Cash Component. The cash component of the 2020 LTIP will be governed by this document.

Cash Component. This section explains the cash component of the 2020 LTIP.

Cash Component. The cash component of the 2019 LTIP will be administered under the Executive Cash Incentive Plan of 2015 for Participants who were “named executive officers” in the Company’s proxy statement or Annual Report on Form 10-K for fiscal 2018 or who serve as Executive Vice President or any more senior position. For all other Participants, this 2019 LTIP will be administered under the Cash Incentive Plan of 2010. This 2019 LTIP will be subject to the terms and conditions of the applicable Plan (which are incorporated into this document by reference). If there is any conflict between the terms of the applicable Plan and this 2019 LTIP, the terms of the applicable Plan will control. Capitalized terms not defined in this Plan have the meanings given to them in the applicable Plan.

Cash Component. This section explains the cash component of the 2019 LTIP.

Distributable Cash Flow Component. At the beginning of each new Measurement Period, the Committee shall establish the Performance Scale for the Distributable Cash Flow Component that will measure the Average Distributable Cash Flow for the Measurement Period. The Performance Scale will include the minimum threshold, target threshold and maximum threshold levels of achievement of Average Distributable Cash Flow that will be used to determine the percentage, if any, of the Unvested Phantom Units attributable to the Distributable Cash Flow Component that will be converted into Vested Phantom Units at the end of the Measurement Period. The percentage of Unvested Phantom Units attributable to the Distributable Cash Flow Component that can be earned and converted into Vested Phantom Units will range from 50% for minimum threshold achievement to 150% for maximum threshold achievement. In the event that Average Distributable Cash Flow for the Measurement Period is achieved between dollar thresholds in the Performance Scale, the percentage of Unvested Phantom Units that will be converted into Vested Phantom Units will be determined based on linear interpolation

Distributable Cash Flow Component. At the beginning of each new Measurement Period, the Committee shall establish the Performance Scale for the Distributable Cash Flow Component that will measure the Average Distributable Cash Flow for the Measurement Period. The Performance Scale will include the minimum threshold, target threshold and maximum threshold levels of achievement of Average Distributable Cash Flow that will be used to determine the percentage, if any, of the Unvested Phantom Units attributable to the Distributable Cash Flow Component that will be converted into Vested Phantom Units at the end of the Measurement Period. The percentage of Unvested Phantom Units attributable to the Distributable Cash Flow Component that can be earned and converted into Vested Phantom Units will range from 50% for minimum threshold achievement to 150% for maximum threshold achievement. In the event that Average Distributable Cash Flow for the Measurement Period is achieved between dollar thresholds in the Performance Scale, the percentage of Unvested Phantom Units that will be converted into Vested Phantom Units will be determined based on linear interpolation

Component Costs. If Patheon incurs an increase in Component costs during the Year (for clarity, this excludes Client-Supplied Components), it may increase the Price for the next Year to pass through the additional Component costs at Patheon’s cost; provided, however, that in the event any proposed increase in the cost of a Component exceeds ​ of the cost for that Component upon which the most recent fee quote was based, and that a change of supplier is mutually agreed between Patheon and Client pursuant to [Section 4.2(e)], Patheon and Client will use commercially reasonable efforts to locate an equivalent alternative lower cost supplier for the applicable Component. If as a result of both parties’ efforts pursuant to [Section 4.2(e)] (but not if Patheon is acting alone) Patheon incurs a net decrease (including any rebates or discounts) in Component costs during the Year, the net cost savings will be ​ in accordance with [Section 4.2(e)] and it will decrease the Price for the next Year to pass through the additional Component cost savings allocated to Client (but not those allocated to Patheon). On or about ​ of each Year, Patheon will give Client information about the increase or decrease in Component costs which will be applied to the calculation of the Price for the next Year to reasonably demonstrate that any Price increase or decrease is in compliance with this [Section 4.2(b)]. But Patheon will not be required to give information to Client that is subject to obligations of confidentiality between Patheon and its suppliers.

Final Component. The remaining ​ of your Retention Bonus (the “Final Component”) will be paid to you if, and only if, you are employed by the Company Group on the Completion Date. In the event your employment terminates before the Completion Date due to a Qualifying Termination, the Company will pay you within 90 days of your Qualifying Termination (but in any event no later than March 15 of the year following such termination) a pro rata portion of the Final Component based on the relative number of days you were employed during the Retention Period.

The discretionary component is designed to reward Participants for various factors related to their contributions to the Company during the Plan Year. Following the completion of the Plan Year, a pool of money will be distributed to each division head to allocate in their discretion (with oversight from the Plan Administrators) among their Participants in each Segment based on the division head’s assessment of various factors related to contributions to the Company during the Plan Year. This amount will then be added to the amount attributable to the Achievement Metrics component, as described above, to arrive at each Participant’s total bonus.

Equity Component. The equity component of the 2020 LTIP will consist of restricted stock that vests in four equal annual installments. Specifically, 25% of the shares will vest on each anniversary of the grant date, with the final installment vesting in 2024. The terms and conditions, including treatment upon termination of employment, of the grant are set forth in an award agreement that will be issued to each recipient.