Attached files
file | filename |
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8-K - FORM 8-K - ANDEAVOR LOGISTICS LP | h81669e8vk.htm |
EX-3.1 - EX-3.1 - ANDEAVOR LOGISTICS LP | h81669exv3w1.htm |
EX-3.2 - EX-3.2 - ANDEAVOR LOGISTICS LP | h81669exv3w2.htm |
EX-10.2 - EX-10.2 - ANDEAVOR LOGISTICS LP | h81669exv10w2.htm |
EX-10.8 - EX-10.8 - ANDEAVOR LOGISTICS LP | h81669exv10w8.htm |
EX-10.4 - EX-10.4 - ANDEAVOR LOGISTICS LP | h81669exv10w4.htm |
EX-10.5 - EX-10.5 - ANDEAVOR LOGISTICS LP | h81669exv10w5.htm |
EX-10.1 - EX-10.1 - ANDEAVOR LOGISTICS LP | h81669exv10w1.htm |
EX-10.6 - EX-10.6 - ANDEAVOR LOGISTICS LP | h81669exv10w6.htm |
EX-10.9 - EX-10.9 - ANDEAVOR LOGISTICS LP | h81669exv10w9.htm |
EX-10.7 - EX-10.7 - ANDEAVOR LOGISTICS LP | h81669exv10w7.htm |
EX-10.11 - EX-10.11 - ANDEAVOR LOGISTICS LP | h81669exv10w11.htm |
EX-10.10 - EX-10.10 - ANDEAVOR LOGISTICS LP | h81669exv10w10.htm |
Exhibit 10.3
TESORO LOGISTICS LP
2011 LONG-TERM INCENTIVE PLAN
2011 LONG-TERM INCENTIVE PLAN
SECTION 1. Purpose of the Plan.
This Tesoro Logistics LP 2011 Long-Term Incentive Plan (the Plan) has been adopted
by Tesoro Logistics GP, LLC, a Delaware limited liability company (the Company), the
general partner of Tesoro Logistics LP, a Delaware limited partnership (the Partnership).
The Plan is intended to promote the interests of the Partnership and the Company by providing to
Employees, Consultants and Directors incentive compensation awards based on Units to encourage
superior performance. The Plan is also contemplated to enhance the ability of the Partnership, the
Company and their Affiliates to attract and retain the services of individuals who are essential
for the growth and profitability of the Company, the Partnership and their Affiliates and to
encourage them to devote their best efforts to advancing the business of the Company, the
Partnership and their Affiliates.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
Affiliate means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is under common control
with, the Person in question. As used herein, the term control means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
ASC Topic 718 means Accounting Standards Codification Topic 718, Compensation
Stock Compensation, or any successor accounting standard.
Award means an Option, Restricted Unit, Phantom Unit, DER, Substitute Award, Unit
Appreciation Right or Unit Award granted under the Plan.
Award Agreement means the written or electronic agreement by which an Award shall be
evidenced.
Board means the board of directors or board of managers, as the case may be, of the
Company.
Cause means, unless otherwise set forth in an Award Agreement or other written
agreement between the Company and the applicable Participant, a finding by the Committee that a
Participant, before or after his termination of Service (i) committed fraud, embezzlement, theft,
felony or an act of dishonesty in the course of his employment or service with the Company or an
Affiliate of the Company which conduct damaged the Company or an Affiliate of the Company or
(ii) disclosed trade secrets of the Company or an Affiliate of the Company. The findings and
decision of the Committee with respect to such matter, including those regarding the acts of the
Participant and the damage done to the Company or an Affiliate of the Company,
will be final for
all purposes. No decision of the Committee, however, will affect the finality of the discharge of
the individual by the Company or an Affiliate of the Company.
Change in Control means, and shall be deemed to have occurred upon one or more of
the following events:
(i) any person or group within the meaning of those terms as used in Sections 13(d)
and 14(d)(2) of the Exchange Act, other than the Company or an Affiliate of the Company (as
determined immediately prior to such event), shall become the beneficial owner, by way of
merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the
combined voting power of the equity interests in the Company or the Partnership;
(ii) the limited partners of the Partnership approve, in one or a series of
transactions, a plan of complete liquidation of the Partnership;
(iii) the sale or other disposition by either the Company or the Partnership of all or
substantially all of its assets in one or more transactions to any Person other than the
Company or an Affiliate of the Company or the Partnership; or
(iv) a transaction resulting in a Person other than the Company or an Affiliate of the
Company (as determined immediately prior to such event) being the sole general partner of
the Partnership.
Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect
to any Award which provides for the deferral of compensation and is subject to Section 409A of the
Code, the transaction or event described in subsection (i), (ii), (iii) or (iv) above with respect
to such Award must also constitute a change in control event, as defined in Treasury Regulation
§1.409A-3(i)(5), and as relates to the holder of such Award, to the extent required to comply with
Section 409A of the Code.
Code means the Internal Revenue Code of 1986, as amended.
Committee means the Board or such committee as may be appointed by the Board to
administer the Plan.
Consultant means an individual who renders consulting services to the Company, the
Partnership or an Affiliate of either.
DER means a distribution equivalent right, representing a contingent right to
receive an amount in cash, Units, Restricted Units and/or Phantom Units equal in value to the
distributions made by the Partnership with respect to a Unit during the period such Award is
outstanding.
Director means a member of the board of directors or board of managers, as the case
may be, of the Company, the Partnership or an Affiliate who is not an Employee or a Consultant
(other than in that individuals capacity as a Director).
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Disability means as determined by the Committee in its discretion exercised in good
faith, a physical or mental condition of a Participant that would entitle him or her to payment of
disability income payments under the Companys or Tesoros long-term disability insurance policy or
plan for employees as then in effect; or in the event that a Participant is not covered, for
whatever reason under the Companys or Tesoros long-term disability insurance policy or plan for
employees or in the event the Company or Tesoro does not maintain such a long-term disability
insurance policy, Disability means a total and permanent disability within the meaning of Section
22(e)(3) of the Code; provided, however, that if a Disability constitutes a payment event with
respect to any Award which provides for the deferral of compensation and is subject to Section 409A
of the Code, then, to the extent required to comply with Section 409A of the Code, the Participant
must also be considered disabled within the meaning of Section 409A(a)(2)(C) of the Code. A
determination of Disability may be made by a physician selected or approved by the Committee and,
in this respect, Participants shall submit to an examination by such physician upon request by the
Committee.
Employee means an employee of the Company or an Affiliate of the Company.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Fair Market Value means, as of any given date, the closing sales price on such date
during normal trading hours (or, if there are no reported sales on such date, on the last date
prior to such date on which there were sales) of the Units on the New York Stock Exchange or, if
not listed on such exchange, on any other national securities exchange on which the Units are
listed or on an inter-dealer quotation system, in any case, as reported in such source as the
Committee shall select. If there is no regular public trading market for the Units, the Fair
Market Value of the Units shall be determined by the Committee in good faith and in compliance with
Section 409A of the Code.
Option means an option to purchase Units.
Other Unit-Based Award means an award granted pursuant to Section 6(e) of the Plan.
Participant means an Employee, Consultant or Director granted an Award under the
Plan and any authorized transferee of such individual.
Partnership Agreement means the Agreement of Limited Partnership of the Partnership,
as it may be amended or amended and restated from time to time.
Person shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a group as defined in
Section 13(d)..
Phantom Unit means a notional interest granted under the Plan that, to the extent
vested, entitles the Participant to receive a Unit or an amount of cash equal to the Fair Market
Value of a Unit, as determined by the Committee in its discretion.
Profits Interest Unit means to the extent authorized by the Partnership Agreement,
an interest in the Partnership that is intended to constitute a profits interest within the
meaning of
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the Code, Treasury Regulations promulgated thereunder, and any published guidance by the
Internal Revenue Service with respect thereto.
Restricted Period means the period established by the Committee with respect to an
Award during which the Award remains subject to forfeiture and is either not exercisable by or
payable to the Participant, as the case may be.
Restricted Unit means a Unit granted under the Plan that is subject to a Restricted
Period.
Rule 16b-3 means Rule 16b-3 promulgated by the SEC under the Exchange Act or any
successor rule or regulation thereto as in effect from time to time.
Securities Act means the Securities Act of 1933, as amended.
SEC means the Securities and Exchange Commission, or any successor thereto.
Service means service as an Employee, Consultant or Director. The Committee, in its
sole discretion, shall determine the effect of all matters and questions relating to terminations
of Service, including, without limitation, the question of whether and when a termination of
Service occurred and/or resulted from a discharge for cause, and all questions of whether
particular changes in status or leaves of absence constitute a termination of Service, provided
that a termination of Service shall not be deemed to occur in the event of (a) a termination where
there is simultaneous commencement by the Participant of a relationship with the Partnership or the
Company or an Affiliate of the Partnership or the Company as an Employee, Director or Consultant or
(b) at the discretion of the Committee, a termination which results in a temporary severance of the
service relationship.
Substitute Award means an award granted pursuant to Section 6(f) of the Plan.
Tesoro means Tesoro Corporation, a Delaware corporation, or any successor thereto.
Unit means a Common Unit of the Partnership.
Unit Appreciation Right or UAR means a contingent right that entitles the
holder to receive the excess of the Fair Market Value of a Unit on the exercise date of the UAR
over the exercise price of the UAR.
Unit Award means an award granted pursuant to Section 6(c) of the Plan.
SECTION 3. Administration.
(a) The Plan shall be administered by the Committee, subject to subsections (b) and (c) below;
provided, however, that, in the event that the Board is not also serving as the Committee, the
Board, in its sole discretion, may at any time and from time to time exercise any and all rights
and duties of the Committee under the Plan. The governance of the Committee shall be subject to
the charter, if any, of the Committee as approved by the Board. Subject to the terms of the Plan
and applicable law, and in addition to other express powers and authorizations
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conferred on the
Committee by the Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii)
determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of
any Award; (v) determine whether, to what extent, and under what circumstances Awards may be
settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any
instrument or agreement relating to an Award made under the Plan; (vii) establish, amend, suspend,
or waive such rules and regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; and (viii) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan
or an Award Agreement in such manner and to such extent as the Committee deems necessary or
appropriate. Unless otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and
binding upon all Persons, including the Company, the Partnership, any Affiliate, any Participant,
and any beneficiary of any Participant.
(b) To the extent permitted by applicable law and the rules of any securities exchange on
which the Units are listed, quoted or traded, the Board or Committee may from time to time delegate
to a committee of one or more members of the Board or one or more officers of the Company the
authority to grant or amend Awards or to take other administrative actions pursuant to Section
3(a); provided, however, that in no event shall an officer of the Company be delegated the
authority to grant awards to, or amend awards held by, the following individuals: (i) individuals
who are subject to Section 16 of the Exchange Act, (ii) officers of the Company (or Directors) to
whom authority to grant or amend Awards has been delegated hereunder, or (iii) to the extent that
Section 162(m) of the Code is applicable to the Company or the Partnership, any Employee who is, or
could be, a covered employee within the meaning of Section 162(m) of the Code; provided, further,
that any delegation of administrative authority shall only be permitted to the extent that it is
permissible under applicable provisions of the Code and applicable securities laws and the rules of
any securities exchange on which the Units are listed, quoted or traded. Any delegation hereunder
shall be subject to such restrictions and limitations as the Board or Committee specifies at the
time of such delegation, and the Board may at any time rescind the authority so delegated or
appoint a new delegatee. At all times, the delegatee appointed under this Section 3(b) shall serve
in such capacity at the pleasure of the Board and the Committee.
(c) Notwithstanding any provision to the contrary in the Plan, for so long as the Company is
an Affiliate of Tesoro, any Award to be granted under the plan to a Participant that is an
executive officer of Tesoro shall only be granted following a recommendation made by the board of
directors or Compensation Committee of Tesoro.
SECTION 4. Units.
(a) Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c),
the number of Units that may be delivered with respect to Awards under the Plan is Seven Hundred
Fifty Thousand (750,000). Units withheld from an Award to either satisfy the Companys or an
Affiliates tax withholding obligations with respect to the Award or pay the
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exercise price of an
Award shall be counted against the number of Units that may be delivered under the Plan and shall
not be available for future grants of Awards. If any Award is forfeited, cancelled, exercised,
paid, or otherwise terminates or expires without the actual delivery of Units pursuant to such
Award (for the avoidance of doubt, the grant of Restricted Units is not a delivery of Units for
this purpose), the Units subject to such Award shall again be available for Awards under the Plan.
To the extent permitted by applicable law and exchange rule, Substitute Awards and Units issued in
assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of
combination by the Partnership or any Affiliate shall not be counted against the Units available
for issuance pursuant to the Plan. There shall not be any limitation on the number of Awards that
may be paid in cash.
(b) Sources of Units Deliverable Under Awards. Any Units delivered pursuant to an
Award shall consist, in whole or in part, of Units acquired in the open market, from any Affiliate,
the Partnership or any other Person, or Units otherwise issuable by the Partnership, or any
combination of the foregoing, as determined by the Committee in its discretion.
(c) Anti-dilution Adjustments.
(i) Equity Restructuring. With respect to any equity restructuring event that could
result in an additional compensation expense to the Company or the Partnership pursuant to the
provisions of ASC Topic 718 if adjustments to Awards with respect to such event were discretionary,
the Committee shall equitably adjust the number and type of Units covered by each outstanding Award
and the terms and conditions, including the exercise price and performance criteria (if any), of
such Award to equitably reflect such event and shall adjust the number and type of Units (or other
securities or property) with respect to which Awards may be granted under the Plan after such
event. With respect to any other similar event that would not result in an ASC Topic 718
accounting charge if the adjustment to Awards with respect to such event were subject to
discretionary action, the Committee shall have complete discretion to adjust Awards and the number
and type of Units (or other securities or property) with respect to which Awards may be granted
under the Plan in such manner as it deems appropriate with respect to such other event.
(ii) Other Changes in Capitalization. In the event of any non-cash distribution, Unit
split, combination or exchange of Units, merger, consolidation or distribution (other than normal
cash distributions) of Partnership assets to unitholders, or any other change affecting the units
of the Partnership, other than an equity restructuring, the Committee may make equitable
adjustments, if any, to reflect such change with respect to (A) the aggregate number and kind of
Units that may be issued under the Plan; (B) the number and kind of Units (or other securities or
property) subject to outstanding Awards; (iii) the terms and conditions of any outstanding Awards
(including, without limitation, any applicable performance targets or criteria with respect
thereto); and (iv) the grant or exercise price per Unit for any outstanding Awards under the Plan.
SECTION 5. Eligibility.
Any Employee, Consultant or Director shall be eligible to be designated a Participant and
receive an Award under the Plan.
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SECTION 6. Awards.
(a) Options and UARs. Subject to Section 3(c), the Committee shall have the authority
to determine the Employees, Consultants and Directors to whom Options and/or UARs shall be granted,
the number of Units to be covered by each Option or UAR, the exercise price therefor, the
Restricted Period and other conditions and limitations applicable to the exercise of the Option or
UAR, including the following terms and conditions and such additional terms and conditions, as the
Committee shall determine, that are not inconsistent with the provisions of the Plan. Options
which are intended to comply with Treasury Regulation Section 1.409A-1(b)(5)(i)(A) and Unit
Appreciation Rights which are intended to comply with Treasury Regulation Section
1.409A-1(b)(5)(i)(B) or any successor regulation may be granted only if the requirements of
Treasury Regulation Section 1.409A-1(b)(5)(iii), or any successor regulation, are satisfied.
Options and UARs that are otherwise exempt from or compliant with Section 409A of the Code may be
granted to any eligible Employee, Consultant or Director.
(i) Exercise Price. The exercise price per Unit purchasable under an Option or
subject to a UAR shall be determined by the Committee at the time the Option or UAR is
granted but, except with respect to a Substitute Award, may not be less than the Fair Market
Value of a Unit as of the date of grant of the Option or UAR.
(ii) Time and Method of Exercise. The Committee shall determine the exercise
terms and the Restricted Period with respect to an Option or UAR, which may include, without
limitation, a provision for accelerated vesting upon the achievement of specified
performance goals or other events, and the method or methods by which payment of the
exercise price with respect to an Option or UAR may be made or deemed to have been made,
which may include, without limitation, cash, check acceptable to the Company, withholding
Units from the Award, a cashless exercise through procedures approved by the Company, or
any combination of the above methods, having a Fair Market Value on the exercise date equal
to the relevant exercise price.
(iii) Forfeitures. Except as otherwise provided in the terms of the Option or
UAR grant, upon termination of a Participants Service for any reason during the applicable
Restricted Period, all unvested Options and UARs shall be forfeited by the Participant. The
Committee may, in its discretion, waive in whole or in part such forfeiture with respect to
a Participants Options and/or UARs; provided that the waiver contemplated under this
Section shall be effective only to the extent that such waiver will not cause the
Participants Options and UARs that are intended to satisfy the requirements of Section 409A
of the Code to fail to satisfy such requirements.
(iv) Exercise of Options and UARs on Termination of Service. Each Option and
UAR shall set forth the extent to which the Participant shall have the right to exercise the
Option or UAR following a termination of the Participants Service. Unless otherwise
determined by the Committee, if the Participants Service is terminated for cause, the
Participants right to exercise the Option or UAR shall terminate immediately on the
effective date of the Participants termination. To the extent the Option or UAR was not
vested and exercisable as of the termination of Service, the Option or UAR shall terminate
when the Participants Service terminates. Subject to the foregoing, such
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provisions shall
be determined in the sole discretion of the Committee, need not be uniform among all Options
and UARs issued pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of Service.
(v) Term of Options and UARs. The term of each Option and UAR shall be stated
in the Award Agreement, provided, that the term shall be no more than ten (10) years from
the date of grant thereof.
(vi) Prohibition on Repricing. Subject to Section 4(c) and Section 7(c), the
Committee shall not, without the approval of the unitholders of the Partnership, (i) reduce
the per Unit exercise price of any outstanding Option or UAR, (ii) cancel any Option or UAR
in exchange for cash or another Award when the Option or UAR price per Unit exceeds the Fair
Market Value of the underlying Units, or (iii) otherwise reprice any Option or UAR. Subject
to Section 4(c), Section 7 and Section 8(e), the Committee shall have the authority, without
the approval of the unitholders of the Partnership, to amend any outstanding Award to
increase the exercise price per Unit or to cancel and replace an Award with the grant of an
Award having an exercise price per Unit that is greater than or equal to the exercise price
per Unit of the original Award.
(b) Restricted Units and Phantom Units. Subject to Section 3(c), the Committee shall
have the authority to determine the Employees, Consultants and Directors to whom Restricted Units
and Phantom Units shall be granted, the number of Restricted Units or Phantom Units to be granted
to each such Participant, the Restricted Period, the conditions under which the Restricted Units or
Phantom Units may become vested or forfeited and such other terms and conditions, including,
without limitation, restrictions on transferability, as the Committee may establish with respect to
such Awards.
(i) DERs. Subject to Section 3(c), the Committee shall have the authority to
determine the Employees, Consultants and Directors to whom DERs are granted, whether such
DERs are tandem or separate Awards, whether the DERs shall be paid directly to the
Participant, be credited to a bookkeeping account (with or without interest in the
discretion of the Committee) the vesting restrictions and payment provisions applicable to
the Award, and such other provisions or restrictions as determined by the Committee in its
discretion all of which shall be specified in the Award Agreements. DERs may be granted by
the Committee based on distributions made with respect to Units, to be credited as of the
distribution dates during the period between the date an Award is granted to a Participant
and the date such Award vests, is exercised, is distributed or expires, as determined by the
Committee. Such DERs shall be converted to cash, Units, Restricted Units and/or Phantom
Units by such formula and at such time and subject to such limitations as may be determined
by the Committee. Tandem DERs may be subject to the same or different vesting restrictions
as the tandem Award, or be subject to such other provisions or restrictions as determined by
the Committee in its discretion. Notwithstanding the foregoing, DERs shall only be paid in a
manner that is either exempt from or in compliance with Section 409A of the Code.
(ii) Forfeitures. Except as otherwise provided in the terms of an Award
Agreement, upon termination of a Participants Service for any reason during the
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applicable
Restricted Period, all outstanding, unvested Restricted Units and Phantom Units awarded the
Participant shall be automatically forfeited on such termination. The Committee may, in its
discretion, waive in whole or in part such forfeiture with respect to a Participants
Restricted Units and/or Phantom Units; provided, that the waiver contemplated under this
Section shall be effective only to the extent that such waiver will not cause the
Participants Restricted Units and/or Phantom Units that are intended to satisfy the
requirements of Section 409A of the Code to fail to satisfy such requirements.
(iii) Payment; Lapse of Restrictions.
(A) Phantom Units. The Committee shall specify, or permit the
Participant to elect in accordance with the requirements of Section 409A of the
Code, the conditions and dates or events upon which the cash or Units underlying an
award of Phantom Units shall be issued, which dates or events shall not be earlier
than the date as of which the Phantom Units vest and become nonforfeitable and which
conditions and dates or events shall be subject to compliance with Section 409A of
the Code (unless the Phantom Units are exempt therefrom).
(B) Restricted Units. Upon or as soon as reasonably practical
following the vesting of each Restricted Unit, subject to satisfying the tax
withholding obligations of Section 8(b), the Participant shall be entitled to have
the restrictions removed from his or her Unit certificate (or book-entry account, as
applicable) so that the Participant then holds an unrestricted Unit.
(c) Unit Awards. Unit Awards may be granted under the Plan (i) to such Employees,
Consultants and/or Directors and in such amounts as the Committee, in its discretion, may select,
subject to Section 3(c), and (ii) subject to such other terms and conditions, including, without
limitation, restrictions on transferability, as the Committee may establish with respect to such
Awards.
(d) Profits Interest Units. Any Restricted Unit award or Unit Award consisting of
Profits Interest Units may only be issued to a Participant for the performance of services to or
for the benefit of the Partnership (i) in the Participants capacity as a partner of the
Partnership, (ii) in anticipation of the Participant becoming a partner of the Partnership, or
(iii) as otherwise determined by the Committee, provided that the Profits Interest Units would
constitute profits interests within the meaning of the Code, Treasury Regulations promulgated
thereunder and any published guidance by the Internal Revenue Service with respect thereto. At the
time of grant, the Committee shall specify the date or dates on which the Profits Interest Units
shall vest and become nonforfeitable, and may specify such conditions to vesting as it deems
appropriate. Profits Interest Units shall be subject to such restrictions on transferability and
other restrictions as the Committee may impose.
(e) Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Plan to
such Employees, Consultants and/or Directors as the Committee, in its discretion, may select,
subject to Section 3(c). An Other Unit-Based Award shall be an award denominated or payable in,
valued in or otherwise based on or related to Units, in whole or in part. The
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Committee shall
determine the terms and conditions of any Other Unit-Based Award. Upon vesting, an Other
Unit-Based Award may be paid in cash, Units (including Restricted Units) or any combination thereof
as provided in the Award Agreement.
(f) Substitute Awards. Awards may be granted under the Plan in substitution of
similar awards held by individuals who become Employees, Consultants or Directors as a result of a
merger, consolidation or acquisition by the Partnership or an Affiliate of another entity or the
assets of another entity. Such Substitute Awards that are Options or UARs may have exercise prices
less than the Fair Market Value of a Unit on the date of the substitution if such substitution
complies with Section 409A of the Code and the Treasury Regulations thereunder and other applicable
laws and exchange rules.
(g) General.
(i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in tandem with, or
in substitution for any other Award granted under the Plan or any award granted under any
other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with
other Awards or awards granted under any other plan of the Company or any Affiliate may be
granted either at the same time as or at a different time from the grant of such other
Awards or awards.
(ii) Limits on Transfer of Awards.
(A) Except as provided in Paragraph (C) below, each Option and UAR shall be
exercisable only by the Participant during the Participants lifetime, or by the
person to whom the Participants rights shall pass by will or the laws of descent
and distribution.
(B) Except as provided in Paragraph (C) below, no Award and no right under any
such Award may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant other than by will or the laws of descent
and distribution and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the Company,
the Partnership or any Affiliate.
(C) The Committee may provide in an Award Agreement that an Award may, on such
terms and conditions as the Committee may from time to time establish, be
transferred by a Participant without consideration to any family member of the
Participant, as defined in the instructions to use of the Form S-8 Registration
Statement under the Securities Act, as applicable, or any other transferee
specifically approved by the Committee after taking into account any state, federal,
local or foreign tax and securities laws applicable to transferable Awards. In
addition, vested Units may be transferred to the extent permitted by the Partnership
Agreement and not otherwise prohibited by the Award Agreement or any other agreement
restricting the transfer of such Units.
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(iii) Term of Awards. Subject to Section 6(a)(v) above, the term of each
Award, if any, shall be for such period as may be determined by the Committee.
(iv) Unit Certificates. Unless otherwise determined by the Committee or
required by any applicable law, rule or regulation, neither the Company nor the Partnership
shall deliver to any Participant certificates evidencing Units issued in connection with any
Award and instead such Units shall be recorded in the books of the Partnership (or, as
applicable, its transfer agent or equity plan administrator). All certificates for Units or
other securities of the Partnership delivered under the Plan and all Units issued pursuant
to book entry procedures pursuant to any Award or the exercise thereof shall be subject to
such stop transfer orders and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations, and other requirements of the SEC, any securities
exchange upon which such Units or other securities are then listed, and any applicable
federal or state laws, and the Committee may cause a legend or legends to be inscribed on
any such certificates or book entry to make appropriate reference to such restrictions.
(v) Consideration for Grants. To the extent permitted by applicable Law,
Awards may be granted for such consideration, including services, as the Committee shall
determine.
(vi) Delivery of Units or other Securities and Payment by Participant of
Consideration. Notwithstanding anything in the Plan or any Award Agreement to the
contrary, subject to compliance with Section 409A of the Code, the Company shall not be
required to issue or deliver any certificates or make any book entries evidencing Units
pursuant to the exercise or vesting of any Award, unless and until the Board or the
Committee has determined, with advice of counsel, that the issuance of such Units is in
compliance with all applicable laws, regulations of governmental authorities and, if
applicable, the requirements of any exchange on which the Units are listed or traded, and
the Units are covered by an effective registration statement or applicable exemption from
registration. In addition to the terms and conditions provided herein, the Board or the
Committee may require that a Participant make such reasonable covenants, agreements, and
representations as the Board or the Committee, in its discretion, deems advisable in order
to comply with any such laws, regulations, or requirements. Without limiting the generality
of the foregoing, the delivery of Units pursuant to the exercise or vesting of an Award may
be deferred for any period during which, in the good faith determination of the Committee,
the Company is not reasonably able to obtain or deliver Units pursuant to such Award without
violating applicable law or the applicable rules or regulations of any governmental agency
or authority or securities exchange. No Units or other securities shall be delivered
pursuant to any Award until payment in full of any amount required to be paid pursuant to
the Plan or the applicable Award grant agreement (including, without limitation, any
exercise price or tax withholding) is received by the Company.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law:
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(a) Amendments to the Plan. Except as required by applicable law or the rules of the
principal securities exchange, if any, on which the Units are traded and subject to Section 7(b)
below, the Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan in
any manner without the consent of any partner, Participant, other holder or beneficiary of an
Award, or any other Person. The Board shall obtain securityholder approval of any Plan amendment
to the extent necessary to comply with applicable law or securities exchange listing standards or
rules.
(b) Amendments to Awards. Subject to Section 7(a), the Committee may waive any
conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided
that no change, other than pursuant to Section 7(c), in any Award shall materially reduce the
rights or benefits of a Participant with respect to an Award without the consent of such
Participant.
(c) Actions Upon the Occurrence of Certain Events. Upon the occurrence of a Change in
Control, any transaction or event described in Section 4(c), any change in applicable law or
regulation affecting the Plan or Awards thereunder, or any change in accounting principles
affecting the financial statements of the Company or the Partnership, the Committee, in its sole
discretion, without the consent of any Participant or holder of the Award, and on such terms and
conditions as it deems appropriate, may take any one or more of the following actions:
(i) provide for either (A) the termination of any Award in exchange for a payment in an
amount, if any, equal to the amount that would have been attained upon the exercise of such
Award or realization of the Participants rights under such Award (and, for the avoidance of
doubt, if as of the date of the occurrence of such transaction or event the Committee
determines in good faith that no amount would have been attained upon the exercise of such
Award or realization of the Participants rights, then such Award may be terminated by the
Company without payment) or (B) the replacement of such Award with other rights or property
selected by the Committee in its sole discretion having an aggregate value not exceeding the
amount that could have been attained upon the exercise of such Award or realization of the
Participants rights had such Award been currently exercisable or payable or fully vested;
(ii) provide that such Award be assumed by the successor or survivor entity, or a
parent or subsidiary thereof, or be exchanged for similar options, rights or awards covering
the equity of the successor or survivor, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of equity interests and prices;
(iii) make adjustments in the number and type of Units (or other securities or
property) subject to outstanding Awards, and in the number and kind of outstanding Awards or
in the terms and conditions of (including the exercise price), and the vesting and
performance criteria included in, outstanding Awards, or both;
(iv) provide that such Award shall vest or become exercisable or payable,
notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and
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(v) provide that the Award cannot be exercised or become payable after such event,
i.e., shall terminate upon such event.
Notwithstanding the foregoing, (i) with respect to an above event that is an equity restructuring
event that would be subject to a compensation expense pursuant ASC Topic 718, the provisions in
Section 4(c) shall control to the extent they are in conflict with the discretionary provisions of
this Section 7, provided, however, that nothing in Section 7(c) or Section 4(c) shall be construed
as providing any Participant or any beneficiary any rights with respect to the time value,
economic opportunity or intrinsic value of an Award or limiting in any manner the Committees
actions that may be taken with respect to an Award as set forth above or in Section 4(c); and (ii)
no action shall be taken under this Section 7 which shall cause an Award to fail to comply with
Section 409A of the Code or the Treasury Regulations thereunder, to the extent applicable to such
Award.
SECTION 8. General Provisions.
(a) No Rights to Award. No Person shall have any claim to be granted any Award under
the Plan, and there is no obligation for uniformity of treatment of Participants. The terms and
conditions of Awards need not be the same with respect to each recipient.
(b) Tax Withholding. Unless other arrangements have been made that are acceptable to
the Company, the Company or any Affiliate is authorized to deduct or withhold, or cause to be
deducted or withheld, from any Award, from any payment due or transfer made under any Award or from
any compensation or other amount owing to a Participant the amount (in cash, Units, Units that
would otherwise be issued pursuant to such Award or other property) of any applicable taxes payable
in respect of an Award, including its grant, its exercise, the lapse of restrictions thereon, or
any payment or transfer thereunder or under the Plan, and to take such other action as may be
necessary in the opinion of the Company to satisfy its withholding obligations for the payment of
such taxes. In the event that Units that would otherwise be issued pursuant to an Award are used
to satisfy such withholding obligations, the number of Units which may be so withheld or
surrendered shall be limited to the number of Units which have a fair market value (which, in the
case of a broker-assisted transaction, shall be determined by the Committee, consistent with
applicable provisions of the Code) on the date of withholding equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal, state, local and foreign
income tax and payroll tax purposes that are applicable to such supplemental taxable income.
(c) No Right to Employment or Services. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or any Affiliate,
continue consulting services or to remain on the Board, as applicable. Furthermore, the Company or
an Affiliate may at any time dismiss a Participant from employment or consulting free from any
liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award
Agreement or other written agreement.
(d) No Rights as Unitholder. Except as otherwise provided herein, a Participant shall
have none of the rights of a unitholder with respect to Units covered by any Award until the
Participant becomes the record owner of such Units.
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(e) Section 409A. To the extent that the Committee determines that any Award granted
under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award
shall incorporate the terms and conditions required by Section 409A of the Code. To the extent
applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of
the Code and Department of Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be issued after the
effective date of the Plan. Notwithstanding any provision of the Plan to the contrary, in the
event that following the effective date of the Plan the Committee determines that any Award may be
subject to Section 409A of the Code and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the effective date of the Plan), the
Committee may adopt such amendments to the Plan and the applicable Award Agreement or adopt other
policies and procedures (including amendments, policies and procedures with retroactive effect), or
take any other actions, that the Committee determines are necessary or appropriate to (i) exempt
the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits
provided with respect to the Award, or (ii) comply with the requirements of Section 409A of the
Code and related Department of Treasury guidance and thereby avoid the application of any penalty
taxes under such Section; provided, however, that nothing herein shall create any obligation on the
part of the Committee, the Company or any of its Affiliates to adopt any such amendment, policy or
procedure or take any such other action, nor shall the Committee, the Company or any of its
Affiliates have any liability for failing to do so. Notwithstanding any provision in the Plan to
the contrary, the time of payment with respect to any Award that is subject to Section 409A of the
Code shall not be accelerated, except as permitted under Treasury Regulation Section
1.409A-3(j)(4).
(f) Lock-Up Agreement. Each Participant shall agree, if so requested by the Company
or the Partnership and any underwriter in connection with any public offering of securities of the
Partnership or any Affiliate, not to directly or indirectly offer, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of or otherwise dispose of or transfer any Units held by it for such period,
not to exceed one hundred eighty (180) days following the effective date of the relevant
registration statement filed under the Securities Act in connection with such public offering, as
such underwriter shall specify reasonably and in good faith. The Company or the Partnership may
impose stop-transfer instructions with respect to securities subject to the foregoing restrictions
until the end of such 180-day period. Notwithstanding the foregoing, the 180-day period may be
extended for up to such number of additional days as is deemed necessary by such underwriter or the
Company or Partnership to continue coverage by research analysts in accordance with FINRA Rule 2711
or any successor rule.
(g) Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan
and the issuance and delivery of Units and the payment of money under the Plan or under Awards
granted or awarded hereunder are subject to compliance with all applicable federal, state, local
and foreign laws, rules and regulations (including but not limited to state, federal and foreign
securities law and margin requirements), the rules of any securities exchange or automated
quotation system on which the Units are listed, quoted or traded, and to such approvals by any
listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under the Plan shall be
subject to such restrictions, and the person acquiring such securities shall,
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if requested by the
Company, provide such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations. In the event an
Award is granted to or held by a Participant who is employed or providing services outside the
United States, the Committee may, in its sole discretion, modify the provisions of the Plan or of
such Award as they pertain to such individual to comply with applicable foreign law or to recognize
differences in local law, currency or tax policy. The Committee may also impose conditions on the
grant, issuance, exercise, vesting, settlement or retention of Awards in order to comply with such
foreign law and/or to minimize the Companys or the Partnerships obligations with respect to tax
equalization for Participants employed outside their home country
(h) Governing Law. The validity, construction, and effect of the Plan and any rules
and regulations relating to the Plan shall be determined in accordance with the laws of the State
of Delaware without regard to its conflicts of laws principles.
(i) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award,
or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be
construed or deemed amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person
or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
(j) Other Laws. The Committee may refuse to issue or transfer any Units or other
consideration under an Award if, in its sole discretion, it determines that the issuance or
transfer of such Units or such other consideration might violate any applicable law or regulation,
the rules of the principal securities exchange on which the Units are then traded, or entitle the
Partnership or an Affiliate to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in connection with
the exercise of such Award shall be promptly refunded to the relevant Participant, holder or
beneficiary.
(k) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between the
Company or any participating Affiliate and a Participant or any other Person. To the extent that
any Person acquires a right to receive payments from the Company or any participating Affiliate
pursuant to an Award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating Affiliate.
(l) No Fractional Units. No fractional Units shall be issued or delivered pursuant to
the Plan or any Award, and the Committee shall determine whether cash, other securities, or other
property shall be paid or transferred in lieu of any fractional Units or whether such fractional
Units or any rights thereto shall be canceled, terminated, or otherwise eliminated.
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(m) Headings. Headings are given to the Sections and subsections of the Plan solely
as a convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.
(n) No Guarantee of Tax Consequences. None of the Board, the Committee, the Company
nor the Partnership makes any commitment or guarantee that any federal, state or local tax
treatment will (or will not) apply or be available to any Participant.
(o) Clawback; Misconduct. To the extent required by applicable law or any applicable
securities exchange listing standards, Awards and amounts paid or payable pursuant to or with
respect to Awards shall be subject to clawback as determined by the Committee, which clawback may
include forfeiture, repurchase and/or recoupment of Awards and amounts paid or payable pursuant to
or with respect to Awards. In addition, and without limiting the foregoing, except as otherwise
provided by the Committee, if at any time (including after a notice of exercise has been delivered
or an award has vested) the Committee or any person designated by the Committee (each such person,
an Authorized Officer) reasonably believes that a Participant may have committed an Act of
Misconduct as described in this Section 8(o), the Authorized Officer, the Committee or the Board
may suspend the Participants rights to exercise or to vest in an Award, and/or to receive payment
for or receive Units in settlement of an Award pending a determination of whether an Act of
Misconduct has been committed.
If the Committee or an Authorized Officer determines a Participant has committed an act of
embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Company or any Affiliate
of the Company, breach of fiduciary duty, violation of ethics policy or code of conduct, or
deliberate disregard of the Companys or Affiliate of the Companys rules resulting in loss, damage
or injury to the Company or any Affiliate of the Company, or if a Participant makes an unauthorized
disclosure of any trade secret or confidential information, solicits any employee or service
provider to leave the employ or cease providing services to the Company or any Affiliate of the
Company, breaches any intellectual property or assignment of inventions covenant, engages in any
conduct constituting unfair competition, breaches any non-competition agreement, induces any
customer to breach a contract with the Company or any Affiliate of the Company or to cease doing
business with the Company or any Affiliate of the Company, or induces any principal for whom the
Company or any Affiliate of the Company acts as agent to terminate such agency relationship (any of
the foregoing acts, an Act of Misconduct), then except as otherwise provided by the Committee,
(i) neither the Participant nor his or her estate nor transferee shall be entitled to exercise any
Option or Unit Appreciation Right whatsoever, vest in or have the restrictions on an Award lapse,
or otherwise receive payment of an Award, (ii) the Participant will forfeit all outstanding Awards
and (iii) the Participant may be required, at the Committees sole discretion, to return and/or
repay to the Company or the Partnership any then unvested Units previously granted under the Plan.
In making such determination, the Committee or an Authorized Officer shall give the Participant an
opportunity to appear and present evidence on his or her behalf at a hearing before the Committee
or its designee or an opportunity to submit written comments, documents, information and arguments
to be considered by the Committee.
(p) Facility Payment. Any amounts payable hereunder to any person under legal
disability or who, in the judgment of the Committee, is unable to manage properly his financial
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affairs, may be paid to the legal representative of such person, or may be applied for the benefit
of such person in any manner that the Committee may select, and the Partnership, the Company and
all of their Affiliates shall be relieved of any further liability for payment of such amounts.
SECTION 9. Term of the Plan.
The Plan shall be effective on the date on which the Plan is adopted by the Board and shall
continue until the earliest of (i) the date terminated by the Board, or (ii) the 10th anniversary
of the date on which the Plan is adopted by the Board. However, any Award granted prior to such
termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights under such Award,
shall extend beyond such termination date. The Plan shall, within twelve (12) months after the
date of the Boards initial adoption of the Plan, be submitted for approval by a majority of the
outstanding securities of the Partnership entitled to vote.
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