Document:

exv10w4

 

Exhibit 10.4

Universal Compression Partners, L.P.

Long-Term Incentive Plan

Grant of Options

	 	 	 	 	 	 	 	 	 
	Grantee:

	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Grant Date:

	 	 	 	, 200	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

	1.	 	Grant of Options. UCO GP, LLC on behalf
of UCO General Partner, LP (the “Company”) hereby grants to you the
right and option (“Options”) to purchase all or any part of an aggregate of [___] Common
Units (“Units”) of Universal Compression Partners, L.P. on the terms and conditions set forth
herein and in the Universal Compression Partners, L.P. Long-Term Incentive Plan (the “Plan”),
which is incorporated herein by reference as a part of this Award
Agreement (the “Agreement”). In the event of any
conflict between the terms of this Agreement and the Plan, the Plan shall control.
Capitalized terms used but not defined in this Agreement shall have the meaning attributed to
such terms under the Plan, unless the context requires otherwise.
	 
	2.	 	Purchase Price. The purchase price per Unit purchased pursuant to the exercise of
the Options shall be $______, subject to
adjustment as provided in the Plan, which is equal to the Fair Market
Value of a Unit on the Grant Date.
	 
	3.	 	Vesting and Exercise of Option. Subject to the further provisions of this Agreement,
the Options shall become vested in accordance with the following schedule, and may be
exercised in an Exercise Month by written notice to the Company at its principal executive
office addressed to the attention of its Secretary (or such other officer or employee of the
Company as the Company may designate from time to time):

	 	 	 
	Vesting Date(s)	 	Vested Percentage(s)
	 
	 	 

	 	 	An “Exercise Month” shall be any [March, May, August or November] coinciding with or
following a date on which the Options become vested. Notwithstanding the above schedule,
but subject to the further provisions hereof, upon the occurrence of the following events,
the Options shall vest and become exercisable or forfeited as provided below:

	 	(a)	 	Disability. If your employment with the Company terminates by reason of
a disability that entitles you to benefits under the Company’s long-term disability
plan, the Options shall become fully vested and, subject to the further provisions

 

	 	 	of this Agreement, may be exercised at any time during an Exercise Month that is
within the one-year period following such termination by you or by your guardian or
legal representative (or, if you die during such one-year period, by your estate or
the person who acquires the Options by will or the laws of descent and
distribution).

	 	(b)	 	Death. If you die while in the employ of the Company, the Options
shall become fully vested and, subject to the further provisions of this Agreement,
your estate (or the person who acquires the Options by will or the laws of descent and
distribution) may exercise the Options at any time during an Exercise Month that is
within the one-year period following the date of your death.
	 
	 	(c)	 	Other Terminations. If your employment with the Company is terminated
for any reason other than as provided in paragraphs 3(a) and (b) above, the Options, to
the extent vested on the date of your termination, may be exercised, subject to the
further provisions of this Agreement, at any time during an Exercise Month that is
within the three-month period following such termination by you or by your guardian or
legal representative (or by your estate or the person who acquires the Options by will
or the laws of descent and distribution or otherwise by reason of your death if you die
during such period), but only as to the vested number of Units, if any, that you were
entitled to purchase hereunder as of the date your employment so terminates.
	 
	 	(d)	 	Change of Control. The Options shall become fully vested upon a Change
of Control.

	 	 	For purposes of this Agreement, “employment with the Company” shall include being a Director
or an Employee of, or a Consultant to, the Company or an Affiliate. However, if your Award
is subject to Section 409A of the Code, whether or not your “employment” with the Company
has terminated will be determined in accordance with the regulations issued under Section
409A.
	 
	 	 	There is no minimum or maximum number of Units that must be purchased upon exercise of the
Options. Instead, the Option may be exercised, at any time and from time to time as
provided in this Agreement, to purchase any number of Units that are then vested and
exercisable according to the provisions of this Agreement.
	 
	 	 	Notwithstanding any of the foregoing, the Options shall not be exercisable in any event
after [_________].
	 
	 	 	All Options that are not vested on your termination of employment with the Company as
provided above shall be automatically cancelled without payment upon such termination.
	 
	4.	 	Payment of Exercise Price. The purchase price of the Units as to which the Options
are exercised shall be paid in full at the time of exercise (a) in cash (including by check
acceptable to the Company), (b) if the Units are readily tradable on a national securities
market or exchange, through a “cashless broker exercise” procedure in accordance with a
program established by the Company, (c) with the consent of the Committee, withholding

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	 	 	upon such exercise a number of Units having a Fair Market Value equal to the purchase price
of the Units with respect to which the Option is being exercised, (d) any other method
approved by the Company, or (e) any combination of the foregoing. No fractional Unit shall
be transferred upon exercise of the Options. Unless and until a certificate or certificates
representing such Units shall have been transferred by the Company to you, you (or the
person permitted to exercise the Options in the event of your death) shall not be or have
any of the rights or privileges of a unitholder of the Company with respect to Units
acquirable upon an exercise of the Options.
	 
	5.	 	Withholding of Taxes. To the extent that the exercise of an Option results in the
receipt of compensation by you with respect to which the Company or an Affiliate has a tax
withholding obligation pursuant to applicable law, unless other arrangements have been made by
you that are acceptable to the Company or such Affiliate, which, with the consent of the
Committee, may include withholding a number of Units that would otherwise be delivered on
exercise that have an aggregate Fair Market Value that does not exceed the amount of taxes to
be withheld, you shall deliver to the Company or the Affiliate such amount of money as the
Company or the Affiliate may require to meet its withholding obligations under such applicable
law. No delivery of Units shall be made pursuant to the exercise of an Option under this
Agreement until you have paid or made arrangements approved by the Company or the Affiliate to
satisfy in full the applicable tax withholding requirements of the Company or Affiliate.
	 
	6.	 	Restrictions. By accepting this grant, you agree that the Units that you may acquire
by exercising the Options will not be sold or otherwise disposed of in any manner that would
constitute a violation of any applicable federal or state securities laws. You also agree
that (i) the certificates representing the Units purchased under the Options may bear such
legend or legends as the Committee deems appropriate in order to assure compliance with
applicable securities laws, (ii) the Company may refuse to register the transfer of the Units
purchased under the Options on the transfer records of the Company if such proposed transfer
would in the opinion of counsel satisfactory to the Company constitute a violation of any
applicable securities law, and (iii) the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the Units purchased under the Options.
	 
	7.	 	Limitations Upon Transfer. All rights under this Agreement shall belong to you alone
and may not be transferred, assigned, pledged, or hypothecated by you in any way (whether by
operation of law or otherwise), other than by will or the laws of descent and distribution and
shall not be subject to execution, attachment, or similar process. Upon any attempt by you to
transfer, assign, pledge, hypothecate, or otherwise dispose of such rights contrary to the
provisions in this Agreement or the Plan, or upon the levy of any attachment or similar
process upon such rights, such rights shall immediately become null and void.
	 
	8.	 	Insider Trading. The terms of the Company’s Insider Trading Policy with respect to
Units are incorporated herein by reference. The timing of the delivery of any Units pursuant
to an Option exercise shall be subject to and comply with such policy.

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	9.	 	Binding Effect. This Agreement shall be binding upon and inure to the benefit of any
successors to the Company and all persons lawfully claiming under you.
	 
	10.	 	Entire Agreement. This Agreement constitutes the entire agreement of the parties
with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to the Option
granted hereby. Without limiting the scope of the preceding sentence, all prior
understandings and agreements, if any, among the parties hereto relating to the subject matter
hereof are hereby null and void and of no further force and effect.
	 
	11.	 	Modifications. Except as provided below, any modification of this Agreement shall be
effective only if it is in writing and signed by both you and an authorized officer of the
Company. However, the Company may make any change to this Agreement that is not adverse to
your rights under this Agreement.
	 
	12.	 	Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflicts of laws principles
thereof.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer all effective as of the day and year first above written.

	 	 	 	 	 
	 	 	UCO General Partner, LP,
	 	 	by its general partner
	 	 	UCO GP, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

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Exhibit 10.5

Universal Compression Partners, L.P.

Long-Term Incentive Plan

Grant of Phantom Units

With DERS

	 	 	 	 	 	 	 
	Grantee:
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	Grant Date:

	 	 	 	, 200	 	 
	 

	 	 
	 	 	 	 

	1.	 	Grant of Phantom Units with DERs. UCO
GP, LLC on behalf of UCO General Partner, LP (the “Company”) hereby
grants to you                      Phantom Units under the Universal Compression Partners, L.P. Long-Term
Incentive Plan (the “Plan”) on the terms and conditions set forth herein and in the Plan,
which is incorporated herein by reference as a part of this Award Agreement
(the “Agreement”). This grant of Phantom
Units includes a tandem grant of Distribution Equivalent Rights or DERs with respect to each
Phantom Unit. The Company shall establish a DER bookkeeping account for you with respect to
each Phantom Unit granted that shall be credited with an amount equal to any cash
distributions made by the Partnership on a Common Unit during the period such Phantom Unit is
outstanding. In the event of any conflict between the terms of this Agreement and the Plan,
the Plan shall control. Capitalized terms used in this Agreement but not defined herein shall
have the meanings ascribed to such terms in the Plan, unless the context requires otherwise.
	 
	2.	 	Vesting. Except as otherwise provided in Paragraph 3 below, the Phantom Units
granted hereunder shall vest as follows:

	 	 	 	 	 
	Vesting Date(s)	 	Vested Percentage(s)
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 

Upon vesting of a Phantom Unit, the amount credited to your tandem DER account with respect to such
Phantom Unit shall also vest. If a Phantom Unit is forfeited, the amount credited to your tandem
DER account with respect to such Phantom Unit shall also be forfeited.

	3.	 	Events Occurring Prior to Vesting.

	 	(a)	 	Death or Disability. If your employment with the Company terminates as
a result of your death or a disability that entitles you to benefits under the
Company’s long-term disability plan, the Phantom Units then held by you and

 

 

any DERs credited to your DER account automatically will become fully vested upon
such termination.

	 	(b)	 	Other Terminations. If your employment with the Company terminates for
any reason other than as provided in Paragraph 3(a) above, all unvested Phantom Units
then held by you and all DERs then credited to your DER account automatically shall be
forfeited without payment upon such termination.
	 
	 	(c)	 	Change of Control. All outstanding Phantom Units then held by you and
all DERs then credited to your DER account automatically shall become fully vested upon
a Change of Control.

For purposes of this Paragraph 3, “employment with the Company” shall include being an
Employee or a Director of, or a Consultant to, the Company or an Affiliate. However, if
your Award is subject to Section 409A of the Code, whether or not your “employment” with the
Company has terminated will be determined in accordance with the regulations issued under
Section 409A.

	4.	 	Payments. Subject to Paragraph 7 below, as soon as administratively practicable
after the vesting of a Phantom Unit, the Company shall pay you one Unit with respect to such
vested Phantom Unit; provided, however, the Committee may, in its sole discretion, direct that
a cash payment be made to you in lieu of the delivery of such Unit. Any such cash payment
shall be equal to the Fair Market Value of the Unit on the payment date. If more than one
Phantom Unit vests at the same time, the Committee may elect to pay such vested Phantom Units
in Units, cash or any combination thereof, in its discretion. Upon vesting of a Phantom Unit,
the amount credited to your DER account with respect to such Phantom Unit shall be paid to you
in cash without interest.
	 
	5.	 	Limitations Upon Transfer. All rights under this Agreement shall belong to you alone
and may not be transferred, assigned, pledged, or hypothecated by you in any way (whether by
operation of law or otherwise), other than by will or the laws of descent and distribution and
shall not be subject to execution, attachment, or similar process. Upon any attempt by you to
transfer, assign, pledge, hypothecate, or otherwise dispose of such rights contrary to the
provisions in this Agreement or the Plan, or upon the levy of any attachment or similar
process upon such rights, such rights shall immediately become null and void.
	 
	6.	 	Restrictions. By accepting this grant, you agree that any Units that you may acquire
upon payment of this Award will not be sold or otherwise disposed of in any manner that would
constitute a violation of any applicable federal or state securities laws. You also agree
that (i) any certificates representing the Units acquired under this Award may bear such
legend or legends as the Committee deems appropriate in order to assure compliance with
applicable securities laws, (ii) the Company may refuse to register the transfer of the Units
to be acquired under this Award on the transfer records of the Partnership if such proposed
transfer would in the opinion of counsel satisfactory to the Partnership constitute a
violation of any applicable securities law, and (iii) the

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	 	 	Partnership may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the Units to be acquired under this Award.
	 
	7.	 	Withholding of Taxes. To the extent that the grant, vesting or payment of a
Phantom Unit or DER account results in the receipt of compensation by you with respect to
which the Company or an Affiliate has a tax withholding obligation pursuant to applicable law,
unless other arrangements have been made by you that are acceptable to the Company or such
Affiliate, which may include the Company or such Affiliate withholding a number of Units from
such payment that have a fair market value not exceeding the Company’s or Affiliate’s tax
withholding obligation, you shall deliver to the Company or the Affiliate such amount of money
as the Company or the Affiliate may require to meet its withholding obligations under such
applicable law. No payment of a vested Phantom Unit or DER account shall be made pursuant to
this Agreement until you have paid or made arrangements approved by the Company or the
Affiliate to satisfy in full the applicable tax withholding requirements of the Company or
Affiliate with respect to such event.
	 
	8.	 	Rights as Unitholder. You, or your executor, administrator, heirs, or legatees shall
have the right to receive distributions on Units and all the other privileges of a unitholder
of the Partnership only from the date of issuance of a Unit certificate in your name
representing payment of a vested Phantom Unit.
	 
	9.	 	Binding Effect. This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company and upon any person lawfully claiming under you.
	 
	10.	 	Entire Agreement. This Agreement constitutes the entire agreement of the parties
with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to the Phantom
Units granted hereby. Without limiting the scope of the preceding sentence, all prior
understandings and agreements, if any, among the parties hereto relating to the subject matter
hereof are hereby null and void and of no further force and effect.
	 
	11.	 	Modifications. Except as provided below or in the Plan, any modification of this
Agreement shall be effective only if it is in writing and signed by both you and an authorized
officer of the Company. However, the Company may make any change to this Agreement that is
not adverse to your rights under this Agreement.
	 
	12.	 	Governing Law. This grant shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to conflicts of laws principles thereof.

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	 	UCO General Partner, LP,

by its general partner

UCO GP, LLC

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

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