Document:

exv10w2

Exhibit 10.2

CONTRIBUTION, CONVEYANCE, ASSUMPTION AND MERGER

AGREEMENT

by and among

MID-CON ENERGY GP, LLC

MID-CON ENERGY PARTNERS, LP

MID-CON ENERGY PROPERTIES, LLC

MID-CON ENERGY I, LLC

MID-CON ENERGY II, LLC

and

The “Founders” named herein

Dated as of [November] [•], 2011

 

 

CONTRIBUTION, CONVEYANCE, ASSUMPTION AND MERGER

AGREEMENT

     This Contribution, Conveyance, Assumption and Merger Agreement, dated as of [November] [•],
2011 (this “Agreement”), is by and among Mid-Con Energy GP, LLC, a Delaware limited liability
company (the “General Partner”), Mid-Con Energy Partners, LP, a Delaware limited partnership (the
“Partnership”), Mid-Con Energy Properties, LLC, a Delaware limited liability company (“Mid-Con
Properties”), Mid-Con Energy I, LLC, a Delaware limited liability company (“Mid-Con I”), Mid-Con
Energy II, a Delaware limited liability company (“Mid-Con Energy II”) and Messrs. Charles R.
Olmstead, Jeffrey R. Olmstead and S. Craig George (each a “Founder” and, collectively, the
“Founders”). The above-named entities are sometimes referred to in this Agreement each as a “Party”
and collectively as the “Parties.” Capitalized terms used herein shall have the meanings assigned
to such terms in Article I.

RECITALS

     WHEREAS, as further described below, the General Partner and the Organizational Limited
Partner (as defined below) have formed the Partnership, pursuant to the Delaware Revised Uniform
Limited Partnership Act (the “Delaware LP Act”), for the purpose of engaging in any business
activity that is approved by the General Partner and that lawfully may be conducted by a limited
partnership organized pursuant to the Delaware LP Act;

     WHEREAS, in order to accomplish the objectives and purposes of the preceding recital, each of
the following actions has been taken prior to the date hereof:

	 	1.	 	Charles R. Olmstead, as the organizational member, formed the General Partner,
pursuant to the Delaware Limited Liability Company Act (the “Delaware LLC Act”), and
contributed $1,000 in exchange for all of the membership interests in the General
Partner;
	 
	 	2.	 	the General Partner and S. Craig George, as the organizational limited partner,
formed the Partnership (the “Organizational Limited Partner”), pursuant to the Delaware
Revised Uniform Limited Partnership Act (the “Delaware LP Act”), and contributed $20
and $980, respectively, in exchange for a 2% general partner interest and a 98% limited
partner interest, respectively, in the Partnership;
	 
	 	3.	 	the Partnership formed Mid-Con Properties pursuant to the Delaware LLC Act and
contributed $1,000 in exchange for all of the membership interests in Mid-Con
Properties.

     WHEREAS, immediately prior to the consummation of the transactions contemplated hereby (the
“Closing”), J&A Oil Company, an [Oklahoma] corporation (“J&A Oil”) and Mid-Con Energy Operating,
Inc., an [Oklahoma] corporation formerly known as RDT Properties, Inc. (“Mid-Con Operating”), will
convey to Mid-Con II certain working interests in the Cushing Field and certain commodity
derivative contracts (the “Cushing Contribution”) for the right to receive aggregate consideration
of $[6.0] million.

     WHEREAS, concurrently with the Closing, each of the following matters will occur:

 

 

	 	1.	 	Mid-Con I and Mid-Con II will distribute their working capital assets,
estimated to be approximately $[•] million and $[•] million, respectively, in
accordance with the provisions of the respective limited liability agreements of
Mid-Con I and Mid-Con II;
	 
	 	2.	 	Each of Charles R. Olmstead, Jeffrey R. Olmstead and S. Craig George
(collectively, the “Founders”) will contribute to the General Partner a portion of his
membership interests in Mid-Con I and Mid-Con II having a value equal
to 0.62⁄3% of the
equity value of the Partnership based on upon the pricing of its initial public
offering (the “Partnership Equity Value”) (each, a “GP Contribution Interest” and,
collectively, “GP Contribution Interests”) in exchange for one-third of the membership
interests in the General Partner so that, collectively, the GP Contribution Interests
will have an aggregate value equal to 2.0% of the Partnership Equity Value;
	 
	 	3.	 	the General Partner will contribute the GP Contribution Interests to the
Partnership in exchange for [•] notional general partner units in the Partnership
representing a continuation of its 2.0% general partner interest in the Partnership;
	 
	 	4.	 	Mid-Con I and Mid-Con II will each merge with and into Mid-Con Properties, with
Mid-Con Properties surviving as a wholly owned subsidiary of the Partnership (the
“Merger”), in exchange for the right of the members of Mid-Con I and Mid-Con II to
receive, in the aggregate, (i) [•] MLP Common Units (as defined herein), (ii) $[•]
million in cash and, (iii) upon the earlier to occur of the expiration of the Option
Period (as defined herein) period or the exercise in full of the Over-Allotment Option
(as defined herein), (A) a number of additional MLP Common Units that is equal to the
excess, if any, of (x) [•]1 over (y) the aggregate number of MLP Common
Units, if any, actually purchased by and issued to the Underwriters (as defined herein)
pursuant to the exercise of the Over-Allotment Option on the Option Closing Date(s) (as
defined herein) (the “Additional MLP Common Units”), and (B) the amount of cash, if
any, contributed by the Underwriters to the Partnership (net of the applicable
Underwriters’ discount and structuring fee) on the Option Closing Date(s) with respect
to MLP Common Units purchased by and issued to the Underwriters pursuant to each
exercise of the Over-Allotment Option (the “Option Net Cash Proceeds”);
	 
	 	5.	 	the public, through the Underwriters, will contribute $[•] million in cash to
the Partnership (or $[•] million, net of the Underwriters’ discount of $[•] million and
the structuring fee of $[•] payable to RBC Capital Markets, LLC) in exchange for [•]
MLP Common Units from the Partnership (representing a [•]% limited partner interest in
the Partnership);
	 
	 	6.	 	Mid-Con Properties will borrow $[•] million under its New Credit Facility (as
defined herein);

 

			
	1	 	Full shoe amount (15% of total number of
units offered to public)

2

 

	 	7.	 	the Partnership will (a) repay the $[•] million in indebtedness outstanding
under its Existing Credit Facilities (as defined herein), (b) pay transaction expenses
of approximately $[•], (c) pay the aggregate consideration of [$6.0] million to J&A Oil
and Mid-Con Operating for the Cushing Contribution and (d) distribute the remaining
$[•] million in cash to the members of Mid-Con I and Mid-Con II in accordance with
Exhibit B as partial consideration for the Merger attached hereto and, in part,
as a reimbursement of pre-formation capital expenditures made by Mid-Con I and Mid-Con
II;
	 
	 	8.	 	the 98% limited partner interest in the Partnership held by the Organizational
Limited Partner will be redeemed and the initial capital contribution of the
Organization Limited Partner will thereupon be refunded;
	 
	 	9.	 	the Partnership will contribute the GP Contribution Interests to Mid-Con
Properties;
	 
	 	10.	 	the agreements of limited partnership and the limited liability company
agreements of the General Partner, the Partnership [and Mid-Con Properties] will be
amended and restated to the extent necessary to reflect the applicable matters set
forth above and contained in this Agreement;

     WHEREAS, (i) Mid-Con I has the following membership interests outstanding: [•] Class A units,
[•] Class B units and [•] Class C units; and (ii) Mid-Con II has the following membership interests
outstanding: [•] Class A units, [•] Class B units and [•] Class C units; and

     WHEREAS, the members or partners of the Parties have taken all corporate, limited liability
company and partnership action, as the case may be, required to approve the transactions
contemplated by this Agreement, including with respect to the Merger.

     NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and
agreements herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

     The terms set forth below in this Article I shall have the meanings ascribed to them below or
in the part of this Agreement referred to below:

     “Commission” means the U.S. Securities and Exchange Commission.

     “Effective Time” means immediately prior to the closing of the IPO pursuant to the
Underwriting Agreement.

     “Existing Credit Facilities” means ___________.

     “IPO” means the initial public offering of MLP Common Units, as contemplated in the
Registration Statement.

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     “IPO Price” means the price paid by investors in IPO as indicated on the cover page of
the prospectus contained in the Registration Statement.

     “Mid-Con I LLC Agreement” means the Limited Liability Company Agreement of Mid-Con I,
dated June [15], 2009, as amended.

     “Mid-Con I Unit” means each Unit of Membership Interest of a Member of Mid-Con I, as
such terms are defined in the Mid-Con I LLC Agreement.

     “Mid-Con II LLC Agreement” means the Limited Liability Company Agreement of Mid-Con
II, dated June [15], 2009, as amended.

     “Mid-Con II Unit” means each Unit of Membership Interest of a Member of Mid-Con II, as
such terms are defined in the Mid-Con II LLC Agreement.

     “MLP Common Units” means the common units representing limited partner interests in
the Partnership.

     “New Credit Facility” means ___________.

     “Option Closing Date” has the meaning assigned to such term in ___________.

     “Option Period” has the meaning assigned to such term in _____________

     “Over-Allotment Option” means the Underwriters’ option to purchase up to an additional
[•] MLP Common Units.

     “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of the Partnership, dated [November] [•], 2011.

     “Registration Statement” means the Registration Statement on Form S-1 filed with the
Commission (Registration No. 333-176265), as amended and effective at the Effective Time.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Underwriters” means those underwriters listed in the Underwriting Agreement.

     “Underwriting Agreement” means that certain Underwriting Agreement between RBC Capital
Markets, LLC and ____________, as representatives of the Underwriters, the General Partner, the
Partnership, Mid-Con Properties and _________, dated as of [•], 2011.

ARTICLE II

CONTRIBUTIONS AND ACKNOWLEDGEMENTS

     Section 2.1 Distribution of Working Capital Assets. (i) Mid-Con I hereby grants,
distributes, bargains, conveys, assigns, transfers, sets over and delivers all of its working
capital as of the Effective Time to the holders of Mid-Con I Units, to be distributed in accordance
with [Section 4.3] of the Mid-Con I LLC Agreement, and (ii) Mid-Con II hereby grants, distributes,
bargains, conveys, assigns, transfers, sets over and delivers all of its working capital as of the

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Effective Time to the holders of Mid-Con II Units, to be distributed in accordance with
Section 4.3 of the Mid-Con II LLC Agreement. Schedule A-I hereto sets forth the amount of
cash to be received by each holder of Mid-Con I Units pursuant to clause (i) of the
immediately preceding sentence, and Schedule A-II hereto sets forth the amount of cash to
be received by each holder of Mid-Con II Units pursuant to clause (ii) of the immediately
preceding sentence.

     Section 2.2 Contribution of the GP Contribution Interests by the Founders to the General
Partner. Each of the Founders hereby grants, distributes, bargains, conveys, assigns,
transfers, sets over and delivers to the General Partner, its successors and assigns, for its and
their own use forever, all right, title and interest in and to his respective GP Contribution
Interest, and the General Partner hereby accepts such GP Contribution Interests.

     Section 2.3 Contribution of the GP Contribution Interests by the General Partner to the
Partnership. The General Partner hereby grants, contributes, bargains, conveys, assigns,
transfers, sets over and delivers to the Partnership, its successors and its assigns, for its and
their own use forever, all right, title and interest in and to the GP Contribution Interests, as a
capital contribution, in exchange for [•] general partner units representing a continuation of its
2.0% general partner interest in the Partnership, and the Partnership hereby accepts the GP
Contribution Interests as a contribution to the capital of the Partnership.

     Section 2.4 Contribution of the GP Contribution Interests by the Partnership to Mid-Con
Properties. The Partnership hereby grants, contributes, bargains, conveys, assigns, transfers,
sets over and delivers to Mid-Con Properties, its successors and its assigns, for its and their own
use forever, all right, title and interest in and to the GP Contribution Interests, and Mid-Con
Properties hereby accepts such GP Contribution Interests.

     Section 2.5 Merger of Mid-Con I and Mid-Con II with and into Mid-Con Properties. The
Parties acknowledge that Mid-Con Properties has adopted a certificate of merger, in the form
attached hereto as Exhibit A and, pursuant thereto, Mid-Con I and Mid-Con II will merge with and
into Mid-Con Properties, the separate existence of Mid-Con I and Mid-Con II will cease and Mid-Con
Properties will survive and continue to exist as a Delaware limited liability company, such that
immediately following the Merger, Mid-Con Properties will be a direct, wholly owned subsidiary of
the Partnership. This Section 2.4, together with Article III hereof, shall serve
as an agreement of merger with respect to the Merger pursuant to Section 18-209 of the Delaware LLC
Act.

     Section 2.6 Underwriters’ Cash Contribution. The Parties acknowledge that the public,
through the Underwriters, has made a capital contribution to the Partnership of $[•] in cash ($[•]
net to the Partnership after the underwriting discount (the “Spread”) of $[•] and the structuring
fee of $[•] payable to RBC Capital Markets, LLC) in exchange for the issuance by the Partnership to
the Underwriters of [•] MLP Common Units, representing a [•]% limited partner interest in the
Partnership.

     Section 2.7 Borrowing Under New Credit Facility. The Parties acknowledge the
Partnership has entered into the New Credit Facility and borrowed $[•] million thereunder;

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     Section 2.8 Repayment of Outstanding Indebtedness, Payment of Transaction Expenses
and Payment of Purchase Consideration. The Parties acknowledge (a) the repayment by the
Partnership of an aggregate of $[•] million in indebtedness outstanding under the Existing Credit
Facilities, (b) the payment by the Partnership, in connection with the transactions contemplated
hereby, of estimated transaction expenses in the amount of approximately $[•] million (exclusive of
the Spread and the structuring fee) and (c) the payment by the Partnership of aggregate
consideration of $[6.0] million to J&A Oil and Mid-Con Operating in exchange for the Cushing
Contribution.

     Section 2.9 Redemption of the Initial Limited Partner Interest in the Partnership and the
Return of Initial Capital Contribution. The Partnership (a) hereby redeems the 98% limited
partner interest in the Partnership held by the Organizational Limited Partner and (b) hereby
refunds and distributes to the Organization Limited Partner the initial capital contribution made
to the Partnership along with 98.0% of any interest or other profit that resulted from the
investment or other use of such initial capital contribution.

ARTICLE III

ADDITIONAL PROVISIONS RELATING TO THE MERGER

     Section 3.1 Merger Consideration. By virtue of the Merger, at the Effective Time, (i)
the Mid-Con I Units issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive, in the aggregate, $[•] in cash and [•] MLP Common Units and
(ii) the Mid-Con II Units issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive, in the aggregate, $[•] in cash and [•] MLP Common Units.
Schedule B-I hereto sets forth the amount of cash and the number of MLP Common Units to be
received by each holder of Mid-Con I Units pursuant to clause (i) of the immediately
preceding sentence, and Schedule B-II hereto sets forth the amount of cash and the number
of MLP Common Units to be received by each holder of Mid-Con II Units pursuant to clause
(ii) of the immediately preceding sentence.

     Section 3.2 Additional Merger Consideration. By virtue of the Merger, at the
expiration of the Option Period, the holders of Mid-Con I Units and Mid-Con II Units, in each case,
issued and outstanding immediately prior to the Effective Time will be entitled to receive, in the
aggregate, up to $[•] in cash or up to [•] MLP Common Units or a combination of cash and MLP Common
Units. Schedule C hereto sets forth (i) the amount of cash to received by each holder of
Mid-Con I Units and each holder Mid-Con II Units in the event that, as the expiration of the Option
Period, the Over-Allotment Option has been exercised in full by the Underwriters, (ii) the number
of MLP Common Units to be received by each of holder of Mid-Con I Units and each holder Mid-Con II
Units in the event that, as the expiration of the Option Period, the Over-Allotment Option has not
been exercised by the Underwriters and (iii) the formulae for determining the amount of cash and
the number of MLP Common Units to be received by the holders of each class of Mid-Con I Units and
the holders of each class of Mid-Con II Units in event that, as the expiration of the Option
Period, the Over-Allotment is exercised in part by the Underwriters.

6

 

     Section 3.3 No Fractional MLP Common Units. No certificates or scrip of the MLP Common
Units representing fractional Common Units or book-entry credit of the same shall be issued upon
the surrender for exchange of Mid-Con I Units and Mid-Con II Units. Notwithstanding any other
provision of this Article III, each holder of Mid-Con I Units or Mid-Con II Units exchanged
in the Merger, who would otherwise have been entitled to receive a fraction of an MLP Common Unit
(after taking into account all Mid-Con I and Mid-Con II Units delivered by such holder), shall
receive, in lieu thereof, cash (without interest rounded to the nearest whole cent) in an amount
equal to the product of (i) the IPO Price per MLP Common Unit and (ii) the fraction of an MLP
Common Unit that such holder would otherwise be entitled to receive pursuant to this Article
III.

     Section 3.4 No Further Rights in Mid-Con I and Mid-Con II. All Mid-Con I Units and
Mid-Con II Units, when converted in the Merger, shall cease to be outstanding and shall
automatically be cancelled and cease to exist. After the Effective Time, each holder of such
Mid-Con I Units and Mid-Con II Units shall cease to have any rights with respect thereto, except to
the receive the consideration specified in Section 3.1 and Section 3.2.

     Section 3.5 Withholding. Each of the Partnership and Mid-Con Properties shall be
entitled to deduct and withhold from the consideration otherwise payable to the Mid-Con I
unitholders and the Mid-Con II unitholders pursuant to this Article III such amounts as the
Partnership or Mid-Con Properties is required to deduct and withholder under the Code or any state,
local or foreign tax law, with respect to such payment. To the extent that amounts are so
withheld, such amounts shall be treated for all purposes of this Agreement as having been paid the
holders of Mid-Con I Units or Mid-Con II Units, as the case may be, in respect of whom such
deduction and withholding was made.

     Section 3.6 Restrictive Legend. The certificates evidencing MLP Common Units issued to
the Mid-Con I unitholders and Mid-Con II unitholders pursuant to this Section 2.4 shall be
characterized as “restricted securities” under the federal securities laws and shall bear the
following legend:

“These securities have not been registered under the Securities Act of 1933,
as amended (the “Securities Act”), or the securities laws of any state or
other jurisdiction. These securities may not be sold or offered for sale
except pursuant to an effective registration statement under the Securities
Act or pursuant to an exemption from registration thereunder, in each case
in accordance with all applicable securities laws of the states or other
jurisdictions, and in the case of a transaction exempt from registration,
such securities may only be transferred if the transfer agent for such
securities has received documentation satisfactory to it that such
transaction does not require registration under the Securities Act.”

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ARTICLE IV

FURTHER ASSURANCES

     From time to time after the Effective Time, and without any further consideration, the Parties
agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale,
conveyances, instruments, notices, releases, acquittances and other documents, and to do all such
other acts and things, all in accordance with applicable law, as may be necessary or appropriate
(a) more fully to assure that the applicable Parties own all of the properties, rights, titles,
interests, estates, remedies, powers and privileges granted by this Agreement, or which are
intended to be so granted, (b) more fully and effectively to vest in the applicable Parties and
their respective successors and assigns beneficial and record title to the interests contributed
and assigned by this Agreement or intended to be so and (c) more fully and effectively to carry out
the purposes and intent of this Agreement.

ARTICLE V

EFFECTIVE TIME; ORDER OF COMPLETION

     Notwithstanding anything contained in this Agreement to the contrary, none of the provisions
of Article II of this Agreement shall be operative or have any effect until the Effective Time, at
which time all the provisions of Article II of this Agreement shall be effective and operative
without further action by any Party hereto. The transactions provided for in Article II of this
Agreement shall be completed immediately following the Effective Time in the order set forth
therein.

ARTICLE VI

MISCELLANEOUS

     Section 6.1 Headings; References; Interpretation. All Article and Section headings in
this Agreement are for convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and
words of similar import, when used in this Agreement, shall refer to this Agreement as a whole,
including, without limitation, all Schedules and Exhibits attached hereto, and not to any
particular provision of this Agreement. All references herein to Articles, Sections, Schedules and
Exhibits shall, unless the context requires a different construction, be deemed to be references to
the Articles and Sections of this Agreement and the Schedules and Exhibits attached hereto, and all
such Schedules and Exhibits attached hereto are hereby incorporated herein and made a part hereof
for all purposes. All personal pronouns used in this Agreement, whether used in the masculine,
feminine or neuter gender, shall include all other genders, and the singular shall include the
plural and vice versa. The use herein of the word “including” following any general statement, term
or matter shall not be construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or matters, whether or not
non-limiting language (such as “without limitation”, “but not limited to”, or words of similar
import) is used with reference thereto, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadest possible scope of such general statement,
term or matter.

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     Section 6.2 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns.

     Section 6.3 No Third Party Rights. The provisions of this Agreement are intended to
bind the Parties as to each other and are not intended to and do not create rights in any other
person or confer upon any other person any benefits, rights or remedies, and no person is or is
intended to be a third party beneficiary of any of the provisions of this Agreement.

     Section 6.4 Counterparts. This Agreement may be executed in any number of counterparts
with the same effect as if all signatory Parties had signed the same document. All counterparts
shall be construed together and shall constitute one and the same instrument.

     Section 6.5 Choice of Law. This Agreement shall be subject to and governed by the
laws of the State of [Oklahoma]. Each Party hereby submits to the jurisdiction of the state and
federal courts in the State of [Oklahoma] and to venue in [Tulsa, Oklahoma].

     Section 6.6 Severability. If any of the provisions of this Agreement are held by any
court of competent jurisdiction to contravene, or to be invalid under, the laws of any political
body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not
invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not
contain the particular provisions or provisions held to be invalid and an equitable adjustment
shall be made and necessary provision added so as to give effect to the intention of the Parties as
expressed in this Agreement at the time of execution of this Agreement.

     Section 6.7 Amendment or Modification. This Agreement may be amended or modified from
time to time only by the written agreement of all the Parties. Each such instrument shall be
reduced to writing and shall be designated on its face as an amendment to this Agreement.

     Section 6.8 Integration. This Agreement and the instruments referenced herein
supersede all previous understandings or agreements among the Parties, whether oral or written,
with respect to the subject matter of this Agreement and such instruments. This Agreement and such
instruments contain the entire understanding of the Parties with respect to the subject matter
hereof and thereof. No understanding, representation, promise or agreement, whether oral or
written, is intended to be or shall be included in or form part of this Agreement unless it is
contained in a written amendment hereto executed by the parties hereto after the date of this
Agreement.

     Section 6.9 Deed; Bill of Sale; Assignment. To the extent required and permitted by
applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of
the assets and interests referenced herein.

[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties to this Agreement have caused it to be duly executed as of the
date first above written.

	 	 	 	 	 
	 	MID-CON ENERGY GP, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Charles R. Olmstead 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	MID-CON ENERGY PARTNERS, LP

 	 
	 	By:  	Mid-Con Energy GP, LLC 
 its general partner
 	 
	 
	 	By:  	 	 
	 	 	Name:  	Charles R. Olmstead 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	MID-CON PROPERTIES, LLC

 	 
	 	By:  	Mid-Con Energy Partners, L.P. 
its sole member
 	 
	 
	 	By:  	Mid-Con Energy GP, LLC 
its general partner
 	 
	 
	 	By:  	 	 
	 	 	Name:  	Charles R. Olmstead 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	MID-CON ENERGY I, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Charles R. Olmstead 	 
	 	 	Title:  	 	 
	 
	 	MID-CON ENERGY II, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Charles R. Olmstead 	 
	 	 	Title:  	 	 
	 

Signature Page to Contribution, Conveyance and Assumption Agreement

 

 

	 	 	 	 	 
	 	FOUNDERS:

 	 
	 	
 	 
	 	Charles R. Olmstead 	 
	 
	 	
 	 
	 	Jeffrey R. Olmstead 	 
	 
	 	
 	 
	 	S.   Craig George 	 
	 

Signature Page to Contribution, Conveyance and Assumption Agreementexv10w3

Exhibit 10.3

FORM OF MID-CON ENERGY PARTNERS, LP

LONG-TERM INCENTIVE PROGRAM

SECTION 1. Purpose of the Program.

The Mid-Con Energy Partners, LP Long-Term Incentive Program (the “Program”) has been
adopted by Mid-Con Energy GP, LLC, a Delaware limited liability company (the “Company”),
general partner of Mid-Con Energy Partners, LP, a Delaware limited partnership (the
“Partnership”). The Program is intended to promote the interests of the Partnership and
the Company and their Affiliates (as defined below) by providing to Employees, Consultants and/or
Directors, incentive compensation awards based on Units (as defined below) to encourage superior
performance. The Program is also contemplated to enhance the ability of the Company and its
Affiliates to attract and retain the services of individuals who are essential for the growth and
profitability of the Partnership and its subsidiaries and to encourage them to devote their best
efforts to advancing the business of the Partnership and its subsidiaries.

SECTION 2. Definitions.

As used in the Program, 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, Unit Appreciation Right, Restricted Unit, Phantom Unit, an Other
Unit-Based Award, or a Unit Award granted under the Program, 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.

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

     “Cause” means, except as otherwise provided in the terms of the Award Agreement, (i)
conviction of a Participant by a court of competent jurisdiction of any felony or a crime involving
moral turpitude; (ii) a Participant’s willful and intentional failure or willful and intentional
refusal to follow reasonable and lawful instructions of the Board; (iii) a Participant’s material
breach or default in the performance of his obligations under an Award Agreement or any employment
agreement between the Participant and the Company or any Affiliate; or (iv) a Participant’s act of
misappropriation, embezzlement, intentional fraud or similar conduct involving the Company or any
of its Affiliates.

     “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 the Company or 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 or
the Partnership;

     (ii) the limited partners of the Partnership approve, in one or a series of transactions, a
program of complete liquidation of the Partnership;

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

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

     (v) except with respect to Other Unit-Based Awards evidenced by “Performance Unit-Based Award
Agreements” which provide for the deferral of compensation and are subject to Section 409A of the
Code (“Section 409A Performance Unit-Based Awards”), any time at which individuals who, as
of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that any individual becoming a
Company Director subsequent to the Effective Date whose election, or nomination for election by the
Partnership’s unitholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board will be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of
office occurs as the result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Incumbent Board.

     Notwithstanding the foregoing, if a Change of Control constitutes a payment event with respect
to any Award which provides for the deferral of compensation and is subject to Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), then, to the extent required to
comply with Section 409A of the Code, the transaction or event described in clause (i), (ii),
(iii), (iv) or (v) above with respect to such Award must also constitute a “change of control
event” as defined in the Treasury Regulation § 1.409A-3(i)(5).

     For the avoidance of doubt, clause (v) of this definition shall not constitute a “Change of
Control” for purposes of any Section 409A Performance Unit-Based Award.

     “Committee” means the Board or the Compensation Committee of the Board or such other committee
as may be appointed by the Board to administer the Program.

     “Consultant” means an individual, other than an Employee or a Director, who renders consulting
services to the Company, the Partnership or an Affiliate of either.

     “DER” or “Distribution Equivalent Right” means a contingent right, which may be granted, if it
all, only in tandem with a specific Phantom Unit Award, to receive with respect to each Phantom
Unit subject to the Award an amount in cash, Units and/or Phantom Units

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equivalent in value to the distributions made by the Partnership with respect to a Unit during
the period such Award is outstanding.

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

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

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

     “Fair Market Value” of a Unit 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.

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

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

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

     “Partnership Agreement” means the Agreement of Limited Partnership of the Partnership, as it
may be amended or amended and restated from time to time.

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

     “Phantom Unit” means a notional unit granted under the Program 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 sole 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 Program 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.

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     “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 representing a limited partnership interest of the Partnership.

     “Unit Appreciation Right” or UAR” means a contingent right that entitles the holder to
receive, in cash or Units, as determined in the sole discretion of the Committee, the excess of the
Fair Market Value of a Unit on the exercise date of the UAR over the exercise price of the UAR.

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

SECTION 3. Administration.

The Program 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
(including an email, fax, or other electronic communication that is authenticated according to the
Uniform Electronic Transactions Act or that is deemed signed by the Committee’s Chair), shall be
the acts of the Committee. Subject to the terms of the Program and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the Program, 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 (including, but not limited to
performance requirements for such Award); (v) determine whether, to what extent, and under what
circumstances Awards may be exercised, canceled, forfeited or settled (and, if settled, whether and
the extent to which settlement is in Units, cash, other property or any combination thereof), and
the method or methods by which Awards may be exercised, canceled, forfeited or settled; (vi)
interpret and administer the Program and any instrument or agreement relating to an Award made
under the Program; (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 Program; (viii) take
any action or exercise any power or right reserved, explicitly or implicitly, to the Committee
under the Program or any Award Agreement; and (ix) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of the Program;
provided that with respect to an Award that provides for the deferral of compensation and is
subject to Section 409A of the Code, the Committee does not have authority to take an action that
subjects a Participant to accelerated or additional taxes pursuant to Section 409A of the Code.
The Committee may correct any defect or supply any omission or reconcile any inconsistency in the
Program or an Award Agreement in such manner and to such extent as the Committee deems necessary or
appropriate. The Committee may, in its sole discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an Award, eliminate or make
less restrictive any restrictions applicable to an Award, waive any restriction or other provision
of this Program or an Award or otherwise amend or modify an Award in any manner that (i) is either
(A) not adverse to the Participant to whom such Award was granted or (B) consented to by such
Participant, and (ii) with respect to an Award that provides for the deferral

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of compensation and is subject to Section 409A of the Code, does not cause the Participant’s taxes
to be accelerated or increased pursuant to Section 409A of the Code. Unless otherwise expressly
provided in the Program, all designations, determinations, interpretations, and other decisions
under or with respect to the Program 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 of the Company, any Participant, and any
other holder or beneficiary of any Award.

SECTION 4. Units.

(a) Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c), the
maximum number of Units that may be delivered with respect to Awards under the Program is _________
Units. 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 Program 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 Program. The limit
for Awards that may be settled in cash shall be $________. The Board and the appropriate officers
of the Company are authorized to take from time to time whatever actions are necessary, and to file
any required documents with governmental authorities, stock exchanges and transaction reporting
systems to ensure that Units are available for issuance pursuant to Awards. If no Units remain
available under the Program for issuance in settlement of an Award, such Award will be settled in
cash.

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

(c) Adjustments. In the event that any distribution (whether in the form of cash, Units,
other securities, or other property), recapitalization, split, reverse split, reorganization or
liquidation, merger, consolidation, split-up, spin-off, separation, combination, repurchase,
acquisition of property or securities, or exchange of Units or other securities of the Partnership,
issuance of warrants or other rights to purchase Units or other securities of the Partnership, or
other similar transaction or event affects the Units, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and type of Units (or other securities
or property) with respect to which Awards may be granted, (ii) the number and type of Units (or
other securities or property) subject to outstanding Awards, (iii) the grant or exercise price with
respect to any Award, (iv) the performance criteria (if any) for an Award that vests upon
satisfaction of performance criteria other than continued service as an Employee, Consultant or
Director (v) the appropriate Fair Market Value and other price determinations for such Awards and
(vi) any other limitations contained within this Program or, subject to Section 8(m), make
provision for a cash payment to the holder of an outstanding Award; provided, that the number of
Units subject to any Award shall always be a whole number.

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SECTION 5. Eligibility.

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

SECTION 6. Awards.

(a) Options and UARs. The Committee shall have the authority to determine the Employees,
Consultants 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 thereof, 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 Program.

     (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.

     (iii) Forfeitures. Except as otherwise provided in the terms of the Award Agreement,
upon termination of all of a Participant’s service relationships, as applicable, with the Company
and all of its Affiliates as an Employee, Consultant or Director for any reason during the
applicable Restricted Period, all outstanding, unvested Options and UARs as of the date of such
termination shall be forfeited by the Participant. The Committee may, in its sole discretion,
waive in whole or in part such forfeiture with respect to a Participant’s Options or UARs; provided
that with respect to an Award that provides for the deferral of compensation and is subject to
Section 409A of the Code, the Committee does not have authority to take an action that subjects a
Participant to accelerated or additional taxes pursuant to Section 409A of the Code.

(b) Restricted Units and Phantom Units. The Committee shall have the authority to
determine the Employees, Consultants and Directors to whom Restricted Units and/or 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 sole discretion, a grant of
Phantom Units may or may not 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 sole 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
sole discretion. Absent a contrary provision in the Award Agreement, except with respect to a
Phantom Unit Award that vests upon satisfaction of performance criteria other than continued
service as an Employee, Consultant or Director, upon a distribution with respect to a Unit, DERs
equal in value to such distribution shall be paid promptly to the Participant in cash without
vesting restrictions. With respect to a Phantom Unit Award that vests upon satisfaction of
performance criteria other than continued service as an Employee, Consultant or Director, DERs
equal in value to such distribution that would otherwise be payable on or after the date of grant
but prior to vesting of the associated Phantom Unit Award shall be credited to a bookkeeping
account established by the Company, which bookkeeping account shall not bear interest and shall be
subject to forfeiture until such time as the associated Phantom Unit Award vests, and the amounts
credited to such bookkeeping account shall be paid to the holder of the Phantom Unit Award within
30 days following the vesting of the associated Phantom Unit Award. Notwithstanding the foregoing,
DERs shall be paid in a manner that is exempt from or in compliance with Section 409A of the Code.

     (ii) UDRs. To the extent provided by the Committee, in its sole discretion, a grant
of Restricted Units may provide that UDRs shall be subject to the same forfeiture and other
restrictions as the Restricted Unit and, if restricted, UDRs shall be held, without interest, until
the Restricted Unit vests or is forfeited, with UDRs being paid or forfeited at the same time, as
the case may be. In addition, the Committee may provide that UDRs be used to acquire additional
Restricted Units for the Participant. Such additional Restricted Units may be subject to such
vesting and other terms as the Committee may proscribe. Absent a contrary provision in the Award
Agreement, UDRs shall be paid promptly to the holder of the Restricted Unit without vesting
restrictions. Notwithstanding the foregoing, UDRs shall be paid in a manner that is exempt from or
in compliance with Section 409A of the Code.

     (iii) Forfeitures. Except as otherwise provided in the terms of the Award Agreement,
upon termination of all of a Participant’s service relationships, as applicable, with the Company
and all of its Affiliates as an Employee, Consultant or Director 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
sole discretion, waive in whole or in part such forfeiture with respect to a Participant’s
Restricted Units and/or Phantom Units; provided that with respect to an Award that provides for the
deferral of compensation and is subject to Section 409A of the Code, the Committee does not have
authority to take an action that subjects a Participant to accelerated or additional taxes pursuant
to Section 409A of the Code.

     (iv) Lapse of Restrictions.

          (A) Phantom Units. Upon or as soon as reasonably practical following the vesting of
each Phantom Unit and any terms of the Phantom Unit Award relating to payment,

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and further 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 one Unit on the date of
vesting. Whether a Phantom Unit Award is settled in Units or cash shall be determined in the sole
discretion of the Committee.

          (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. For payments related to Restricted Units
that are deferred compensation regulated by Section 409A of the Code, unless the Committee provides
otherwise in an Award Agreement, that payment date is not later than March 15 of the calendar year
following the calendar year in which the vesting of each Phantom Unit occurs.

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

(d) Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Program to
such Employees, Consultants and/or Directors as the Committee, in its sole 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
settled in cash, Units (including Restricted Units), other property or any combination thereof, as
determined in the sole discretion of the Committee.

(e) General.

     (i) Awards May Be Granted Separately or Together. Awards may, in the sole 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 Program or any award granted under any other program of the
Company or any Affiliate of the Company. Awards granted in addition to or in tandem with other
Awards or awards granted under any other program of the Company or any Affiliate of the Company 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
of the Company.

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          (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 or on such terms and conditions as the
Committee may from time to time establish. In the terms of an Award Agreement, the Committee may
allow the designation of a death beneficiary for cash payments.

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

     (iv) Unit Certificates. All certificates for Units or other securities of the
Partnership delivered under the Program 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 Program or the rules, regulations, and other requirements of the SEC, any stock exchange
upon which such Units or other securities are then listed, and any applicable federal or state
laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to
make appropriate reference to such restrictions.

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

     (vi) Delivery of Units or other Securities and Payment by Participant of
Consideration. Notwithstanding anything in the Program or any Award Agreement to the contrary,
delivery of Units pursuant to the exercise or vesting of an Award may be deferred for any period
during which, in the good faith determination of the Committee, the 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 Program or the applicable Award Agreement (including,
without limitation, any exercise price or tax withholding) is received by the Company.

     (vii) 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
unless the Committee shall determine otherwise in the Award Agreement, 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 to prevent
dilution or enlargement of the benefits or potential benefits intended to be made available under
the Plan or an outstanding Award:

          (A) provide for either (i) 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 without payment), or (ii) the

9

 

replacement of such Award with 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, values and prices, including, but not limited to, exercise
prices;

          (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., shall
terminate upon such event).

     Notwithstanding the foregoing in this subsection (vii), any such action contemplated under
this subsection (vii) shall be effective only to the extent that such action will not cause any
Award that is designed to satisfy Section 409A of the Code to fail to satisfy such section.

SECTION 7. Amendment, Modification and Termination.

The Board may amend, modify, suspend or terminate this Program (and the Committee may amend an
Award Agreement) for the purpose of meeting or addressing any changes in legal requirements or for
any other purpose permitted by law, except that (i) no amendment or alteration that would adversely
affect the rights of any Participant under any Award previously granted to such Participant shall
apply to such Participant without the consent of such Participant and (ii) no amendment or
alteration shall be effective prior to its approval by the unitholders of the Partnership to the
extent unitholder approval is otherwise required by applicable legal requirements or the
requirements of the securities exchange on which the Partnership’s units are listed, including any
amendment that (A) expands the types of Awards available under this Program, (B) materially
increases the number of Units available for Awards under this Program, (C) materially expands the
classes of persons eligible for Awards under this Program, (D) materially extends the term of this
Program, (E) materially changes the method of determining the exercise price of Options or UARs,
(F) deletes or limits any provisions of this Program that prohibit the repricing of Options or
UARs, or (G) decreases any minimum vesting requirements for any Award.

SECTION 8. General Provisions.

(a) No Rights to Award. No Person shall have any claim to be granted any Award under the
Program, 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.

10

 

(b) Tax Withholding. Unless other arrangements have been made that are acceptable to the
Company, the Company or any Affiliate of the Company 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 at the time of the creation of compensation as defined in the applicable tax or
withholding laws, rules or regulations or at any later time, 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 or under the Program 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 or any Affiliate of the
Company or in the service of the Company or any Affiliate of the Company as a Consultant or
Director. Furthermore, the Company or an Affiliate of the Company may at any time dismiss a
Participant from employment or service free from any liability or any claim under the Program,
unless otherwise expressly provided in the Program, any Award Agreement or other agreement.

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

(e) Severability. If any provision of the Program 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 Program 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 Program or the Award, such provision shall be stricken as to such jurisdiction,
Person or Award and the remainder of the Program and any such Award shall remain in full force and
effect.

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

(g) No Trust or Fund Created. Neither the Program 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.

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

(i) Headings. Headings are given to the Sections and subsections of the Program 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 Program or any provision thereof.

(j) Facility of 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.

(k) Participation by Affiliates. In making Awards to Employees employed by an Affiliate of
the Company, the Committee shall be acting on behalf of such Affiliate, and to the extent the
Partnership has an obligation to reimburse such Affiliate 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 such Affiliate, and, if made to the Company, shall be received by the
Company as agent for such Affiliate.

(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) Compliance with Section 409A.

     (i) Awards made under this Program are intended to comply with or be exempt from Section 409A
of the Code, and ambiguous provisions hereof, if any, shall be construed and interpreted in a
manner consistent with such intent. No payment, benefit or consideration shall be substituted for
an Award if such action would result in the imposition of taxes under Section 409A of the Code.
Notwithstanding anything in this Program to the contrary, if any Program provision or Award under
this Program would result in the imposition of an additional tax under Section 409A of the Code,
that Program provision or Award shall be reformed, to the extent permissible under Section 409A of
the Code, to avoid imposition of the additional tax, and no such action shall be deemed to
adversely affect the Participant’s rights to an Award.

     (ii) Unless the Committee provides otherwise in an Award Agreement, each Phantom Unit (or
portion thereof if the Phantom Unit is subject to a vesting schedule) shall be settled no later
than the 15th day of the third month after the end of the first calendar year in which the Award
(or such portion thereof) is no longer subject to a “substantial risk of forfeiture” within the
meaning of Section 409A of the Code. If the Committee determines that a Phantom Unit is intended
to be subject to Section 409A of the Code, the applicable Award Agreement shall include terms that
are designed to satisfy the requirements of Section 409A of the Code.

     (iii) Notwithstanding anything herein or in any Award Agreement to the contrary, if the
Participant is a “specified employee” within the meaning of Section 409A of the Code(a)(2)(B)(i) on
the date on which the Participant has a “separation from service” (other than

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due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Award payable or
settled on account of separation from service that is deferred compensation subject to Section 409A
of the Code shall be paid or settled on the earliest of (1) the first business day following the
expiration of six months from the Participant’s separation from service, (2) the date of the
Participant’s death, or (3) such earlier date as complies with the requirements of Section 409A of
the Code.

(n) No Guarantee of Tax Consequences. None of the Board, the Partnership, the Company, any
Affiliate of the Company nor the Committee makes any commitment or guarantee that any federal,
state or local tax treatment will apply or be available to any person participating or eligible to
participate hereunder.

(o) Claw-back Policy. All Awards (including any proceeds, gains or other economic benefit
actually or constructively received by the Participant upon any receipt or exercise of any Award or
upon the receipt or resale of any Units underlying the Award) shall be subject to the provisions of
any claw-back policy implemented by the Partnership or the Company, including, without limitation,
any claw-back policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform
and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set
forth in such claw-back policy and/or in the applicable Award Agreement.

SECTION 9. Term of the Program.

The Program, shall be effective on December [_____], 2011 (“Effective Date”). The Program
shall continue until the earliest of (i) the date terminated by the Board, (ii) all Units available
under the Program have been issued to Participants, or (iii) the 10th anniversary of the date on
which the Program was approved by the Company. However, any Award granted prior to such
termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights under such Award,
shall extend beyond such termination date.

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