Document:

exv10w10

 

Exhibit 10.10

Director and Officer

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (this “Agreement”) is made and delivered this                     day of                     ,
200                    , by Western Gas Holdings, LLC (the “Company”), to and for the benefit of
                                          (“Indemnitee”).

RECITALS

     WHEREAS, in order to attract and retain qualified individuals to serve as a member
(“Director”) of the Board of Directors (the “Board”) and/or as an officer of the Company
(“Officer”), the Company is executing and delivering to Indemnitee this Indemnification Agreement.

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company hereby agrees as follows:

SECTION 1. Right To Indemnification and Advancement of Expenses

(a) Right to Indemnification. If Indemnitee is made a party or is threatened to be made a
party to or is involved (including, without limitation, as a witness) in any actual or threatened
action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a
“proceeding”), by reason of the fact that Indemnitee is or was a Director or an Officer of the
Company (or of any subsidiary of the Company) or is or was serving at the request of the Company or
the Board, including service with respect to any employee benefit plan or any subsidiary of the
Company, whether the basis of such proceeding is alleged action in an official capacity as a
Director or an Officer or in any other capacity while serving as a Director or an Officer,
Indemnitee shall be indemnified and held harmless by the Company to the fullest extent permitted by
Section 18-108 of the Delaware Limited Liability Company Act, as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent that such amendment permits
the Company to provide broader indemnification rights than said law permitted the Company to
provide prior to such amendment), or by other applicable law as then in effect, against all
expense, liability and loss (including attorneys’ fees, judgments, fines, or penalties and amounts
to be paid in settlement) actually and reasonably incurred or suffered by Indemnitee in connection
therewith and such indemnification shall continue after Indemnitee has ceased to be a Director or
an Officer and shall inure to the benefit of Indemnitee’s heirs, executors and administrators;
provided, however, that except as provided in Section 2 of this Agreement with respect to
proceedings seeking to enforce rights to indemnification or to advancement of expenses, the Company
shall be required to indemnify Indemnitee in connection with a proceeding (or part thereof)
initiated by Indemnitee only if such proceeding (or part thereof) was authorized by the Board.

(b) Right to Advancement of Expenses. The right to indemnification conferred in this
Agreement shall include the right to be paid by the Company the reasonable expenses

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(including attorneys’ fees) incurred in defending any such proceeding in advance of its final
disposition (hereinafter an “advancement of expenses”); further provided, however, that, if the
Delaware Limited Liability Company Act requires, an advancement of expenses incurred by Indemnitee
in the capacity as a Director or an Officer (and not in any other capacity in which service was or
is rendered by Indemnitee while a Director or an Officer including, without limitation, service to
an employee benefit plan) shall be made only upon delivery to the Company of a written request
accompanied by such documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is entitled to
indemnification and an undertaking, if permitted by Federal law, by or on behalf of Indemnitee, to
repay all amounts so advanced if it shall ultimately be determined that Indemnitee is not entitled
to be indemnified under this Agreement, or otherwise, and provided further that except as provided
in Section 2 of this Agreement with respect to proceedings seeking to enforce rights to
indemnification or an advancement of expenses, the Company shall be required to advance expenses to
Indemnitee in connection with a proceeding initiated by Indemnitee only if such proceeding was
authorized by the Board.

SECTION 2. Right To Bring Suit

     If a claim under Section 1 of this Agreement is not paid in full by the Company within sixty
(60) days after a written claim has been received by the Company, except in the case of a claim for
an advancement of expenses, in which case the applicable period shall be twenty (20) days,
Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount
of the claim and, to the extent successful in whole or in material part, Indemnitee shall be
entitled to be paid the expense of prosecuting such suit. Indemnitee shall be presumed to be
entitled to indemnification under this Agreement upon submission of a written claim (and, in an
action brought to enforce a claim for an advancement of expenses, where the required undertaking,
if any is required, has been tendered to the Company), and thereafter the Company shall have the
burden of proof to overcome the presumption that Indemnitee is not so entitled. Neither the
failure of the Company (including its Board, independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such suit that indemnification of Indemnitee
is proper in the circumstances, nor an actual determination by the Company (including its Board,
independent legal counsel or its security holders) that Indemnitee is not entitled to
indemnification, shall be a defense to the suit or create a presumption that Indemnitee is not so
entitled.

SECTION 3. Insurance, Contracts and Funding

     The Company may maintain insurance, at its expense, to protect itself and Indemnitee against
any expense, liability or loss, whether or not the Company would have the power to indemnify
Indemnitee against such expense, liability or loss under the Delaware Limited Liability Company
Act. The Company may enter into contracts with Indemnitee in furtherance of the provisions of this
Agreement and may create a trust fund, grant a security interest or use other means (including,
without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary
to effect

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indemnification as provided in this Agreement. To the extent the Company maintains an
insurance policy or policies providing directors’ and officers’ liability insurance, Indemnitee
shall be covered by such policy or policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any Company Director or Officer.

SECTION 4. Change in Control

     (a) For purposes of this Agreement only, a “Change in Control” shall mean the occurrence of
any of the following with respect to the Company: (i) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially all of the
Company’s assets to any other person, unless immediately following such sale, lease, exchange or
other transfer such assets are owned, directly or indirectly, by the Company; (ii) the dissolution
or liquidation of the Company; (iii) the consolidation or merger of the Company with or into
another person pursuant to a transaction in which the outstanding securities of any class of a
person entitling the holders thereof to vote in the election of, or to appoint, members of the
board of directors or other similar governing body of the Company (“Voting Securities”) are changed
into or exchanged for cash, securities or other property, other than any such transaction where (A)
the outstanding Voting Securities of the Company are changed into or exchanged for Voting
Securities of the surviving person or its parent and (B) the holders of the Voting Securities of
the Company immediately prior to such transaction own, directly or indirectly, not less than a
majority of the outstanding Voting Securities of the surviving person or its parent immediately
after such transaction; and (iv) a “person” or “group” (within the meaning of Sections 13(d) or
14(d)(2) of the Exchange Act) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Exchange Act) of more than 50% of all of the then outstanding Voting Securities of the
Company, except (A) Anadarko Petroleum Corporation and any affiliates of Anadarko Petroleum
Corporation and (B) in a merger or consolidation which would not constitute a Change in Control
under clause (iii) above.

     (b) Change in Control. The Company agrees that if there is a Change in Control, then
with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity
payments and expense advances under this Agreement, any other agreements, the Certificate of
Formation or the Amended and Restated Limited Liability Company Agreement now or hereafter in
effect relating to a proceeding, the Company shall seek legal advice only from special independent
counsel selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld), and who has not otherwise performed services for the Company (other than in
connection with such matters) or Indemnitee. In the event that Indemnitee and the Company are
unable to agree on the selection of the special independent counsel, such special independent
counsel shall be selected by lot from among at least five law firms in New York City, New York or
Houston, Texas selected by Indemnitee, each having no less than 50 partners. Such selection shall
be made in the presence of Indemnitee (and Indemnitee’s legal counsel or either of them, as
Indemnitee may elect). Such special independent counsel, among other things, shall determine
whether and to what extent

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Director and Officer

Indemnitee would be permitted to be indemnified under applicable law and shall render its
written opinion to the Company and Indemnitee to such effect.

     The Company agrees to pay the reasonable fees of the special independent counsel referred to
above and to fully indemnify such counsel against any and all expenses (including attorneys’ fees),
claims, liabilities and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.

SECTION 5. Nonexclusivity of Rights

     The rights to indemnification and to the advancement of expenses conferred in this Agreement
are in addition to and shall not be exclusive of any other right Indemnitee may have or hereafter
acquire under any statute, provision of the Certificate of Formation of the Company or its Amended
and Restated Limited Liability Company Agreement, or under any other plan, program, arrangement,
agreement, vote of members or disinterested members of the Board or otherwise.

SECTION 6. Subrogation

     In the event of payment under this Agreement, the Company (or its insurance carrier in the
event of insurance coverage) shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do everything that may
be necessary to secure such rights, including the execution of such documents necessary to enable
the Company (or its insurance carrier) effectively to bring suit to enforce such rights.

SECTION 7. No Duplication of Payments; Coordination of Indemnities

     The Company shall not be liable under this Agreement to make any payment in connection with
any proceeding against Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy or otherwise) of the amounts otherwise indemnifiable hereunder, unless
payments were made by any other party or such party’s insurance carrier on behalf of Indemnitee by
virtue that said Indemnitee is separately entitled to such indemnification by such party. In that
event, the Company shall reimburse that party or its insurance carrier for such amounts paid on
behalf of Indemnitee that Indemnitee would otherwise be entitled to pursuant to this Agreement.

     To the extent Indemnitee is entitled to indemnification by any other party for actions taken
in the capacity as a Director or an Officer of the Company, then the right to indemnification under
this Agreement shall be satisfied before any other such rights of indemnification that said
Director or Officer may be entitled to are performed. The Company shall not seek reimbursement
(either directly or pursuant to any subrogation rights under Section 6 of this Agreement) from such
other party providing indemnification benefits to said Director or Officer.

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SECTION 8. Notification and Defense of Proceedings

     Indemnitee agrees to use all reasonable efforts to notify the Company promptly after receipt
by Indemnitee of notice of the commencement of any proceeding if Indemnitee anticipates that a
request for indemnification in respect thereof is to be made against the Company under this
Agreement; but failure to so notify the Company will not relieve the Company from any
indemnification or other obligation or liability which it may have to Indemnitee. With respect to
any such proceeding as to which Indemnitee notifies the Company of the commencement thereof:

     (a) the Company will be entitled to participate therein at its own expense; and

     (b) except as otherwise provided below, to the extent that it may wish, the Company jointly
with any other indemnifying party similarly notified will be entitled to assume the defense
thereof, with counsel satisfactory to Indemnitee. After notice from the Company to Indemnitee of
its election to assume the defense thereof, the Company will not be liable to Indemnitee under this
Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with
the defense thereof other than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ its counsel in such proceeding, but the fees and expenses
of such counsel incurred after notice from the Company of its assumption of the defense thereof
shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been
authorized by the Company, (ii) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of the defense of such
proceeding or (iii) the Company shall not in fact have employed counsel to assume the defense of
such proceeding, in each of which cases the fees and expenses of counsel shall be at the expense of
the Company. The Company shall not be entitled to assume the defense of any proceeding brought by
or on behalf of the Company or as to which Indemnitee shall have made the conclusion provided for
in clause (ii) of this subsection 8(b).

     (c) The Company shall not be liable to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any proceeding effected by Indemnitee without the Company’s prior
written consent. The Company shall not settle any proceeding in any manner which would impose any
penalty or limitation on Indemnitee without Indemnitee’s prior written consent. Neither the
Company nor Indemnitee will unreasonably withhold their consent to any proposed settlement.

SECTION 9. Notices

     All notices, requests, demands and other communications sent pursuant to this Agreement must
be in writing or by electronic transmission and will be deemed delivered and received: (a) if
personally delivered by telex, telegram, facsimile, electronic transmission or courier service,
when actually received by the party to whom the notice or communication is sent; or (b) if
delivered by mail, whether actually received or not, at the close of business on the third business
day in the city in which the Company’s

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Director and Officer

principal executive office is located next following the day when placed in the U.S. mail,
postage prepaid, certified or registered, addressed to the appropriate party at the address of that
party set forth below, or at such other address as that party may designate by notice in writing or
by electronic transmission to the other party in accordance herewith.

	 	(i)	 	If to Indemnitee, to:

                                                            

                                                            

                                                            

Fax No.:                                                             

E-mail:                                                             

	 	 	 	with a copy, which will not constitute notice for purposes of this Agreement, to such legal
counsel, if any, as Indemnitee may designate in writing or by electronic transmission.

	 	(ii)	 	If to the Company, to:

Western Gas Holdings, LLC

1201 Lake Robbins Drive

The Woodlands, Texas 77380

Attention: President

Fax No.: (832) 636-                                        

E-mail:                                         @westerngas.com

SECTION 10. No Presumptions

     For purposes of this Agreement, the termination of any proceeding against Indemnitee by
judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea
of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet
any particular standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law. In addition, neither the failure of the
Company to have made a determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the Company that Indemnitee
has not met such standard of conduct or did not have such belief, prior to the commencement of
legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be
indemnified under applicable law shall be a defense to Indemnitee’s claim for indemnification or
create a presumption that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.

SECTION 11. Acknowledgment of Reliance

     The Company acknowledges that Indemnitee is relying on this Agreement and the promises and
agreements of the Company herein in continuing Indemnitee’s service as a Director or an Officer and
in agreeing to undertake and in undertaking Indemnitee’s responsibilities, duties and services to
and for the Company in connection therewith.

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Director and Officer

SECTION 12. No Modification

     No supplement, modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver. Any waiver to this agreement shall be in
writing.

SECTION 13. Counterparts

     This Agreement may be executed in one or more counterparts, each of which will for all
purposes be deemed to be original but all of which together will constitute one and the same
agreement.

SECTION 14. Headings

     The headings of the Sections hereof are inserted for convenience only and do not and will not
be deemed to constitute part of this Agreement or to affect the construction thereof.

SECTION 15. Miscellaneous

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware. Each provision hereof is intended to be severable and the invalidity or illegality of
any portion of this Agreement shall not affect the validity or legality of the remainder.

     Executed as an instrument under seal as of the day and year first above written.

	 	 	 	 	 
	 	WESTERN GAS HOLDINGS, LLC 

 	 
	 	By:  	__________________________
 	 
	 	 	Name:  	 	 
	 	 	Title:  	  	 
	 	 	Hereunto duly authorized 	 
	 

7exv10w11

 

Exhibit 10.11

WESTERN GAS PARTNERS, LP

2008 LONG-TERM INCENTIVE PLAN

SECTION 1

Purpose of the Plan

     The Western Gas Partners, LP 2008 Long-Term Incentive Plan (the “Plan”) has been adopted by
Western Gas Holdings, LLC, a Delaware limited liability company (the “Company”) and general partner
of Western Gas Partners, LP (the “Partnership”). The purpose of the Plan is to promote the
interests of the Partnership and its unitholders by strengthening its ability to attract, retain
and motivate qualified individuals to serve as Directors and Employees.

SECTION 2

Definitions

     The following terms shall have the meanings set forth in this Section 2:

     “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, Unit Appreciation Right, Restricted Unit, Phantom Unit, Other
Unit-Based Award, or a Unit Award granted under the Plan, and includes any tandem DERs granted with
respect to a Phantom Unit.

     “Award Agreement” means the written or electronic agreement by which an Award shall be
evidenced, including applicable terms and conditions of the Award.

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

     “Change of Control” means, and shall be deemed to have occurred upon one or more of the
following events:

     (i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and
14(d)(2) of the Exchange Act, other than an Affiliate of the Company, shall become the beneficial
owner, 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;

     (ii) the members of the Company approve, in one or a series of transactions, a plan of
complete liquidation of the Company;

     (iii) the sale or other disposition by the Company of all or substantially all of its assets
in one or more transactions to any Person other than or an Affiliate of the Company; or

 

 

     (iv) the Company or an Affiliate of the Company ceases to be the general partner of the
Partnership.

     Notwithstanding the foregoing, with respect to an Award that is (i) subject to Code Section
409A and (ii) a Change of Control would accelerate the timing of payment thereunder, the term
“Change of Control” shall mean a change in the ownership or effective control of the Company, or in
the ownership of a substantial portion of the assets of the Company as defined in Code Section 409A
and the authoritative guidance issued thereunder, but only to the extent inconsistent with the
above definition, and only to the minimum extent necessary to comply with Code Section 409A as
determined by the Committee.

     “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time,
and the temporary or final regulations of the Secretary of the United States Treasury adopted
pursuant to the Code.

     “Committee” means the Board or a committee of the Board appointed by the Board to administer
the Plan.

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

     “Director” means a member of the Board who is not an Employee.

     “Employee” means an employee of the Partnership, the Company, Anadarko Petroleum Corporation
or any other Affiliate of the Company.

     “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). 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 in such a manner as it deems appropriate,
consistent with the requirements of Code Section 409A.

     “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.

     “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.

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     “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 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.

     “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.

SECTION 3

Administration

     The Plan shall be administered by the Committee. A majority of the Committee shall constitute
a quorum, and the acts of the members of the Committee who are present at any meeting thereof at
which a quorum is present, or acts unanimously approved by the members of the Committee in writing,
shall be the acts of the Committee. 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 Director.
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

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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; (viii) make any other determination and take
any other action that the Committee deems necessary or desirable for the administration of the
Plan; and (ix) ensuring the payment of any Award or benefit hereunder is made in full compliance
with the requirements of Code Section 409A. 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 and shall be final, conclusive, and binding upon all Persons, including the
Partnership, the Company, any Affiliate, any Participant, and any Participant’s beneficiary of any
Award.

SECTION 4

Units

     (a) Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c),
the total aggregate number of Units that may be delivered with respect to Awards under the Plan is
two million two hundred fifty thousand (2,250,000); provided, however, that Units withheld from an
Award to either satisfy the Company’s or an Affiliate’s tax withholding obligations with respect to
the Award or pay the exercise price of an Award shall not be considered to be 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 subject to such Award
shall again be available for Awards under the Plan. There shall not be any limitation on the
number of Awards that may be paid 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 acquired in the open market, from the Company,
the Partnership, any Affiliate or any other Person, or 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 Company pursuant to the provisions of
Financial Accounting Standard (“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. Any such adjustment shall be final,
binding and conclusive on all persons claiming any right or interest under the Plan.

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SECTION 5

Eligibility

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

SECTION 6

Awards

     (a) Options and UARs. The Committee shall have the authority to determine the
Employees and Directors to whom Options and/or 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 but 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 provision for accelerated vesting upon the achievement of specified
performance goals or other events, and 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 Company, withholding Units from
the Award, a “cashless-broker” exercise through procedures approved by the Company, or any
combination of the above methods, having a Fair Market Value on the exercise date equal to
the relevant exercise price. Options and UARs shall in no event have a term longer than ten
(10) years from the date of grant.

     (iii) Forfeitures. Except as otherwise provided in the Award Agreement related
to the Option or UAR grant, upon termination of a Participant’s employment with the Company
and its 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 and Directors to whom Restricted Units and Phantom 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.

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     (i) DERs. To the extent provided by the Committee, in its discretion, a grant
of Phantom Units 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), 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. Absent a contrary provision in the Award
Agreement, upon a distribution with respect to a Unit, cash equal in value to such
distribution shall be paid promptly to the Participant without vesting restrictions with
respect to each 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 Company 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 prescribe. 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 Award Agreement, upon termination of a Participant’s employment with
the Company and/or its 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, subject to the provisions of Section 8(b), the
Participant shall be entitled to receive from the Company 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 be entitled to have
the restrictions removed from his or her Unit certificate so that the Participant
then holds an unrestricted Unit.

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     (c) Unit Awards. Unit Awards may be granted under the Plan to such Employees and/or
Directors and in such amounts as the Committee, in its discretion, may select.

     (d) Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Plan to
such Employees and/or Directors and in such amounts 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 of any such Other Unit-Based Award. Upon vesting, an Other Unit-Based Award
may be paid in cash, common 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
instead of any other Award granted under the Plan or any award granted under any other plan
of the Partnership, the Company or any Affiliate. Awards granted in addition to or in
tandem with other Awards or awards granted under any other plan of the Company 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 or any Affiliate.

     (C) To the extent specifically provided by the Committee with respect to an
Option or Unit Appreciation Right, an Option or Unit Appreciation Right may be
transferred by a Participant without consideration to immediate family members or
related family trusts, limited partnerships or similar entities or 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
Company 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

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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 grant 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 Company
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 Agreement (including, without limitation, any exercise price or tax
withholding) is received by the Company. Units may be delivered to a Participant by either
a physical certificate or certificates or by the establishment of a book-entry account with
the unit transfer agent.

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 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 Participant, other holder or beneficiary of an Award, or any
other Person.

     (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 7(c), in any Award shall (i) materially
reduce the rights or benefits of a Participant with respect to an Award without the consent
of such Participant, and/or (ii) result in taxation to the Participant under Code Section
409A unless otherwise determined by the Board.

     (c) Actions Upon the Occurrence of Certain Events. Upon the occurrence of a
Change of Control, 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 or the Company, 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:

-8-

 

     (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 attained upon the
exercise of such Award or realization of the Participant’s rights (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 (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;

     (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., 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, 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 recipient.

     (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, Units that would otherwise be issued pursuant to such Award
or other property) of any applicable taxes payable in respect of the grant of an Award, its
exercise, the lapse of restrictions thereon, or any payment or transfer under an Award

-9-

 

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 Partnership, the Company or
any Affiliate or to remain on the Board, as applicable. Furthermore, the Company or an Affiliate
may at any time dismiss a Participant from employment 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 Texas 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, 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
Company or an Affiliate to recover the same 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.

(g) Code Section 409A

     (i) The Plan is intended to be administered, operated and construed in compliance with
Section 409A of the Code and any guidance issued thereunder. Notwithstanding this or any
other provision of the Plan to the contrary, the Board or the Committee may amend the Plan
in any manner, or take any other action, that either of them determines, in its sole
discretion, is necessary, appropriate or advisable to cause the Plan to comply with Code
Section 409A and any guidance issued thereunder. Any such action, once taken, shall be
deemed to be effective from the earliest date necessary to avoid a violation of Code Section
409A and shall be final, binding and conclusive on all Participants and other individuals
having or claiming any right or interest under the Plan.

     (ii) Notwithstanding the provisions of the Plan or any Award Agreement, no payment
pursuant to an Award that is subject to Code Section 409A shall be made to a Participant as
a result of such Participant’s “separation from service” (within the meaning

-10-

 

of such phrase in Code Section 409A), within the six-month period following such
separation from service (or, if earlier, the date of death of the employee), if the
Participant is a Specified Employee. For purposes of the previous sentence the term
“Specified Employee” is defined in Code Section 409A and the authoritative guidance
thereunder.

     (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 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.

     (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 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 Company shall be relieved of
any further liability for payment of such amounts.

     (l) 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.

     (m) Deferrals. The Committee may, to the extent permitted by applicable law, permit
Participants to defer Awards under the Plan. Any such deferrals shall be subject to such terms,
conditions and procedures that the Committee may establish from time to time in its sole discretion
and consistent with the advance and subsequent deferral requirements of Code Section 409A.

     (n) Unfunded Obligations. Any amounts (deferred or otherwise) to be paid to
Participants pursuant to the Plan are unfunded obligations of the Company and or its Affiliates.
Neither the Partnership nor the Company is required to segregate any monies from its general funds,
to create any trusts or to make any special deposits with respect to such unfunded obligation. The
Committee, in its sole discretion, may direct the Partnership or the Company to share with its
Affiliates the costs of a portion of the Awards paid to Participants. Beneficial ownership of any
investments, including trust investments which the Partnership or the Company may make to fulfill
this obligation, shall at all times remain in the Partnership or the Company, as applicable. Any
investments and the creation or maintenance of any trust or any Participant account shall not
create or constitute a trust or a fiduciary relationship between the Committee,

-11-

 

the Partnership, the Company or any Affiliate and a Participant, or otherwise create any vested or
beneficial interest in any Participant or the Participant’s beneficiary or the Participant’s
creditors in any assets of the Partnership, the Company or its Affiliates whatsoever. The
Participants shall have no claim against the Partnership or the Company for any changes in the
value of any assets which may be invested or reinvested by the Partnership or the Company with
respect to the Plan.

     (o) Forfeiture Events.

     (i) If the Partnership or Company is required to prepare an accounting restatement due
to the material noncompliance of the Partnership or Company, as a result of misconduct, with
any financial reporting requirement under the securities laws, and if a Participant
knowingly engaged in the misconduct, was grossly negligent with respect to such misconduct,
or knowingly or grossly negligently failed to prevent the misconduct (whether or not the
Participant is one of the individuals subject to automatic forfeiture under Section 304 of
the Sarbanes-Oxley Act of 2002), the Participant shall reimburse the Partnership or the
Company the amount of any payment in settlement of an Award earned or accrued during the
twelve-month period following the first public issuance or filing with the SEC (whichever
first occurred) of the financial document embodying such financial reporting requirement.

     (ii) The Committee may specify in an Award Agreement that the Participant’s rights,
payments, and benefits with respect to an Award shall be subject to reduction, cancellation,
forfeiture, or recoupment upon the occurrence of certain specified events, in addition to
any otherwise applicable vesting or performance conditions of an Award. Such events may
include, without limitation, termination of employment for cause, violation of material
policies that may apply to the Participant, breach of noncompetition, confidentiality, or
other restrictive covenants that may apply to the Participant, or other conduct by the
Participant that is detrimental to the business or reputation of the Partnership, the
Company or any Affiliate.

SECTION 9

Term of the Plan

     The Plan shall be effective on the date it is approved by the unitholders of the Partnership
of the Company, if such approval is required by the rules of the principal securities exchange on
which the Units are traded, or, if such approval is not required, then on the date the Plan is
adopted by the Company and shall continue until the earliest of (a) the date it is terminated by
the Board, (b) all Units available under the Plan have been paid to Participants, or (c) the 10th
anniversary of the date the Plan is approved, as provided in this Section 9, with respect to any
new Awards. 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.

-12-

 

     IN WITNESS WHEREOF, the Company has caused the Plan to be executed effective as of January
   , 2008.

	 	 	 	 	 
	 	  	WESTERN GAS PARTNERS, LP

 	 
	 	  	 	 
	 	 	Robert G. Gwin 	 
	 	 	President and Chief Executive Officer

Western Gas Holdings, LLC, General Partner	 
	 

-13-

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