Exhibit 10.3


 


RHINO LONG-TERM INCENTIVE PLAN


 


SECTION 1.           Purpose of the Plan


 


The Rhino Long-Term Incentive Plan (the “Plan”) has been adopted by
Rhino GP LLC, a Delaware limited liability company, the general partner (“General
Partner”) of Rhino Resource Partners LP, a Delaware limited partnership (the “Partnership”).  The Plan is intended to promote the interests
of the Partnership 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 Partnership and its 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.


 


SECTION 2.           Definitions


 


As
used in the Plan, the following terms shall have the meanings set forth below:


 


“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. 
For purposes of the preceding sentence, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control with”),
as used with respect to any entity or organization, shall mean the possession,
directly or indirectly, of the power (i) to vote more than 50% of the
securities or equity interests having ordinary voting power for the election of
directors of the controlled entity or organization, or (ii) to direct or
cause the direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or equity
interests or by contract or otherwise.


 


“Award”
means an Option, Unit Appreciation Right, Restricted Unit, Phantom Unit, Other
Unit-Based Award, or a Unit Award granted under the Plan, and includes a DER
granted in tandem with respect to a Phantom Unit.


 


“Award
Agreement” means the written or electronic agreement by which an Award shall be
evidenced.


 


“Board”
means the Board of Directors or Managers, as the case may be, of the General
Partner.


 


“Change
of Control” means, and shall be deemed to have occurred upon, any of the
following events:  (a) 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 (i) Wexford, the General
Partner or an Affiliate of either, (ii) any fund or other entity owned,
managed or otherwise controlled by Wexford, or (iii) any Person(s) who,
on the effective date of the Plan, is (are) an owner(s) of the General
Partner (or any Person who, subsequent to the effective date of the Plan,
through inheritance from such an owner becomes a direct or indirect owner of
the General Partner), (a “Third Party”) shall become the beneficial owner, by
way of merger, consolidation,


 

















 


recapitalization,
reorganization or otherwise, of more than 50% of the voting power of the voting
securities of either the Partnership or the General Partner; or (b) the
sale or other disposition, including by way of liquidation, by either the
Partnership or the General Partner of all or substantially all of its assets,
whether in a single or series of related transactions, to one or more Third
Parties.  For clarity, an initial public
offering of Units shall not constitute a Change of Control.


 


“Committee”
means the Board, unless and to the extent the Board delegates its powers and
duties as provided in Section 3.


 


“Consultant”
means an individual, other than a Director or an Employee, who performs
services for the benefit of the General Partner, the Partnership or an
Affiliate of either.


 


“DER”
means a contingent right, granted in tandem with a specific Phantom Unit, to
receive with respect to a Phantom Unit subject to the Award an amount in cash,
Units, Restricted Units, and/or Phantom Units equal in value to the cash
distributions made by the Partnership with respect to a Unit during the period
such Phantom Unit is “outstanding.”


 


“Director”
means a member of the Board who is not also an Employee or a Consultant, and
shall also include any individual who is appointed a member of the Board by
Wexford (a “Wexford Director”).


 


“Disability”
means, unless provided otherwise in the Award Agreement, an illness or injury
that entitles the Participant to benefits under a long-term disability plan of
the General Partner or an Affiliate.


 


“Employee”
means an employee of the General Partner, the Partnership or an Affiliate of
either.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


“Fair
Market Value” means the closing sales price of a Unit on the principal national
securities exchange or other market in which trading in Units occurs on the
applicable date (or, if there is no trading in the Units on such date, on the
next preceding date on which there was trading) as reported in such reporting
service approved by the Committee.  If
Units are not traded on a national securities exchange or other market at the
time a determination of fair market value is required to be made hereunder, the
determination of fair market value shall be made in good faith by the
Committee.


 


“Option”
means an option to purchase Units granted under the Plan.


 


“Other
Unit-Based Award” means an Award granted pursuant to Section 6(d) of
the Plan.


 


“Participant”
means an Employee or Director granted an Award under the Plan.  With respect to a Wexford Director, Wexford
or its assignee shall be deemed to be the Participant and not the individual
appointed to the Board from time to time by Wexford.


 


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“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.


 


“Phantom
Unit” means a notional Unit granted under the Plan that upon vesting entitles
the Participant to receive a Unit or an amount of cash equal to the Fair Market
Value of a Unit, as determined by the Committee in its discretion.


 


“Restricted
Period” means the period established by the Committee with respect to an Award
during which the Award remains subject to forfeiture and either is not
exercisable by or payable to the Participant, as the case may be.


 


“Restricted
Unit” means a Unit granted under the Plan that is subject to a Restricted
Period.


 


“Rule 16b-3”
means Rule 16b-3 promulgated by the SEC under the Exchange Act or any
successor rule or regulation thereto as in effect from time to time.


 


“SEC”
means the Securities and Exchange Commission, or any successor thereto.


 


“UDR”
means a distribution made by the Partnership with respect to a Restricted Unit.


 


“Unit”
means a Common Unit of the Partnership.


 


“Unit
Appreciation Right” or UAR” means a contingent right that entitles the holder
to receive all or part of the excess of the Fair Market Value of a Unit on the
exercise date of the UAR over the exercise price of the UAR.  Such excess shall be paid in Units, cash or
any combination thereof, in the discretion of the Committee.


 


“Unit
Award” means a grant of a Unit that is not subject to a Restricted Period.


 


“Wexford”
means Wexford Capital LP, a Delaware limited partnership.


 


SECTION 3.           Administration


 


The
Plan shall be administered by the Committee. 
Subject to applicable law and the following, the Committee, in its sole
discretion, may delegate any or all of its powers and duties under the Plan,
including the power to grant Awards under the Plan, to a committee comprised
solely of members of the Board and/or to the Chief Executive Officer of the
General Partner, subject to such limitations on such delegated powers and
duties as the Committee may impose, if any. 
Upon any such delegation, all references in the Plan to the “Committee”
shall be deemed to include such delegatees; provided, however, that a
delegation to the Chief Executive Officer shall not limit the Chief Executive
Officer’s right to receive Awards under the Plan.  Notwithstanding the foregoing, the Chief
Executive Officer may not grant Awards to, or take any action with respect to
any Award previously granted to, a person who is an officer subject to Rule 16b-3
or a member of the Board or take any action provided in Section 7.  Subject to the terms of the Plan and
applicable law, and any limitations provided in any delegations by the Board,
the Committee shall have full power and authority, in addition to the other
express 


 


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powers
and authorizations conferred on the Committee by the Plan, to:
(i) designate Participants; (ii) determine the type or types of
Awards to be granted to a Participant; (iii) determine the number of Units
to be covered by Awards; (iv) determine the terms and conditions of any
Award; (v) determine whether, to what extent, and under what circumstances
Awards may be settled, exercised, canceled, or forfeited; (vi) interpret
and administer the Plan and any instrument or agreement relating to an Award
made under the Plan; (vii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (viii) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan.  The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or an Award Agreement in such manner and to such
extent as the Committee deems necessary or appropriate.  Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time (including after the grant
of an Award) and shall be final, conclusive, and binding upon all Persons,
including the Partnership, the General Partner, any Affiliate, any Participant,
and any beneficiary thereof.  Without
limiting the foregoing, the Committee may delegate any or all of its administrative
duties to any Person, subject to such limitations, if any, as the Committee may
provide with such delegation.


 


SECTION 4.           Units


 


(a)           Limits on Units Deliverable.  Subject to adjustment as provided in Section 4(c),
the number of Units that may be delivered with respect to Awards under the Plan
is equal to 10% of the number of Common Units and subordinated units
outstanding on the closing date of the initial public offering of Units.  Units withheld from an Award to satisfy the
General Partner’s, Partnership’s or an Affiliate’s tax withholding obligations
with respect to the Award or to pay the exercise price of an Award shall be
considered Units delivered under the Plan for this purpose.  If any Award is forfeited, cancelled,
exercised, paid, or otherwise terminates or expires without the actual delivery
of Units pursuant to such Award (the grant of Restricted Units is not a
delivery of Units for this purpose), the Units that were subject to such Award
shall again be available for new Awards under the Plan.  There shall not be any limitation on the
number of Awards that may be paid or settled in cash.


 


(b)           Sources of Units Deliverable Under Awards.  Any Units delivered pursuant to an Award
shall consist, in whole or in part, of Units newly issued by the Partnership,
Units acquired in the open market, from any Affiliate of the Partnership or
from any other Person, or may be any combination of the foregoing, as
determined by the Committee in its discretion.


 


(c)           Anti-dilution Adjustments.  With respect to any “equity restructuring”
event that could result in an additional compensation expense to the
Partnership pursuant to the provisions of Statement of Financial Accounting
Standards No. 123(R), Codified as “FASB Topic 718-Stock Compensation” (“FAS
123R”) if adjustments to Awards with respect to such event were discretionary,
the Committee shall equitably adjust the number and type of Units covered by
each outstanding Award and the terms and conditions, including the exercise
price and performance criteria (if any), of such Award to reflect such
restructuring event and shall adjust the number and type of Units (or other
securities or property) with respect to which Awards may 


 


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be granted under the Plan after such event.  With respect to any other similar event that
would not result in a FAS 123R accounting charge if the adjustment to Awards
with respect to such event were subject to discretionary action, the Committee
shall have complete discretion to adjust Awards in such manner as it deems
appropriate with respect to such other event.


 


SECTION 5.           Eligibility


 


Each
Employee, Consultant and Director shall be eligible to be designated a
Participant by the Committee and receive an Award under the Plan; provided, however,
any Award granted to a Wexford Director shall be treated, for all purposes, as
a grant to Wexford or its assignee, as Wexford may direct or provide, and not
to the individual serving on the Board on behalf of Wexford or its assignee.


 


SECTION 6.           Awards


 


(a)           Options and UARs.  The Committee shall have the authority to
determine the Employees, Consultants and Directors to whom Options and UARs
shall be granted, the number of Units to be covered by each Option or UAR, the
exercise price therefor, the Restricted Period and other conditions and
limitations applicable to the exercise of the Option or UAR, including the
following terms and conditions and such additional terms and conditions, as the
Committee shall determine, that are not inconsistent with the provisions of the
Plan.


 


(i)            Exercise Price.  The exercise price per Unit purchasable under
an Option or subject to a UAR shall be determined by the Committee at the time
the Option or UAR is granted and may not be less than the Fair Market Value of
a Unit as of the date of grant of the Option or UAR.


 


(ii)           Time and Method of Exercise.  The Committee shall determine the exercise
terms and the Restricted Period with respect to an Option or UAR grant, which
may include, without limitation, (A) a provision for accelerated vesting
upon the death or Disability of a Participant, the achievement of specified
performance goals or such other events as the Committee may provide, and (B) the
method or methods by which payment of the exercise price with respect to an
Option may be made or deemed to have been made, which may include, without
limitation, cash, check acceptable to the Committee, withholding (netting)
Units from the payment of the Award, a “cashless-broker” exercise through
procedures approved by the Committee, or any combination of the above methods.


 


(iii)          Forfeitures.  Except as otherwise provided in the terms of
the Option or UAR grant, upon termination of a Participant’s employment or
consulting services with the Partnership, General Partner or their Affiliates,
or membership on the Board, whichever is applicable, for any reason during the
applicable Restricted Period, all unvested Options and UARs shall be forfeited
by the Participant.  The Committee may,
in its discretion, waive in whole or in part such forfeiture with respect to a
Participant’s Options or UARs.


 


(b)           Restricted Units and Phantom Units.  The Committee shall have the authority to
determine the Employees, Consultants and Directors to whom Restricted Units and
Phantom 


 


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Units shall be granted, the number of Restricted
Units or Phantom Units to be granted to each such Participant, the Restricted
Period, the conditions under which the Restricted Units or Phantom Units may
become vested or forfeited and such other terms and conditions as the Committee
may establish with respect to such Awards which may include, without
limitation, a provision for accelerated vesting upon the death or Disability of
a Participant, the achievement of specified performance goals and such other
events as the Committee may provide.


 


(i)            DERs.  To the extent provided by the Committee, in
its discretion, a grant of Phantom Units may include a tandem grant of DERs,
which may provide that such DERs shall be paid directly to the Participant at
the time of a distribution with respect to a Unit, be credited to a bookkeeping
account (with or without interest in the discretion of the Committee), be “reinvested”
in Restricted Units or additional Phantom Units and be subject to the same or
different vesting restrictions as the tandem Phantom Unit Award, or be subject
to such other provisions or restrictions as determined by the Committee in its
discretion.  DERs shall be credited to a
Participant’s DER Account at the time of the corresponding distribution with
respect to a Unit.  Absent any such
provisions in the Award Agreement with respect to DERs granted in tandem with a
Phantom Unit, upon a distribution with respect to a Unit, cash equal in value
to such Unit distribution shall be paid promptly to the Participant by the
General Partner without vesting restrictions with respect to each tandem
Phantom Unit then held.


 


(ii)           UDRs.  To the extent provided by the Committee, in
its discretion, a grant of Restricted Units may provide that the distributions
made by the Partnership with respect to the Restricted Units shall be subject
to the same forfeiture and other restrictions as the Restricted Unit and, if
restricted, such distributions shall be held, without interest, until the Restricted
Unit vests or is forfeited with the UDR being paid or forfeited at the same
time, as the case may be.  In addition,
the Committee may provide that such distributions be used to acquire additional
Restricted Units for the Participant. 
Such additional Restricted Units may be subject to such vesting and
other terms as the Committee may proscribe. 
Absent such a restriction on the UDRs in the Award Agreement, upon a
distribution with respect to the Restricted Unit, such distribution shall be
paid promptly to the holder of the Restricted Unit without vesting
restrictions.


 


(iii)          Forfeitures.  Except as otherwise provided in the terms of
the Restricted Units or Phantom Units grant agreement, upon termination of a
Participant’s employment or consulting services with the Partnership, General
Partner or their Affiliates, or membership on the Board, whichever is
applicable, for any reason during the applicable Restricted Period, all
outstanding, unvested Restricted Units and Phantom Units awarded the Participant
shall be automatically forfeited on such termination.  The Committee may, in its discretion, waive
in whole or in part such forfeiture with respect to a Participant’s Restricted
Units and/or Phantom Units.


 


(iv)          Lapse of Restrictions.


 


(A)          Phantom Units.  Upon or as soon as reasonably practical
following the vesting of each Phantom Unit, but not later than 30 days after
such vesting unless the Award Agreement specifically provides for a later date,
subject to


 


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satisfying the tax withholding obligations of Section 8(b),
the Participant shall receive from the General Partner one Unit or cash equal
to the Fair Market Value of a Unit, as determined by the Committee in its
discretion.


 


(B)           Restricted Units.  Upon or as soon as reasonably practical
following the vesting of each Restricted Unit, subject to satisfying the tax
withholding obligations of Section 8(b), the Participant shall have the
restrictions removed from his or her Unit certificate so that the Participant
then holds an unrestricted Unit.


 


(c)           Unit Awards.  Unit Awards may be granted under the Plan to
such Employees, Consultants and Directors and in such amounts as the Committee,
in its discretion, may select.  Such
Awards may be in addition to, or in satisfaction of, cash compensation, whether
base salary, incentive or deferred compensation or otherwise, due the
individual.


 


(d)           Other Unit-Based Awards.  Other Unit-Based Awards may be granted under
the Plan to such Employees, Consultants and Directors and in such amounts as
the Committee, in its discretion, may select. 
An Other Unit-Based Award shall be an award denominated in, valued in or
otherwise based on or related to Units, in whole or in part.  The Committee shall determine the terms and
conditions of any such Other Unit-Based Award. 
Upon vesting, an Other Unit-Based Award may be paid in cash, Units
(including Restricted Units) or any combination thereof as provided in the
Award Agreement.


 


(e)           General.


 


(i)            Awards May Be Granted
Separately or Together. 
Awards may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution for any other Award
granted under the Plan or any award granted under any other plan of the
Partnership, an Affiliate or any other Person. 
Awards granted in addition to or in tandem with other Awards or awards
granted under any other plan of the Partnership, an Affiliate or any other
Person may be granted either at the same time as or at a different time from
the grant of such other Awards or awards.


 


(ii)           Limits on Transfer of
Awards.


 


(A)          Except as provided in
subparagraph (C) below, each Option and Unit Appreciation Right shall be
exercisable only by the Participant during the Participant’s lifetime, or by
the person to whom the Participant’s rights shall pass by will or the laws of
descent and distribution.


 


(B)           Except as provided in
subparagraph (A) above or subparagraph (C) below, no Award and no
right under any such Award may be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by a Participant (or any permitted
transferee or successor holder of the Participant) 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.


 


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(C)           To the extent specifically
provided and approved by the Committee with respect to an Award, an Award may
be transferred by a Participant without consideration to immediate family
members or related family trusts, limited partnerships or similar entities on
such terms and conditions as the Committee may from time to time establish.


 


(iii)          Term of Awards.  The term of each Award shall be for such
period as may be determined by the Committee.


 


(iv)          Unit Certificates.  All certificates for Units or other
securities of the Partnership delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange upon which
such Units or other securities are then listed, and any applicable federal or
state laws, and the Committee may cause a legend or legends to be inscribed on
any such certificates to make appropriate reference to such restrictions.


 


(v)           Consideration for Grants.  Awards may be granted for such consideration,
including services, as the Committee shall determine.


 


(vi)          Delivery of Units or other
Securities and Payment by Participant of Consideration.  Notwithstanding anything in the Plan or any
Award Agreement to the contrary, delivery of Units pursuant to the exercise or
vesting of an Award may be deferred for any period during which, in the good
faith determination of the Committee, the General Partner is not reasonably
able to obtain Units to deliver pursuant to such Award without violating
applicable law or the applicable rules or regulations of any governmental
agency or authority or securities exchange. 
No Units or other securities shall be delivered pursuant to any Award
until payment in full of any amount required to be paid pursuant to the Plan or
the applicable Award grant agreement (including, without limitation, any
exercise price or tax withholding) is received by the General Partner or
appropriate Affiliate.


 


SECTION 7.           Amendment and Termination.


 


Except
to the extent prohibited by applicable law:


 


(a)           Amendments to the Plan.  Except as required by the rules of the
principal securities exchange on which the Units are traded or provided in any
Award Agreement and subject to Section 7(b) below, the Board may
amend, alter, suspend, discontinue, or terminate the Plan in any manner without
the consent of any member, Participant, other holder or beneficiary of an
Award, or any other Person.  In addition,
except in connection with a corporate transaction involving the General Partner
(including, without limitation, any unit, unit split, extraordinary cash
distribution, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination, or exchange of units), the terms of
outstanding Awards may not be amended to reduce the exercise price of
outstanding Options or SARs or cancel outstanding Options or SARs in exchange
for cash, other Awards or Options or SARs with an exercise price that is less
than the exercise price of the original Options or SARs without unitholder
approval.  Notwithstanding 


 


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the foregoing, the Plan may not be terminated with
respect to an Award that is subject to Section 409A of the Internal
Revenue Code of 1986, as amended, unless such termination would not result in
the Award becoming subject to the additional tax under Section 409A.


 


(b)           Amendments to Awards.  Subject to Section 7(a), the Board or
the Committee may waive any conditions or rights under, amend any terms of, or
alter any Award theretofore granted, provided no change, other than pursuant to
Section 7(c), in any Award shall materially reduce the vested rights or
benefits (as contrasted with a contingent right or benefit) of a Participant
(or holder) with respect to an outstanding Award without the consent of such
Participant (or holder).  Notwithstanding
anything in the Plan to the contrary, no amendment may be made with respect to
an Award without the Participant’s consent that would cause the Participant to
incur the additional tax provided under Section 409A with respect to such Award.


 


(c)           Actions Upon the Occurrence of Certain Events.  Upon the occurrence of a Change of Control, a
recapitalization, reorganization, merger, consolidation, combination, exchange
or change in the capitalization of the Partnership, 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 General Partner
or the Partnership, 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 in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or an outstanding Award:


 


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


 


(ii)           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 and prices;


 


(iii)          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;


 


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


 


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


 


Notwithstanding
the foregoing, with respect to an above event that is an “equity restructuring”
event that would result in a compensation expense pursuant FAS 123R, the
provisions in Section 4(c) shall control to the extent they are in
conflict with the discretionary provisions of this Section 7.


 


SECTION 8.           General Provisions.


 


(a)           No Rights to Award.  No Person shall have any claim to be granted
any Award under the Plan, and there is no obligation for uniformity of
treatment of Participants.  The terms and
conditions of Awards need not be the same with respect to each Participant.


 


(b)           Tax Withholding.  Unless other arrangements have been made that
are acceptable to the Committee, the General Partner and any applicable
Affiliate-employer is authorized to withhold from any Award, from any payment
due or transfer made under any Award or from any compensation or other amount
owing to a Participant the amount (in cash, Units, Units that would otherwise
be issued pursuant to such Award or other property) of any applicable taxes
required to be withheld in respect of the grant of an Award, its exercise, the
lapse of restrictions thereon, or any payment or transfer under an Award or
under the Plan and to take such other action as may be necessary in the opinion
of the Committee to satisfy the tax withholding obligations with respect to
such Award.  Notwithstanding the foregoing,
with respect to any Participant who is subject to Rule 16b-3, such tax
withholding automatically shall be effected by the General Partner “netting” or
withholding Units otherwise deliverable to the Participant on the vesting or
payment of such Award.


 


(c)           No Right to Continued Employment, Consulting or
Board Membership.  The grant
of an Award shall not be construed as giving a Participant the right to be
retained in the employ of or provide consulting services to the General Partner
or any Affiliate or to remain on the Board, as applicable.  Furthermore, the General Partner or an
Affiliate may at any time dismiss a Participant from employment or services or
the Board free from any liability or any claim under the Plan, unless otherwise
expressly provided in the Plan, any Award Agreement or other agreement.


 


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


 


(e)           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 the applicable law or, if it cannot
be construed or deemed amended without, in the determination of the Committee, 


 


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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.


 


(f)            Other Laws.  The Committee may refuse to issue or transfer
any Units or other consideration under an Award if, in its sole discretion, it
determines that the issuance or transfer of such Units or such other
consideration might violate any applicable law or regulation, the rules of
the principal securities exchange on which the Units are then traded, or
entitle the Partnership or an Affiliate to recover the same under Section 16(b) of
the Exchange Act, and any payment tendered by a Participant, other holder or
beneficiary in connection with the exercise of such Award shall be promptly
refunded to the relevant Participant, holder or beneficiary.


 


(g)           No Trust or Fund Created.  Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Partnership or any participating Affiliate and a
Participant or any other Person.  To the
extent that any Person acquires a right to receive payments from the
Partnership or any participating Affiliate pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Partnership or any participating Affiliate.


 


(h)           No Fractional Units.  No fractional Units shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Units or whether such fractional Units or any rights
thereto shall be canceled, terminated, or otherwise eliminated.


 


(i)            Headings.  Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of the Plan or any
provision thereof.


 


(j)            Facility Payment.  Any amounts payable hereunder to any person
under legal disability or who, in the judgment of the Committee, is unable to
manage properly his financial affairs, may be paid to the legal representative
of such person, or may be applied for the benefit of such person in any manner
that the Committee may select, and the General Partner and all Affiliates shall
be relieved of any further liability for payment of such amounts.


 


(k)           Gender and Number.  Words in the masculine gender shall include
the feminine gender, the plural shall include the singular and the singular
shall include the plural.


 


(l)            Compliance with IRC Section 409A.  The Plan and the Award Agreements are
intended to be exempt from Section 409A of the Internal Revenue Code of
1986, as amended, or, if not exempt, to comply with Section 409A to the
extent applicable.  To the extent Section 409A
is applicable, the terms of the Plan and Award Agreements shall be construed as
necessary to comply with Section 409A. 
The provisions of Section 409A and the Treasury regulations
thereunder required to be in the Plan or an Award Agreement are hereby
incorporated by reference and shall control over any provision in conflict
therewith, unless such provision expressly provides to the contrary.  If a payment under an Award is subject to the
provisions of Section 409A(a)(2)(B)(i), such payment shall be delayed to
comply with said Section and shall 


 


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be paid in a lump sum (without interest) on (i) the
first day that is more than six months after the Participant’s separation from
service date or (ii) his death, if earlier.


 


(m)          Participation by Affiliates.  To the extent the Partnership has an
obligation to reimburse the General Partner or an Affiliate for compensation
paid for services rendered for the benefit of the Partnership, such
reimbursements may be made by the Partnership directly or indirectly to the
entity employing the Participant.


 


SECTION 9.           Term of the Plan.


 


The
Plan shall be effective on the day immediately preceding the effective date of
the initial public offering of Units; provided, however, no Award shall become
vested or exercisable prior to the closing date of the initial public offering
of Units.  Subject to the preceding
sentence, the Plan shall continue until the earliest of (i) the date it is
terminated by the Board, (ii) all Units available under the Plan have been
paid to Participants or beneficiaries, or (iii) the 10th anniversary of
the date the Plan is adopted by the Board; provided, however, any Award granted
prior to such termination, and the authority of the Board or the Committee to
amend, alter, adjust, suspend, discontinue, or terminate any such Award or to
waive any conditions or rights under such Award, shall extend beyond such
termination date.


 


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