exv10w9






Exhibit 10.9





The Carlyle Group L.P.

2012 Equity Incentive Plan




1. Purpose of the Plan




     The Carlyle Group L.P. 2012 Equity Incentive Plan (the “Plan”) is designed to promote
the long term financial interests and growth of The Carlyle Group L.P., a Delaware limited
partnership (the “Partnership”), and its Affiliates by (i) attracting and retaining senior
professionals,  employees, consultants, directors, members, partners  and other service providers of the
Partnership or any of its Affiliates, including directors of the Partnership’s general partner,
Carlyle Group Management L.L.C. (the “General Partner”), and (ii) aligning the interests of
such individuals with those of the Partnership and its Affiliates by providing them with
equity-based awards based on the common units of limited partner interests in the Partnership (the
“Common Units”) or the partnership units (the “Carlyle Holdings Partnership Units”)
of Carlyle Holdings (as defined below).



2. Definitions




     The following capitalized terms used in the Plan have the respective meanings set forth in
this Section:



     (a) Act: The Securities Exchange Act of 1934, as amended, or any successor thereto.



     (b) Administrator: The Board, or the committee or subcommittee thereof to whom
authority to administer the Plan has been delegated pursuant to Section 4 hereof.



     (c) Affiliate: 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.



     (d) Award: Individually or collectively, any Option, Unit Appreciation Right, or
Other Unit-Based Awards based on or relating to the Common Units or Carlyle Holdings Partnership
Units issuable under the Plan.



     (e) Beneficial Owner: A “beneficial owner”, as such term is defined in Rule 13d-3
under the Act (or any successor rule thereto).



     (f) Board: The board of directors of the General Partner.



     (g) Carlyle Holdings: The collective reference to all of the Carlyle Holdings
Partnerships.











 



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     (h) Carlyle Holdings Partnership Units: Each “Carlyle Holdings
Partnership Unit”
shall consist of one partnership unit in each of the three Carlyle Holdings Partnerships.






      (i) Carlyle Holdings Partnerships: Each of Carlyle Holdings I L.P.,
Carlyle Holdings
II L.P. and Carlyle Holdings III L.P.





     (j) Change in Control: (i) The occurrence of any Person, other than a Person approved
by the General Partner, becoming the general partner of the Partnership; or (ii) during any period
of two consecutive years, Continuing Directors cease for any reason to constitute a majority of the
directors serving on the Board. For purposes of this definition, “Continuing Director”
means any member of the Board (a) serving on the Board at the beginning of the relevant period of
two consecutive years referred to in the immediately preceding sentence, (b) appointed or elected
to the Board by the members of the General Partner or (c) whose appointment or election to the
Board by such Board, or nomination for election to the Board by
the limited partners of the
Partnership, was approved by a majority of the directors of the Board  then still serving at the time of such approval who were so serving at the beginning of the
relevant period of two consecutive years, were so appointed or elected by the members of the
General Partner or whose appointment or election or nomination for election was so approved.



     (k) Code: The Internal Revenue Code of 1986, as amended, or any successor thereto.



     (l) Common Units: The common units representing limited partner interests of the
Partnership.



     (m) Disability: The term “Disability” shall have the meaning as provided under
Section 409A(a)(2)(C)(i) of the Code. Notwithstanding the foregoing or any other provision of this
Plan, the definition of Disability (or any analogous term) in an Award agreement shall supersede
the foregoing definition; provided, however, that if no definition of Disability or any analogous
term is set forth in such agreement, the foregoing definition shall apply.



     (n) Effective Date: The date on which the Board adopts the Plan, or such later date
as is designated by the Board.





     (o) Fair Market Value: Of a Common Unit or a Carlyle Holdings
Partnership Unit on any
given date means (i) the closing sale price per Common Unit as
quoted on the National Association of Securities Dealers Automated
Quotation System (“NASDAQ”) on that
date (or, if no closing sale price is reported, the last reported sale price), (ii) if the Common
Units are not listed for trading on NASDAQ, the closing sale price (or, if no
closing sale price is reported, the last reported sale price) as reported on that date in composite
transactions for the principal national securities exchange registered pursuant to Section 6(g) of
the Act on which the Common Units are listed, (iii) if the Common Units are not so listed on a
national securities exchange, the last quoted bid price for the Units on that date in the
over-the-counter market as reported by Pink Sheets LLC or a similar organization, or (iv) if the
Common Units are not so quoted by Pink Sheets LLC or a similar organization, the average of the
mid-point of the last bid and ask prices for the Common Units on that date from a nationally
recognized independent investment banking firm selected by the General Partner for this purpose.











 



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     (p) General Partner: Carlyle Group Management L.L.C., a Delaware limited liability
company.



     (q) Option: A nonqualified option to purchase Units granted pursuant to Section 6 of
the Plan.



     (r) Option Price: The purchase price per Unit of an Option, as determined pursuant to
Section 6(a) of the Plan.



     (s) Other Unit-Based Awards: Awards granted pursuant to Section 8 of the Plan.



     (t) Participant: A senior professional,  employee,
consultant, director, member, partner or other
service provider of the Partnership or of any of its Affiliates, including any director of the
General Partner, who is selected by the Administrator to participate in the Plan.



     (u) Partnership: The Carlyle Group L.P., a Delaware limited partnership.



     (v) Person: A “person”, as such term is used for purposes of Section 13(d) or 14(d)
of the Act (or any successor section thereto).







     (w) Plan: The Carlyle Group L.P. 2012 Equity Incentive Plan.




     (x) Services:
Shall be deemed to refer to (i)
a Participant’s employment if the Participant is an employee of the Partnership or any of its
Affiliates, (ii) a Participant’s services as a consultant,
member or partner, if the Participant is
consultant to, or partner of, the Partnership or of any of its Affiliates, and (iii) a
Participant’s services as an non-employee director, if the Participant is a non-employee member of
the Board; provided, however, that with respect to any Award subject to Section
409A of the Code, a Participant’s termination of Services shall be deemed to occur upon the date
of the Participant’s separation from service within the meaning of Section 409A of the Code.



     (y) Unit Appreciation Right: A unit appreciation right granted pursuant to Section 7
of the Plan.



     (z) Units: Common Units or Carlyle Holdings Partnership Units which are issued or may
be issued under the Plan.



3. Units Subject to the Plan




     (a) Subject to Section 9 hereof, the total number of Units which may be issued under the Plan
shall be 30,450,000, of which all or any portion may be issued as Common Units or Carlyle
Holdings Partnership Units. Notwithstanding the foregoing, the total number of Units subject to
the Plan shall be increased on the first day of each fiscal year beginning in calendar year 2013 by
a number of Units equal to the positive difference, if any, of (x) 10% of the aggregate number of
Common Units and Carlyle Holdings Partnership Units outstanding on the last day of the immediately
preceding fiscal year (excluding Carlyle Holdings Partnership Units held by the Partnership or its
wholly-owned subsidiaries) minus (y) the aggregate number of Common Units and Carlyle Holdings
Partnership Units which were available for the issuance of future Awards under the Plan on such
last day of the immediate preceding fiscal year, unless the Administrator should decide to increase
the number of Common Units and Carlyle Holdings Partnership Units covered by the Plan by a lesser
amount on any such date.









 



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     (b) The issuance of Units or the payment of cash upon the exercise of an Award or in
consideration of the cancellation or termination of an Award shall reduce the total number of Units
available under the Plan, as applicable. Units which are subject to Awards which terminate or lapse
without the payment of consideration may be granted again under the Plan.



     (c) Unless the Administrator shall otherwise determine, Common Units delivered by the
Partnership or its Affiliates upon exchange of Carlyle Holdings Partnership Units that have been
issued under the Plan shall be issued under the Plan.



4. Administration




     (a) The Plan shall be administered by the Board, which may delegate its duties and powers in
whole or in part to any committee or subcommittee thereof (the “Administrator”). The
Administrator may delegate the authority to grant Awards under the Plan to any employee or group of
employees of the Partnership or of any Affiliate of the Partnership; provided that
such delegation and grants are consistent with applicable law and guidelines established by the
Board from time to time. Awards may, in the discretion of the Administrator, be made under the
Plan in assumption of, or in substitution for, outstanding awards previously granted by the
Partnership, any Affiliate of the Partnership or any entity acquired by the Partnership or with
which the Partnership combines. The number of Units underlying such substitute awards shall be
counted against the aggregate number of Units available for Awards under the Plan.



     (b) The Administrator is authorized to interpret the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan. The Administrator may correct any
defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the
extent the Administrator deems necessary or desirable. Any decision of the Administrator in the
interpretation and administration of the Plan, as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties concerned (including,
but not limited to, Participants and their beneficiaries or successors).



     (c) The Administrator shall have the full power and authority to establish the terms and
conditions of any Award consistent with the provisions of the Plan and to waive any such terms and
conditions at any time (including, without limitation, accelerating or waiving any vesting
conditions).



     (d) The Administrator may require payment of any amount it may determine to be necessary to
withhold for federal, state, local or other taxes as a result of the exercise, grant or vesting of
an Award. In connection therewith, the Partnership or any Affiliate shall have the right to
withhold from any compensation or other amount owing to the Participant, applicable withholding
taxes with respect to any issuance or transfer under the Plan and to take such action as may be
necessary in the opinion of the Partnership to satisfy all obligations for the payment of such
withholding taxes. Additionally, the Administrator may permit or require a Participant to publicly
sell, in a manner prescribed by the Administrator, a sufficient number of Units in connection with
the settlement of an Award (with a remittance of the sale proceeds to the Partnership) to cover
applicable tax withholdings.



5. Limitations











 



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     No Award may be granted under the Plan after the tenth anniversary of the Effective Date, but
Awards theretofore granted may extend beyond that date.



6. Terms and Conditions of Options




     Options granted under the Plan shall be non-qualified options for federal income tax purposes,
and shall be subject to the foregoing and the following terms and conditions and to such other
terms and conditions, not inconsistent therewith, as the Administrator shall determine:



     (a) Option Price. The Option Price per Unit shall be determined by the Administrator;
provided that the Option Price per Unit shall not be less than the Fair Market Value of a Unit on
the applicable date the Option is granted unless the Participant is not subject to Section 409A of
the Code or the Option is otherwise designed to be compliant with Section 409A of the Code.



     (b) Exercisability. Options granted under the Plan shall be exercisable at such time
and upon such terms and conditions as may be determined by the Administrator, but in no event shall
an Option be exercisable more than ten years after the date it is granted.



     (c) Exercise of Options. 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 Section 6 of the Plan, the exercise date of an
Option shall be the later of the date a notice of exercise is received by the Partnership and, if
applicable, the date payment is received by the Partnership pursuant to the relevant clauses in the
following sentence. The purchase price for the Units as to which an Option is exercised shall be
paid to the Partnership, and in the manner designated by the Administrator, pursuant to one or more
of the following methods: (i) in cash or its equivalent (e.g., by personal check), (ii) in Units
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 Administrator, (iii) partly in cash and
partly in such Units, (iv) if the Option relates to Common Units and if there is a public market
for the Common Units at such time, through the delivery of irrevocable instructions to a broker to
sell Common Units obtained upon the exercise of the Option and to deliver promptly to the
Partnership an amount out of the proceeds of such Sale equal to the aggregate Option Price for the
Common Units being purchased, or (v) to the extent permitted by the Administrator, through net
settlement in Units. Unless otherwise provided in an Award agreement, no Participant shall have
any rights to distributions or other rights of a holder with respect to Units subject to an Option
until the Participant has given written notice of exercise of the Option, paid in full for such
Units and, if applicable, has satisfied any other conditions imposed by the Administrator pursuant
to the Plan.



     (d) Attestation. Wherever in this Plan or any agreement evidencing an Award a
Participant is permitted to pay the exercise price of an Option or taxes relating to the exercise
of an Option by delivering Units, the Participant may, subject to procedures satisfactory to the
Administrator, satisfy such delivery requirement by presenting proof of beneficial ownership of
such Units, in which case the Partnership shall treat the Option as exercised without further
payment and/or shall withhold such number of Units from the Units acquired by the exercise of the
Option, as appropriate.



     (e) Service Recipient Stock. No Option may be granted to a Participant subject to
Section 409A of the Code unless (i) the Units constitute “service recipient stock” with respect to









 



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such Participant (as defined in Section 1.409A-1(b)(5)(iii)) or (ii) the Option is
otherwise designed to be compliant with Section 409A of the Code.




7. Terms and Conditions of Unit Appreciation Rights




     (a) Grants. The Administrator may grant (i) a Unit Appreciation Right independent of
an Option or (ii) a Unit Appreciation Right in connection with an Option, or a portion thereof. A
Unit Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be
granted at the time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same number of Units covered by an Option
(or such lesser number of Units as the Administrator may determine) and (C) shall be subject to the
same terms and conditions as such Option except for such additional limitations as are contemplated
by this Section 7 (or such additional limitations as may be included in an Award agreement).



     (b) Terms. The exercise price per Unit of a Unit Appreciation Right shall be an
amount determined by the Administrator; provided, however, that (z) the exercise
price per Unit shall not be less than the Fair Market Value of a Unit on the applicable date the
Unit Appreciation Right is granted unless the Participant is not subject to Section 409A of the
Code or the Unit Appreciation Right is otherwise designed to be compliant with Section 409A of the
Code and (y) in the case of a Unit Appreciation Right granted in conjunction with an Option, or a
portion thereof, the exercise price may not be less than the Option Price of the related Option.
Each Unit Appreciation Right granted independent of an Option shall entitle a Participant upon
exercise to an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of
one Unit over (B) the exercise price per Unit, times (ii) the number of Units covered by the Unit
Appreciation Right. Each Unit Appreciation Right granted in conjunction with an Option, or a
portion thereof, shall entitle a Participant to surrender to the Partnership the unexercised
Option, or any portion thereof, and to receive from the Partnership in exchange therefore an amount
equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Unit over (B) the
Option Price per Unit, times (ii) the number of Units covered by the Option, or portion thereof,
which is surrendered. Payment shall be made in Units or in cash, or partly in Units and partly in
cash (any such Units valued at such Fair Market Value), all as shall be determined by the
Administrator. Unit Appreciation Rights may be exercised from time to time upon actual receipt by
the Partnership of written notice of exercise stating the number of Units with respect to which the
Unit Appreciation Right is being exercised. The date a notice of exercise is received by the
Partnership shall be the exercise date. The Administrator, in its sole discretion, may determine
that no fractional Units will be issued in payment for Unit Appreciation Rights, but instead cash
will be paid for a fraction or the number of Units will be rounded downward to the next whole Unit.



     (c) Limitations. The Administrator may impose, in its discretion, such conditions
upon the exercisability of Unit Appreciation Rights as it may deem fit, but in no event shall a
Unit Appreciation Right be exercisable more than ten years after the date it is granted.



     (d) Service Recipient Stock. No Unit Appreciation Right may be granted to a
Participant subject to Section 409A of the Code unless (i) the Units constitute “service recipient
stock” with respect to such Participant (as defined in Section 1.409A-1(b)(5)(iii)) or (ii) the
Unit Appreciation Right is otherwise designed to be compliant with Section 409A of the Code.









 



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8. Other Unit-Based Awards




     The Administrator, in its sole discretion, may grant or sell Awards of Units, restricted
Units, deferred restricted Units, phantom restricted Units or other Unit-Based awards based in
whole or in part on the Fair Market Value of the Common Units or Carlyle Holdings Partnership Units
(“Other Unit-Based Awards”). Such Other Unit-Based Awards shall be in such form, and
dependent on such conditions, as the Administrator shall determine, including, without limitation,
the right to receive, or vest with respect to, 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 objectives. 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
Administrator shall determine to whom and when Other Unit-Based Awards will be made, the number of
Units 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, any vesting provisions
thereof).



9. Adjustments Upon Certain Events




     Notwithstanding any other provisions in the Plan to the contrary, the following provisions
shall apply to all Awards granted under the Plan:



     (a) Generally. In the event of any change in the outstanding Units after the
Effective Date by reason of any Unit distribution or split, reorganization, recapitalization,
merger, consolidation, spin-off, combination, combination or transaction or exchange of Units or
other corporate exchange, or any distribution to holders of Units other than regular cash
distributions or any transaction similar to the foregoing, the Administrator shall make an
equitable substitution or adjustment (subject to Section 17) as to (i) the number or kind of Units
or other securities issued or reserved for issuance pursuant to the Plan or pursuant to outstanding
Awards, (ii) the Option Price or exercise price of any Option or Unit Appreciation Right and/or
(iii) any other affected terms of such Awards, in each case, to the extent determined by the
Administrator to be necessary to preserve (and not to enlarge) Participants’ rights with respect to
Awards outstanding under the Plan; provided, however, that the manner and form of
any such equitable adjustments shall be determined by the Administrator in its sole discretion and
without liability to any person.



     (b) Change in Control. In the event of a Change in Control after the Effective Date,
the Administrator may (subject to Section 17), but shall not be obligated to, (A) accelerate, vest
or cause the restrictions to lapse with respect to all or any portion of an Award, (B) cancel such
Awards for fair value (as determined in the sole discretion of the Administrator) which, in the
case of Options and Unit Appreciation Rights, may equal the excess, if any, of value of the
consideration to be paid in the Change in Control transaction to holders of the same number of
Units subject to such Options or Unit Appreciation Rights (or, if no consideration is paid in any
such transaction, the Fair Market Value of the Units subject to such Options or Unit Appreciation
Rights) over the aggregate exercise price of such Options or Unit Appreciation Rights, (C) provide
for the issuance of substitute Awards that will substantially preserve the otherwise applicable
terms of any affected Awards previously granted hereunder as determined by the Administrator in its
sole discretion or (D) provide that for a period of at least 15 days prior to the Change in
Control, such Options shall be exercisable as to all shares subject thereto and that upon the
occurrence of the Change in Control, such Options shall terminate and be of no further









 



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force and
effect. The provisions of this Section 9(b) shall not limit a Participant’s rights, if any, to
accelerated vesting of an Award upon a Change in Control to the extent provided under the terms of
any applicable Award agreement.




10. No Right to Continued Service, Employment or Awards




     The granting of an Award under the Plan shall impose no obligation on
the Partnership or any
Affiliate to continue the Services of a Participant and shall not lessen or affect the
Partnership’s or Affiliate’s right to terminate the Services 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 Administrator’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).



11. Successors and Assigns




     The Plan shall be binding on all successors and assigns of the Partnership and a Participant,
including without limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or representative of the
Participant’s creditors.



12. Non-transferability of Awards




     Unless otherwise determined or approved by the Administrator, an Award shall not be
transferable or assignable by the Participant otherwise than by will or by the laws of descent and
distribution. An Award exercisable after the death of a Participant may be exercised by the
legatees, personal representatives or distributees of the Participant.



13. Amendments or Termination




     The Board may amend, alter or discontinue the Plan, but no amendment, alteration or
discontinuation shall be made, without the consent of a Participant, if such action would
materially diminish any of the rights of the Participant under any Award theretofore granted to
such Participant under the Plan; provided, however, that the Administrator may
amend the Plan in such manner as it deems necessary to permit the granting of Awards meeting the
requirements of the Code or other applicable laws (including, without limitation, to avoid adverse
tax consequences to the Partnership or to Participants).



     Notwithstanding any provision of the Plan to the contrary, in the event that the Administrator
determines that any amounts payable hereunder will be taxable to a Participant under Section 409A
of the Code and related Department of Treasury guidance prior to payment to such Participant of
such amount, the Partnership may (a) adopt such amendments to the Plan and Awards and appropriate
policies and procedures, including amendments and policies with retroactive effect, that the
Administrator determines necessary or appropriate to preserve the intended tax treatment of the
benefits provided by the Plan and Awards hereunder and/or (b) take such other actions as the
Administrator determines necessary or appropriate to avoid the imposition of an additional tax
under Section 409A of the Code.



14. International Participants












 



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     With respect to Participants who reside or work outside the United States of America, the
Administrator may, in its sole discretion, amend the terms of the Plan or Awards with respect to
such Participants (or establish a sub-plan operating under the Plan) in order to conform such terms
with the requirements of local law or to obtain more favorable tax or other treatment for a
Participant, the Partnership or an Affiliate.



15. Choice of Law




     The Plan shall be governed by and construed in accordance with the law of the State of New
York without regard to its conflict of law provisions.



16. Effectiveness of the Plan




     The Plan shall be effective as of the Effective Date.



17. Section 409A




     To the extent applicable, this Plan and Awards issued hereunder shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any such regulations or
other guidance that may be issued after the Effective Date. Notwithstanding other provisions of
the Plan or any Award agreements thereunder, no Award shall be granted, deferred, accelerated,
extended, paid out or modified under this Plan in a manner that would result in the imposition of
an additional tax under Section 409A of the Code upon a Participant. In the event that it is
reasonably determined by the Administrator that, as a result of Section 409A of the Code, payments
in respect of any Award under the Plan may not be made at the time contemplated by the terms of the
Plan or the relevant Award agreement, as the case may be, without causing the Participant holding
such Award to be subject to taxation under Section 409A of the Code, the Partnership may take
whatever actions the Administrator determines necessary or appropriate to comply with, or exempt
the Plan and Award agreement from the requirements of Section 409A of the Code and related
Department of Treasury guidance and other interpretive materials as may be issued after the
Effective Date, which action may include, but is not limited to, delaying payment to a Participant
who is a “specified employee” within the meaning of Section 409A of the Code until the first day
following the six-month period beginning on the date of the Participant’s termination of
Services. The Partnership shall use commercially reasonable efforts to implement the provisions
of this Section 17 in good faith; provided that neither the Partnership, the Administrator
nor any employee, director or representative of the Partnership or of any of its Affiliates shall
have any liability to Participants with respect to this Section 17.



18. Fractional Units




     Notwithstanding other provisions of the Plan or any Award agreements thereunder, the
Partnership shall not be obligated to issue or deliver fractional Units pursuant to the Plan or any
Award and the Administrator 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 cancelled, terminated or otherwise eliminated with, or without,
consideration.