Document:

Exhibit 10.1

 

Hiland Partners, LP

Long-Term Incentive Plan

 

Grant of Phantom Units

 

	
  Grantee:

  	
                                

  
	
   

  	
   

  
	
  Grant
  Date:

  	
                       ,
  200  

  

 

1.                                       Grant
of Phantom Units.
Hiland Partners GP, LLC (the “Company”) hereby grants to you       
Phantom Units under the Hiland Partners 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 Agreement. This grant of
Phantom Units does not include tandem DERs. 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.                                       Regular
Vesting. Except
as otherwise provided in Paragraph 3 below, the Phantom Units granted hereunder
shall vest on the anniversary of the Grant Date as follows:

 

	
  Anniversary of

  Grant Date

  	
   

  	
  Cumulative

  Vested Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

3.                                       Events
Occurring Prior to Regular 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 automatically will become
fully vested upon such termination.

 

(b)                                 By the Company
other than for Cause. If your employment is terminated by the
Company for any reason other than “Cause,” as determined by the Company in
accordance with its employment policies, the Phantom Units then held by you
automatically will become fully vested upon such termination.

 

 

(c)                                  Other Terminations. Except
as provided in Paragraph 2 hereof, if you terminate from the Company for any reason
other than as provided in Paragraphs 3(a) and (b) above, all unvested Phantom
Units then held by you automatically shall be forfeited without payment upon
such termination.

 

(d)                                 Change of Control. All outstanding
Phantom Units held by you 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 of or a director or consultant
to the Company or an Affiliate.

 

4.                                       Payment. As
soon as administratively practicable after the vesting of a Phantom Unit, you
shall be entitled to receive from the Company one 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
Award in Units, cash or any combination thereof, in its discretion.

 

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 which you may acquire upon payment of this award will not
be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities laws. You also agree
that (i) the 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 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 Tax. To  the  extent that the grant, vesting or payment of
a Phantom Unit 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, 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 shall be made pursuant to this 

 

2

 

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 vote and 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.                                       Insider
Trading Policy. The terms of the Company’s Insider Trading
Policy are incorporated herein by reference. The timing of the delivery of any
Units pursuant to a vested Phantom Unit shall be subject to and comply with
such Policy.

 

10.                                 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.

 

11.                                 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. 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.

 

12.                                 Governing
Law. This grant shall be
governed by, and construed in accordance with, the laws of the State of
Oklahoma, without regard to conflicts of laws principles thereof.

 

	
   

  	
  Hiland Partners
  GP, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

3Exhibit 10.1

 

Hiland Partners, LP

Long-Term Incentive Plan

 

Grant of Phantom Units

 

Grantee:

 

Grant Date:                                       ,
200

 

1.                                       Grant of Phantom Units. Hiland Partners GP, LLC (the “Company”)
hereby grants to you
           Phantom Units
under the Hiland Partners 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 Agreement. This grant of Phantom Units does not
include tandem DERs. 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.                                       Regular Vesting. Except as otherwise provided in Paragraph 3
below, the Phantom Units granted hereunder shall vest on the anniversary of the
Grant Date as follows:

 

	
  Anniversary of

  Grant Date

  	
   

  	
  Cumulative

  Vested Percentage

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

3.                                       Events Occurring Prior to
Regular 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 automatically will become fully vested upon such termination.

 

(b)                                 By the Company other than
for Cause. If your
employment is terminated by the Company for any reason other than “Cause,” as
determined by the Company in accordance with its employment policies, the
Phantom Units then held by you automatically will become fully vested upon such
termination.

 

 

(c)                                  Other Terminations. Except as provided in Paragraph 2 hereof,
if you terminate from the Company for any reason other than as provided in
Paragraphs 3(a) and (b) above, all unvested Phantom Units then held by you
automatically shall be forfeited without payment upon such termination.

 

(d)                                 Change of Control. All outstanding Phantom Units held by you
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 of or
a director or consultant to the Company or an Affiliate.

 

4.                                       Payment. As soon as administratively practicable
after the vesting of a Phantom Unit, you shall be entitled to receive from the
Company one 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 Award in Units, cash or any combination
thereof, in its discretion.

 

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 which you may acquire upon payment of this award will not be sold or
otherwise disposed of in any manner which would constitute a violation of any
applicable federal or state securities laws. You also agree that (i) the
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 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 Tax. To 
the  extent that the grant,
vesting or payment of a Phantom Unit 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, 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 shall be made pursuant to this

 

2

 

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 vote and 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.                                       Insider Trading Policy. The terms of the Company’s Insider Trading
Policy are incorporated herein by reference. The timing of the delivery of any
Units pursuant to a vested Phantom Unit shall be subject to and comply with
such Policy.

 

10.                                 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.

 

11.                                 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. 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.

 

12.                                 Governing Law. This grant shall be governed by, and
construed in accordance with, the laws of the State of Oklahoma, without regard
to conflicts of laws principles thereof.

 

	
   

  	
  Hiland
  Partners GP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

3

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