Exhibit 10.22
 
BREITBURN ENERGY PARTNERS L.P.
2006 LONG-TERM INCENTIVE PLAN
RESTRICTED PHANTOM UNIT AGREEMENT
 
Pursuant to this Restricted Phantom Unit Agreement (the “Agreement”), BreitBurn
GP, LLC (the “Company”), as the general partner of BreitBurn Energy Partners
L.P., a Delaware limited partnership (the “Partnership”), hereby grants to
[Name] (the “Participant”) the following award of Restricted Phantom Units
(“RPUs”), pursuant and subject to the terms and conditions of this Agreement and
the Partnership’s First Amended and Restated 2006 Long-Term Incentive Plan (the
“Plan”), the terms and conditions of which are hereby incorporated into this
Agreement by reference. Each RPU 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,
including without limitation on Exhibit A hereto, 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 RPUs: [Number]
 
Grant Date: [Date]
 
Vesting of RPUs: One–third of the RPUs (rounded down to the next whole number of
units, except in the case of the final vesting date) shall vest on each of
December 28, 2011, December 28, 2012 and December 28, 2013 (each, a “Vesting
Date”), subject to the Participant’s continued service as an Employee, Director
or Consultant through each such date. In addition, the RPUs shall be subject to
accelerated vesting as set forth in Section 4 below.
 
Termination of RPUs: In the event of the Participant’s Separation from Service
for any reason other than those set forth in Section 4 of the “Terms and
Conditions of Restricted Phantom Units,” all RPUs that have not vested prior to
or in connection with such Separation from Service shall thereupon automatically
be forfeited by the Participant without further action and without payment of
consideration therefor.
 
Payment of RPUs: Vested RPUs shall be paid to the Participant in the form of
Units as set forth in Section 5 below.
 
DERs: Each RPU granted under this Agreement shall be issued in tandem with a
corresponding DER, which shall entitle the Participant to receive payments in an
amount equal to Partnership distributions in accordance with Section 3 of this
Agreement.
 
 
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TERMS AND CONDITIONS OF RESTRICTED PHANTOM UNITS
 
1.        Grant. The Partnership hereby grants to the Participant, as of the
Grant Date, an award of [Number] RPUs, subject to all of the terms and
conditions contained in this Agreement and the Plan.
 
2.        RPUs. Subject to Section 4 below, each RPU that vests shall represent
the right to receive payment, in accordance with Section 5 below, in the form of
one Unit. Unless and until an RPU vests, the Participant will have no right to
payment in respect of any such RPU. Prior to actual payment in respect of any
vested RPU, such RPU 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 RPU granted hereunder is hereby granted in
tandem with a corresponding DER, which DER shall remain outstanding from the
Grant Date until the earlier of the payment or forfeiture of the RPU to which it
corresponds. Pursuant to each DER, the Participant shall be entitled to receive
payments in an amount equal to any distributions made by the Partnership in
respect of the underlying Unit, if any, payable in the same form and amounts as
distributions paid to the holders of Units, so long as such DER is outstanding
as of the record date set by the Board of Directors of the Company for such
distribution to be paid to the holders of Units. Such payments shall be made no
later than 15 days after the date of any applicable distribution paid to the
holders of Units by the Partnership, but in no event later than the last day of
the applicable two and one-half (2-1/2) month “short-term deferral” period with
respect to such DER payment, within the meaning of Treasury Regulation Section
1.409A-1(b)(4). DERs shall not entitle the Participant to any payments relating
to distributions occurring after the earlier to occur of the applicable RPU
payment date or the forfeiture of the RPU underlying such DER. The DERs and any
amounts that may become distributable in respect thereof shall be treated
separately from the RPUs and the rights arising in connection therewith for
purposes of the designation of time and form of payments required by Code
Section 409A.
 
4.         Vesting and Termination.
 
(a)            General. The RPUs shall vest in such amounts and at such times as
are set forth in the Grant Notice above, provided, that the RPUs shall vest in
full upon any earlier occurrence of (a) the Participant’s Separation from
Service due to the Participant’s death or Disability, or (b) a Change of Control
and, in any case, shall be subject to the payment provisions contained in
Section 5 below. Upon the Participant’s Separation from Service by reason of a
termination by the Employer without Cause, the Award shall thereupon vest with
respect to a pro rata number of RPUs equal to the total number of RPUs which
would otherwise have vested on the next succeeding Vesting Date immediately
following the Separation from Service, had the Participant remained employed
through such Vesting Date multiplied by a fraction, the numerator of which is
equal to the number of days in the period commencing on the immediately
preceding December 31st and ending on the Separation from Service date, and the
denominator of which is equal to 365.
 
 No portion of the RPUs which has not become vested at the date of the
Participant’s Separation from Service shall thereafter become vested. In the
event of the Participant’s Separation from Service for any reason other than as
set forth in (a) and (b) of this Section, all RPUs that have not vested prior to
or in connection with such Separation from Service shall thereupon automatically
be forfeited by the Participant without further action and without payment of
consideration therefor.
 
 
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(b)            Change of Control Definition. “Change of Control” means, and
shall be deemed to have occurred upon one or more of the following events:
 
(i)          any “person” or “group” within the meaning of those terms as used
in Sections 13(d) and 14(d)(2) of the Exchange Act, other than an Affiliate of
the Company, shall become the beneficial owner, directly or indirectly, by way
of merger, consolidation, recapitalization, reorganization or otherwise, of 50%
or more of the combined voting power of the equity interests or of a controlling
interest in BreitBurn Management Company, LLC, the Company or the Partnership;
 
(ii) the limited partners of the Partnership approve, in one or a series of
transactions, a plan of complete liquidation of the Partnership;
 
(iii) the sale or other disposition by either the Company or the Partnership of
all or substantially all of its assets in one or more transactions to any Person
other than the Company or an Affiliate of the Company;
 
(iv) a transaction resulting in a Person other than the Company or an Affiliate
of the Company being the general partner of the Partnership; or
 
(v)         any time at which individuals who, as of the Grant Date, constitute
the board of directors of the Company (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the Grant Date whose election,
or nomination for election by the Partnership’s unitholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
will be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as the result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Incumbent Board.
 
5.         Payment of RPUs; Issuance of Units.

 (a)          General. Unpaid, vested RPUs shall be paid to the Participant in
the form of Units in a lump-sum during the sixty-day period commencing with the
earliest to occur of the following dates (the “Payment Date”): (i) the
applicable Vesting Date specified in the Grant Notice; or (ii) subject to
Section 5(b) below, the date of Participant’s Separation from Service. Payments
of any RPUs 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.
 
 
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 (b)          Potential Six-Month Delay. Notwithstanding anything to the
contrary in this Agreement, no amounts payable under this Agreement shall be
paid to the Participant during the six-month period following the Participant’s
Separation from Service to the extent that the Company reasonably determines
that paying such amounts prior to the expiration of such six-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-month period (or such earlier date upon which such amounts can be paid under
Code Section 409A 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 RPUs. Without limiting the
generality of Section 8(b) of the Plan, to the extent that such obligation
arises at the time that the RPUs are paid to the Participant in Units, the
Company and/or its Affiliates may withhold Units otherwise issuable in respect
of such RPUs having a Fair Market Value equal to the sums required to be
withheld in satisfaction of the foregoing requirement. Notwithstanding any other
provision of the Plan or this Agreement, the number of Units which may be so
withheld in order to satisfy the Participant’s income and payroll tax
liabilities with respect to the issuance, vesting or payment of the RPUs shall
be limited to the number of Units which have a Fair Market Value on the date of
withholding equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for income 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. RPUs may not be sold, pledged, assigned or
transferred in any manner other than by will or the laws of descent and
distribution. Neither the RPUs nor any interest or right therein shall be liable
for the debts, contracts or engagements of the Participant or his or her
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.
 
 
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9.        Distribution of Units. The Units issued pursuant to this Agreement
shall be held in book entry form and no certificates shall be issued therefor;
provided, that certificates may be issued representing such Units at the request
of the Participant and in accordance with the Partnership’s governing documents,
as amended and supplemented from time to time. Notwithstanding anything herein
to the contrary, (a) no payment shall be made under this Agreement in the form
of Units unless such Units issuable upon such payment are then registered under
the Securities Act of 1933, as amended (the “ Securities Act”) or, if such Units
are not then so registered, the Company has determined that such payment and
issuance would be exempt from the registration requirements of the Securities
Act, and (b) the Partnership shall not be required to issue or deliver any Units
(whether in certificated or book-entry form) pursuant to this Agreement unless
(i) such issuance and delivery are in compliance with all applicable laws and
regulations and, if applicable, the requirements of any exchange on which the
Units are listed or traded, and (ii) any consent or approval of any governmental
or regulatory authority necessary or desirable as a condition to such issuance
and delivery to the Participant (or his or her estate) has been obtained. Any
certificates delivered pursuant to this Agreement shall be subject to any
stop-transfer orders and other restrictions as the Company deems necessary or
advisable to comply with federal, state or local securities or other laws, rules
and regulations and the rules of any national securities exchange or automated
quotation system on which the Units are listed, quoted or traded. The Company
may place legends on any certificate to reference restrictions applicable to the
Units. 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. The Company shall have the right to
require the Participant to comply with any timing or other restrictions with
respect to the settlement of any RPUs pursuant to this Agreement, including a
window-period limitation, as may be imposed in its discretion. No fractional
Units shall be issued or delivered pursuant to the RPUs.
 
10.      Partnership Agreement. Units issued upon payment of the RPUs shall be
subject to the terms of the Plan and the terms of the Partnership Agreement.
Upon the issuance of Units to the Participant, the Participant shall,
automatically and without further action on his or her part, be deemed to be a
party to, signatory of and bound by the Partnership Agreement.
 
11.       No Effect on Employment. Nothing in this Agreement or in the Plan
shall confer upon the Participant any right to serve or continue to serve as an
Employee, Director or Consultant.
 
12.      Severability. If any provision in this Agreement is held invalid or
unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining
provisions of this Agreement, which shall remain in full force and effect.
 
13.      Tax Consultation. None of the Partnership, the Company or any of their
Affiliates has made any warranty or representation to Participant with respect
to the income tax consequences of the issuance of the RPUs, the Units or the
transactions contemplated by this Agreement, and Participant is in no manner
relying on such entities or their representatives for an assessment of such tax
consequences. The Participant understands that the Participant may suffer
adverse tax consequences in connection with the RPUs 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
RPUs and that the Participant is not relying on the Partnership for tax advice.
 
 
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14.      Amendments, Suspension and Termination. 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 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.
 
15.      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 and 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,
and the RPUs 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.
 
16.      Code Section 409A. The RPUs and the amounts payable under this
Agreement may constitute or provide for “nonqualified deferred compensation”
which is intended to comply with the requirements of Code Section 409A. To the
extent that the Committee determines that any RPUs or any amounts payable under
this Agreement may not be compliant with Code Section 409A, the Committee and
the Participant shall cooperate and work together in good faith to timely amend
this Agreement in a manner intended to comply with the requirements of Code
Section 409A or an exemption therefrom (including amendments with retroactive
effect), or take any other actions as they deem necessary or appropriate to (a)
exempt the RPUs from Code Section 409A and/or preserve the intended tax
treatment of the benefits provided with respect to the RPUs, or (b) comply with
the requirements of Code Section 409A. To the extent applicable, this Agreement
shall be interpreted in accordance with the provisions of Code Section 409A.
 
17. Adjustments. The Participant acknowledges that the RPUs are subject to
modification and termination in certain events as provided in this Agreement and
Section 7 of the Plan.
 
18.      Successors and Assigns. The Partnership may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of 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.
 
19.      Governing Law. The laws of the State of Delaware shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.
 
20.       Captions. Captions provided herein are for convenience only and are
not to serve as a basis for interpretation or construction of this Agreement.
 
[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, except with respect to the
definition of “Change of Control” contained in this Agreement, which definition
shall control over the one in the Plan. 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 RPUs. 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.
 
PARTICIPANT:    
 
 
Name

 
BREITBURN GP, LLC

By:
 
Name:
Title:

 
 
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EXHIBIT A
CERTAIN DEFINITIONS
 
For purposes of this Agreement, when capitalized herein, the terms below shall
have the following meanings:
 
“EMPLOYER” means BreitBurn Management Company, LLC or a successor employer.
 
“CAUSE” means “Cause” as defined in the Participant’s employment agreement with
the Employer if such an agreement exists and contains a definition of Cause, or,
if no such agreement exists or such agreement does not contain a definition of
Cause, then Cause means (i) any material failure or neglect by the Participant
to perform his or her duties or responsibilities to the Employer; (ii) any act
of fraud, embezzlement, theft, misappropriation or dishonesty by the Participant
relating to the Employer or its business or assets; (iii) the Participant’s
commission of a felony or other crime involving moral turpitude; (iv) any gross
negligence or intentional misconduct on the part of the Participant in the
conduct of his duties and responsibilities with the Employer or which adversely
affects the image, reputation or business of the Employer or its affiliates; or
(v) any material breach by the Participant of any written agreement between the
Employer and the Participant.
 
“DISABILITY” means a condition that entitles the Participant to receive benefits
under an applicable Employer long-term disability insurance plan or, if the
Participant is not covered by such a plan, a condition that would entitle the
Participant to such benefits had the Participant been covered under such a plan.
 
“SEPARATION FROM SERVICE” means the Participant’s “separation from service” from
the Employer within the meaning of Code Section 409A(a)(2)(A)(i).
 
 
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