Exhibit 10.1

ROSE ROCK MIDSTREAM

EQUITY INCENTIVE PLAN

 

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Table of Contents

 

Article 1 Establishment & Purpose

     1   

1.1

   Establishment      1   

1.2

   Purpose of the Plan      1   

Article 2 Definitions

     1   

Article 3 Administration

     4   

3.1

   Authority of the Committee      4   

3.2

   Delegation      5   

3.3

   Limitation of Liability      5   

Article 4 Eligibility and Participation

     5   

4.1

   Eligibility      5   

4.2

   Type of Awards      5   

Article 5 Units Subject to the Plan

     6   

5.1

   General      6   

5.2

   Additional Units      6   

Article 6 Unit Options

     6   

6.1

   Grant of Options      6   

6.2

   Restrictions on Option Grants      6   

6.3

   Terms of Option Grant      7   

6.4

   Option Term      7   

6.5

   Method of Exercise      7   

Article 7 Unit Appreciation Rights

     7   

7.1

   Grant of Unit Appreciation Rights      7   

7.2

   Restrictions on Unit Appreciation Rights Grants      8   

7.3

   Terms of Unit Appreciation Right      8   

7.4

   Tandem Unit Appreciation Rights and Options      8   

Article 8 Restricted Units and Phantom Units

     8   

8.1

   Restricted Units      8   

8.2

   Phantom Units      10   

Article 9 Other Unit-Based Awards

     10   

Article 10 DERs

     11   

Article 11 Compliance with Section 409A and Section 457A

     11   

11.1

   General      11   

11.2

   Payments to Specified Employees      11   

11.3

   Separation from Service      12   

11.4

   Section 457A      12   

Article 12 Adjustments

     12   

 

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12.1

   Anti-dilution Adjustments      12   

12.2

   Actions Upon the Occurrence of Certain Events      12   

Article 13 Duration, Amendment, Modification, Suspension and Termination

     13   

13.1

   Duration of the Plan      13   

13.2

   Amendment, Modification, Suspension and Termination of Plan      13   

Article 14 General Provisions

     14   

14.1

   No Right to Service      14   

14.2

   Settlement of Awards; Fractional Units      14   

14.3

   Tax Withholding      14   

14.4

   No Guarantees Regarding Tax Treatment      15   

14.5

   Non-Transferability of Awards      15   

14.6

   Conditions and Restrictions on Units      15   

14.7

   Compliance with Law      15   

14.8

   Awards to Non-U.S. Employees or Directors      16   

14.9

   Rights as a Unitholder      16   

14.10

   Severability      16   

14.11

   Unfunded Plan      17   

14.12

   No Constraint on General Partner Action      17   

14.13

   Successors      17   

14.14

   Governing Law      17   

14.15

   Waiver of Certain Claims      17   

14.16

   Data Protection      18   

14.17

   Effective Date      18   

 

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Rose Rock Midstream Equity Incentive Plan

 

Article 1 Establishment & Purpose

1.1 Establishment. Rose Rock Midstream GP, LLC, a Delaware limited liability
company and the general partner (“General Partner”) of Rose Rock Midstream,
L.P., a Delaware limited partnership (the “Partnership”), hereby establishes the
Rose Rock Midstream Equity Incentive Plan (hereinafter referred to as the
“Plan”) as set forth in this document.

1.2 Purpose of the Plan. The Plan is intended to promote the interests of the
General Partner, the Partnership and their Affiliates 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 General Partner, the Partnership and their Affiliates to attract
and retain the services of individuals who are essential for the growth and
profitability of the Partnership and to encourage them to devote their best
efforts to advancing the business of the Partnership.

 

Article 2 Definitions

Whenever capitalized in the Plan, the following terms shall have the meanings
set forth below.

2.1 “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.

2.2 “Award” means any Option, Unit Appreciation Right, Restricted Unit, Phantom
Unit or Other Unit-Based Award that is granted under the Plan, and shall include
any tandem DERs that may be granted with respect to an Award.

2.3 “Award Agreement” means either (a) a written agreement entered into by the
General Partner or the Partnership and a Participant setting forth the terms and
provisions applicable to an Award granted under this Plan, or (b) a written
statement issued by the General Partner, the Partnership or any of their
Affiliates to a Participant describing the terms and conditions of the actual
grant of such Award.

2.4 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed
to such term in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act.

2.5 “Board” means the Board of Directors of the General Partner.

 

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2.6 “Change of Control” means, unless otherwise specified in the Award
Agreement, the occurrence of any of the following events:

 

  (a) any sale, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the General Partner’s or
the Partnership’s assets to any other Person, unless immediately following such
sale, exchange or other transfer such assets are owned, directly or indirectly,
by the General Partner or the Partnership, as the case may be, or the General
Partner or the Partnership, as the case may be, owns or controls such other
Person;

 

  (b) the dissolution or liquidation of the General Partner or the Partnership;

 

  (c) the consolidation or merger of the General Partner or the Partnership with
or into another Person, other than any such transaction where (i) the
outstanding Voting Securities of the General Partner or the Partnership, as the
case may be, are changed into or exchanged for Voting Securities of the
surviving Person or its parent and (ii) the holders of the Voting Securities of
the General Partner or the Partnership, as the case may be, immediately prior to
such transaction own, directly or indirectly, not less than a majority of the
outstanding Voting Securities of the surviving Person or its parent immediately
after such transaction; or

 

  (d) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of
the Exchange Act) other than the General Partner, the Partnership or any of
their Affiliates being or becoming the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then
outstanding Voting Securities of the General Partner or the Partnership, except
in a merger or consolidation that would not constitute a Change of Control under
clause (c) above.

Notwithstanding the foregoing, however, in any circumstance or transaction in
which compensation resulting from or in respect of an Award would be subject to
tax under Section 409A if the foregoing definition of “Change in Control” were
to apply, but would not be so subject if the term “Change in Control” were
defined herein to mean a “change in control event” within the meaning of
Treasury Regulation section 1.409A-3(i)(5), then “Change in Control” means, but
only to the extent necessary to prevent such compensation from becoming subject
to tax under Section 409A, a transaction or circumstance that satisfies the
requirements of both (1) a Change in Control under the applicable clauses
(i) through (iv) above, and (2) a “change in control event” within the meaning
of Treasury Regulation section 1.409A-3(i)(5).

2.7 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time.

2.8 “Committee” means the Board or such committee as may be appointed by the
Board to administer the Plan.

2.9 “Consultant” means an individual who renders consulting or advisory services
to the General Partner, the Partnership or any of their Affiliates.

 

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2.10 “DER” means a distribution equivalent right, being a contingent right,
granted in tandem with a specific Award (other than a Restricted Unit), to
receive with respect to each Unit subject to the Award an amount in cash equal
to the Unit Distributions.

2.11 “Director” means a member of the Board or the board of an Affiliate of the
General Partner who is not an Employee or a Consultant (other than in that
individual’s capacity as a Director).

2.12 “Effective Date” means the date set forth in Section 14.17.

2.13 “Employee” means an employee of the General Partner or an Affiliate of the
General Partner.

2.14 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time.

2.15 “Fair Market Value” means, as of any date, the per Unit value determined as
follows, in accordance with applicable provisions of Section 409A:

 

  (a) The closing price of a Unit on a recognized national exchange or any
established over-the-counter trading system on which dealings take place, or if
no trades were made on any such day, the immediately preceding day on which
trades were made; or

 

  (b) In the absence of an established market for the Units of the type
described in (a) above, the per Unit Fair Market Value shall be determined by
the Committee in good faith using a “reasonable application of a reasonable
valuation method” within the meaning of Treasury Regulation section
1.409A-1(b)(5)(iv)(B).

2.16 “General Partner” means Rose Rock Midstream GP, LLC.

2.17 “Option” means any Unit option granted under Article 6 of the Plan.

2.18 “Option Price” means the purchase price per Unit subject to an Option, as
determined pursuant to Section 6.3 of the Plan.

2.19 “Other Unit-Based Award” means any right granted under Article 10 of the
Plan.

2.20 “Participant” means any eligible person as set forth in Section 4.1 of the
Plan to whom an Award is granted.

2.21 “Partnership” means Rose Rock Midstream, L.P.

2.22 “Person” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
governmental agency or political subdivision thereof or other entity.

 

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2.23 “Phantom Unit” means a phantom (notional) Unit granted under the Plan which
upon vesting entitles the Participant to receive a Unit or an amount of cash
equal to the Fair Market Value of a Unit on the date of vesting, whichever is
determined by the Committee, and which is granted under Section 8.2 of the Plan.

2.24 “Plan” means the Rose Rock Midstream Equity Incentive Plan.

2.25 “Restriction 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.

2.26 “Restricted Unit” means any Award granted under Section 8.1 of the Plan.

2.27 “Section 409A” means Section 409A of the Code and all regulations,
guidance, compliance programs and other interpretative authority thereunder.

2.28 “Section 457A” means Section 457A of the Code and all regulations,
guidance, compliance programs and other interpretive authority thereunder.

2.29 “Service” means service as an Employee, Consultant or Director.

2.30 “UDR” means a unit distribution right, being a contingent right, associated
with an Award of Restricted Units, to receive Unit Distributions with respect to
each Unit subject to the Award.

2.31 “Unit” means a common unit representing a limited partnership interest of
the Partnership.

2.32 “Unit Distribution” means a distribution by the Partnership with respect to
a Unit.

2.33 “Unitholder” means a holder of Units.

2.34 “Unit Appreciation Right” means any right granted under Article 7 of the
Plan.

2.35 “Voting Securities” of a Person means securities of any class of such
Person entitling the holders thereof to vote in the election of, or to appoint,
members of the board of directors or other similar governing body of such
Person; provided that if such Person is a limited partnership, the Voting
Securities of such Person shall be the general partner interest in such Person.

 

Article 3 Administration

3.1 Authority of the Committee. The Plan shall be administered by the Committee,
which shall have full power to interpret and administer the Plan and Award
Agreements and full authority to select the Employees, Consultants and Directors
to whom Awards will be granted, and to determine the type and amount of Awards
to be granted to each such Employee, Consultant or Director, and the terms and
conditions of Awards and Award Agreements. Without

 

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limiting the generality of the foregoing, the Committee may, in its sole
discretion but subject to the limitations in Article 13 and Section 409A,
clarify, construe or resolve any ambiguity in any provision of the Plan or any
Award Agreement, extend the term or period of exercisability of any Awards, or
waive any terms or conditions applicable to any Award. Awards may be granted
under the Plan in substitution for similar awards held by individuals who become
Employees, Consultants or Directors as a result of a merger, consolidation or
acquisition by the Partnership or any of its Affiliates of another entity or the
assets of another entity. Such substitute awards that are Options 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. The Committee
shall have full and exclusive discretionary power to adopt rules, forms,
instruments, and guidelines for administering the Plan as the Committee deems
necessary or proper. All actions taken and all interpretations and
determinations made by the Committee or by the Board (or any other committee or
sub-committee thereof), as applicable, shall be final and binding upon the
General Partner, the Partnership, any of their Affiliates, any Participant, any
beneficiary of any Participant and all other interested individuals.

3.2 Delegation. The Committee may delegate to one or more of its members, one or
more officers of the General Partner, the Partnership or any of their
Affiliates, or one or more agents or advisors such administrative duties or
powers as it may deem advisable; provided that the Committee shall not delegate
to officers of the General Partner, the Partnership or any of their Affiliates
the power to make grants of Awards to officers of the General Partner, the
Partnership or any of their Affiliates; and provided, further, that no
delegation shall be permitted under the Plan that is prohibited by applicable
law.

3.3 Limitation of Liability. The Committee and each member thereof shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or employee of the General Partner, the
Partnership or any of their Affiliates, the General Partner’s or the
Partnership’s legal counsel, independent auditors or consultants or any other
agents assisting in the administration of the Plan. Members of the Committee and
any officer or employee of the General Partner, the Partnership or any of their
Affiliates acting at the direction or on behalf of the Committee shall not be
personally liable for any action or determination taken or made in good faith
with respect to the Plan, and shall, to the fullest extent permitted by law, be
indemnified and held harmless by the Partnership with respect to any such action
or determination.

 

Article 4 Eligibility and Participation

4.1 Eligibility. Participants will consist of such Employees, Consultants and
Directors as the Committee in its sole discretion determines and whom the
Committee may designate from time to time to receive Awards. Designation of a
Participant in any year shall not require the Committee to designate such person
to receive an Award in any other year or, once designated, to receive the same
type or amount of Award as granted to the Participant in any other year.

 

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4.2 Type of Awards. Awards under the Plan may be granted in any one or a
combination of: (a) Options, (b) Unit Appreciation Rights, (c) Restricted Units,
(d) Phantom Units and (e) Other Unit-Based Awards, and shall include any tandem
DERs that may be granted with respect to an Award other than Restricted Units.
Awards granted under the Plan shall be evidenced by Award Agreements (which need
not be identical) that provide additional terms and conditions associated with
such Awards, as determined by the Committee in its sole discretion; provided,
however, that in the event of any conflict between the provisions of the Plan
and any such Award Agreement, the provisions of the Plan shall prevail.

 

Article 5 Units Subject to the Plan

5.1 General. Subject to adjustment as provided in Article 12 hereof, the maximum
number of Units available for issuance to Participants pursuant to Awards under
the Plan shall be 840,000. Any Units delivered pursuant to an Award may consist,
in whole or in part, of Units acquired in the open market, from the Partnership,
from any Affiliate of the Partnership or from any other Person, or any
combination of the foregoing, as determined by the Committee in its discretion.

5.2 Additional Units. In the event that any outstanding Award expires, is
forfeited, cancelled or otherwise terminated without the issuance of Units or is
otherwise settled for cash, the Units subject to such Award, to the extent of
any such forfeiture, cancellation, expiration, termination or settlement for
cash, shall again be available for Awards. If the Committee authorizes the
assumption under this Plan, in connection with any merger, consolidation,
acquisition of property or stock, or reorganization, of awards granted under
another plan, such assumption shall not reduce the maximum number of Units
available for issuance under this Plan.

 

Article 6 Unit Options

6.1 Grant of Options. Subject to the restrictions of this Article 6, the
Committee is hereby authorized to grant Options to Participants. Each Option
shall permit a Participant to purchase a stated number of Units at an Option
Price established by the Committee, subject to the terms and conditions set
forth in this Article 6 and to such additional terms and conditions, not
inconsistent with the provisions of the Plan, as may be established by the
Committee in its sole discretion. Each Option shall be evidenced by an Award
Agreement which shall state the number of Units covered by such Option and shall
conform to the requirements of the Plan, and may contain such other provisions
as the Committee shall deem advisable.

6.2 Restrictions on Option Grants. The Committee may grant Options that are
intended to comply with Treasury Regulation section 1.409A-l(b)(5)(i)(A) only to
Employees, Consultants or Directors performing direct services for the
Partnership or a corporation or other type of entity in a chain of corporations
or other entities in which each corporation or other entity has a “controlling
interest” in another corporation or entity in the chain, starting with the
Partnership and ending with the corporation or other entity for which the
Employee, Consultant or Director performs direct services. For purposes of this
Article 6, “controlling interest” means (i) in the case of a corporation,
ownership of stock possessing at least 50% of total combined voting power of all
classes of stock of such corporation entitled to vote or at least 50% of the
total value of shares of all classes of stock of such corporation; (ii) in the
case of a partnership, ownership of at least 50% of the profits interest or
capital interest of such partnership; (iii) in the case of a sole
proprietorship, ownership of the sole proprietorship; or (iv) in the case of a
trust or

 

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estate, ownership of an actuarial interest (as defined in Treasury Regulation
section 1.414(c)-2(b)(2)(ii)) of at least 50% of such trust or estate. The
Committee may grant Options that are otherwise exempt from or compliant with
Section 409A to any Employee, Consultant or Director.

6.3 Terms of Option Grant. Subject to the terms of the Plan, the Option Price
(which shall not be less than the Fair Market Value of a Unit on the date of the
grant of the Option), term, methods of exercise and any other terms and
conditions of any Option shall be as determined by the Committee. The Committee
may impose such conditions or restrictions on the exercise of any Option as it
may deem appropriate.

6.4 Option Term. The term of each Option shall be determined by the Committee at
the time of grant and shall be stated in the Award Agreement, but in no event
shall such term be greater than ten (10) years.

6.5 Method of Exercise. Except as otherwise provided in the Plan or in an Award
Agreement, an Option may be exercised for all, or from time to time any part, of
the Units for which it is then exercisable. For purposes of this Article 6, the
exercise date of an Option shall be the later of the date a notice of exercise
is received by the General Partner and, if applicable, the date payment is
received pursuant to clauses (i), (ii), (iii) or (iv) of the following sentence
(including the applicable tax withholding pursuant to Section 14.3 of the Plan).
The aggregate Option Price for the Units as to which an Option is exercised
shall be paid in full at the time of exercise at the election of the Participant
(i) in cash or its equivalent (e.g., by cashier’s check), (ii) to the extent
permitted by the Committee, in Units (whether or not previously owned by the
Participant) having a Fair Market Value equal to the aggregate Option Price for
the Units being purchased and satisfying such other requirements as may be
imposed by the Committee, (iii) partly in cash and, to the extent permitted by
the Committee, partly in such Units (as described in (ii) above) or (iv) if
there is a public market for the Units at such time, subject to such
requirements as may be imposed by the Committee, through the delivery of
irrevocable instructions to a broker to sell Units obtained upon the exercise of
the Option and to deliver promptly an amount out of the proceeds of such sale
equal to the aggregate Option Price for the Units being purchased. The Committee
may prescribe any other method of payment that it determines to be consistent
with applicable law and the purpose of the Plan.

 

Article 7 Unit Appreciation Rights

7.1 Grant of Unit Appreciation Rights. Subject to the restrictions of this
Article 7, the Committee is hereby authorized to grant Unit Appreciation Rights
to Participants, including a grant of Unit Appreciation Rights in tandem with
any Option at the same time such Option is granted (a “Tandem UAR”). Each grant
of Unit Appreciation Rights shall be evidenced by an Award Agreement that shall
conform to the requirements of the Plan and may contain such provisions as the
Committee shall deem advisable. Subject to the terms of the Plan and any
applicable Award Agreement, a Unit Appreciation Right granted under the Plan
shall confer on the holder thereof a right to receive, upon exercise thereof,
the excess of (a) the Fair Market Value of a specified number of Units on the
date of exercise over (b) the grant price of the Unit Appreciation Right as
specified by the Committee on the date of the grant. Such payment may be in the
form of cash, Units, other property or any combination thereof, as the Committee
shall determine in its sole discretion.

 

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7.2 Restrictions on Unit Appreciation Rights Grants. The Committee may grant
Unit Appreciation Rights which are intended to comply with Treasury Regulation
section 1.409A-1(b)(5)(i)(B) only to Employees, Consultants or Directors
performing direct services for the Partnership or a corporation or other type of
entity in a chain of corporations or other entities in which each corporation or
other entity has a “controlling interest” in another corporation or entity in
the chain, starting with the Partnership and ending with the corporation or
other entity for which the Employee, Consultant or Director performs direct
services. For purposes of this Section 7.2, “controlling interest” shall have
the same meaning set forth in Section 6.2. The Committee may grant Unit
Appreciation Rights that are otherwise exempt from or compliant with
Section 409A to any Employee, Consultant or Director.

7.3 Terms of Unit Appreciation Right. Subject to the terms of the Plan, the
grant price (which shall not be less than the Fair Market Value of a Unit on the
date of the grant of the Unit Appreciation Right), term, methods of exercise,
methods of settlement, and any other terms and conditions of any Unit
Appreciation Right shall be as determined by the Committee. The Committee may
impose such other conditions or restrictions on the exercise of any Unit
Appreciation Right as it may deem appropriate. No Unit Appreciation Right shall
have a term of more than ten (10) years from the date of grant.

7.4 Tandem Unit Appreciation Rights and Options. A Tandem UAR shall be
exercisable only to the extent that the related Option is exercisable and shall
expire no later than the expiration of the related Option. Upon the exercise of
all or a portion of a Tandem UAR, a Participant shall be required to forfeit the
right to exercise an equivalent portion of the related Option (and, when a Unit
is purchased under the related Option, the Participant shall be required to
forfeit an equivalent portion of the Tandem UAR).

 

Article 8 Restricted Units and Phantom Units

8.1 Restricted Units

 

  (a) Grant of Restricted Units. Subject to the restrictions of this Article 8,
the Committee is hereby authorized to grant Restricted Units to Participants. An
Award of Restricted Units is a grant by the Committee of a specified number of
Units to the Participant, which Units are subject to forfeiture upon the
occurrence of specified events. Participants shall be awarded Restricted Units
in exchange for consideration not less than the minimum consideration required
by applicable law. Restricted Units shall be evidenced by an Award Agreement,
which shall conform to the requirements of the Plan and may contain such other
provisions as the Committee shall deem advisable.

 

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  (b) Terms of Restricted Unit Awards. Each Award Agreement evidencing a
Restricted Unit grant shall specify the Restriction Period(s), the number of
Restricted Units subject to the Award, the performance, employment or other
conditions (including the termination of a Participant’s Service whether due to
death, disability or other reason) under which the Restricted Units will vest or
be forfeited and such other provisions as the Committee shall determine. Any
Restricted Units granted under the Plan shall be evidenced in such manner as the
Committee may deem appropriate, including book-entry registration or issuance of
a Unit certificate or certificates (in which case, the certificate(s)
representing such Units shall be legended as to sale, transfer, assignment,
pledge or other encumbrances during the Restriction Period and deposited by the
Participant, together with a Unit power endorsed in blank, with the General
Partner, to be held in escrow during the Restriction Period). At the end of the
Restriction Period, the restrictions imposed hereunder and under the Award
Agreement shall lapse as set forth in the Award Agreement, and the legend, stop
transfer order or other similar restrictive feature shall be removed and the
vested Units delivered to the Participant (or, where appropriate, the
Participant’s legal representative).

 

  (c) UDRs. Each Restricted Unit shall include one UDR. Unless provided
otherwise in the applicable Award Agreement, Unit Distributions made by the
Partnership pursuant to the UDRs shall be paid in cash to the holder of the
Restricted Unit without restriction at the same time as Unit Distributions are
paid by the Partnership to its other Unitholders. The applicable Award Agreement
may provide that Unit Distributions made by the Partnership pursuant to the UDRs
with respect to the Restricted Units shall be subject to the same forfeiture and
other restrictions as the Restricted Unit and, if so restricted, such Unit
Distributions shall be held, without interest, until the Restricted Units vest
or are forfeited, as the case may be, in which case such Unit Distributions
shall similarly be paid or forfeited, as the case may be. Notwithstanding the
foregoing, Unit Distributions made pursuant to UDRs shall only be paid in a
manner that is either exempt from or in compliance with Section 409A.

 

  (d) Voting. The Committee shall determine and set forth in the Participant’s
Award Agreement whether or not a Participant holding Restricted Units granted
hereunder shall have the right to exercise voting rights with respect to the
Restricted Units during the Restriction Period. The Committee may require a
Participant to grant an irrevocable proxy and power of substitution.

 

  (e) Performance Goals. The Committee may condition the grant of Restricted
Unit or the expiration of the Restriction Period upon the Participant’s
achievement of one or more performance goal(s) specified in the Award Agreement.
If the Participant fails to achieve the specified performance goal(s), the
Committee shall not grant the Restricted Units to such Participant or the
Participant shall forfeit such Restricted Units, as applicable.

 

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  (f) Section 83(b) Election. If a Participant makes an election pursuant to
Section 83(b) of the Code concerning Restricted Units, the Participant shall be
required to file promptly a copy of such election with the General Partner.

8.2 Phantom Units

 

  (a) Grant of Phantom Units. Subject to the restrictions of this Article 68,
the Committee is hereby authorized to grant Phantom Units to Participants. The
Committee shall have the authority to determine the number of Phantom Units to
be granted to a Participant, the Restriction Period, the conditions under which
the Phantom Units may vest or be forfeited, which may include, without
limitation, accelerated vesting upon the achievement of specified performance
goals, and such other terms and conditions as the Committee may establish with
respect to such Phantom Units, including whether DERs are granted with respect
to such Phantom Units.

 

  (b) Forfeiture. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s Service for any reason during the
applicable Restriction Period, all unvested Phantom Units shall be forfeited by
the Participant.

 

  (c) Performance Goals. The Committee may condition the grant of Phantom Units
or the expiration of the Restriction Period upon the Participant’s achievement
of one or more performance goal(s) specified in the Award Agreement. If the
Participant fails to achieve the specified performance goal(s), the Committee
shall not grant the Phantom Units to the Participant or the Participant shall
forfeit such Phantom Units, as applicable.

 

  (d) Payment. Upon or as soon as reasonably practical following the vesting of
each Phantom Unit, but not later than 15th day of the third month following the
end of the Participant’s taxable year in which the vesting of each Phantom Unit
occurs, the Participant shall receive from the Company one Unit or cash equal to
the Fair Market Value of a Unit on the date of vesting, as determined by the
Committee in its discretion.

 

Article 9 Other Unit-Based Awards

The Committee, in its sole discretion, may grant Awards of Units and Awards that
are valued, in whole or in part, by reference to, or are otherwise based on, the
Fair Market Value of Units (the “Other Unit-Based Awards”). Such Other
Unit-Based Awards shall be in such form, and dependent on such conditions, as
the Committee shall determine, including, without limitation, the right to
receive one or more Units (or the equivalent cash value of such Units) upon the
completion of a specified period of Service, the occurrence of an event and/or
the attainment of performance goals. Other Unit-Based Awards may be granted
alone or in addition to any other Awards granted under the Plan. Subject to the
provisions of the Plan, the Committee shall determine to whom and when Other
Unit-Based Awards will be made, the number of Units

 

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to be awarded under (or otherwise related to) such Other Unit-Based Awards,
whether such Other Unit-Based Awards shall be settled in cash, Units or a
combination of cash and Units, and all other terms and conditions of such Awards
(including, without limitation, the vesting provisions thereof and provisions
ensuring that all Units so awarded and issued shall be fully paid and
non-assessable).

 

Article 10 DERs

To the extent provided by the Committee, in its discretion, an Award (other than
a Restricted Unit) may include a tandem DER grant, which may provide that the
distribution equivalents shall be paid directly to the Participant, be credited
to a bookkeeping account (with or without interest in the discretion of the
Committee) subject to the same vesting restrictions as the tandem Award, or be
subject to such other provisions or restrictions as determined by the Committee
in its discretion. Any grant of DERs will be evidenced in the Award Agreement
for the Award for which DERs are granted in tandem. Absent a contrary provision
in the Award Agreement, distribution equivalents shall be paid in cash to the
Participant without restriction at the same time as Unit Distributions are paid
by the Partnership to its Unitholders. Notwithstanding the foregoing,
distribution equivalents shall only be paid in a manner that is either exempt
from or in compliance with Section 409A. Upon forfeiture, vesting or exercise
(as applicable), expiration or settlement of the underlying Award, any tandem
DER will expire.

 

Article 11 Compliance with Section 409A and Section 457A

11.1 General. The General Partner intends that any Awards be structured in
compliance with, or to satisfy an exemption from, Section 409A (and shall be
interpreted to comply therewith), such that there are no adverse tax
consequences, interest, or penalties as a result of the Awards. Notwithstanding
the General Partner’s intention, in the event any Award is subject to
Section 409A, the Committee may, in its sole discretion and without a
Participant’s prior consent, amend the Plan and/or Awards, adopt policies and
procedures, or take any other actions (including amendments, policies,
procedures and actions with retroactive effect) as are necessary or appropriate
to (i) exempt the Plan and/or any Award from the application of Section 409A,
(ii) preserve the intended tax treatment of any such Award, or (iii) comply with
the requirements of Section 409A, including without limitation any such
regulations guidance, compliance programs and other interpretative authority
that may be issued after the date of grant of an Award.

11.2 Payments to Specified Employees. Notwithstanding any contrary provision in
the Plan or Award Agreement, any payment(s) of nonqualified deferred
compensation (within the meaning of Section 409A) that are otherwise required to
be made under the Plan to a “specified employee” (as defined under Section 409A)
as a result of his or her separation from service (other than a payment that is
not subject to Section 409A) shall be delayed for the first six (6) months
following such separation from service (or, if earlier, the date of death of the
specified employee) and shall instead be paid (in a manner set forth in the
Award Agreement) on the payment date that immediately follows the end of such
six-month period or as soon as administratively practicable within 90 days
thereafter, but in no event shall such 90-day period extend beyond the end of
the taxable year in which such six-month period expires.

 

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11.3 Separation from Service. A termination of employment shall not be deemed to
have occurred for purposes of any provision of the Plan or any Award Agreement
providing for the payment of any amounts or benefits that are considered
nonqualified deferred compensation under Section 409A upon or following a
termination of employment, unless such termination is also a “separation from
service” within the meaning of Section 409A and the payment thereof prior to a
“separation from service” would violate Section 409A. For purposes of any such
provision of the Plan or any Award Agreement relating to any such payments or
benefits, references to a “termination,” “termination of employment” or like
terms shall mean “separation from service.”

11.4 Section 457A. The General Partner intends that any Awards be structured in
compliance with, or to satisfy an exemption from, Section 457A, such that there
are no adverse tax consequences, interest, or penalties as a result of the
Awards. Notwithstanding the General Partner’s intention, in the event any Award
is subject to Section 457A, the Committee may, in its sole discretion and
without a Participant’s prior consent, amend the Plan and/or Awards, adopt
policies and procedures, or take any other actions (including amendments,
policies, procedures and actions with retroactive effect) as are necessary or
appropriate to (i) exempt the Plan and/or any Award from the application of
Section 457A, (ii) preserve the intended tax treatment of any such Award, or
(iii) comply with the requirements of Section 457A, including without limitation
any such regulations, guidance, compliance programs and other interpretative
authority that may be issued after the date of the grant of an Award.

 

Article 12 Adjustments

12.1 Anti-dilution Adjustments. In the event the Committee determines that any
distribution (whether in the form of cash, Units, other securities, or other
property), recapitalization, split, reverse split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of Units
or other securities of the Partnership, issuance of warrants or other rights to
purchase Units or other securities of the Partnership, or other similar
transaction or event affects the Units such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Units (or other securities or property) with
respect to which Awards may be granted, (ii) the number and type of Units (or
other securities or property) subject to outstanding Awards, and (iii) the grant
or exercise price with respect to any Award; provided that the number of Units
subject to any Award shall always be a whole number.

12.2 Actions Upon the Occurrence of Certain Events. Upon the occurrence of a
Change of Control, 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 Partnership, or unless the Committee shall determine
otherwise in the Award Agreement, 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 to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or an outstanding Award:

 

  (a) provide for either (i) the termination of any Award in exchange for an
amount of cash, if any, equal to the amount that would have been attained upon
the exercise of such Award or realization of the Participant’s rights (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 Participant’s
rights, then such Award may be terminated without payment), or (ii) the
replacement of such Award with other rights or property selected by the
Committee in its sole discretion;

 

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  (b) 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, values and prices, including, but not limited to, exercise
prices;

 

  (c) 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;

 

  (d) provide that such Award shall be exercisable or payable, notwithstanding
anything to the contrary in the Plan or the applicable Award Agreement; and

 

  (e) provide that the Award cannot be exercised or become payable after such
event (i.e., shall terminate upon such event).

Notwithstanding the foregoing, any such action contemplated under this
Section 12.2 shall be effective only to the extent that such action will not
cause any Award that is designed to satisfy Section 409A to fail to satisfy such
section.

 

Article 13 Duration, Amendment, Modification, Suspension and Termination

13.1 Duration of the Plan. Unless sooner terminated as provided in Section 13.2,
the Plan shall terminate on the tenth (10th) anniversary of the Effective Date.

13.2 Amendment, Modification, Suspension and Termination of Plan. The Committee
may amend, alter, suspend, discontinue, or terminate (for purposes of this
Section 13.2, an “Action”) the Plan or any portion thereof or any Award (or
Award Agreement) thereunder at any time; provided that no such Action shall be
taken, other than as permitted under Article 11 or Article 12, (i) without
Unitholder approval (A) if such approval is necessary to comply with any tax or
regulatory requirement applicable to the Plan, (B) if such Action increases the
number of Units available under the Plan (other than an increase permitted under
Article 5 absent Unitholder approval), (C) if such Action results in a material
increase in benefits permitted under the Plan (but excluding increases that are
immaterial or that are minor and to

 

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benefit the administration of the Plan, to take account of any changes in
applicable law, or to obtain or maintain favorable tax, exchange, or regulatory
treatment for the General Partner, the Partnership and/or any of their
Affiliates) or a change in eligibility requirements under the Plan, or (D) if
such Action results in a reduction of the Option Price or grant price per Unit,
as applicable, of any outstanding Options or Unit Appreciation Rights or a
cancellation of any outstanding Options or Unit Appreciation Rights in exchange
for cash, or for other Awards, such as other Options or Unit Appreciation
Rights, with an Option Price or grant price per Unit, as applicable, that is
less than such price of the original Options or Unit Appreciation Rights, and
(ii) without the written consent of the affected Participant, if such Action
would materially diminish the rights of such Participant under any Award
theretofore granted to such Participant under the Plan; provided, however, that
the Committee may amend the Plan, any Award or any Award Agreement without such
consent of the Participant in such manner as it deems necessary to comply with
applicable laws.

 

Article 14 General Provisions

14.1 No Right to Service. The granting of an Award under the Plan shall impose
no obligation on the General Partner, the Partnership or any of their Affiliates
to continue the Service of a Participant and shall not lessen or affect any
right that the General Partner, the Partnership or any of their Affiliates may
have to terminate the Service of such Participant. No Participant or other
Person shall have any claim to be granted any Award, and there is no obligation
for uniformity of treatment of Participants, or holders or beneficiaries of
Awards. The terms and conditions of Awards and the Committee’s determinations
and interpretations with respect thereto need not be the same with respect to
each Participant (whether or not such Participants are similarly situated).

14.2 Settlement of Awards; Fractional Units. Each Award Agreement shall
establish the form in which the Award shall be settled. The Committee shall
determine whether cash, Awards, other securities or other property shall be
issued or paid in lieu of fractional Units or whether such fractional Units or
any rights thereto shall be rounded, forfeited or otherwise eliminated.

14.3 Tax Withholding. Unless other arrangements have been made that are
acceptable to the General Partner, the Partnership or the applicable Affiliate
of the General Partner or the Partnership, the General Partner, the Partnership
or such Affiliate shall have the power and the right to deduct or withhold
automatically from any amount deliverable under an Award or otherwise, or
require a Participant to remit to the General Partner, the Partnership or such
Affiliate the minimum statutory amount to satisfy federal, state, and local
taxes, domestic or foreign, required by law or regulation to be withheld with
respect to any taxable event arising as a result of the Plan. With respect to
required withholding, Participants may elect (subject to the General Partner’s,
the Partnership’s or the applicable Affiliate’s automatic withholding right set
out above), subject to the approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by having the General Partner, the Partnership
or the applicable Affiliate of the General Partner or the Partnership withhold
Units having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax that could be imposed on the transaction.
Notwithstanding the foregoing, with respect to any Participant who is subject to
Rule 16b-3 of the Exchange Act, such tax withholding automatically shall be
effected by “netting” or withholding Units otherwise deliverable to the
Participant on the vesting or payment of such Award.

 

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14.4 No Guarantees Regarding Tax Treatment. Participants (or their
beneficiaries) shall be responsible for all taxes with respect to any Awards
under the Plan. The Board, the Committee, the General Partner, the Partnership
and the Affiliates of the General Partner and the Partnership make no guarantees
to any Person regarding the tax treatment of Awards or payments made under the
Plan. None of the Board, the Committee, the General Partner, the Partnership or
any Affiliate of the General Partner or the Partnership has any obligation to
take any action to prevent the assessment of any tax on any Person with respect
to any Award under Section 409A or Section 457A or otherwise, and none of the
General Partner, the Partnership or any Affiliate, employee or representative of
the General Partner, the Partnership or any of their Affiliates shall have any
liability to a Participant with respect thereto.

14.5 Non-Transferability of Awards. Unless otherwise determined by the
Committee, an Award shall not be transferable or assignable by the Participant
except in the event of his death (subject to the applicable laws of descent and
distribution) and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
General Partner, the Partnership and their Affiliates. No transfer shall be
permitted for value or consideration. An Award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant. Any permitted transfer of the Awards to heirs
or legatees of the Participant shall not be effective to bind the General
Partner, the Partnership or any of their Affiliates unless the Committee shall
have been furnished with written notice thereof and a copy of such evidence as
the Committee may deem necessary to establish the validity of the transfer and
the acceptance by the transferee or transferees of the terms and conditions
hereof.

14.6 Conditions and Restrictions on Units. The Committee may impose such other
conditions or restrictions on any Units received in connection with an Award as
it may deem advisable or desirable. These restrictions may include, but shall
not be limited to, a requirement that the Participant hold the Units received
for a specified period of time or a requirement that a Participant represent and
warrant in writing that the Participant is acquiring the Units for investment
and without any present intention to sell or distribute such Units. Any
certificates for Units may include any legend which the Committee deems
appropriate to reflect any conditions and restrictions applicable to such Units.

14.7 Compliance with Law. The granting of Awards and the issuance of Units under
the Plan shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies, or any stock exchanges on which the
Units are admitted to trading or listed, as may be required. The General Partner
shall have no obligation to issue or deliver evidence of title for Units issued
under the Plan prior to:

 

  (a) Obtaining any approvals from governmental agencies that the General
Partner determines are necessary or advisable; and

 

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  (b) Completion of any registration or other qualification of the Units under
any applicable national, state or foreign law or ruling of any governmental body
that the General Partner determines to be necessary or advisable.

The restrictions contained in this Section 14.7 shall be in addition to any
conditions or restrictions that the Committee may impose pursuant to
Section 14.6. The inability of the General Partner to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the General
Partner’s counsel to be necessary to the lawful issuance and sale of any Units
hereunder, shall relieve the General Partner, the Partnership and their
Affiliates of any liability in respect of the failure to issue or sell such
Units as to which such requisite authority shall not have been obtained.

14.8 Awards to Non-U.S. Employees or Directors. To comply with the laws in
countries other than the United States in which the General Partner, the
Partnership or any of their Affiliates operates or has Employees, Consultants or
Directors, the Committee, in its sole discretion, shall have the power and
authority to:

 

  (a) Determine which Affiliates of the General Partner or the Partnership shall
be covered by the Plan;

 

  (b) Determine which Employees, Consultants or Directors outside the United
States are eligible to participate in the Plan;

 

  (c) Modify the terms and conditions of any Award granted to Employees,
Consultants or Directors outside the United States to comply with applicable
foreign laws;

 

  (d) Take any action, before or after an Award is made, that it deems advisable
to obtain the approval of local governmental or regulatory authorities or comply
with any necessary local government regulatory exemptions or approvals; and

 

  (e) Establish subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or advisable. Any
subplans and modifications to Plan terms and procedures established under this
Section 14.8 by the Committee shall be attached to this Plan document as
appendices.

14.9 Rights as a Unitholder. Except as otherwise provided herein or in the
applicable Award Agreement, 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 holder of such Units.

14.10 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 applicable laws, or if it cannot be so 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.

 

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14.11 Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments that the General Partner, the Partnership or
any of their Affiliates may make to aid it in meeting its obligations under the
Plan. Nothing contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the General Partner, the Partnership or any of
their Affiliates and any Participant, beneficiary, legal representative, or any
other Person. To the extent that any Person acquires a right to receive payments
from the General Partner, the Partnership or any of their Affiliates under the
Plan, such right shall be no greater than the right of an unsecured general
creditor of the General Partner, the Partnership or such Affiliate. All payments
to be made hereunder shall be paid from the general funds of the General
Partner, the Partnership or their applicable Affiliate and no special or
separate fund shall be established and no segregation of assets shall be made to
assure payment of such amounts. The Plan is not subject to the U.S. Employee
Retirement Income Security Act of 1974, as amended from time to time.

14.12 No Constraint on General Partner Action. Nothing in the Plan shall be
construed to (i) limit, impair, or otherwise affect the General Partner’s right
or power to make adjustments, reclassifications, reorganizations, or changes in
the capital or business structure of the General Partner, the Partnership or any
of their Affiliates, or to merge or consolidate, or dissolve, liquidate, sell,
or transfer all or any part of the business or assets of the General Partner,
the Partnership or any of their Affiliates, or (ii) limit the right or power of
the General Partner to take any action which it deems to be necessary or
appropriate.

14.13 Successors. All obligations of the General Partner under the Plan with
respect to Awards granted hereunder shall be binding on any successor to the
General Partner, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the General Partner.

14.14 Governing Law. The Plan and each Award Agreement shall be governed by the
laws of the State of Delaware, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
to the substantive law of another jurisdiction.

14.15 Waiver of Certain Claims. By participating in the Plan, the Participant
waives all and any rights to compensation or damages in consequence of the
termination of his or her office or Service with the General Partner, the
Partnership or any of their Affiliates for any reason whatsoever, whether
lawfully or otherwise, insofar as those rights arise or may arise from his or
her ceasing to have rights under the Plan as a result of such termination, or
from the loss or diminution in value of such rights or entitlements, including
by reason of the operation of the terms of the Plan, any determination by the
Board or Committee pursuant to a discretion contained in the Plan or any Award
Agreement or the provisions of any statute or law relating to taxation.

 

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14.16 Data Protection. By participating in the Plan, the Participant consents to
the collection, processing, transmission and storage by the General Partner, the
Partnership and their Affiliates, in any form whatsoever, of any data of a
professional or personal nature which is necessary for the purposes of
introducing and administering the Plan. The General Partner, the Partnership and
their Affiliates may share such information with any of their other Affiliates,
the trustee of any employee benefit trust, registrars, trustees, brokers, other
third party administrators or any Person who obtains control of the General
Partner or acquires the General Partner.

14.17 Effective Date. The Plan shall be effective as of the date of adoption by
the Board, which date is set forth below (the “Effective Date”).

* * *

This Plan was duly adopted and approved by resolution of the Board of Directors
of the General Partner on the 8th day of December, 2011.

 

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