exv10w2



 





Exhibit 10.2




RESOLUTE ENERGY PARTNERS, LP

LONG-TERM INCENTIVE PLAN




     SECTION 1. Purpose of the Plan.



     The Resolute Energy Partners, LP Long-Term Incentive Plan (the “Plan”) has been adopted by
Resolute Energy GP, LLC, a Delaware limited liability company (the “Company”), the general partner
of Resolute Energy Partners, LP, a Delaware limited partnership (the “Partnership”). The Plan is
intended to promote the interests of the Partnership, the Company and their Affiliates by providing
to employees, consultants and directors of the Partnership, the Company and their Affiliates
incentive compensation awards that are based on Units for superior performance. The Plan is also
contemplated to enhance the ability of the Partnership, the Company and their Affiliates to attract
and retain the services of individuals who are essential for the growth and profitability of the
Company, the Partnership and their Affiliates, and to encourage them to devote their best efforts
to advancing the business of the Company, the Partnership and their Affiliates.



     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. 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.



     “Award” means an Option, UAR, Restricted Unit, Phantom Unit, Other Unit-Based Award, Unit
Award or Replacement Award, and shall also include any tandem DERs granted with respect to an
Option, UAR or Phantom Unit.



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



     “Board” means the Board of Directors of the Company.



     “Change of Control” means, and shall be deemed to have occurred upon the occurrence of, 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 or the Partnership,
shall become the direct owner, by way of merger, consolidation, recapitalization,
reorganization or otherwise, of 50% or more of the combined voting power of the equity
interests in 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, lease 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; or




     (iv) a transaction resulting in a Person other than the Company or an Affiliate of the
Company being the general partner of the Partnership.



     Notwithstanding the foregoing, with respect to an Award that is subject to Section 409A of the
Code and with respect to which a Change of Control will accelerate payment, “Change of Control”
shall only include a Change of Control that constitutes a “change of control event” as defined in
the regulations and guidance issued under Section 409A of the Code.



     Further, notwithstanding the foregoing, for purposes of determining whether the vesting of any
Award accelerates, “Change of Control” shall not include any initial public offering of the
Partnership’s equity securities that is registered under the Securities Act of 1933.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Committee” means the Board or such committee of the Board, if any, as may be appointed by the
Board to administer the Plan.



     “Consultant” means an independent contractor, other than a Director, who performs services for
the benefit of the Company or the Partnership or an Affiliate of either of them.



     “DER” or “Distribution Equivalent Right” means a contingent right, granted in tandem with a
specific Option, UAR or Phantom Unit, to receive an amount in cash equal to the cash distributions
made by the Partnership with respect to a Unit during the period such DER is outstanding.



     “Director” means a member of the Board or a board of directors of an Affiliate who is not an
Employee or a Consultant (other than in that individual’s capacity as a Director).



     “Employee” means any employee of the Company, the Partnership or an Affiliate of either of
them who performs services for the benefit of the Company, the Partnership or an Affiliate of
either of them.



     “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 The Wall Street Journal (or other reporting service approved by the
Committee). In the event 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.



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Notwithstanding the foregoing, with respect to an Award granted on the effective date of the
initial public offering of Units, Fair Market Value on such date shall mean the initial offering
price per Unit as stated on the cover page of the S-1 for such offering.



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



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



     “Participant” means any Employee, Consultant or Director granted an Award under the Plan.



     “Person” means an individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity.



     “Phantom Unit” means a phantom (notional) unit granted under the Plan which entitles the
Participant to receive an amount of cash equal to the Fair Market Value of one Unit upon vesting of
the Phantom Unit; however, the Committee, in its discretion, may elect to pay such vested Phantom
Unit with a Unit in lieu of cash.



     “Replacement Award” means an Award granted pursuant to Section 6(g) of the Plan.



     “Restricted Period” means the period established by the Committee with respect to an Award
during which the Award remains subject to forfeiture and is either 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.



     “Unit” means a common unit of the Partnership.



     “UAR” or “Unit Appreciation Right” means an Award that, upon exercise, entitles the holder to
receive the excess of the Fair Market Value of a Unit on the exercise date over the exercise price
established for such Unit Appreciation Right. Such excess may be paid in cash, Units or any
combination thereof, as determined by the Committee in its discretion.



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



     “UDR” or “Unit Distribution Right” means a right to receive distributions made by the
Partnership with respect to a Restricted Unit.



     SECTION 3. Administration.



     (a) Governance. The Plan shall be administered by the Committee.



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     (b) Delegation. Subject to the following and applicable law, 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 the Chief Executive Officer of the Company, 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”, other than in Section 7, shall be
deemed to include the Chief Executive Officer; provided, however, that such delegation 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.



     (c) Authority and Powers. Subject to the terms of the Plan and applicable law, and
in addition to other express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority 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 vested, 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, 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 and shall be final, conclusive, and binding upon all Persons, including the Company,
the Partnership, any Affiliate, any Participant, and any beneficiary of any Participant.



     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 may not exceed
4,400,000 Units; provided, however, if any Award (including Restricted Units) is terminated,
cancelled, forfeited or expires for any reason without the actual delivery of Units covered by such
Award or Units are withheld from an Award to satisfy the exercise price or the employer’s tax
withholding obligation with respect to such Award or previously acquired Units are delivered to the
Company in full or partial payment of the exercise price for the exercise of an Option granted
under the Plan, such Units shall again be available for delivery pursuant to other Awards granted
under the Plan. Notwithstanding the foregoing, (i) there shall not be any limitation on the number
of Awards that may be granted under the Plan and paid in cash, and (ii) any Units allocated to an
Award shall, to the extent such Award is paid in cash, be again available for delivery under the
Plan with respect to other Awards.



     (b) Sources of Units Deliverable Under Awards. Any Units delivered pursuant to an
Award shall consist, in whole or in part, of Units acquired in the open market or from any



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Affiliate, the Partnership or any other Person, or any combination of the foregoing, as
determined by the Committee in its sole discretion.



     (c) Anti-Dilution Adjustments. With respect to any “equity restructuring” event that
could result in an additional compensation expense to the Company or the Partnership pursuant to
the provisions of Statement of Financial Accounting Standards No. 123 (“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 equitably reflect such
restructuring event and shall adjust the number and type of Units (or other securities or property)
with respect to which Awards may be granted 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. In the event the Committee makes any adjustment pursuant to the foregoing provisions of
this Section 4(c), the Committee shall make a corresponding and proportionate adjustment with
respect to the maximum number of Units that may be delivered with respect to Awards under the Plan
as provided in Section 4(a) and the kind of Units or other securities available for grant under the
Plan.



     SECTION 5. Eligibility.



     Any Employee, Consultant or Director shall be eligible to be designated a Participant and
receive an Award under the Plan.



     SECTION 6. Awards.



     (a) Options. The Committee shall have the authority to determine the Employees,
Consultants and Directors to whom Options shall be granted, the number of Units to be covered by
each Option, whether DERS are granted with respect to such Option, and the conditions and
limitations applicable to the exercise of such Option, 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 under an Option shall be
determined by the Committee at the time the Option is granted and, except with respect to a
Replacement Award, may not be less than its Fair Market Value as of the date of grant.




     (ii) Time and Method of Exercise. The Committee shall determine (A) the time
or times at which an Option may be exercised in whole or in part, which may include, without
limitation, accelerated vesting upon the achievement of specified performance goals or other
events, and (B) in its discretion the method or methods by which payment of the exercise
price with respect thereto may be made or deemed to have been made, which may include,
without limitation, cash, check acceptable to the Company, a “cashless-broker” exercise
through a program approved by the Company, with the consent of the Company, the withholding
of Units that would otherwise be delivered to the Participant upon the exercise of the
Option, other securities or other



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property, or any combination thereof, having a Fair Market Value on the exercise date
equal to the relevant exercise price.




     (iii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment or consulting with the Company,
the Partnership and their Affiliates or membership as a Director, whichever is applicable,
for any reason during the applicable Restricted Period, all Options 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.




     (iv) DERs. To the extent provided by the Committee, in its discretion, a grant
of Options may include a tandem DER grant, which may provide that such DERs shall be paid
directly to the Participant, be credited to a bookkeeping account (with or without interest
in the discretion of the Committee) subject to the same vesting restrictions as the tandem
Award, or be subject to such other provisions or restrictions as determined by the Committee
in its discretion. Absent any provision to the contrary with regard to the DERs in the
Award Agreement, DERs shall be subject to the same vesting restrictions as apply to the
Options with respect to which they were granted. Further, to the extent required by Section
409A of the Code, DERs granted in tandem with Options shall not be directly or indirectly
contingent on the exercise of the Options with respect to which they were granted.



     (b) UARs. The Committee shall have the authority to determine the Employees and
Directors to whom Unit Appreciation Rights shall be granted, the number of Units to be covered by
each grant, whether DERs are granted with respect to such Unit Appreciation Right, the exercise
price therefor and the conditions and limitations applicable to the exercise of the Unit
Appreciation Right, 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 Appreciation Right shall be
determined by the Committee at the time the Unit Appreciation Right is granted but may not
be less than the Fair Market Value of a Unit as of the date of grant.




     (ii) Time of Exercise. The Committee shall determine the Restricted Period,
i.e., the time or times at which a Unit Appreciation Right may be exercised in whole or in
part, which may include, without limitation, accelerated vesting upon the achievement of
specified performance goals.




     (iii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment with the Company and its
Affiliates or membership as a Director, whichever is applicable, for any reason during the
applicable Restricted Period, all outstanding unvested Unit Appreciation Rights 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 Unit
Appreciation Rights.



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     (iv) Unit Appreciation Right DERs. To the extent provided by the Committee, in
its discretion, a grant of Unit Appreciation Rights may include a tandem DER grant, which
may provide that such DERs shall be paid directly to the Participant, be credited to a
bookkeeping account (with or without interest in the discretion of the Committee) subject to
the same vesting restrictions as the tandem Unit Appreciation Rights Award, or be subject to
such other provisions or restrictions as determined by the Committee in its discretion.
Absent any provision to the contrary with regard to the DERs in the Award Agreement, DERs
shall be subject to the same vesting restrictions as apply to the Unit Appreciation Rights
with respect to which they were granted. Further, to the extent required by Section 409A of
the Code, DERs granted in tandem with UARs shall not be directly or indirectly contingent on
the exercise of the UARs with respect to which they were granted.



     (c) Phantom Units. The Committee shall have the authority to determine the Employees,
Consultants, and Directors to whom Phantom Units shall be granted, the number of Phantom Units to
be granted to each such Participant, the Restricted Period, the time or conditions under which the
Phantom Units may become vested or forfeited, which may include, without limitation, the
accelerated vesting upon the achievement of specified performance goals or other events, and such
other terms and conditions as the Committee may establish with respect to such Awards, including
whether DERs are granted with respect to such Phantom Units.




     (i) DERs. To the extent provided by the Committee in its discretion, a grant
of Phantom Units may include a tandem DER grant, which provides that such DERs shall be
credited to a bookkeeping account (without interest) and shall be paid to the Participant in
cash upon the vesting of the tandem Phantom Unit. However, the Committee, in its
discretion, may provide such other terms, including different vesting and payment forms and
mediums and the “investment” of such DERs in additional Phantom Units, as it may choose with
respect to DERs and may also provide that a grant of Phantom Units does not include tandem
DERs. Absent any provision to the contrary on the DERs in the Award Agreement, DERs shall
be subject to the same vesting restrictions as apply to the Phantom Units with respect to
which they were granted and no “investment” requirements shall apply.




     (ii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment or consulting arrangement with the
Company, the Partnership and their Affiliates or membership as a Director, whichever is
applicable, for any reason during the applicable Restricted Period, all outstanding Phantom
Units awarded the Participant, and any outstanding tandem DERs credited to such 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 Phantom Units and
tandem DERs.




     (iii) Lapse of Restrictions. Upon or as soon as reasonably practical following
the vesting of each Phantom Unit, subject to the provisions of Section 8(b), the Participant
shall be entitled to settlement of such Phantom Unit by receiving from the Company cash
equal to the Fair Market Value of one Unit as of the vesting date;



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     however, the Committee, in its discretion, may elect to pay such vested Phantom Unit in
the form of one Unit in lieu of cash.



     (d) Restricted Units. The Committee shall have the authority to determine the
Employees, Consultants and Directors to whom Restricted Units shall be granted, the number of
Restricted Units to be granted to each such Participant, the Restricted Period, the conditions
under which the Restricted Units may become vested or forfeited, which may include, without
limitation, the accelerated vesting upon the achievement of specified performance goals or other
events, and such other terms and conditions as the Committee may establish with respect to such
Awards.




     (i) UDRs. To the extent provided by the Committee, in its discretion, a grant
of Restricted Units may provide that distributions made by the Partnership with respect to
the Restricted Units shall be subject to such forfeiture and other restrictions as the
Committee may choose and, if so restricted, such distributions shall be held, without
interest, until the UDR vests or is forfeited. 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 prescribe. Absent any provision to the contrary with regard to the UDRs in the Award
Agreement, UDRs shall be subject to the same vesting restrictions as apply to the Restricted
Units to which they relate.




     (ii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment or consulting with the Company,
the Partnership and their Affiliates or membership as a Director, whichever is applicable,
for any reason during the applicable Restricted Period, all outstanding unvested Restricted
Units awarded the Participant, and any unpaid UDRs credited to the Participant, shall be
automatically forfeited on such termination. The Committee may, in its discretion, waive in
whole or in part such forfeitures with respect to a Participant’s Restricted Units and UDRs.




     (iii) Lapse of Restrictions. Upon or as soon as reasonably practical following
the vesting of each Restricted Unit, subject to the provisions of Section 8(b), the
Participant shall be entitled to have the restrictions removed from his or her Award so that
the Participant then holds an unrestricted Unit.



     (e) 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.



     (f) Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Plan to
such Employees, Consultants and Directors as the Committee, in its discretion, may select. An
Other Unit-Based Award shall be an award denominated or payable in, valued in or otherwise based on
or related to Units, in whole or in part. The Committee shall determine the terms and conditions,
if any, of any such Other Unit-Based Award. Upon or as soon as reasonably practicable following
vesting, an Other Unit-Based Award may be settled, as determined by the Committee in its
discretion, in cash, Units (including Restricted Units) or any combination thereof as determined by
the Committee, in its discretion.



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     (g) Replacement Awards. Awards may be granted under the Plan in substitution or
replacement for similar equity or equity appreciation awards cancelled or forfeited by Employees,
Consultants and Directors as a result of a merger or acquisition by the Partnership or an Affiliate
of an entity or the assets of an entity or in connection with or related to the transfer of assets
to the Partnership and its Affiliates as a result of the establishment of the Partnership. Such
Replacement Awards may have such terms and conditions as the Committee may determine and the
exercise price of an Option may be less than the Fair Market Value of a Unit on the date of such
substitution or replacement.



     (h) 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 Company, the Partnership or any Affiliate. Awards granted in addition to
or in tandem with other Awards or awards granted under any other plan of the Company, the
Partnership or any Affiliate 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 paragraph (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 paragraph (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 and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company, the Partnership or any Affiliate.




     (C) To the extent specifically provided 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, but shall not exceed 10 years.




     (iv) Issuance of Units. The Units purchased or delivered pursuant to an Award
may be evidenced in any manner deemed appropriate by the Committee in its sole discretion,
including, but not limited to, in the form of a certificate issued in the name of the
Participant or by book entry, electronic or otherwise, 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



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the Committee may cause a legend or legends to be inscribed on any certificates to make
appropriate reference to such restrictions.




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




     (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, if the Company is not reasonably able to obtain Units to deliver pursuant to such
Award without violating the rules or regulations of any applicable law or securities
exchange, no delivery shall occur until such time as the Committee, in good faith,
determines that the delivery of Units may be made without violating applicable law or the
applicable rules or regulations of any governmental agency 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 Agreement
(including, without limitation, any exercise price or tax withholding) is received by the
Company.




     (vii) Change of Control, Similar Events. Upon the occurrence of a Change of
Control, a recapitalization, reorganization, merger, consolidation, combination, exchange or
other relevant change in capitalization of or involving 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 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 either prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or an outstanding Award or
mitigate any unfavorable accounting consequences:




     (A) provide for either (i) the cancellation and termination of any Award in
exchange for an amount of cash, other property or securities, if any, equal to the
amount that would have been attained upon the exercise of such Award or realization
of the Participant’s rights or if the Participant were a unitholder on the
occurrence of such event (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 attained upon the exercise of such Award or realization of
the Participant’s rights, then such Award may be terminated by the Company without
payment) or (ii) the replacement of such Award with or the conversion of such Award
into cash or other securities, other rights or property selected by the Committee in
its sole discretion;




     (B) 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;



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     (C) 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;




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




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


Notwithstanding the foregoing, with respect to an above event that is an “equity
restructuring” event that would be subject to a compensation expense pursuant FAS 123R if a
discretionary change were made, the provisions in Section 4(c) shall control to the extent
they are in conflict with the discretionary provisions of this Section 6.



Further, notwithstanding the foregoing, the Committee shall not take any action pursuant to
this Section 6(h)(vii) that would result in a Participant becoming subject to the adverse
tax consequences imposed by a violation of Section 409A of the Code as a result of such
action.




     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 or inter-dealer quotation system on which the Units are traded or listed, by
the Code or by the Exchange Act or other applicable law, and subject to Section 7(b) below, the
Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan in any manner,
including increasing the number of Units available for Awards under the Plan, without the consent
of any partner, Participant, other holder or beneficiary of an Award, or any other Person.
Notwithstanding the foregoing, no amendment, alteration, suspension, discontinuance, or termination
of the Plan will modify the time at which a payment related to an award that provides for the
deferral of compensation within the meaning of Section 409A of the Code shall be made to any
Participant except to the extent such a modification is permitted by, and in compliance with,
Section 409A and the applicable guidance issued thereunder.



     (b) Amendments to Awards. Subject to Section 7(a), 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 6(f)(vii) or, as determined by the Committee, in its sole
discretion, as being necessary or appropriate to comply with applicable law, in any Award shall
materially reduce the benefit of a Participant without the consent of such Participant.
Notwithstanding the foregoing, if the terms of an Award would result in the imposition of the
additional tax under Section 409A of the Code, the Award will be reformed, if possible, to avoid
imposition of such tax in a manner that will result in the least adverse economic impact on the



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Participant and, for purposes of the Plan, such reformation shall be deemed not to reduce the
Participant’s rights thereunder and shall not require the Participant’s consent.



     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 Company, the Company or any Affiliate 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, other securities or property, or Units that would otherwise
be issued or delivered pursuant to such Award) of any applicable taxes payable in respect of the
grant or settlement 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 Company to satisfy its withholding obligations for the payment of such taxes.



     (c) No Right to Employment or Services. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company, the Partnership or
any Affiliate or to remain a Director or continue to provide services as a Consultant, as
applicable. Further, the Company, the Partnership or an Affiliate may at any time dismiss a
Participant from employment or services, free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in 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) Compliance with Section 409A. Compliance with Section 409A. Nothing in the Plan
or any Award Agreement shall operate or be construed to cause the Plan or an Award, to the extent
subject to Section 409A, to fail to comply with the requirements of Section 409A of the Code. With
respect to any Award that is subject to Section 409A of the Code, the applicable provisions of
Section 409A the Code and the regulations thereunder are hereby incorporated by reference and shall
control over any provision of the Plan or any Award Agreement that is in conflict therewith. For
purposes of such compliance, in the event that an Award that is subject to Section 409A of the Code
is payable in connection with a Participant’s termination of service as an Employee, Consultant or
Director, such payments shall be made only in connection with a “separation from service” within
the meaning of Section 409A of the Code and the regulations thereunder (a “Separation from
Service”). Further, notwithstanding anything to the contrary in this Plan, in the event an Award
issued under the Plan is subject to Section 409A of the Code, if upon a Participant’s Separation
from Service, the Participant is a “specified employee” within the meaning of Section 409A of the
Code, and the deferral of any amounts or benefits otherwise payable or to be provided under any
Award made pursuant to this Plan as a result of the Participant’s Separation from Service is
necessary in order to prevent any accelerated or



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additional tax to the Participant under Section 409A of the Code, then the Company will delay
the payment of any such amounts or the provision of any such benefits hereunder until the earliest
of (x) the date that is six (6) months following the date of the Participant’s Separation from
Service and (y) the date of the Participant’s death following such Separation from Service. Upon
the expiration of the applicable deferral period, any delayed amounts will be paid to the
Participant in a single lump sum, with interest from the date otherwise payable, at the prime rate
as published in The Wall Street Journal on the Participant’s Separation from Service, and any
delayed benefits will be provided on such date.



     (f) 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 laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee, 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.



     (g) 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 result in
recoverable short-swing profits under Section 16(b) of the Exchange Act, and any payment tendered
to the Company 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.



     (h) 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
Company 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 Company or any participating Affiliate
pursuant to an Award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating Affiliate.



     (i) No Fractional Units. No fractional Units shall be issued or delivered pursuant to
the Plan or any Award, and the Committee shall determine, in its sole discretion, 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, with or without consideration.



     (j) 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.



     (k) Facility Payment. Any amounts payable hereunder to any Person under legal
disability or who, in the judgment of the Committee, is unable to properly manage his or her
financial affairs, may be paid to the legal representative of such Person, or may be applied for
the



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benefit of such Person in any manner which the Committee may select, and the Company shall be
relieved of any further liability for payment of such amounts.



     (l) Participation by Affiliates. In making Awards to Employees employed by an entity
other than the Company, the Committee shall be acting on behalf of the Affiliate, and to the extent
the Partnership has an obligation to reimburse the Company for compensation paid for services
rendered for the benefit of the Partnership, such payments or reimbursement payments may be made by
the Partnership directly to the Affiliate, and, if made to the Company, shall be received by the
Company as agent for the Affiliate.



     (m) 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.



     SECTION 9. Term of the Plan.



     The Plan shall become effective on the date of its approval by the Board and shall terminate
on, and no Awards may be granted after, the earliest of (i) the date established by the Board or
the Committee, (ii) the 10th anniversary of the date the Plan was adopted by the Company
(or such earlier anniversary, if any, required by the rules of the exchange on which Units are
traded) or (iii) the date Units are no longer available for delivery pursuant to Awards under the
Plan. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any
Award granted prior to any Plan 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.



[SIGNATURES ON NEXT PAGE]




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     IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of
______, 2008 by its Chief Executive Officer pursuant to prior action taken by the
Board.



	 	 	 	 	 
	 	RESOLUTE ENERGY GP, LLC

 	 
	 	By:  	 	 
	 	 	Nicholas J. Sutton, Chief Executive Officer 	 
	 	 	 	 
	 



ATTEST:




	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	James M. Piccone, Secretary