Exhibit 10.1

 

Hiland Partners, LP
Long-Term Incentive Plan

 

Grant of Phantom Units

 

Grantee:

 

Grant Date:                                       , 200

 

1.                                       Grant of Phantom Units. Hiland Partners
GP, LLC (the “Company”) hereby grants to you            Phantom Units under the
Hiland Partners Long-Term Incentive Plan (the “Plan”) on the terms and
conditions set forth herein and in the Plan, which is incorporated herein by
reference as a part of this Agreement. This grant of Phantom Units does not
include tandem DERs. In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. Capitalized terms used in this
Agreement but not defined herein shall have the meanings ascribed to such terms
in the Plan, unless the context requires otherwise.

 

2.                                       Regular Vesting. Except as otherwise
provided in Paragraph 3 below, the Phantom Units granted hereunder shall vest on
the anniversary of the Grant Date as follows:

 

Anniversary of
Grant Date

 

Cumulative
Vested Percentage

 

 

 

 

 

 

 

 

 

 

3.                                       Events Occurring Prior to Regular
Vesting.

 

(a)                                  Death or Disability. If your employment
with the Company terminates as a result of your death or a disability that
entitles you to benefits under the Company’s long-term disability plan, the
Phantom Units then held by you automatically will become fully vested upon such
termination.

 

(b)                                 By the Company other than for Cause. If your
employment is terminated by the Company for any reason other than “Cause,” as
determined by the Company in accordance with its employment policies, the
Phantom Units then held by you automatically will become fully vested upon such
termination.

 

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(c)                                  Other Terminations. Except as provided in
Paragraph 2 hereof, if you terminate from the Company for any reason other than
as provided in Paragraphs 3(a) and (b) above, all unvested Phantom Units then
held by you automatically shall be forfeited without payment upon such
termination.

 

(d)                                 Change of Control. All outstanding Phantom
Units held by you automatically shall become fully vested upon a Change of
Control.

 

For purposes of this Paragraph 3, employment with the Company shall include
being an employee of or a director or consultant to the Company or an Affiliate.

 

4.                                       Payment. As soon as administratively
practicable after the vesting of a Phantom Unit, you shall be entitled to
receive from the Company one Unit; provided, however, the Committee may, in its
sole discretion, direct that a cash payment be made to you in lieu of the
delivery of such Unit. Any such cash payment shall be equal to the Fair Market
Value of the Unit on the payment date. If more than one Phantom Unit vests at
the same time, the Committee may elect to pay such vested Award in Units, cash
or any combination thereof, in its discretion.

 

5.                                       Limitations Upon Transfer. All rights
under this Agreement shall belong to you alone and may not be transferred,
assigned, pledged, or hypothecated by you in any way (whether by operation of
law or otherwise), other than by will or the laws of descent and distribution
and shall not be subject to execution, attachment, or similar process. Upon any
attempt by you to transfer, assign, pledge, hypothecate, or otherwise dispose of
such rights contrary to the provisions in this Agreement or the Plan, or upon
the levy of any attachment or similar process upon such rights, such rights
shall immediately become null and void.

 

6.                                       Restrictions. By accepting this grant,
you agree that any Units which you may acquire upon payment of this award will
not be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities laws. You also agree
that (i) the certificates representing the Units acquired under this award may
bear such legend or legends as the Committee deems appropriate in order to
assure compliance with applicable securities laws, (ii) the Company may refuse
to register the transfer of the Units to be acquired under this award on the
transfer records of the Partnership if such proposed transfer would in the
opinion of counsel satisfactory to the Partnership constitute a violation of any
applicable securities law, and (iii) the Partnership may give related
instructions to its transfer agent, if any, to stop registration of the transfer
of the Units to be acquired under this award.

 

7.                                       Withholding of Tax. To  the  extent
that the grant, vesting or payment of a Phantom Unit results in the receipt of
compensation by you with respect to which the Company or an Affiliate has a tax
withholding obligation pursuant to applicable law, unless other arrangements
have been made by you that are acceptable to the Company or such Affiliate, you
shall deliver to the Company or the Affiliate such amount of money as the
Company or the Affiliate may require to meet its withholding obligations under
such applicable law. No payment of a vested Phantom Unit shall be made pursuant
to this

 

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Agreement until you have paid or made arrangements approved by the Company or
the Affiliate to satisfy in full the applicable tax withholding requirements of
the Company or Affiliate with respect to such event.

 

8.                                       Rights as Unitholder. You, or your
executor, administrator, heirs, or legatees shall have the right to vote and
receive distributions on Units and all the other privileges of a unitholder of
the Partnership only from the date of issuance of a Unit certificate in your
name representing payment of a vested Phantom Unit.

 

9.                                       Insider Trading Policy. The terms of
the Company’s Insider Trading Policy are incorporated herein by reference. The
timing of the delivery of any Units pursuant to a vested Phantom Unit shall be
subject to and comply with such Policy.

 

10.                                 Binding Effect. This Agreement shall be
binding upon and inure to the benefit of any successor or successors of the
Company and upon any person lawfully claiming under you.

 

11.                                 Entire Agreement. This Agreement constitutes
the entire agreement of the parties with regard to the subject matter hereof,
and contains all the covenants, promises, representations, warranties and
agreements between the parties with respect to the Phantom Units granted hereby.
Without limiting the scope of the preceding sentence, all prior understandings
and agreements, if any, among the parties hereto relating to the subject matter
hereof are hereby null and void and of no further force and effect. Any
modification of this Agreement shall be effective only if it is in writing and
signed by both you and an authorized officer of the Company.

 

12.                                 Governing Law. This grant shall be governed
by, and construed in accordance with, the laws of the State of Oklahoma, without
regard to conflicts of laws principles thereof.

 

 

Hiland Partners GP, LLC

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

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