[Form of Grant --
Non-Employee Manager

]

ATLAS PIPELINE HOLDINGS

LONG-TERM INCENTIVE PLAN

PHANTOM UNIT GRANT AGREEMENT

THIS PHANTOM UNIT GRANT AGREEMENT ("Agreement"), dated as of _____ ____________,
200__ (the "Date of Grant"), is delivered by Atlas Pipeline Holdings, L.P., a
Delaware limited partnership (the "Partnership"), to ______________ (the
"Participant").

RECITALS

A. The Atlas Pipeline Holdings Long-Term Incentive Plan (the "Plan") provides
for the grant of phantom units ("Phantom Units"), which are phantom (notional)
rights that represent the right to receive one or more common units of limited
partner interest of the Partnership (a "Unit") or its then Fair Market Value (as
defined in the Plan) in cash, as determined by the Committee (the "Committee")
(as defined in the Plan). The Plan also permits the granting of rights to
receive an amount in cash equal to, and at the same time as, the cash
distributions made by the Partnership with respect to a Unit during the period
such Phantom Unit is outstanding ("DERs").

B. The Committee has decided to make a Phantom Unit grant, with DERs, subject to
the terms and conditions set forth in this Agreement and the Plan, as an
inducement for the Participant to promote the best interests of the Partnership
and its equity holders. The Participant may receive a copy of the Plan by
contacting __________ at ________.

NOW, THEREFORE

, the parties hereto, intending to be legally bound, hereby agree as follows:

Grant of Phantom Restricted Units
.

 a. Each Manager (as defined in the Plan), shall be awarded Phantom Units with
    DERs as of , in an amount equal to the lesser of (A) 500 or (B) that number
    of Phantom Units equal to $15,000 divided by the Fair Market Value of a Unit
    as of that date. Each Manager who is first appointed to the Board on or
    after the effective date of the Plan shall be awarded Phantom Units with
    DERs as of the date of first appointment in an amount equal to the lesser of
    (A) 500 or (B) that number of Phantom Units equal to $15,000 divided by the
    Fair Market Value of a Unit as of that date. Thereafter, on each anniversary
    of the date on which a Manager is first awarded Phantom Units during the
    term of the Plan, the Manager shall be awarded Phantom Units with DERs as of
    that date in an amount equal to the lesser of (A) 500 or (B) that number of
    Phantom Units equal to $15,000 divided by the Fair Market Value of a Unit as
    of that date. A Manager shall vest in 25% of his or her Phantom Units on
    each anniversary of the original Award for such Phantom Units such that each
    Award shall fully vest on the fourth anniversary of the Award.
 b. Subject to the terms and conditions set forth in this Agreement and the
    Plan, the Partnership hereby grants to the Participant _____ Phantom Units
    (the "Phantom Restricted Units"). The Phantom Restricted Units will become
    vested in accordance with Paragraph 3 below and will be distributed in
    accordance with Paragraph 4 below. Except as otherwise provided below, prior
    to the date the Phantom Restricted Units are distributed as Units, if any,
    in accordance with Paragraph 4 below, the Participant will not be deemed to
    have any voting rights or cash distribution rights with respect to any Units
    subject to this grant. For purposes of this Agreement, each Phantom
    Restricted Unit shall be equivalent to one Unit.

Phantom Unit Account
. The Partnership shall establish and maintain a Restricted Phantom Unit
account, as a bookkeeping account on its records, (the "
Phantom Restricted Unit Account
") for the Participant and shall record in such Phantom Restricted Unit Account
the number of Phantom Restricted Units granted to the Participant pursuant to
this Agreement. The Participant shall not have any interest in any fund or
specific assets of the Partnership by reason of this grant or the Phantom
Restricted Unit Account established for the Participant.
Vesting
.

(a) Except as otherwise provided in subparagraphs (b) and (c) below, the
Participant will become vested in the Phantom Restricted Units awarded pursuant
to this grant and credited to the Participant's Phantom Restricted Unit Account
according to the following vesting schedule, provided the Participant does not
cease to be a non-employee member of the Managing Board of Atlas Pipeline
Holdings GP, LLC (the "Company") prior to the applicable vesting date (the
"Vesting Date"):

Date

Percentage of Phantom Restricted Units

First anniversary of Date of Grant

 

Second anniversary of Date of Grant

 

Third anniversary of Date of Grant

 

Fourth anniversary of Date of Grant

 

The vesting of the Phantom Restricted Units shall be cumulative, but shall not
exceed 100% of the Phantom Restricted Units subject to the grant. If the
foregoing schedule would produce fractional Phantom Restricted Units, the number
of Phantom Restricted Units that vest shall be rounded down to the nearest whole
Phantom Restricted Unit.

(b) If the Participant terminates as a non-employee member of the Managing Board
of the Company (the "Board") prior to the Vesting Date for any portion of the
Phantom Restricted Units, the Phantom Restricted Units credited to the
Participant's Phantom Restricted Unit Account that have not vested as of such
Vesting Date shall terminate and the corresponding Units shall be forfeited;
provided, however, that if the Participant terminates as a non-employee member
of the Board on account of death or Disability (as defined in the Plan), all of
the Participant's unvested Phantom Restricted Units shall become vested as of
the date of the Participant's termination as a non-employee member of the Board
on account of death or Disability.

(c) If a Change in Control (as defined in the Plan) occurs while the Participant
is a non-employee member of the Board, but prior to the Vesting Date for any
portion of the Phantom Restricted Units, the portion of the Phantom Restricted
Units credited to the Participant's Phantom Restricted Unit Account that have
not vested prior to the consummation of the Change in Control shall become
vested as of the date of the Change in Control.

Distribution.
On ______ ___ of each calendar year, or the next business day after _____ ___ if
____ __ is not a business day, (the "
Distribution Date
") all of the Phantom Restricted Units credited to the Participant's Phantom
Restricted Unit Account that vested during such calendar year pursuant to
Paragraph 3 above shall become converted to, at the Participant's election prior
to the applicable Distribution Date, Units to be issued under the Plan or the
cash equivalent value of such Phantom Restricted Units, based on the Fair Market
Value of such vested Phantom Restricted Units on the Distribution Date, and
distributed as such to the Participant as soon as administratively practicable
on or after the Distribution Date. Notwithstanding the immediately preceding
sentence, if a Change in Control occurs prior to the Distribution Date, all of
the Phantom Restricted Units credited to the Participant's Phantom Restricted
Unit Account that have not previously been distributed or forfeited shall be
converted and distributed to the Participant as described in the immediately
preceding sentence on the date of the Change in Control; provided, however, that
such conversion and distribution shall not occur if doing so would violate the
requirements of section 409A of the Internal Revenue Code of 1986, as amended
(the "
Code
"), if applicable.
DERs
. From the Date of Grant through the date the Phantom Restricted Units are
converted and distributed pursuant to Paragraph 4 or earlier forfeited, if any
cash distributions are made by the Partnership with respect to its Units, a DER
will be paid to the Participant equal to the value of the cash payment that
would have been paid if such Phantom Restricted Units credited to the
Participant's Phantom Restricted Unit Account at the time of the declaration of
the cash payment had been Units. The DERs will be paid to the Participant as
soon as administratively practicable after the cash payments are paid to the
holders of Units.
Change in Control
. The provisions set forth in the Plan applicable to a Change in Control shall
apply to the Phantom Restricted Units.
Acknowledgment by Participant
. By executing this grant, the Participant hereby acknowledges that with respect
to any right to a distribution and DERs pursuant to this Agreement, the
Participant is and shall be an unsecured creditor of the Partnership without any
preference as against other unsecured general creditors of the Partnership, and
the Participant hereby covenants for himself or herself, and anyone at any time
claiming through or under the Participant, not to claim any such preference, and
hereby disclaims and waives any such preference that may at any time be at
issue, to the fullest extent permitted by applicable law.
Restrictions on Issuance or Transfer of Units
.

(a) The obligation of the Partnership to deliver Units upon distribution of the
Phantom Restricted Units shall be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing, registration
or qualification of the Units upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the issuance of
the Units, the Units may not be issued in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee. In the event an
exemption from registration under the Securities Act of 1933 (the "Securities
Act") is available, the Participant (or the Participant's estate or personal
representative in the event of the Participant's death or incapacity), if
requested by the Partnership to do so, will execute and deliver to the
Partnership in writing an agreement containing such provisions as the
Partnership may require to assure compliance with applicable securities laws. No
sale or disposition of Units acquired pursuant to this grant by the Participant
shall be made in the absence of an effective registration statement under the
Securities Act with respect to such Units unless an opinion of counsel
satisfactory to the Partnership is provided that such sale or disposition will
not constitute a violation of the Securities Act or any other applicable
securities laws is first obtained.

(b) The Participant understands and agrees that the sale of any Units received
by the Participant pursuant to this grant will be subject to, and must comply
with, the Partnership's Insider Trading Policy.

(c) As soon as reasonably practicable after the Distribution Date, the
Partnership shall deliver to the Participant a certificate or certificates for
the Units then being distributed.

Grant Subject to Plan Provisions
. This grant is made pursuant to the Plan, the terms of which are incorporated
herein by reference, and in all respects shall be interpreted in accordance with
the Plan. In the event of any contradiction, distinction or difference between
this Agreement and the terms of the Plan, the terms of the Plan will control.
This grant is subject to the interpretations, regulations and determinations
concerning the Plan established from time to time by the Committee in accordance
with the provisions of the Plan, including, but not limited to, provisions
pertaining to (i) rights and obligations with respect to withholding taxes, (ii)
the registration, qualification or listing of Units, (iii) changes in
capitalization of the Partnership, and (iv) other requirements of applicable
law. The Committee shall have the authority to interpret and construe this
Agreement pursuant to the terms of the Plan, and its decisions shall be
conclusive as to any questions arising hereunder. By receiving this grant, the
Participant hereby agrees to be bound by the terms and conditions of the Plan
and this Agreement. The Participant further agrees to be bound by the
determinations and decisions of the Committee with respect to this Agreement and
the Plan and the Participant's rights to benefits under this Agreement and the
Plan and agrees that all such determinations and decisions of the Committee
shall be binding on the Participant, his or her beneficiaries and any other
person having or claiming an interest under this Agreement and the Plan on
behalf of the Participant.
Assignment and Transfers
. No Phantom Restricted Units or DERs awarded to the Participant under this
Agreement may be transferred, assigned, pledged or encumbered by the
Participant, and Phantom Restricted Units and DERs shall be distributed during
the lifetime

of the Participant only for the benefit of the Participant; provided, however,
that in the event of the Participant's death, the Units subject to the Phantom
Restricted Units or the cash equivalent value of the Units, as applicable,

shall be issued (subject to the limitations specified in the Plan and this
Agreement) solely to the legal representatives of the Participant, or by the
person who acquires the right to receive the Units subject to the Phantom
Restricted Units or the cash equivalent value of the Units, as applicable, by
will or by the laws of descent and distribution, to the extent that the Phantom
Restricted Units subject to this grant are otherwise vested pursuant to this
Agreement. Any attempt to transfer, assign, pledge or encumber the Phantom
Restricted Units or DERs by the Participant shall be null, void and without
effect. The rights and protections of the Partnership hereunder shall extend to
any successors or assigns of Partnership.
Taxes/Withholding.
The vesting of Restricted Phantom Units, as well as any amounts received upon
distribution of Restricted Phantom Units pursuant to Paragraph 4 above, and the
payment of cash for any DERs, is treated as taxable income to the Participant,
and the Participant (or the Participant's legal representative in the event of
the death of the Participant) shall be solely responsible for all tax
consequences that result from the vesting and distribution of the Restricted
Phantom Units, as well as any subsequent sale of Units, and the payment of cash
with respect to DERs. The Partnership or the Company, as applicable, is
authorized, if required by applicable law, to withhold from any payment due or
transfer made under this grant or from any compensation or other amount owing to
the Participant, the amount (in cash, Units, other securities, Units that would
otherwise be issued pursuant to this grant or other property) of any applicable
withholding taxes that are due in respect of this grant, the lapse of
restrictions thereon, or any payment or transfer under this grant and to take
such other action as may be necessary in the opinion of the Partnership or the
Company to satisfy its withholding obligations for the payment of such taxes.
No Rights as Unitholder
. The Participant shall not have any rights as a Unitholder of the Partnership,
including the right to any cash distributions (except as provided in Paragraph
5), or the right to vote, with respect to any Phantom Restricted Units.
Membership on the Managing Board of the Company Not Affected.
This grant of Phantom Restricted Units and DERs shall not confer upon the
Participant any right to be retained as a non-employee member of the Board.
Amendments.
The Partnership may waive any conditions or rights under and amend any terms of
this Agreement, provided that no change shall materially reduce the benefit to
the Participant without the consent of the Participant, except as necessary to
comply with the requirements of Paragraph 17 below.
Governing Law
. The validity, construction, interpretation and effect of this Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware, without giving effect to the conflict of laws provisions thereof, and
applicable federal law.
Notice
. Any notice to the Partnership provided for in this Agreement shall be
addressed to the Partnership in care of the Chief Legal Officer at the principal
office of the Partnership, and any notice to the Participant shall be addressed
to such Participant at the current address shown in the records of the Company,
or to such other address as the Participant may designate to the Company in
writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in
a properly sealed envelope addressed as stated above, registered and deposited,
postage prepaid, in a post office regularly maintained by the United States
Postal Service.
Section 409A of the Code
. Notwithstanding anything in the Plan or this Agreement to the contrary, the
Committee may, without the Participant's consent, amend this Agreement to comply
with the requirements of section 409A of the Code and any corresponding guidance
and regulations issued under section 409A of the Code to the extent it is
subsequently determined, in the sole discretion of the Committee, that such
amendments are necessary for this grant to comply with the requirements of
section 409A of the Code, if applicable.

 

 

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

IN WITNESS WHEREOF, this Agreement has been duly executed as of the Date of
Grant.

ATLAS PIPELINE HOLDINGS, L.P.

Witness: By: Atlas Pipeline Holdings GP, LLC, its general partner

By:

Name:

Title:

 

 

I hereby accept the Phantom Restricted Units and DERs described in this
Agreement, and I agree to be bound by the terms of the Plan and this Agreement.
I hereby further agree that all of the decisions and interpretations of the
Committee with respect to this Agreement and the Plan shall be final and
binding.

 

Participant :