to the total number of days in the applicable performance year. The Company shall establish performance metrics and objectives applicable to Executive's bonus opportunity for such partial fiscal year within a reasonable period following the Effective Date.
Any annual bonus earned by Executive pursuant to this Section 3.2 shall be paid to Executive in a lump sum cash payment no later than March 15 of the calendar year following the calendar year to which the bonus relates, subject to Executive's continued employment through the date on which the bonus is paid (except as otherwise expressly provided in Section 5.6 of this Agreement). Participation in the annual bonus program does not guarantee the payment of any bonus, and except as otherwise provided in Section 5.6, Executive must be actively employed by the Company on the date any bonus is paid in order to earn and receive such bonus.
Section 3.3 — Equity Compensation
During the Employment Term, Executive shall be eligible to participate in any equity incentive plan, long-term incentive program, or other equity-based compensation arrangement established by Parent, the Company, or any of their affiliates and made available to similarly situated senior executives of the Company, subject to the terms and conditions of any such plan or program and the approval of the board of directors of Parent, the compensation committee thereof, or such other body as may have authority to administer such plan or program. Any grants of equity awards to Executive shall be made at the sole discretion of the applicable granting authority and shall be subject to the terms and conditions of the applicable equity incentive plan and the individual award agreement evidencing such grant. Nothing in this Section 3.3 shall be construed as a guarantee that Executive will receive any equity compensation awards or a commitment by the Company or Parent to establish any particular equity incentive plan or program.
Section 3.4 — Retention Bonus
In addition to the compensation described in Sections 3.1 through 3.3 above, Executive shall be eligible to receive a retention bonus from the retention bonus pool in the aggregate amount of Three Million Five Hundred Thousand Dollars ($3,500,000) established by the Company for key Meridian employees pursuant to the Purchase Agreement (the "Retention Bonus Pool"), in such amount as shall be determined by the Company in its discretion (the "Retention Bonus").
The Retention Bonus, if any, shall be payable to Executive in two (2) equal installments, as follows:
(a) First Installment. The first installment of the Retention Bonus shall be payable on the six (6) month anniversary of the Closing Date (i.e., April 30, 2025), subject to Executive's continued employment with the Company through such date.
(b) Second Installment. The second installment of the Retention Bonus shall be payable on the twelve (12) month anniversary of the Closing Date (i.e., October 31, 2025), subject to Executive's continued employment with the Company through such date.
Each installment of the Retention Bonus shall be subject to Executive's continuous, active employment with the Company through the applicable payment date. In the event that Executive's employment with the Company terminates for any reason prior to an applicable payment date, Executive shall forfeit any unpaid installment of the Retention Bonus, except as may otherwise be required by applicable law. Payment of the Retention Bonus shall be subject to all applicable withholdings and deductions required by law.
Section 3.5 — Benefits
During the Employment Term, Executive shall be entitled to participate in all employee benefit plans, programs, and arrangements made available by the Company to its similarly situated senior executives, as such plans, programs, and arrangements may be established, modified, or terminated from time to time in the Company's sole discretion, including, without limitation, medical, dental, and vision insurance plans; group life insurance; short-term and long-term disability insurance; and retirement plans. Executive's participation in any such plan shall be subject to the terms and conditions of the applicable plan documents and the Company's eligibility requirements.
Without limiting the generality of the foregoing, Executive shall be eligible to participate in the Company's 401(k) retirement savings plan (as successor to the Meridian Surgical Technologies 401(k) Plan previously administered by Cornerstone Retirement Plan Services, Inc.), subject to the terms and conditions of such plan, including any applicable vesting schedules, contribution limits, and matching or employer contribution provisions.
The Company reserves the right to modify, amend, or terminate any employee benefit plan, program, or arrangement at any time and from time to time, in accordance with the terms of such plan and applicable law. Nothing in this Agreement shall be construed to require the Company to establish or maintain any particular benefit plan or to prevent the Company from modifying or terminating any such plan.
Section 3.6 — Vacation and Paid Time Off
During the Employment Term, Executive shall be entitled to four (4) weeks of paid vacation per calendar year (prorated for any partial year of employment), in addition to all Company-observed holidays and personal days, in accordance with the Company's vacation and paid time off policies as in effect from time to time. Vacation shall be scheduled and taken at such times as are consistent with the operational needs of the Company and Executive's duties and responsibilities hereunder. The accrual, carryover, and forfeiture of unused vacation days shall be governed by the Company's applicable policies.
Section 3.7 — Expense Reimbursement
The Company shall reimburse Executive for all reasonable and documented out-of-pocket business expenses actually incurred by Executive in the performance of her duties and responsibilities hereunder, in accordance with the Company's expense reimbursement policies and procedures as in effect from time to time. Executive shall submit expense reports and supporting documentation in a timely manner and in accordance with the Company's policies. All reimbursements shall be paid within a reasonable period following Executive's submission of a proper expense report and shall, in all events, be made no later than the last day of the calendar year following the calendar year in which the expense was incurred.
ARTICLE 4 — CONFIDENTIALITY, INTELLECTUAL PROPERTY, AND RESTRICTIVE COVENANTS
Section 4.1 — Confidential Information
(a) Definition. For purposes of this Agreement, "Confidential Information" means all trade secrets, proprietary information, and confidential data and materials of or relating to the Company, Parent, and their respective affiliates (including, following the Closing, Meridian), whether in written, oral, electronic, or any other form, that is not generally known to the public and that has been or may be disclosed to, obtained by, or developed by Executive in the course of, or as a result of, Executive's employment with the Company (or Executive's prior employment with Meridian). Confidential Information includes, without limitation:
(i) trade secrets, know-how, and proprietary technology;
(ii) business plans, strategies, forecasts, and projections;
(iii) customer lists, customer data, and customer relationship information;
(iv) supplier and vendor information, including pricing terms and contractual arrangements;
(v) financial information, including revenue data, cost structures, margins, and budgets;
(vi) technical data, product designs, engineering specifications, and manufacturing processes;
(vii) regulatory submissions, clinical data, and quality system documentation;
(viii) information concerning the ArthroNav robotic-assisted arthroscopy platform, including software architecture, control algorithms, and hardware specifications;
(ix) information concerning the PrecisionBlade product line, including design specifications, manufacturing tolerances, and distribution strategies;
(x) proprietary algorithms for real-time cartilage thickness mapping and any other proprietary analytical or diagnostic methodologies;
(xi) marketing strategies, pricing methodologies, and competitive intelligence;
(xii) personnel information, compensation data, and organizational plans; and
(xiii) any other information that the Company, Parent, or any affiliate designates as confidential or that a reasonable person would understand to be confidential given the nature of the information and the circumstances of disclosure.
Confidential Information shall not include information that: (A) was or becomes generally available to the public other than as a result of a disclosure by Executive in violation of this Agreement; (B) was lawfully in Executive's possession on a non-confidential basis prior to Executive's employment with Meridian, as evidenced by Executive's contemporaneous written records; or (C) is independently developed by Executive after termination of employment without reference to or use of any Confidential Information.
(b) Non-Disclosure. Executive shall not, during the Employment Term or at any time thereafter, directly or indirectly, disclose, publish, communicate, or make available any Confidential Information to any person, entity, or other third party, or use any Confidential Information for any purpose, except as required in the faithful and diligent performance of Executive's duties and responsibilities hereunder or as expressly authorized in writing by the Company. Executive shall use at least the same degree of care to protect the confidentiality of Confidential Information as she would use to protect her own confidential information of a similar nature, but in no event less than reasonable care.
(c) Required Disclosures. Nothing in this Section 4.1 shall prohibit Executive from disclosing Confidential Information to the extent required by applicable law, regulation, or valid legal process (including a subpoena, civil investigative demand, or similar process); provided, however, that Executive shall, to the extent legally permitted, (i) promptly notify the Company in writing of such requirement prior to making any such disclosure, (ii) cooperate with the Company in seeking a protective order or other appropriate remedy to prevent or limit such disclosure, and (iii) disclose only that portion of the Confidential Information that is legally required to be disclosed.
(d) Defend Trade Secrets Act Notice. Pursuant to the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1833(b), Executive is hereby notified that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.
Section 4.2 — Intellectual Property Assignment
(a) Assignment. Executive hereby acknowledges and agrees that all inventions, discoveries, improvements, designs, processes, methods, techniques, formulas, works of authorship, software, firmware, algorithms, data, documentation, and other intellectual property, whether or not patentable or copyrightable (collectively, "Work Product"), that are conceived, created, developed, reduced to practice, or made by Executive, alone or jointly with others, during the Employment Term and that (i) relate to the actual or anticipated business, research, or development of the Company, Parent, or any of their affiliates, (ii) result from any work performed by Executive for or on behalf of the Company, or (iii) are created using the Company's resources, facilities, equipment, or Confidential Information, shall be and are hereby assigned to, and shall be the sole and exclusive property of, the Company (or such affiliate as the Company may designate).
(b) Assistance and Cooperation. Executive shall promptly and fully disclose all Work Product to the Company and shall execute all documents, instruments, and applications (including patent applications, copyright registrations, and assignments) and take all other actions as may be reasonably requested by the Company, at the Company's expense, to effectuate, evidence, perfect, register, or record the Company's ownership of and rights in any Work Product. Executive hereby irrevocably appoints the Company as Executive's attorney-in-fact, coupled with an interest, to execute such documents and take such actions on Executive's behalf if Executive fails or refuses to do so within a reasonable period following the Company's request.
(c) Moral Rights. To the fullest extent permitted by applicable law, Executive hereby irrevocably waives and agrees never to assert any and all moral rights Executive may have in or with respect to any Work Product, including any rights of attribution or integrity.
(d) Prior Inventions. Executive represents that there are no inventions, discoveries, or other intellectual property that Executive owns or has an interest in as of the Effective Date that relate to the Company's business and that Executive wishes to exclude from the scope of this Section 4.2. If Executive has any such prior inventions, Executive shall list them on a schedule to be delivered to the Company within ten (10) business days following the Effective Date; in the absence of such a schedule, Executive shall be deemed to have represented that no such prior inventions exist.
Section 4.3 — Non-Competition and Non-Solicitation
Executive acknowledges and agrees that, concurrently with the execution of this Agreement and as a condition to the Closing of the transactions contemplated by the Purchase Agreement, Executive has entered into a separate Non-Competition and Non-Solicitation Agreement with the Company dated as of the Effective Date (the "Restrictive Covenant Agreement"), a copy of which is attached as an exhibit to the Purchase Agreement and is incorporated herein by reference. The Restrictive Covenant Agreement contains, among other things, covenants restricting Executive's ability to compete with the Company and to solicit the Company's employees, customers, and business partners during Executive's employment and for a period of two (2) years following the termination of Executive's employment for any reason (the "Restricted Period"), as more fully described in the Restrictive Covenant Agreement. The Restrictive Covenant Agreement is governed by the laws of the State of Delaware.
Executive acknowledges and agrees that (a) the restrictive covenants set forth in the Restrictive Covenant Agreement are reasonable and necessary to protect the Company's legitimate business interests, including the goodwill acquired by the Company in connection with the transactions contemplated by the Purchase Agreement, the Confidential Information of the Company and its affiliates, and the Company's relationships with its customers, suppliers, and employees; (b) Executive has received adequate and independent consideration for such restrictive covenants, including the employment provided under this Agreement, the compensation and benefits described herein, and the substantial merger consideration received by Executive in connection with the Closing; and (c) the enforcement of such restrictive covenants would not impose an undue hardship on Executive.
Section 4.4 — Non-Disparagement
(a) Executive's Obligations. During the Employment Term and at all times thereafter, Executive shall not, directly or indirectly, make, publish, or communicate any disparaging, defamatory, or derogatory statements or comments, whether written, oral, or in any other form (including on social media platforms or through any electronic communication), about the Company, Parent, or any of their respective affiliates, subsidiaries, predecessors, successors, directors, officers, employees, agents, products, services, or business practices. Nothing in this Section 4.4(a) shall restrict Executive from (i) providing truthful testimony or information in connection with any legal proceeding, governmental investigation, or regulatory inquiry, or (ii) making truthful statements in the context of any legal claim or proceeding between Executive and the Company.
(b) Company's Obligations. The Company shall instruct its senior executives (meaning its officers at the level of vice president and above) not to make, publish, or communicate any disparaging, defamatory, or derogatory statements or comments about Executive, whether written, oral, or in any other form. The Company's obligations under this Section 4.4(b) are limited to such instruction and do not extend to statements made by individuals outside of their capacity as officers of the Company or statements required by law or legal process.
Section 4.5 — Return of Property
Upon the termination of Executive's employment for any reason, or at any time upon the written request of the Company, Executive shall immediately return to the Company all property of the Company, Parent, and their affiliates in Executive's possession or control, including, without limitation, all documents, files, records, reports, correspondence, manuals, notebooks, computer equipment (including laptops, tablets, and mobile devices), access cards, keys, identification badges, software, data, and all copies, excerpts, summaries, or other reproductions thereof, in any form or medium. Executive shall not retain any copies of any Confidential Information or other Company property following such return, and Executive shall, upon the Company's request, certify in writing that all such materials have been returned and that no copies have been retained.
ARTICLE 5 — TERMINATION
Section 5.1 — Termination by the Company for Cause
The Company may terminate Executive's employment for "Cause" at any time upon written notice to Executive specifying the grounds therefor. For purposes of this Agreement, "Cause" shall mean the occurrence of any of the following:
(a) a material breach by Executive of this Agreement or the Restrictive Covenant Agreement, which breach, if curable, remains uncured for a period of thirty (30) days after written notice from the Company specifying the nature of such breach;
(b) Executive's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud, or dishonesty;
(c) Executive's commission of fraud, embezzlement, misappropriation of funds or property, or other act of material dishonesty in connection with Executive's employment or the business of the Company or any of its affiliates;
(d) Executive's willful and continued failure or refusal to substantially perform her duties and responsibilities hereunder (other than any failure resulting from Executive's Disability), which failure or refusal continues for a period of thirty (30) days after written notice from the Company specifying the nature of such failure or refusal and demanding cure;
(e) a material violation by Executive of any written policy, code of conduct, or directive of the Company or Parent, including, without limitation, policies relating to harassment, discrimination, workplace safety, substance abuse, or securities trading; or
(f) Executive's breach of any fiduciary duty owed to the Company, Parent, or any of their affiliates, including, without limitation, any act of self-dealing, usurpation of corporate opportunity, or unauthorized disclosure of Confidential Information.
A determination of whether Cause exists shall be made in good faith by the Company's board of directors (or a designated committee thereof). The Company shall provide Executive with written notice setting forth in reasonable detail the specific facts and circumstances giving rise to the Cause determination prior to the effective date of termination, and, where a cure period is applicable, shall afford Executive the opportunity to cure as set forth above.
Section 5.2 — Termination by the Company Without Cause
The Company may terminate Executive's employment without Cause at any time during the Employment Term upon not less than thirty (30) days' prior written notice to Executive. The Company may, in its sole discretion, elect to provide Executive with payment in lieu of all or any portion of such notice period (based on Executive's Base Salary rate then in effect), in which case Executive's employment shall terminate on the date specified in the Company's notice or such earlier date as the Company may designate.
Section 5.3 — Termination by Executive for Good Reason
Executive may terminate her employment for "Good Reason" upon satisfaction of the conditions set forth below. For purposes of this Agreement, "Good Reason" shall mean the occurrence of any of the following events without Executive's prior written consent:
(a) a material diminution in Executive's Base Salary below Three Hundred Seventy-Five Thousand Dollars ($375,000) per annum during the Initial Term;
(b) a material diminution in Executive's title, duties, authority, or responsibilities, including a requirement that Executive report to a person or body other than a senior executive of the Company or Parent at the level of Division President or above (it being understood that a change in the identity of the individual to whom Executive reports shall not, by itself, constitute a material diminution so long as such individual holds a position at the level of Division President or above);
(c) a relocation of Executive's principal place of employment to a location more than fifty (50) miles from the location of Executive's principal place of employment as of the Effective Date (i.e., King of Prussia, Pennsylvania or Exton, Pennsylvania, as applicable) without Executive's prior written consent; or
(d) a material breach by the Company of any provision of this Agreement that remains uncured following the notice and cure procedure set forth below.
Notwithstanding the foregoing, Executive may not terminate her employment for Good Reason unless: (i) Executive provides written notice to the Company of the existence of the condition constituting Good Reason within sixty (60) days of the initial occurrence of such condition, specifying in reasonable detail the facts and circumstances giving rise to such condition; (ii) the Company fails to cure such condition within thirty (30) days following its receipt of such written notice (the "Cure Period"); and (iii) Executive actually terminates her employment within thirty (30) days following the expiration of the Cure Period if such condition has not been cured. If the Company cures the condition within the Cure Period, Executive shall not be entitled to terminate her employment for Good Reason on the basis of such cured condition.
Section 5.4 — Termination by Executive Without Good Reason
Executive may terminate her employment without Good Reason at any time upon not less than sixty (60) days' prior written notice to the Company. The Company may, upon receipt of such notice, elect to accelerate the effective date of Executive's termination to any date during such notice period, in which case the Company shall pay Executive her Base Salary through the accelerated termination date (but shall not be required to pay any additional Base Salary for the balance of the notice period unless the Company, in its sole discretion, elects to do so).
Section 5.5 — Termination Due to Death or Disability
(a) Death. Executive's employment shall automatically terminate upon Executive's death.
(b) Disability. The Company may terminate Executive's employment upon Executive's "Disability." For purposes of this Agreement, "Disability" shall mean Executive's inability to perform the essential functions of her position, with or without reasonable accommodation, due to a physical or mental condition, for a period of one hundred eighty (180) consecutive calendar days or for an aggregate of two hundred seventy (270) calendar days in any three hundred sixty-five (365) day period, as determined by a physician selected by the Company and reasonably acceptable to Executive (or Executive's legal representative). The Company's determination of Disability shall be made in good faith and in compliance with applicable law, including the Americans with Disabilities Act and any applicable state disability laws.
Section 5.6 — Effect of Termination
(a) Termination for Cause or by Executive Without Good Reason. If Executive's employment is terminated by the Company for Cause pursuant to Section 5.1 or by Executive without Good Reason pursuant to Section 5.4, Executive shall be entitled to receive only the following (collectively, the "Accrued Obligations"):
(i) any accrued and unpaid Base Salary through the date of termination, payable on the Company's next regular payroll date following the date of termination;
(ii) any accrued but unused vacation or paid time off, to the extent required by applicable law or Company policy;
(iii) reimbursement for any unreimbursed business expenses properly incurred and documented prior to the date of termination, in accordance with Section 3.7 and the Company's expense reimbursement policies; and
(iv) any vested benefits to which Executive is entitled under the terms of any employee benefit plan or program of the Company as of the date of termination, payable in accordance with the terms of such plan or program.
Upon payment of the Accrued Obligations, the Company shall have no further obligation to Executive under this Agreement, except as otherwise expressly provided herein (including, without limitation, the Company's obligations under Article 4 and Article 7).
(b) Termination Without Cause or by Executive for Good Reason. If Executive's employment is terminated by the Company without Cause pursuant to Section 5.2 or by Executive for Good Reason pursuant to Section 5.3, Executive shall be entitled to receive the Accrued Obligations and, subject to Executive's (x) execution and delivery to the Company of a general release of claims substantially in the form attached hereto as Exhibit A (the "Release") within the period specified therein (but in no event later than sixty (60) days following the date of termination) and (y) non-revocation of such Release within the applicable revocation period, the following additional severance benefits:
(i) Salary Continuation. Continued payment of Executive's Base Salary (at the rate in effect immediately prior to the date of termination) for a period of twelve (12) months following the date of termination (the "Severance Period"), payable in substantially equal installments in accordance with the Company's regular payroll schedule, commencing on the first payroll date following the date on which the Release becomes effective and irrevocable (with the first payment including any installments that would have been paid between the date of termination and the commencement of payments);
(ii) Prorated Annual Bonus. A prorated annual bonus for the fiscal year in which the termination occurs, calculated based on the actual level of achievement of the applicable performance metrics for such fiscal year (as determined by the Company or its compensation committee following the end of such fiscal year) and prorated based on the number of days Executive was employed during such fiscal year, payable at the same time annual bonuses are paid to other senior executives of the Company for such fiscal year (but in no event later than March 15 of the calendar year following the year to which the bonus relates); and
(iii) COBRA Continuation. Subject to Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall pay or reimburse Executive for the monthly cost of such COBRA continuation coverage (at the same level of coverage in effect immediately prior to the date of termination) for a period of up to twelve (12) months following the date of termination, or until such earlier date as Executive becomes eligible for comparable group health insurance coverage through a subsequent employer. Executive shall promptly notify the Company if Executive becomes eligible for such comparable coverage.
For the avoidance of doubt, Executive shall not be entitled to receive any severance benefits under this Section 5.6(b) unless and until the Release has been executed, delivered, and become effective and irrevocable. In the event that the sixty (60) day period following the date of termination spans two calendar years, the severance payments shall commence in the second calendar year to the extent required to comply with Section 409A of the Internal Revenue Code.
(c) Death or Disability. If Executive's employment is terminated due to Executive's death pursuant to Section 5.5(a) or the Company's termination of Executive's employment due to Disability pursuant to Section 5.5(b), Executive (or Executive's estate, surviving spouse, or designated beneficiary, as applicable) shall be entitled to receive:
(i) the Accrued Obligations; and
(ii) a prorated annual bonus for the fiscal year in which the termination occurs, calculated based on the actual level of achievement of the applicable performance metrics for such fiscal year (as determined by the Company or its compensation committee following the end of such fiscal year) and prorated based on the number of days Executive was employed during such fiscal year, payable at the same time annual bonuses are paid to other senior executives of the Company for such fiscal year (but in no event later than March 15 of the calendar year following the year to which the bonus relates).
(d) Exclusive Remedies. The payments and benefits set forth in this Section 5.6 shall constitute Executive's sole and exclusive remedies in connection with the termination of Executive's employment, and Executive shall not be entitled to any other payments, benefits, damages, or compensation of any kind from the Company, Parent, or any of their affiliates, except as otherwise expressly provided in this Agreement, the Restrictive Covenant Agreement, or the Purchase Agreement (including any rights Executive may have in her capacity as a Seller under the Purchase Agreement with respect to indemnity escrow amounts and earnout payments).
(e) No Mitigation. Executive shall not be required to mitigate the amount of any payment or benefit provided under this Section 5.6 by seeking other employment or otherwise, and the amount of any payment or benefit provided under this Section 5.6 shall not be reduced by any compensation earned by Executive as a result of employment with another employer or from any other source.
Section 5.7 — Section 409A Compliance
(a) General. The Parties intend that all payments and benefits provided under this Agreement shall be exempt from, or comply with, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations and other guidance promulgated thereunder (collectively, "Section 409A"), and this Agreement shall be construed and interpreted in a manner consistent with such intent. Notwithstanding any provision of this Agreement to the contrary, to the extent that any payment or benefit hereunder is subject to Section 409A, it shall be provided in a manner that complies with Section 409A.
(b) Separation from Service. For purposes of this Agreement, any reference to Executive's termination of employment, date of termination, or similar terms shall mean a "separation from service" within the meaning of Section 409A.
(c) Six-Month Delay. Notwithstanding any provision of this Agreement to the contrary, if Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the date of Executive's separation from service, then, to the extent that any payment or benefit under this Agreement constitutes "nonqualified deferred compensation" subject to Section 409A that is payable on account of Executive's separation from service, such payment or benefit shall not be paid or provided until the first business day following the six (6) month anniversary of Executive's separation from service (or, if earlier, Executive's death) (the "Delayed Payment Date"). Any payments that are delayed pursuant to this Section 5.7(c) shall be accumulated and paid in a lump sum on the Delayed Payment Date, together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code for the period of delay, and all remaining payments shall be made in accordance with their original schedule.
(d) Separate Payments. For purposes of Section 409A, each installment payment made under this Agreement shall be treated as a separate and distinct payment and shall not be treated as part of a series of payments.
(e) Expense Reimbursements. To the extent that any reimbursement of expenses or in-kind benefits provided under this Agreement constitutes "nonqualified deferred compensation" subject to Section 409A, (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during one calendar year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) all reimbursements shall be made no later than the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for any other benefit.
(f) No Tax Guarantee. Notwithstanding any provision of this Agreement to the contrary, the Company makes no representation or warranty and shall have no liability to Executive or any other person with respect to any taxes, penalties, or interest that may be imposed on Executive under Section 409A or otherwise.
ARTICLE 6 — REPRESENTATIONS AND WARRANTIES
Section 6.1 — Executive's Representations
Executive hereby represents and warrants to the Company as follows:
(a) Executive is not a party to or bound by any employment agreement, non-competition agreement, non-solicitation agreement, confidentiality agreement, or any other agreement or obligation (other than the Restrictive Covenant Agreement entered into in connection with this Agreement and the Purchase Agreement) that would prevent, restrict, or materially impair Executive's ability to accept employment with the Company, perform the duties and responsibilities contemplated by this Agreement, or comply with the terms and conditions hereof.
(b) Executive has disclosed to the Company all material facts known to Executive that could reasonably be expected to affect Executive's ability to perform the duties and responsibilities contemplated by this Agreement, including, without limitation, any pending or threatened claims, actions, proceedings, or investigations involving Executive.
(c) The execution, delivery, and performance of this Agreement by Executive does not and will not violate, conflict with, or result in a breach of any order, judgment, injunction, decree, or award of any court, governmental body, or arbitrator that is binding upon Executive.
(d) All information provided by Executive to the Company in connection with her employment, including information contained in any application, resume, or other submission, is true, accurate, and complete in all material respects.
Section 6.2 — Company's Representations
The Company hereby represents and warrants to Executive as follows:
(a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement.
(b) The execution, delivery, and performance of this Agreement by the Company have been duly authorized by all necessary corporate action, and this Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.
ARTICLE 7 — INDEMNIFICATION AND D&O COVERAGE
Section 7.1 — Indemnification
The Company shall indemnify, defend, and hold harmless Executive to the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company's certificate of incorporation, and the Company's bylaws, as each may be amended from time to time, against all losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and expenses) arising out of or in connection with Executive's service as an officer and director of Meridian prior to and following the Closing Date and as an officer of the Company following the Closing Date, including any acts or omissions occurring in the course of such service. The Company shall advance expenses to Executive in connection with any such indemnification obligation, subject to Executive's delivery of an undertaking to repay such advances if it is ultimately determined that Executive is not entitled to indemnification under applicable law.
The Company's obligations under this Section 7.1 shall survive the termination of this Agreement and Executive's employment for any reason and shall continue in full force and effect with respect to any claims or proceedings arising out of or relating to events or circumstances occurring during Executive's service, regardless of when such claims or proceedings are asserted or commenced.
Section 7.2 — D&O Insurance
The Parties acknowledge and agree that, pursuant to the Purchase Agreement, the Company (as Buyer thereunder) has procured a six (6) year directors' and officers' liability "tail" (run-off) insurance policy from Northbridge Specialty Insurance Co. (arranged through Caldwell Risk Advisors, Inc.), providing coverage of Ten Million Dollars ($10,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate for the benefit of Meridian's pre-closing directors and officers, including Executive, for claims arising out of or relating to acts or omissions occurring prior to the Closing Date. The premium for such tail policy in the amount of Three Hundred Eighty-Five Thousand Dollars ($385,000) has been prepaid by the Company at the Closing.
In addition to the foregoing tail policy, during the Employment Term, the Company shall maintain directors' and officers' liability insurance coverage for Executive on terms (including coverage amounts, deductibles, and scope of coverage) no less favorable than those provided to other similarly situated senior executives of the Company. The Company shall not take any action or fail to take any action that would materially diminish or impair Executive's coverage under any such policy without Executive's prior written consent.
ARTICLE 8 — MISCELLANEOUS
Section 8.1 — Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of laws rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
Section 8.2 — Dispute Resolution
(a) Arbitration. Except as expressly provided in Section 8.2(b) below, any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be resolved by final and binding arbitration administered by the American Arbitration Association (the "AAA") in Philadelphia, Pennsylvania, in accordance with the AAA's Employment Arbitration Rules and Mediation Procedures then in effect. The arbitration shall be conducted before a single arbitrator mutually selected by the Parties in accordance with the AAA's rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could award, including damages, injunctive relief, and attorneys' fees. The decision of the arbitrator shall be final, binding, and enforceable in any court of competent jurisdiction. Each Party shall bear its own costs and attorneys' fees in connection with any arbitration, unless the arbitrator determines that the award of attorneys' fees and costs to the prevailing party is appropriate under the circumstances. The Company shall bear the costs of the AAA's administrative fees and the arbitrator's fees and expenses.
(b) Injunctive Relief. Notwithstanding the foregoing, either Party may seek temporary, preliminary, or permanent injunctive relief, specific performance, or other equitable relief in any court of competent jurisdiction in connection with any actual or threatened breach of the confidentiality, intellectual property, non-competition, non-solicitation, non-disparagement, or return of property provisions of this Agreement or the Restrictive Covenant Agreement, without the requirement of posting a bond or other security and without the necessity of proving actual damages. The Parties agree that the pursuit of injunctive or equitable relief shall not constitute a waiver of the right to submit any dispute to arbitration under Section 8.2(a).
Section 8.3 — Entire Agreement
This Agreement, together with the Restrictive Covenant Agreement, the Purchase Agreement, and the other ancillary agreements and instruments referenced therein (including, without limitation, the schedules and exhibits hereto and thereto), constitutes the entire agreement between the Parties with respect to the subject matter hereof, including Executive's employment with the Company, and supersedes all prior and contemporaneous agreements, understandings, representations, warranties, and negotiations between the Parties, whether written or oral, relating to such subject matter.
For the avoidance of doubt, any and all prior employment agreements, offer letters, compensation arrangements, and other employment-related agreements between Executive and Meridian are hereby terminated as of the Effective Date and shall be of no further force or effect. Executive acknowledges and agrees that she has no rights or entitlements under any such prior agreements as of the Effective Date, except to the extent that any obligations of Meridian under such agreements have been expressly assumed by the Company under this Agreement or under the Purchase Agreement.
Section 8.4 — Amendment and Waiver
No amendment, modification, or supplement to this Agreement shall be effective unless made in writing and signed by both Parties. No waiver by either Party of any breach of or default under any provision of this Agreement shall be deemed a waiver of any other provision or of any subsequent breach or default of the same or any other provision, nor shall any single or partial exercise of any right, power, or remedy under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. All waivers must be in writing and signed by the waiving Party.
Section 8.5 — Severability
If any provision of this Agreement (or any portion thereof) is held to be invalid, illegal, or unenforceable by any court or tribunal of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement (or the remaining portions of such provision), and the remaining provisions of this Agreement shall continue in full force and effect. In the event that any provision is held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify such provision so as to give effect to the original intent of the Parties to the fullest extent permitted by applicable law.
Section 8.6 — Assignment
Executive may not assign, delegate, or otherwise transfer this Agreement or any of her rights or obligations hereunder without the prior written consent of the Company. Any purported assignment, delegation, or transfer in violation of this Section 8.6 shall be null and void and of no force or effect. The Company may freely assign this Agreement and its rights and obligations hereunder, in whole or in part, to any successor to all or substantially all of the Company's business or assets (whether by merger, consolidation, acquisition, reorganization, or otherwise) or to any affiliate of the Company, without the prior written consent of Executive. Upon any such assignment, the assignee shall assume all of the Company's obligations hereunder, and the Company shall be released from further liability to the extent of such assumption.
Section 8.7 — Notices
All notices, requests, demands, consents, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered personally, (b) sent by registered or certified mail, return receipt requested, postage prepaid, (c) sent by a nationally recognized overnight courier service, or (d) transmitted by electronic mail with confirmation of receipt, addressed as follows (or to such other address as either Party may designate by written notice to the other Party in accordance with this Section 8.7):
If to the Company:
Solstice Biomedical, Inc. 1200 Innovation Drive, Suite 400 Wilmington, Delaware 19801
Attention: Patrick Lennox, General Counsel
Email: plennox@solsticebiomedical.com
With a copy to (which shall not constitute notice):
Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, New York 10022
Attention: Beatrice Holloway
Email: bholloway@calderwoodharkness.com
If to Executive:
Catherine Pryor At the address on file with the Company's Human Resources Department
Any notice delivered personally or sent by overnight courier shall be deemed given on the date of delivery. Any notice sent by registered or certified mail shall be deemed given on the third business day following the date of mailing. Any notice transmitted by electronic mail shall be deemed given on the date of transmission, provided that a confirmation copy is sent by one of the other methods specified above within one (1) business day.
Section 8.8 — Withholding
The Company shall be entitled to withhold from any amounts payable to Executive under this Agreement all amounts required to be withheld under applicable federal, state, and local tax laws, Social Security and Medicare taxes, and any other withholdings required by applicable law, rule, or regulation. Executive shall be solely responsible for the payment of all taxes imposed on Executive with respect to the compensation and benefits provided under this Agreement.
Section 8.9 — Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile, electronic mail (including .pdf format), or other electronic transmission shall be deemed to be, and shall have the same legal effect as, execution and delivery of an original signed copy.
Section 8.10 — Survival
The provisions of Article 4 (Confidentiality, intellectual Property, and Restrictive Covenants), Section 5.6 (Effect of Termination), Article 6 (Representations and Warranties), Article 7 (Indemnification and D&O Coverage), and Article 8 (Miscellaneous) shall survive the termination or expiration of this Agreement and Executive's employment hereunder, regardless of the reason for such termination or expiration, and shall remain in full force and effect in accordance with their respective terms.
Section 8.11 — Construction
The

EMPLOYMENT AGREEMENT

SOLSTICE BIOMEDICAL, INC.

CATHERINE PRYOR

EMPLOYMENT AGREEMENT

RECITALS

Record

Parties

Dates

Amounts