Exhibit 10.10

 

USA COMPRESSION PARTNERS, LP

2013 LONG-TERM INCENTIVE PLAN

 

FORM OF DIRECTOR PHANTOM UNIT AGREEMENT

(in lieu of Annual Cash Retainer)

 

Pursuant to this Phantom Unit Agreement, dated as of Grant Date identified in
the Grant Notice below (this “Agreement”), USA Compression GP, LLC (the
“Company”), as the general partner of USA Compression Partners, LP (the
“Partnership”), hereby grants to [          ] (the “Participant”) the following
award of Phantom Units (“Phantom Units”), pursuant and subject to the terms and
conditions of this Agreement and the USA Compression Partners, LP 2013 Long-Term
Incentive Plan (the “Plan”), the terms and conditions of which are hereby
incorporated into this Agreement by reference.  Each Phantom Unit shall
constitute a Phantom Unit under the terms of the Plan and is hereby granted in
tandem with a corresponding DER, as further detailed in Section 3 below.  Except
as otherwise expressly provided herein, all capitalized terms used in this
Agreement, but not defined, shall have the meanings provided in the Plan.

 

GRANT NOTICE

 

Subject to the terms and conditions of this Agreement, the principal features of
this Award are as follows:

 

Number of Phantom Units:  [          ] Phantom Units

 

Grant Date:  [          ], 2013

 

Vesting of Phantom Units:  Phantom Units shall vest in equal installments on
each of March 31, 2013, June 30, 2013, September 30, 2013 and December 31, 2013,
subject to the Participant continuing in Service through such date; provided
that the Phantom Units shall be subject to accelerated vesting in certain
circumstances as set forth in Section 4(b).

 

Forfeiture of Phantom Units:  In the event of a cessation of the Participant’s
Service for any reason, all Phantom Units that have not vested prior to or in
connection with such cessation of Service shall thereupon automatically be
forfeited by the Participant without further action and without payment of
consideration therefor.

 

Payment of Phantom Units:  Vested Phantom Units shall be paid to the Participant
in the form of Units as set forth in Section 5 below.

 

DERs: Each Phantom Unit granted under this Agreement shall be issued in tandem
with a corresponding dividend equivalent right, or DER, which shall entitle the
Participant to receive payments in an amount equal to Partnership distributions
in accordance with Section 3 below.

 

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TERMS AND CONDITIONS OF PHANTOM UNITS

 

1.                                      Grant.  The Company hereby grants to the
Participant, as of the Grant Date, an award of Phantom Units in the amount set
forth in the Grant Notice above, subject to all of the terms and conditions
contained in this Agreement and the Plan.

 

2.                                      Phantom Units.  Subject to Section 4
below, each Phantom Unit that vests shall represent the right to receive
payment, in accordance with Section 5 below, in the form of one (1) Unit. 
Unless and until a Phantom Unit vests, the Participant will have no right to
payment in respect of such Phantom Unit.  Prior to actual payment in respect of
any vested Phantom Unit, such Phantom Unit will represent an unsecured
obligation of the Partnership, payable (if at all) only from the general assets
of the Partnership.

 

3.                                      Grant of Tandem DER. Each Phantom Unit
granted hereunder is hereby granted in tandem with a corresponding DER, which
shall remain outstanding from the Grant Date until the earlier of the payment or
forfeiture of the related Phantom Unit.  Each vested DER shall entitle the
Participant to receive payments, subject to and in accordance with this
Agreement, in an amount equal to any distributions made by the Partnership
following the Grant Date in respect of the Unit underlying the Phantom Unit to
which such DER relates.  The Company shall establish, with respect to each
Phantom Unit, a separate DER bookkeeping account for such Phantom Unit (a “DER
Account”), which shall be credited (without interest) on the applicable
distribution dates with an amount equal to any distributions made by the
Partnership during the period that such Phantom Unit remains outstanding with
respect to the Unit underlying the Phantom Unit to which such DER relates.  Upon
the vesting of a Phantom Unit, the DER (and the DER Account) with respect to
such vested Phantom Unit shall also become vested.  Similarly, upon the
forfeiture of a Phantom Unit, the DER (and the DER Account) with respect to such
forfeited Phantom Unit shall also be forfeited.

 

4.                                      Vesting and Forfeiture.

 

(a)                                 Vesting.  Subject to Section 4(c) below, the
Phantom Units shall vest in such amounts and at such times as are set forth in
the Grant Notice above.

 

(b)                             Accelerated Vesting.  Subject to
Section 4(c) below, the Phantom Units shall vest in full upon the occurrence of
a Change in Control.

 

(c)                                  Forfeiture.  Notwithstanding the foregoing,
in the event of a cessation of the Participant’s Service for any reason, all
Phantom Units that have not vested prior to or in connection with such cessation
of Service shall thereupon automatically be forfeited by the Participant without
further action and without payment of consideration therefor.  No portion of the
Phantom Units which has not become vested at the date of the Participant’s
cessation of Service shall thereafter become vested.

 

(d)                                 Payment.  Vested Phantom Units shall be
subject to the payment provisions set forth in Section 5 below.

 

5.                                      Payment of Phantom Units and DERs.

 

(a)                                 Phantom Units.    Unpaid, vested Phantom
Units shall be paid to the

 

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Participant in the form of Units in a lump-sum as soon as reasonably practical,
but not later than forty-five (45) days, following the date on which such
Phantom Units vest.  Payments of any Phantom Units that vest in accordance
herewith shall be made to the Participant (or in the event of the Participant’s
death, to the Participant’s estate) in whole Units in accordance with this
Section 5.

 

(b)                                 DERs.    Unpaid, vested DERs shall be paid
to the Participant as follows: as soon as reasonably practical, but not later
than forty-five (45) days, following the date on which a Phantom Unit and
related DER vests, the Participant shall be paid an amount in cash equal to the
amount then credited to the DER Account maintained with respect to such Phantom
Unit.

 

(c)                                  Potential Delay.  Notwithstanding anything
to the contrary in this Agreement, no amounts payable under this Agreement shall
be paid to the Participant prior to the expiration of the six (6)-month period
following his “separation from service” (within the meaning of Treasury
Regulation Section 1.409A-1(h)) (a “Separation from Service”) to the extent that
the Company determines that paying such amounts prior to the expiration of such
six (6)-month period would result in a prohibited distribution under
Section 409A(a)(2)(B)(i) of the Code.  If the payment of any such amounts is
delayed as a result of the previous sentence, then on the first business day
following the end of the applicable six (6)-month period (or such earlier date
upon which such amounts can be paid under Section 409A of the Code without
resulting in a prohibited distribution, including as a result of the
Participant’s death), such amounts shall be paid to the Participant.

 

6.                                      Tax Withholding.  The Company and/or its
Affiliates shall have the authority and the right to deduct or withhold, or to
require the Participant to remit to the Company and/or its Affiliates, an amount
sufficient to satisfy all applicable federal, state and local taxes (including
the Participant’s employment tax obligations) required by law to be withheld
with respect to any taxable event arising in connection with the Phantom Units
and the DERs.  In satisfaction of the foregoing requirement, unless otherwise
determined by the Committee, the Company and/or its Affiliates shall withhold
Units otherwise issuable in respect of such Phantom Units having a Fair Market
Value equal to the sums required to be withheld.  In the event that Units that
would otherwise be issued in payment of the Phantom Units are used to satisfy
such withholding obligations, the number of Units which shall be so withheld
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.

 

7.                                      Rights as Unit Holder.  Neither the
Participant nor any person claiming under or through the Participant shall have
any of the rights or privileges of a holder of Units in respect of any Units
that may become deliverable hereunder unless and until certificates representing
such Units shall have been issued or recorded in book entry form on the records
of the Partnership or its transfer agents or registrars, and delivered in
certificate or book entry form to the Participant or any person claiming under
or through the Participant.

 

8.                                      Non-Transferability.  Except as set
forth in the next sentence, neither the Phantom Units nor any right of the
Participant under the Phantom Units may be assigned,

 

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alienated, pledged, attached, sold or otherwise transferred or encumbered by the
Participant (or any permitted transferee) 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 and any of their Affiliates. 
Notwithstanding the foregoing, (i) the Phantom Units or any right of the
Participant under the Phantom Units may 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; and (ii) vested Units may be
transferred to the extent permitted by the Partnership Agreement and not
otherwise prohibited by this Agreement or any other agreement restricting the
transfer of such Units.

 

9.                                      Distribution of Units.  Unless otherwise
determined by the Committee or required by any applicable law, rule or
regulation, neither the Company nor the Partnership shall deliver to the
Participant certificates evidencing Units issued pursuant to this Agreement 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 issued pursuant to this Agreement and all Units issued pursuant to
book entry procedures hereunder shall be subject to such stop transfer orders
and other restrictions as the Company may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities Exchange
Commission, any stock exchange upon which such Units are then listed, and any
applicable federal or state laws, and the Company may cause a legend or legends
to be inscribed on any such certificates or book entry to make appropriate
reference to such restrictions.  In addition to the terms and conditions
provided herein, the Company may require that the Participant make such
covenants, agreements, and representations as the Company, in its sole
discretion, deems advisable in order to comply with any such laws, regulations,
or requirements.  No fractional Units shall be issued or delivered pursuant to
the Phantom Units and the Committee shall determine the amount of cash, other
securities, or other property that shall be paid or transferred in lieu of
fractional Units.

 

10.                               Partnership Agreement.  Units issued upon
payment of the Phantom Units shall be subject to the terms of the Plan and the
Partnership Agreement.  Upon the issuance of Units to the Participant, the
Participant shall, automatically and without further action on his or her part,
(i) be admitted to the Partnership as a Limited Partner (as defined in the
Partnership Agreement) with respect to the Units, and (ii) become bound, and be
deemed to have agreed to be bound, by the terms of the Partnership Agreement.

 

11.                               No Effect on Service.  Nothing in this
Agreement or in the Plan shall be construed as giving the Participant the right
to be retained in the employ or service of the Company or any Affiliate
thereof.  Furthermore, the Company and its Affiliates may at any time dismiss
the Participant from employment or consulting free from any liability or any
claim under the Plan or this Agreement, unless otherwise expressly provided in
the Plan, this Agreement or any other written agreement between the Participant
and the Company or an Affiliate thereof.

 

12.                               Non-Disparagement.  The Participant agrees to
refrain from making any oral or written statements to a third party about the
Company, the Partnership, or any of their Affiliates that are slanderous,
libelous or defamatory with the effect of damaging the business or reputation of
the Company, the Partnership, or any of their Affiliates. If the

 

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Participant violates the terms of this Section 12, the violation shall be deemed
an Act of Misconduct under the Plan and the Phantom Units, DERs, and Units
issuable hereunder, whether vested or unvested and whether or not previously
issued, shall be subject to the clawback described in Section 8(o) of the Plan
only to the extent that the violation resulted in actual demonstrable harm to
the Company, the Partnership, or any of their Affiliates.

 

13.                               Severablility.  If any provision of this
Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in
any jurisdiction, 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 this
Agreement, such provision shall be stricken as to such jurisdiction, and the
remainder of this Agreement shall remain in full force and effect.

 

14.                               Tax Consultation.  None of the Board, the
Committee, the Company or the Partnership has made any warranty or
representation to Participant with respect to the income tax consequences of the
issuance of the Phantom Units, the DERs, the Units or the transactions
contemplated by this Agreement, and the Participant represents that he or she is
in no manner relying on such entities or their representatives for tax advice or
an assessment of such tax consequences.  The Participant understands that the
Participant may suffer adverse tax consequences in connection with the Phantom
Units and DERs granted pursuant to this Agreement.  The Participant represents
that the Participant has consulted with any tax consultants that the Participant
deems advisable in connection with the Phantom Units and DERs.

 

15.                               Amendments, Suspension and Termination. 
Solely to the extent permitted by the Plan, this Agreement may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Board or the Committee.  Except as provided in the
preceding sentence, this Agreement cannot be modified, altered or amended,
except by an agreement, in writing, signed by both the Partnership and the
Participant.

 

16.                               Lock-Up Agreement.  The 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 thereof, 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 him or her 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.

 

17.                               Conformity to Securities Laws.  The
Participant acknowledges that the Plan and this Agreement are intended to
conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act, any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, and all applicable state
securities laws and regulations.  Notwithstanding anything herein to the
contrary, the Plan shall be administered,

 

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and the Phantom Units and DERs are granted, only in such a manner as to conform
to such laws, rules and regulations.  To the extent permitted by applicable law,
the Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

 

18.                               Code Section 409A.  None of the Phantom Units,
the DERs or any amounts paid pursuant to this Agreement are intended to
constitute or provide for a deferral of compensation that is subject to
Section 409A of the Code.  Nevertheless, to the extent that the Committee
determines that the Phantom Units or DERs may not be exempt from (or compliant
with) Section 409A of the Code, the Committee may (but shall not be required to)
amend this Agreement in a manner intended to comply with the requirements of
Section 409A of the Code or an exemption therefrom (including amendments with
retroactive effect), or take any other actions as it deems necessary or
appropriate to (a) exempt the Phantom Units or DERs from Section 409A of the
Code and/or preserve the intended tax treatment of the benefits provided with
respect to the Phantom Units or DERs, or (b) comply with the requirements of
Section 409A of the Code.  To the extent applicable, this Agreement shall be
interpreted in accordance with the provisions of Section 409A of the Code. 
Notwithstanding anything in this Agreement to the contrary, to the extent that
any payment or benefit hereunder constitutes non-exempt “nonqualified deferred
compensation” for purposes of Section 409A of the Code, and such payment or
benefit would otherwise be payable or distributable hereunder by reason of the
Participant’s cessation of Service, all references to the Participant’s
cessation of Service shall be construed to mean a Separation from Service, and
the Participant shall not be considered to have a cessation of Service unless
such cessation constitutes a Separation from Service with respect to the
Participant.

 

19.                               Adjustments; Clawback.  The Participant
acknowledges that the Phantom Units are subject to modification and forfeiture
in certain events as provided in this Agreement and Section 7 of the Plan.  The
Participant further acknowledges that the Phantom Units, DERs and Units issuable
hereunder, whether vested or unvested and whether or not previously issued, are
subject to clawback as provided in Section 8(o) of the Plan.

 

20.                               Successors and Assigns.  This Agreement shall
inure to the benefit of the successors and assigns of the Company and the
Partnership.  Subject to the restrictions on transfer contained herein, this
Agreement shall be binding upon the Participant and his or her heirs, executors,
administrators, successors and assigns.

 

21.                               Governing Law.  The validity, construction,
and effect of this Agreement and any rules and regulations relating to this
Agreement shall be determined in accordance with the laws of the State of
Delaware without regard to its conflicts of laws principles.

 

22.                               Headings.  Headings are given to the sections
and subsections of this Agreement 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 this Agreement or any provision hereof.

 

[Signature page follows]

 

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The Participant’s signature below indicates the Participant’s agreement with and
understanding that this award is subject to all of the terms and conditions
contained in the Plan and in this Agreement, and that, in the event that there
are any inconsistencies between the terms of the Plan and the terms of this
Agreement, the terms of the Plan shall control.  The Participant further
acknowledges that the Participant has read and understands the Plan and this
Agreement, which contains the specific terms and conditions of this grant of
Phantom Units.  The Participant hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Committee upon any questions
arising under the Plan or this Agreement.

 

 

 

USA Compression Partners, LP

 

a Delaware limited partnership

 

 

 

By:

USA Compression GP, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

“PARTICIPANT”

 

 

 

 

 

 

 

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