Document:

stag_Ex10-1

		

			 

		

		
			Exhibit 10.1
		

		
			EXECUTIVE EMPLOYMENT AGREEMENT
		

		
			This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made effective as of October 27,  2014 (“Effective Date”), by and among STAG INDUSTRIAL, INC., a Maryland corporation (“Company”), STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P. (“Partnership”), a Delaware limited partnership, and JEFFREY M. SULLIVAN (“Executive”) to affirm the terms and conditions of Executive’s employment.  
		

		
			The parties agree as follows:
		

			
	
			
				 1.
			Employment.  Employer (as defined below) hereby employs Executive, and Executive hereby accepts such employment, upon the terms and conditions set forth herein.  

			
	
			
				 2.
			Duties.

			
	
			
				 2.1
			Position.  Executive is employed on a full-time basis, (i) from the Effective Date through December 31, 2014 (the “Advisor Term”) as Special Legal Advisor to the Company, shall report directly to the General Counsel of the Company, and shall have the duties and responsibilities commensurate with such position as shall be reasonably and in good faith determined from time to time by the General Counsel, including such duties and responsibilities with respect to the Company, the Partnership and/or a subsidiary of either (collectively, “Employer”) and (ii) from January 1, 2015 through December 31, 2017 (the “Initial Term”) as Executive Vice President, General Counsel and Secretary, shall report directly to the Board of Directors of the Company (the “Board of Directors”), and shall have the duties and responsibilities commensurate with such positions as shall be reasonably and in good faith determined from time to time by the Board of Directors, including such duties and responsibilities with respect to the Employer.  

			
	
			
				 2.2
			Duties.  Executive shall: (i) abide by all applicable federal, state and local laws, regulations and ordinances, and (ii) except for vacation and illness periods, devote substantially all of his business time, energy, skill and efforts to the performance of his duties hereunder in a manner that will faithfully and diligently further the business interests of the Employer; provided, that, notwithstanding the foregoing, Executive may (x) make and manage personal business investments of his choice, subject to the limitations set forth in Section 8 hereof, (y) serve as a director or in any other capacity of any business enterprise, including an enterprise whose activities may involve or relate to the Employer’s Business (as defined in Section 8), provided that such service is expressly approved in advance by the Board of Directors, and (z) serve in any capacity with any civic, educational, religious or charitable organization, or any governmental entity or trade association; provided that all such other activities do not materially interfere with the performance of the Executive’s duties hereunder.

			
	
			
				 3.
			Term of Employment.  The term of this Agreement shall commence on the Effective Date and shall continue until and including the expiration of the Initial Term unless earlier terminated as herein provided.  The Advisor Term shall expire upon the commencement of the Initial Term and shall not be renewed for any period. The Initial Term shall be automatically renewed for successive one-year periods (each an “Extended Term”) unless either party gives notice of non-renewal at least sixty (60) days prior to the end of the Initial Term or any Extended Term.  As used herein, “Term” shall include the Advisor Term, the Initial Term and any Extended Term, but the Term shall end upon any lawful termination of Executive’s employment with Employer as herein provided.     

		 

		

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				 4.
			Compensation.

			
	
			
				 4.1
			Base Salary.  As compensation for Executive’s performance of Executive’s duties as set forth herein and as hereafter determined by the compensation committee of the Board of Directors from time to time, Employer shall pay to Executive a base salary of $290,000 per year (“Base Salary”), payable in accordance with the normal payroll practices of Employer, less all legally required or authorized payroll deductions and tax withholdings.  Base Salary shall be reviewed annually, and may be increased, at the sole discretion of the compensation committee of the Board of Directors, in light of the Executive’s performance and the Employer’s financial performance and other economic conditions and relevant factors determined by the compensation committee.  

			
	
			
				 4.2
			LTIP Units, Restricted Stock and Other Equity Awards.  

			
	
			
				 (a)
			In consideration of services to be performed by Executive for the Partnership in his capacity as a partner thereof, upon execution of this Agreement, the Employer shall cause to be granted to Executive long-term incentive plan units (“LTIP Units”) equal in fair value at the time of such grant to two times the Executive’s Base Salary, pro-rated for the partial calendar year at the beginning of the Term.  Such LTIP Units shall be evidenced by, and subject to, the LTIP Unit award agreement attached to this Agreement as Exhibit A (“LTIP Agreement”) and the Company’s 2011 Equity Incentive Plan, as amended (“2011 Equity Plan”) (a copy of which has been delivered to Executive).  The initial LTIP Agreement provides for a five-year term and vesting of one-twentieth of the LTIP grant on the last day of each quarter during the term of the LTIP Agreement.  At the time of any subsequent grant of LTIPs, the compensation committee of the Board of Directors shall determine the amount, term and vesting period of any such grant. Irrespective of the vesting schedule, Executive will receive distributions on the entire LTIP Unit grant (vested and unvested) equal in value to the dividends payable for a commensurate number of shares of common stock. In addition, as part of the consideration for employment, Executive shall be eligible to receive additional awards of LTIP Units and other equity awards, subject to the terms and conditions of the Company’s 2011 Equity Plan (or such subsequent equity plan as may be in place from time to time) and the applicable award agreement, such awards typically to be granted in January of each calendar year, subject to the determination of the compensation committee of the Board of Directors.  

			
	
			
				 (b)
			At any time after the execution of this Agreement, as part of the consideration for his employment as an officer of the Company, Executive shall be eligible to receive shares of common stock (“Restricted Stock”), in such number as the compensation committee of the Board of Directors deems appropriate, should it determine that such a grant of Restricted Stock is advisable in its sole discretion, and such Restricted Stock shall be evidenced by, and subject to, a Restricted Stock award agreement in the form then currently in use by the Company (“Restricted Stock Agreement”).  Such awards of Restricted Stock and any other equity awards granted shall be subject to the terms and conditions of the Company’s 2011 Equity Plan (or such subsequent equity plan as may be in place from time to time) and the applicable award agreement.  

			
	
			
				 (c)
			Any LTIP Units granted to the Executive during the term of this Agreement shall be deemed to have been granted to the Executive in consideration of services rendered or to be rendered in Executive’s capacity as a partner of the Partnership.

			
	
			
				 (d)
			During the Term, the Company and the Partnership shall (and shall cause each subsidiary that is a component Employer to) allocate the services provided by Executive to each component Employer and compensate Executive from the respective component Employer on a basis proportionate to the services provided by Executive to each component Employer.  The parties confirm that Employer shall (and intends to) require that a sufficient amount of services be provided hereunder to the Partnership by Executive in his capacity as a partner of the Partnership to constitute full and adequate consideration for 
		

		 

		

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			the issuance of LTIP Units to Executive and to the Company by Executive in his capacity as an officer of the Company to constitute full and adequate consideration for the issuance of Restricted Stock to Executive.  

			
	
			
				 4.3
			Bonus.   At the sole discretion of the Board of Director’s compensation committee, Executive may be paid a cash bonus (“Bonus”) relating to each calendar year during the Term subject to the satisfaction of the terms and conditions set forth in  the Executive Compensation Program approved by the Board of Director’s compensation committee. Such discretionary Bonus, if any, shall be paid on or before January 15 of the following calendar year.  

			
	
			
				 4.4
			Signing Bonus LTIPS. In consideration of services to be performed by Executive for the Partnership in his capacity as a partner thereof and for Executive’s completion of the Initial Term under this Agreement, upon execution of this Agreement, the Employer shall cause to be granted to Executive LTIP Units equal in fair value at the time of such grant to $600,000 (“Signing Bonus LTIPS”).  Such Signing Bonus LTIPS shall be evidenced by, and subject to, the LTIP Unit award agreement attached to this Agreement as Exhibit B (“SB LTIP Agreement”) and the Company’s 2011 Equity Plan.  The SB LTIP Agreement provides for a term running concurrently with this Agreement.  No vesting of any of the Signing Bonus LTIPS will occur during the Term; provided, however, on the expiration of the Initial Term all of the Signing Bonus LTIPS will vest.    Irrespective of the vesting schedule, Executive will receive distributions on the entire Signing Bonus LTIPS grant equal in value to the dividends payable for a commensurate number of shares of common stock. 

			
	
			
				 4.5
			Relocation Expenses.  The Company will reimburse the Executive for the reasonable and customary costs incurred for the following expenses in connection with Executive’s relocation to the Boston area: (a) the packing, shipping and the unpacking of the Executive’s household goods; (b) the rental of temporary housing; (c) travel costs related to the search for and move into temporary housing and/or a new home;  and (d) travel costs related to Executive’s commuting to and from Boston; provided, however, the relocations expenses will not exceed, in the aggregate, $75,000.00.  Executive shall submit any such expenses for reimbursement within thirty (30) days of incurring the same.

			
	
			
				 5.
			Customary Fringe Benefits.  Executive shall be eligible for all customary and usual fringe benefits generally available to full-time employees of Employer, subject to the terms and conditions of Employer’s policies and benefit plan documents, as the same may be amended from time to time.  As of the date hereof, Employer provides the following fringe benefits:  group health insurance, group dental insurance, life insurance (equal to two times Executive’s Base Salary), accidental death and disability insurance and flexible health and child care spending program. Employer reserves the right to change or eliminate the fringe benefits (except the life insurance) on a prospective basis, at any time, effective upon written notice to Executive (which written notice may be delivered electronically by e-mail to Executive’s Company email account).  In addition, Executive shall receive an allowance for parking costs of up to $500.00 a month. Executive shall be entitled to vacation of four weeks per year.  

			
	
			
				 6.
			Business Expenses.  Executive shall be reimbursed for all reasonable, out-of-pocket business expenses incurred in the performance of Executive’s duties on behalf of Employer.  To obtain reimbursement, expenses must be submitted within one  (1)  month of being incurred with appropriate supporting documentation in accordance with Employer’s policies.  All such expenses shall be reimbursed within one (1) month of submission and, in any event, in the same fiscal year in which they were incurred or within one (1) month after the end of such year. 

			
	
			
				 7.
			Termination of Employment.  Subject to the terms and conditions of this Section 7, either Company or Executive may terminate Executive’s employment with Employer at any time, with or without Cause (as defined in Section 7.10), during the Term.  Any termination of Executive’s employment during the Term shall be communicated by written notice of termination from the terminating party to the other 
		

		 

		

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			party (“Notice of Termination”).  The Notice of Termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination and a written statement of the reason(s) for the termination.  In the case of a Notice of Termination provided by Executive to Employer, such Notice of Termination shall not be effective for a period of thirty (30) days after receipt of such Notice of Termination by Employer.  In the case of a Notice of Termination provided by Company to Executive, such Notice of Termination shall not be effective for a period of thirty (30) days after receipt of such Notice of Termination by Executive; provided that Company may require Executive to leave the Company’s premises and refrain from any further business activities on behalf of the Company as of the date designated by Company in the Notice of Termination.  If Executive’s employment is terminated by either party, for any reason, during the Term, Employer shall pay to the Executive the accrued and unpaid Base Salary and accrued but unused vacation as of the date of Executive’s termination of employment.  Further, if Executive’s employment is terminated by either party, for any reason other than a termination by the Company for Cause or termination by Executive without Good Reason, during the Term, Employer shall pay to the Executive an amount equal to the product of (a) the Bonus (or deemed Bonus) referenced in Section 7.1(a)(ii) of this Agreement multiplied by (b) a fraction, the numerator of which is the number of days that have elapsed between the beginning of the fiscal year in which the termination occurs and the date of termination and the denominator of which is the number of days in the fiscal year in which the termination occurs, such payment to be made no later than thirty (30) days following the date of termination of Executive’s employment and shall be subject to Executive’s execution of a general release in favor of Company, and all subsidiary and related entities, and their officers, directors, shareholders, employees and agents to the fullest extent permitted by law, drafted by Company and in a form reasonably satisfactory to Company.  Except as otherwise provided in this Section 7 and its subsections, Employer shall have no further obligation to make or provide to Executive, and Executive shall have no further right to receive or obtain from Employer, any payments or benefits in respect of the termination of Executive’s employment with Employer during the Term.  

			
	
			
				 7.1
			Severance Upon Involuntary Termination without Cause.  If Company terminates Executive’s employment with Employer without Cause (as defined in Section 7.10)  during the Term, such termination is not in connection with Executive’s Disability (as defined below), and such termination qualifies as a “Separation from Service” under Section 409A (as hereinafter defined), Executive shall be entitled to a “Severance Package” that consists of the following: 

			
	
			
				 (a)
			a single cash lump-sum “Severance Payment” equal to two (2) times the sum of (i) Executive's annual rate of Base Salary in effect immediately prior to Executive’s termination of employment, and (ii) the Bonus (if any) actually paid to Executive for the most recently completed fiscal year; 

			
	
			
				 (b)
			Employer’s direct-to-insurer payment of any group health or other insurance premiums for a period of eighteen (18) months (subject to Executive’s eligibility for, and proper and timely election of continued group health benefits under the Consolidated Omnibus Budget and Reconciliation Act (“COBRA”)) to continue Executive’s coverage under the Company’s group health insurance plan, group dental plan and, if any, the Company’s group life and disability insurance plans;  

			
	
			
				 (c)
			immediate vesting of all outstanding LTIP Units (which shall, in accordance with the applicable award agreement, remain subject to achieving parity with common units of limited partnership interest in the Partnership), Restricted Stock, stock options, and other equity awards granted to Executive under any of Employer’s equity incentive plans; 

			
	
			
				 (d)
			immediate vesting of the Signing Bonus LTIPS (which shall, in accordance with the CB LTIP Agreement, remain subject to achieving parity with common units of limited partnership interest in the Partnership); and

		 

		

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				 (e)
			continuation of coverage under the Company’s liability insurance for directors and officers with respect to any of the Executive’s actions as Executive of the Company during the Term; 

		
			provided,  however, that all of the following conditions are first satisfied: 
		

			
	
			
				 (i)
			Executive reaffirms Executive’s commitment to comply with all surviving provisions of this Agreement, including Section 9 and Section 10 hereof; and 

			
	
			
				 (ii)
			Executive executes a Separation Agreement that includes a general release in favor of Company, and all subsidiary and related entities, and their officers, directors, shareholders, employees and agents to the fullest extent permitted by law, drafted by Company and in a form reasonably satisfactory to Company, and the general release becomes effective in accordance with its terms no later than thirty (30) days following the date of termination of Executive’s employment.  

		
			If the Company terminates Executive’s employment pursuant to this Section 7.1 during calendar year  2015, then the Bonus referred to in Section 7.1(a)(ii) hereof shall be grossed up to reflect the amount of Bonus that would have been paid had the Executive worked the full year of 2014. The Severance Payment shall be subject to all legally required and authorized deductions and tax withholdings and shall be paid on the date that is the thirtieth (30th) day following the date of termination of Executive’s employment, provided that Executive has complied with all of the above-referenced conditions to receiving the Severance Payment. Effective immediately upon termination of employment, Executive shall no longer be eligible to contribute to or to be an active participant in any retirement or benefit plan covering employees of Employer; provided, however, Executive may effect a rollover or other transfer of his interests in any such retirement or benefit plan in accordance with the terms of such plan and applicable law.  All other Employer obligations to Executive shall be automatically terminated and completely extinguished.  
		

			
	
			
				 7.2
			Severance Upon Resignation for Good Reason.  If Executive resigns from employment with Employer for Good Reason (as defined in Section 7.10) during the Term and such resignation qualifies as a “Separation from Service” under Section 409A, Executive shall be entitled to a “Severance Package” that consists of the following: 

			
	
			
				 (a)
			a single cash lump-sum “Severance Payment” equal to two (2) times the sum of (i) Executive's annual rate of Base Salary in effect immediately prior to Executive’s termination of employment, and (ii) the Bonus (if any)  actually paid to Executive for the most recently completed fiscal year;

			
	
			
				 (b)
			Employer’s direct-to-insurer payment of any group health or other insurance premiums for a period of eighteen (18) months (subject to Executive’s eligibility for, and proper and timely election of continued group health benefits under COBRA) to continue Executive’s coverage under the Company’s group health insurance plan, group dental plan and, if any, the Company’s group life and disability insurance plans;  

			
	
			
				 (c)
			immediate vesting of all outstanding LTIP Units (which shall, in accordance with the applicable award agreement, remain subject to achieving parity with common units of limited partnership interest in the Partnership), Restricted Stock, stock options, and other equity awards granted to Executive under any of Employer’s equity incentive plans; 

			
	
			
				 (d)
			immediate vesting of the Signing Bonus LTIPS  (which shall, in accordance with the CB LTIP Agreement, remain subject to achieving parity with common units of limited partnership interest in the Partnership); and

		 

		

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				 (e)
			continuation of coverage under the Company’s liability insurance for directors and officers with respect to any of the Executive’s actions as Executive of the Company during the Term;  

		
			provided, however, that all of the following conditions are first satisfied: 
		

			
	
			
				 (i)
			Executive reaffirms Executive’s commitment to comply with all surviving provisions of this Agreement, including Section 9 and Section 10 hereof; and 

			
	
			
				 (ii)
			Executive executes a Separation Agreement that includes a general release in favor of Company, and all subsidiary and related entities, and their officers, directors, shareholders, employees and agents to the fullest extent permitted by law, drafted by Company and in a form reasonably satisfactory to Company, and the general release becomes effective in accordance with its terms no later than thirty (30) days following the date of termination of Executive’s employment.  

		
			If the Executive resigns from his employment pursuant to this Section 7.2 during calendar year 2015, then the Bonus referred to in Section 7.2(a)(ii) hereof shall be grossed up to reflect the amount of Bonus that would have been paid had the Executive worked the full year of 2014. The Severance Payment shall be subject to all legally required and authorized deductions and tax withholdings and shall be paid on the thirtieth (30th) day following the date of termination of Executive’s employment, provided that Executive has complied with all of the above-referenced conditions to receiving the Severance Payment. Effective immediately upon termination of employment, Executive shall no longer be eligible to contribute to or to be an active participant in any retirement or benefit plan covering employees of Employer; provided, however, Executive may effect a rollover or other transfer of his interests in any such retirement or benefit plan in accordance with the terms of such plan and applicable law.  All other Employer obligations to Executive shall be automatically terminated and completely extinguished.  
		

			
	
			
				 7.3
			Severance Upon Change of Control.   If during the last year of the Initial Term or during any Extended Term, a “Change of Control” (as defined in Section 7.10) occurs and the Company gives notice of non-renewal of this Agreement within twelve (12) months following such Change of Control, Executive shall be entitled to a “Severance Package” that consists of the following: 

			
	
			
				 (a)
			a single cash lump-sum “Severance Payment” equal to two (2) times the sum of (i) Executive's annual rate of Base Salary in effect immediately prior to Executive’s termination of employment, and (ii) the Bonus (if any)  actually paid to Executive for the most recently completed fiscal year; 

			
	
			
				 (b)
			Employer’s direct-to-insurer payment of any group health or other insurance premiums for a period of eighteen (18) months (subject to Executive’s eligibility for, and proper and timely election of continued group health benefits under COBRA) to continue Executive’s coverage under the Company’s group health insurance plan, group dental plan and, if any, the Company’s group life and disability insurance plans;  

			
	
			
				 (c)
			immediate vesting of all outstanding LTIP Units (which shall, in accordance with the applicable award agreement, remain subject to achieving parity with common units of limited partnership interest in the Partnership), Restricted Stock, stock options, and other equity awards granted to Executive under any of Employer’s equity incentive plans; 

			
	
			
				 (d)
			immediate vesting of the Signing Bonus LTIPS  (which shall, in accordance with the CB LTIP Agreement, remain subject to achieving parity with common units of limited partnership interest in the Partnership); and

		 

		

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				 (e)
			continuation of coverage under the Company’s liability insurance for directors and officers with respect to any of the Executive’s actions as Executive of the Company during the Term; 

		
			provided, however, that all of the following conditions are first satisfied: 
		

			
	
			
				 (i)
			Executive reaffirms Executive’s commitment to comply with all surviving provisions of this Agreement, including Section 9 and Section 10 hereof; and 

			
	
			
				 (ii)
			Executive executes a Separation Agreement that includes a general release in favor of Company, and all subsidiary and related entities, and their officers, directors, shareholders, employees and agents to the fullest extent permitted by law, drafted by Company and in a form reasonably satisfactory to Company, and the general release becomes effective in accordance with its terms no later than thirty (30) days following the date of termination of Executive’s employment.  

		
			If the Executive’s employment terminates pursuant to this Section 7.3 during calendar year 2015, then the Bonus referred to in Section 7.3(a)(ii) hereof shall be grossed up to reflect the amount of Bonus that would have been paid had the Executive worked the full year of 2014. The Severance Payment shall be subject to all legally required and authorized deductions and tax withholdings and shall be paid on the thirtieth (30th) day following the date of termination of Executive’s employment, provided that Executive has complied with all of the above-referenced conditions to receiving the Severance Payment.  Effective immediately upon termination of employment, Executive shall no longer be eligible to contribute to or to be an active participant in any retirement or benefit plan covering employees of Employer; provided, however, Executive may effect a rollover or other transfer of his interests in any such retirement or benefit plan in accordance with the terms of such plan and applicable law.  All other Employer obligations to Executive shall be automatically terminated and completely extinguished.
		

			
	
			
				 7.4
			Beneficial Excise Tax Treatment.  If any payment or benefit received or to be received by Executive pursuant to this Agreement or otherwise would subject Executive to any excise tax pursuant to Section 4999 of the Code due to the characterization of such payment or benefit as an excess parachute payment under Section 280G of the Code, Executive may elect, in his sole discretion, to reduce the amounts of any payments or benefits called for under this Agreement in order to avoid such characterization.  To aid Executive in making any election called for under this Section 7.4, upon the occurrence of any event that might reasonably be anticipated to give rise to the application of this Section 7.4 (an “Event”), Company shall promptly request a determination in writing by independent public accountants selected by Employer (the “Accountants”).  Unless Company and Executive otherwise agree in writing, the Accountants, within thirty (30) days after the date of the Event, shall determine and report to Company and Executive whether any reduction in payments or benefits at the election of Executive would produce a greater after-tax benefit to Executive and shall provide to Company and Executive a written report containing a sufficiently detailed quantitative substantiation of their analysis and presented in a manner that Executive can readily understand.  For the purposes of such determination, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make their required determination.  The Company shall bear all fees and expenses the Accountants may reasonably charge in connection with their services contemplated by this Section 7.4.  Under no circumstances shall Executive be entitled to any tax reimbursement or tax gross-up payment by virtue of the occurrence of an Event or any additional payment or benefit under this Section 7.4.  

			
	
			
				 7.5
			Section 409A Compliance.  The parties intend for this Agreement either to satisfy the requirements of Section 409A or to be exempt from the application of Section 409A, and this Agreement shall be construed and interpreted accordingly.  If this Agreement either fails to satisfy the requirements of 
		

		 

		

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			Section 409A or is not exempt from the application of Section 409A, then the parties hereby agree to amend or to clarify this Agreement in a timely manner so that this Agreement either satisfies the requirements of Section 409A or is exempt from the application of Section 409A.  

		
			Notwithstanding any provision in this Agreement to the contrary, if Executive is a “specified employee” (as defined in Section 409A), any Severance Payment, severance benefits or other amounts payable under this Agreement that would be subject to the special rule regarding payments to “specified employees” under Section 409A(a)(2)(B) of the Code (together, “Specified Employee Payments”) shall not be paid before the expiration of a period of six (6) months following the date of Executive’s termination of employment (or before the date of Executive’s death, if earlier).  The Specified Employee Payments to which Executive would otherwise have been entitled during the six-month period following the date of Executive’s termination of employment shall be accumulated and paid as soon as administratively practicable following the first date of the seventh month following the date of Executive’s termination of employment.  
		

		
			To ensure satisfaction of the requirements of Section 409A(b)(3) of the Code, assets shall not be set aside, reserved in a trust or other arrangement, or otherwise restricted for purposes of the payment of amounts payable under this Agreement.  
		

		
			Notwithstanding anything herein to the contrary, the reimbursement of expenses or in-kind benefits provided pursuant to this Agreement shall be subject to the following conditions: (i) the expenses eligible for reimbursement or in-kind benefits in one taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year; (ii) the reimbursement of eligible expenses or in-kind benefits shall be made promptly, subject to Company’s applicable policies, but in no event later than the end of the year after the year in which such expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
		

		
			Employer hereby informs Executive that the federal, state, local, and/or foreign tax consequences (including without limitation those tax consequences implicated by Section 409A) of this Agreement are complex and subject to change.  Executive acknowledges and understands that Executive should consult with his or her own personal tax or financial advisor in connection with this Agreement and its tax consequences.  Executive understands and agrees that Employer has no obligation and no responsibility to provide Executive with any tax or other legal advice in connection with this Agreement and its tax consequences.  Executive agrees that Executive shall bear sole and exclusive responsibility for any and all adverse federal, state, local, and/or foreign tax consequences (including without limitation any and all tax liability under Section 409A) of this Agreement to Executive.  
		

			
	
			
				 7.6
			Effect of Death or Disability.  If Executive dies or his employment is terminated by Company upon his experiencing a Disability (as defined in Section 7.10) during the Term, Executive (or his estate) shall be entitled to (a) payment of his accrued and unpaid Base Salary as of the date of Executive’s death or termination of employment by the Company upon his experiencing a Disability; (b) payment of a single cash lump-sum payment equal to the product of (i) the Bonus referenced in Section 7.1(a)(ii) of this Agreement multiplied by (ii) a fraction, the numerator of which is the number of days that have elapsed between the beginning of the fiscal year in which Executive’s death or termination of his employment occurs and the date of Executive’s death or termination of employment and the denominator of which is the number of days in the fiscal year in which Executive’s death or termination of employment occurs; and (c) payment by Employer of any group health or other insurance premiums for a period of eighteen (18) months (subject to Executive’s (or his spouse’s) eligibility for, and proper and timely election of continued group health benefits under COBRA) to continue Executive’s coverage under the Company’s group health insurance plan, group dental plan and, if any, the Company’s group life and disability insurance plans.  The payments described in the previous sentence shall be subject to all legally required 
		

		 

		

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			and authorized deductions and tax withholdings, including for wage garnishments, if applicable, to the extent required or permitted by law, and shall be paid on the thirtieth (30th) day following the date of termination of Executive’s employment.  Payment under this Section 7.6 shall be made not more than once, if at all.  If Executive dies or his employment is terminated by Company upon his experiencing a Disability during calendar year  2015, then the Bonus referred to in Section 7.6(b)(ii) hereof shall be grossed up to reflect the amount of Bonus that would have been paid had the Executive worked the full year of 2014.

			
	
			
				 7.7
			Employment Reference.  If Executive’s employment is terminated without Cause, or Executive resigns for Good Reason, or this Agreement is not renewed by Company pursuant to a Change of Control, Executive and Employer will negotiate in good faith to reach an agreement on a neutral statement for termination or resignation, to the extent necessary or appropriate.  This statement will include, at minimum and as applicable, positions held, date of hire, employment period and confirmation of salary history (if requested by Executive).  

			
	
			
				 7.8
			Ineligibility For Severance.  For avoidance of doubt, Executive shall not be entitled to any Severance Package under this Agreement, and none of Sections 7.1, 7.2 and 7.3 shall apply to Executive, if at any time during the Term, either (a) Executive voluntarily resigns or otherwise terminates employment with Employer other than for Good Reason, or (b) Company terminates Executive’s employment for Cause.  Effective immediately upon termination of employment, Executive shall no longer be eligible to contribute to or to be an active participant in any retirement or benefit plan covering employees of Employer; provided, however, Executive may effect a rollover or other transfer of his interests in any such retirement or benefit plan in accordance with the terms of such plan and applicable law.  All other Employer obligations to Executive shall be automatically terminated and completely extinguished.  

			
	
			
				 7.9
			Taxes and Withholdings.  The Employer may withhold from any amounts payable under this Agreement, including any benefits or Severance Payment, such federal, state or local taxes as may be required to be withheld pursuant to applicable law or regulations, which amounts shall be deemed to have been paid to Executive.  

			
	
			
				 7.10
			Definitions.

			
	
			
				 (a)
			“Cause” shall mean the occurrence during the Term  of any of the following: (i) Executive’s indictment for, formal admission to (including a plea of guilty or nolo contendere to), or conviction of: a felony, a crime of moral turpitude, fraud and dishonesty, breach of trust or unethical business conduct, or any crime involving Employer, (ii) gross negligence or willful misconduct by Executive in the performance of Executive’s duties which has materially damaged Employer’s financial position or reputation; (iii) willful or knowing unauthorized dissemination with the intent to cause harm by Executive of Confidential Employer Information; (iv) repeated failure by Executive to perform Executive’s duties that are reasonably and in good faith requested in writing by the Board of Directors or the member of the Board of Directors authorized by it  (the “Delegator”), and which are not substantially cured by Executive within thirty (30) days following receipt by Executive of such written request; (v) failure of Executive to perform any lawful and reasonable directive of the Delegator communicated to Executive in the form of a written request from the Delegator, which is consistent with the Employer Business, and which failure Executive does not begin to cure within ten (10) days following receipt by Executive of such written request or Executive has not substantially cured within forty-five (45) days following receipt by Executive of such written request, or (vi) material breach of this Agreement by Executive which breach has been communicated to Executive in the form of a written notice from a Delegator, which material breach Executive does not begin to cure within ten (10) days following receipt by Executive of such written notice or Executive has not substantially cured within forty-five (45) days following receipt by Executive of such written notice.  

		 

		

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				 (b)
			“Disability” shall mean the occurrence during the Term of a medically determinable physical or mental impairment of Executive that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months and which either (i) renders Executive unable to engage in any substantial gainful activity, with or without leave accommodation, for a period of not less than three (3) months; or (ii) results in Executive receiving income replacement benefits for a period of not less than three (3) months under any policy of long-term disability insurance that may be maintained by the Company for the benefit of its employees.  

			
	
			
				 (c)
			“Change of Control” shall have the meaning ascribed to it in the 2011 Equity Incentive Plan.

			
	
			
				 (d)
			“Good Reason” shall mean the occurrence during the Term of any of the following: (i) a material breach of this Agreement by Company which is not cured by Company within 30 days following Company’s receipt of written notice by Executive to Company describing such alleged breach; (ii) Executive’s Base Salary is materially reduced by Company; (iii) a material reduction in Executive’s title, duties and/or responsibilities, or the assignment to Executive of any duties materially inconsistent with Executive’s position; or (iv) a material change in the Company headquarters’ geographic location; provided, however, none of the occurrences described in (i) through (iv) hereof shall constitute Good Reason unless within ninety (90) days of any such occurrence Executive provides a Notice of Termination effective no more than 31 days after receipt by the  Company and specifying the occurrence.   

			
	
			
				 (e)
			“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and all applicable regulations or guidance promulgated thereunder.  

			
	
			
				 7.11
			Nonduplication of Benefits.  Notwithstanding any provision in this Agreement or in any other Employer benefit plan or compensatory arrangement to the contrary, but at all times subject to Section 7.4, (a) any payments due under Section 7.1, Section 7.2 or Section 7.3 shall be made not more than once, if at all, (b) payments may be due under  Section 7.1, Section 7.2 or Section 7.3, but under no circumstances shall payments be made under all of or any combination of Section 7.1, Section 7.2 and Section 7.3, (c) no payments made under Sections 7.1, 7.2 and 7.3 this Agreement shall be considered compensation for purposes of any benefit plan or compensatory arrangement of Employer, and (d) Executive shall not be entitled to severance benefits from Employer other than as contemplated under this Agreement, unless such other severance benefits offset and reduce the benefits due under this Agreement on a dollar-for-dollar basis, but not below zero.  

			
	
			
				 8.
			No Competition and No Conflict of Interest.  Except as otherwise provided in Section 2.2 of this Agreement, during the Term, Executive must not (a) engage in any work, paid or unpaid, that creates an actual conflict of interest with the essential business-related interests of the Employer where such conflict would materially and substantially disrupt operations, (b) directly or indirectly, whether as an owner, partner, stockholder, principal, agent, employee, consultant, or in any other relationship or capacity, engage in, or acquire any interest in any Person, corporation, partnership or other entity (other than Company or any entity directly or indirectly controlled by Company) engaged in the Employer Business, or (c) in any way other than on behalf of and as an employee of Employer, act as an officer, director, employee, consultant, shareholder, volunteer, lender, or agent of any business enterprise engaged in the Employer Business or any business in which Employer becomes actively engaged during the Term.  In addition, Executive agrees not to refer any tenant or potential tenant of Employer to competitors of Employer, without obtaining Company’s prior written consent, during the Term.  Notwithstanding the foregoing, Executive’s passive investment in, or passive ownership of, less than five percent (5%) of the capital stock or other equity interests of any business entity (including a business entity engaged in the Employer Business) shall not be treated as a breach of this Section 8.  For purposes of this Agreement, the term “Employer Business” shall mean the acquisition, disposition, development, redevelopment, ownership, operation, management 
		

		 

		

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			or financing of single tenant industrial properties in the United States, and “passive” means no employment or involvement in management, operations or policy decisions of the business entity and excludes any service as a director (or equivalent), manager, officer, employee or consultant or as a general partner or managing member (or equivalent) of the business entity

			
	
			
				 9.
			Confidentiality.  During the Term, Executive has been and will continue to be given access to a wide variety of information about the Employer, its affiliates and other related businesses that the Employer considers “Confidential Employer Information.”  As a condition of continued employment, Executive agrees to abide by Employer’s business policies and directives on confidentiality and nondisclosure of Confidential Employer Information.  Confidential Employer Information shall mean all information applicable to the business of the Employer which confers or may confer a competitive advantage upon the Employer over one who does not possess the information; and has commercial value in the business of the Employer or any other business in which the Employer engages or is preparing to engage during Executive’s employment with Employer.  Confidential Employer Information includes, but is not limited to, information regarding the Employer’s business plans and strategies; contracts and proposals (including leases and proposed leases); artwork, designs, drawings and specifications for development and redevelopment projects; tenants and  prospective tenants; suppliers and other business partners and Employer’s business arrangements and strategies with respect to them; current and future marketing or advertising campaigns; software programs; codes, underwriting models, credit analyses, formulae or techniques; rent rolls; financial information; personnel information; and all ideas, plans, processes or information related to the current, future and proposed projects or other business of the Employer that has not been disclosed to the public by an authorized representative of the Employer, acting within the scope of his or her authority, whether or not such information would be enforceable as a trade secret of the Employer or enjoined or restrained by a court or arbitrator as constituting unfair competition.  Confidential Employer Information also includes confidential information of any third party who may disclose such information to the Employer or Executive in the course of the Employer’s business.  

			
	
			
				 9.1
			Nondisclosure.  Executive acknowledges that Confidential Employer Information constitutes valuable, special and unique assets of the Employer’s business and that the unauthorized disclosure of such information to competitors of the Employer, or to the general public, will be highly detrimental to the Employer.  Executive therefore agrees to hold Confidential Employer Information in strictest confidence.  Except as shall occur as and to the extent that Executive performs his duties to Employer, Executive agrees not to disclose or allow to be disclosed to any individual or entity, other than those individuals or entities authorized by the Company, any Confidential Employer Information that Executive has or may acquire during Executive’s employment by Employer (whether or not developed or compiled by Executive and whether or not Executive has been authorized to have access to such Confidential Employer Information).  

			
	
			
				 9.2
			Continuing Obligation.  Executive agrees that the agreement not to disclose Confidential Employer Information will be effective during Executive’s employment and continue even after Executive is no longer employed by Employer.  Any obligation not to disclose any portion of any Confidential Employer Information will continue indefinitely unless such information (a) has become public knowledge through no fault of Executive; or (b) has been developed independently without any reference to any information obtained during Executive‘s employment with Employer; or (c) must be disclosed in response to a valid order by a court or government agency or is otherwise required by law.  

			
	
			
				 9.3
			Return of Employer Property.  On termination of employment with Employer for whatever reason, or at the request of the Employer before termination, Executive agrees to promptly deliver to Employer all records, files, computer disks, memoranda, documents, lists and other information regarding or containing any Confidential Employer Information, including all copies, reproductions, summaries or excerpts thereof, then in Executive’s possession or control, whether prepared by Executive 
		

		 

		

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			or others.  Executive also agrees to promptly return, on termination or the Employer’s request, any and all Employer property issued to Executive, including but not limited to computers, cellular phones, keys and credits cards.  Executive further agrees that should Executive discover any Employer property or Confidential Employer Information in Executive’s possession after the return of such property has been requested, Executive agrees to return it promptly to Employer without retaining copies, summaries or excerpts of any kind.  

			
	
			
				 9.4
			No Violation of Rights of Third Parties.  Executive warrants that the performance of all the terms of this Agreement does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Executive prior to Executive’s employment with Employer.  Executive agrees not to disclose to Employer, or induce Employer to use, any confidential or proprietary information or material belonging to any previous employers or others.  Executive warrants that Executive is not a party to any other agreement that will interfere with Executive’s full compliance with this Agreement.  Executive further agrees not to enter into any agreement, whether written or oral, in conflict with the provisions of this Agreement while such provisions remain effective.  

			
	
			
				 10.
			Interference with Business Relations.    

			
	
			
				 10.1
			Interference with Sellers, Tenants, Brokers and Other Business Partners.  Executive acknowledges that Employer’s seller information, tenant base, broker network, pipeline, leasing and acquisitions/sales strategies and its other business arrangements have been developed through substantial effort and expense, and its nonpublic business information regarding these matters is confidential and constitutes trade secrets.  In addition, because of Executive’s position, Executive understands that Employer will be particularly vulnerable to significant harm from Executive’s use of such information for purposes other than to further Employer’s business interests.  Accordingly, Executive agrees that during Executive’s employment with Employer, and for a period of twelve (12) months thereafter, Executive will not, either directly or indirectly, separately or in association with others, interfere with, impair, disrupt or damage Employer’s relationship with any of the sellers, tenants, brokers or other business partners of Employer with whom Executive has had contact, or conducted business, during the Term of Employment by contacting them for the purpose of inducing or encouraging any of them to divert or take away business from Employer.  

			
	
			
				 10.2
			Interference with Employer’s Employees.  Executive acknowledges that the services provided by Employer’s employees are unique and special, and that Employer’s employees possess trade secrets and Confidential Employer Information that is protected against misappropriation and unauthorized use.  As such, Executive agrees that during, and for a period of twelve (12) months after, Executive’s employment with Employer, Executive will not, either directly or indirectly, separately or in association with others, interfere with, impair, disrupt or damage Employer’s business by contacting any Employer employees for the purpose of inducing or encouraging them to discontinue their employment with Employer.  

			
	
			
				 10.3
			Negative Information.  During the Term and thereafter, Executive shall not disclose confidential or negative non-public information or make any disparaging or defamatory remarks, comments or statements regarding Employer or its directors, officers, employees, investors, shareholders or advisors and any affiliates of any of the foregoing (collectively, the “Employer Affiliates”);  provided, however, that nothing contained in this Section 10.3 shall affect any legal obligation of Executive to respond to mandatory governmental inquiries concerning the Employer or the Employer Affiliates or to act in accordance with, or to establish, his rights under this Agreement.  Employer likewise agrees that no one acting with the actual authority of Employer shall disclose negative non-public information or make any disparaging or defamatory remarks, comments or statements regarding Executive;  provided, however, that nothing contained in this Section 10.3 shall affect any legal obligation of the Employer or the Employer 
		

		 

		

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			Affiliates to respond to mandatory governmental inquiries concerning Executive or to act in accordance with, or to establish, the rights of the Employer and the Employer Affiliates under this Agreement.  

			
	
			
				 10.4
			Post-Termination Noncompetition. For a period of twelve (12) months following the termination of Executive’s employment with the Employer, Executive will not engage in Competitive Activities (as hereinafter defined). Notwithstanding any other provision herein to the contrary, this Section 10.4 shall terminate and be null and void if the Employer terminates Executive’s employment without Cause, or Executive resigns from employment with Employer for Good Reason, or if the Employer elects to send Executive notice of non-renewal pursuant to Section 3 hereof.    The term “Competitive Activities,” for purposes of this Section 10.4, shall mean the taking of any of the following actions by Executive: (a) Executive’s direct or indirect participation (for his own account or jointly with others) in the management of, or as an employee, board member, partner, manager, member, joint venturer, representative or other agent of, or advisor or consultant to, any other business operation if a material portion (either in comparison to the size of Employer’s Business or, if smaller, to such business operation’s business) of such operation is engaging in the Employer Business or any business in which Employer has been actively engaged at the time of the termination of Executive’s employment with Employer (a “Competitive Operation”); (b) Executive’s investment in, or ownership of, the capital stock or other equity interests in any business entity that is a Competitive Operation; or (c) Executive’s lending of funds for the purpose of establishing or operating any Competitive Operation, or otherwise giving advice to any Competitive Operation, or lending or allowing his name or reputation to be used by any Competitive Operation or otherwise allowing his skill, knowledge or experience to be so used. Notwithstanding the foregoing, neither Executive’s passive investment in, or passive ownership of, up to five percent (5%) of the capital stock or other equity interests of any business entity (including a business entity engaged in the Employer Business) nor Executive’s return to the private practice of law within a law firm or as a sole practitioner (but not as in-house counsel) shall be treated as a breach of this Section 10.4.  For purposes of this Section 10.4, “Employer Business” and “passive” have the meanings set forth in Section 8 above and “material portion” shall mean that either (i) the total assets engaged in a Competitive Operation exceeds 20% of such business operation’s total assets or (ii) the total assets engaged in a Competitive Operation of such business operation equals or exceeds 20% of the Employer’s Business.  This Section 10.4 governs the period of time following Executive’s employment with Employer, and Section 8 above governs during the Term.

			
	
			
				 11.
			Injunctive Relief.  Executive acknowledges that Executive’s breach of the covenants contained in Sections 8 through 10 of this Agreement inclusive (collectively “Covenants”) would cause irreparable injury and continuing harm to Employer for which there will be no adequate remedy at law, and agrees that Employer shall be entitled to temporary and preliminary injunctive relief upon a showing of a likelihood of such a breach, and shall be entitled to permanent injunctive relief upon establishing such a breach, to the fullest extent allowed by Massachusetts law, without the necessity of proving irreparable harm or actual damages or of posting any bond or other security.    

			
	
			
				 12.
			Agreement to Arbitrate.  

			
	
			
				 12.1
			Mandatory Arbitration.  Any dispute or controversy arising out of or relating to any interpretation, construction, performance, termination or breach of this Agreement, will be settled by final and binding arbitration by a single arbitrator to be held in Boston, Massachusetts, in accordance with the American Arbitration Association national rules for resolution of employment disputes then in effect, except as provided herein.  The arbitrator selected shall have the authority to grant any party all remedies otherwise available by law, including injunctions, but shall not have the power to grant any remedy that would not be available in a state or federal court.  The arbitrator shall have the authority to hear and rule on dispositive motions (such as motions for summary adjudication or summary judgment).  The arbitrator shall have the powers granted by Massachusetts law and the rules of the American Arbitration Association which conducts the arbitration, except as modified or limited herein.  In aid of arbitration, either party may seek 
		

		 

		

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			temporary and/or preliminary injunctive relief in the Business Litigation Session of the Suffolk County Massachusetts Superior Court (or in a regular session of that court if the case is not accepted into the Business Litigation Session) at any time before an arbitration demand has been filed and served, or before an arbitrator has been selected.

			
	
			
				 12.2
			Principles Governing Arbitration.  Notwithstanding anything to the contrary in the rules of the American Arbitration Association, the arbitration shall provide (i) for written discovery and depositions as provided under Massachusetts law and (ii) for a written decision by the arbitrator that includes the essential findings and conclusions upon which the decision is based which shall be issued no later than thirty (30) days after a dispositive motion is heard and/or an arbitration hearing has completed.  Except in disputes where Executive asserts a claim otherwise under a state or federal statute prohibiting discrimination in employment (a “Statutory Discrimination Claim”), each side shall split equally the fees and administrative costs charged by the arbitrator and American Arbitration Association.  In disputes where Executive asserts a Statutory Discrimination Claim against Employer, Executive shall be required to pay the American Arbitration Association’s filing fee only to the extent such filing fee does not exceed the fee to file a complaint in state or federal court.  Employer shall pay the balance of the arbitrator’s fees and administrative costs.  

			
	
			
				 12.3
			Rules Governing Arbitration.  Executive and Employer shall have the same amount of time to file any claim against any other party as such party would have if such a claim had been filed in state or federal court.   In conducting the arbitration, the arbitrator shall follow the rules of evidence of the Commonwealth of Massachusetts (including but not limited to all applicable privileges), and the award of the arbitrator must follow Massachusetts and/or federal law, as applicable.  

			
	
			
				 12.4
			Selection of Arbitrator.  The arbitrator shall be selected by the mutual agreement of the parties.  If the parties cannot agree on an arbitrator, the parties shall alternately strike names from a list provided by the American Arbitration Association until only one name remains.  

			
	
			
				 12.5
			Arbitrator Decision.  The decision of the arbitrator will be final, conclusive and binding on the parties to the arbitration.  The parties in the arbitration shall each pay their respective attorneys’ fees and one half of the costs or fees charged by the arbitrator and the American Arbitration Association.  In disputes where Executive asserts a Statutory Discrimination Claim, reasonable attorneys’ fees shall be awarded by the arbitrator based on the same standard as such fees would be awarded if the Statutory Discrimination Claim had been asserted in state or federal court.  Judgment may be entered on the arbitrator's decision in any court having jurisdiction.  

			
	
			
				 13.
			General Provisions.

			
	
			
				 13.1
			Successors and Assigns.  The rights and obligations of Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Employer.  The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) or assignee to all or substantially all of the business and/or assets of the Employer to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession or assignment had taken place.  Executive shall not be entitled to assign any of Executive’s rights or obligations under this Agreement without Employer’s written consent.

			
	
			
				 13.2
			Nonexclusivity of Rights.  Except as expressly provided in this Agreement, Executive is not prevented from continuing or future participation in any Employer benefit, bonus, incentive or other plans, programs, policies or practices provided by Employer subject to the terms and conditions of such plans, programs, or practices.  

		 

		

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				 13.3
			Waiver.  Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.  

			
	
			
				 13.4
			Attorneys’ Fees.  Each side will bear its own attorneys’ fees in any dispute unless a statutory section at issue, if any, authorizes the award of attorneys’ fees to the prevailing party, and the arbitrator awards such attorneys’ fees accordingly.  

			
	
			
				 13.5
			Severability.  In the event any provision of this Agreement is found to be unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by law.  If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby. 

			
	
			
				 13.6
			Interpretation; Construction.  The headings set forth in this Agreement are for convenience only and shall not be used in interpreting this Agreement.  This Agreement has been drafted by legal counsel representing Employer, but Executive has participated in the negotiation of its terms.  Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise the Agreement and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.  

			
	
			
				 13.7
			Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.  Except as and to the extent that Section 12 does not properly apply, each party consents to the jurisdiction and venue of the state or federal courts in Suffolk County, Massachusetts in any action, suit, or proceeding arising out of or relating to this Agreement.  

			
	
			
				 13.8
			Notices.  Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated:  (a) by personal delivery when delivered personally; (b) by overnight courier upon written verification of receipt; (c) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon verification of receipt.  Notice shall be sent to the addresses set forth below, or such other address as either party may specify in writing.

			
	
			
				 13.9
			Survival.  The following provisions shall survive Executive’s employment with Employer to the extent reasonably necessary to fulfill the parties’ expectations in entering this Agreement:  Section 7 (“Termination of Employment”), Section 9 (“Confidentiality”), 10 (“Interference with Business Relations”) Section 11 (“Injunctive Relief”), Section 12 (“Agreement to Arbitrate”), Section 13 (“General Provisions”), and Section 14 (“Entire Agreement”).    

			
	
			
				 14.
			Entire Agreement.  This Agreement, together with the other agreements and documents governing the benefits described in this Agreement, constitute the entire agreement among the parties relating to this subject matter hereof and supersedes all prior or simultaneous representations, discussions, negotiations, and agreements, whether written or oral.  This Agreement may be amended or modified only with the written consent of Board of Directors of the Company and Executive.  No oral waiver, amendment or modification will be effective under any circumstances whatsoever.  

		

		

		 

		

			15

		

 

		

			 

		

		THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.
		

			
					
						 

					
					
						 

					
					
						STAG INDUSTRIAL, INC.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Dated: September 8, 2014

					
					
						 

					
					
						By:  /s/ BENJAMIN S. BUTCHER

				
	
					
						 

					
					
						 

					
					
						Name:  Benjamin S. Butcher

				
	
					
						 

					
					
						 

					
					
						Title:    President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						STAG INDUSTRIAL OPERATING

				
	
					
						 

					
					
						 

					
					
						PARTNERSHIP, L.P.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By: STAG Industrial GP, LLC, its sole general partner

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Dated: September 8, 2014

					
					
						 

					
					
						By: :  /S/ BENJAMIN S. BUTCHER

				
	
					
						 

					
					
						 

					
					
						Name:  Benjamin S. Butcher

				
	
					
						 

					
					
						 

					
					
						Title:    President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						JEFFREY M. SULLIVAN

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Dated: September 8, 2014

					
					
						 

					
					
						/s/ JEFFREY M. SULLIVAN

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				

		

		

		 

		

			16

		

 

		

			 

		

		
		

		
			Exhibit A
		

		
			 
		

		
			LTIP UNIT AGREEMENT
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			17

		

 

		

			 

		

		
		

		
			Exhibit B
		

		
			SB LTIP UNIT AWARD AGREEMENT
		

		
			 
		

		
			 
		

		 

		

			18Exhibit 10.2 (Q3 2014)

Exhibit 10.2

MASTER AGREEMENT 
THIS MASTER AGREEMENT (this “Agreement”) is entered into effective as of September 16, 2014 (the “Effective Date”), by and between EAGLE ROCK ENERGY G&P, LLC (the “Company”) and Roger A. Fox (“Executive”).      
W I T N E S S E T H:
WHEREAS, the Company is the general partner of Eagle Rock Energy GP, L.P., a Delaware limited partnership (“ERGP”), which is, in turn, the general partner of Eagle Rock Energy Partners, L.P., a Delaware limited partnership (the “Partnership”); 
WHEREAS, Executive is currently employed by the Company and is an integral part of the management of the Company and the Partnership; and
WHEREAS, the Company desires to continue to employ Executive and Executive desires to continue to be employed by the Company, in each case, on the terms and conditions and for the consideration hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the Company and Executive agree as follows: 
1.Definitions.  For purposes of this Agreement, the terms listed below will have the meanings specified herein: 
(a)“Board” means the board of directors of the Company.  
(b)“COC Agreement” means that certain Executive Change of Control Agreement by and between the Company and Executive, dated as of March 26, 2012. 
(c)“Code” means the Internal Revenue Code of 1986, as amended, and applicable administrative guidance issued thereunder.  
(d)“Midstream Transaction” means the transaction contemplated by that certain Contribution Agreement by and among the Partnership, Regency Energy Partners LP and Regal Midstream LLC, dated as of December 23, 2013.
(e)“Partnership Entities” means the Company, the Partnership and any other entity which is an affiliate of the foregoing entities and, when applicable in accordance with Section 4(b), means any successor to the Company, the Partnership or any other entity which is an affiliate thereof, and also includes any other entity which is an affiliate of such successor entity(ies). 
(f)“Side Letter Agreement” means that certain letter agreement adopted by the Company for the benefit of Executive, dated as of December 23, 2013, which provides for accelerated 

vesting of all restricted units issued to Executive upon Executive’s termination without “Cause” or for “Good Reason” during the “Protection Period” (each term as defined in the Side Letter Agreement). 
2.Acknowledgements. The Company and Executive hereby acknowledge and agree to the following items, each of which shall serve as consideration for the other items:
(a)Title; Duties.  Executive has not heretofore experienced a termination of employment with the Company. On and after the Effective Date, the Company shall employ Executive in the position of (i) Senior Vice President, Operations of the Company and in such other position or positions as the Company or the Board may designate or appoint from time to time. Executive shall report to the Chief Executive Officer of the Company. Executive agrees to serve in the position(s) referred to in this Section 2(a) and to perform diligently and to the best of Executive’s abilities the duties and services pertaining to such position(s), as well as such additional duties and services appropriate to such position(s) which the parties mutually may agree upon from time to time. 
(b)    Base Salary; Bonus.  On and after the Effective Date, Executive shall be entitled to receive an annualized base salary that is at least equal to the annualized base salary received by Executive immediately prior to the Effective Date and, except as specified in Sections 2(e)(ii) and 2(f) below solely with respect to calendar year 2014, Executive shall remain eligible to participate in the Company’s cash performance bonus program in effect from time to time, at a target bonus level at least equal to the target bonus level that was in effect for Executive immediately prior to the Effective Date. 
(c)    Performance Unit Award. On the Effective Date, Executive shall receive a one-time award of 70,753 performance units pursuant to the Company’s form Performance Unit Agreement for officers attached hereto as Exhibit A, which shall contain a start date of July 1, 2014 for the “Performance Period” (as defined in such Performance Unit Agreement). 
(d)    Restricted Unit Award. On the Effective Date, Executive shall receive a one-time award of 70,753 restricted units pursuant to the Company’s form Restricted Unit Agreement for officers attached hereto as Exhibit B.
(e)    Equivalent Cash Payment. Executive shall be eligible to receive the following payments (the “Equivalent Cash Payment”), subject to the terms and conditions, and payable at the times, specified below:
(i)Retention Bonus. Executive shall be eligible to receive a retention bonus in an amount equal to $1,334,375.00 (the “Retention Bonus”), payable in three installments, with 40% of the Retention Bonus payable on December 31, 2014, 40% of the Retention Bonus payable on August 31, 2015 and 20% of the Retention Bonus payable on August 31, 2016; provided that, Executive is continuously employed by one of the Partnership Entities through each applicable payment date. Notwithstanding the continued employment requirement applicable 

to the Retention Bonus, in the event of Executive’s termination of employment by the Partnership Entities for any reason (with or without cause) prior to an applicable payment date, Executive shall be entitled to receive the unpaid portion of the Retention Bonus in a single lump sum cash payment on the 60th day following Executive’s termination of employment; provided that, upon such termination of employment, Executive executes a release of all claims against the Partnership Entities (the form of which shall be delivered to Executive on the date of termination) within 45 days following Executive’s date of termination and does not subsequently revoke such release within the seven (7) day period following its execution. In the event of Executive’s termination of employment by Executive for any reason prior to an applicable payment date, any unpaid portion of the Retention Bonus shall immediately be forfeited by Executive upon such termination. Notwithstanding the foregoing, the Retention Bonus shall be subject to potential termination or return (offset) as described in Section 3 below.
(ii)Pre-Effective Date Pro Rata Bonus. Executive shall be eligible to receive a pro rata bonus, assuming a 100% level of performance achievement, under the Company’s Short Term Incentive Bonus Plan (“STIBP”) for calendar year 2014 with respect to the time period beginning January 1, 2014 and ending on the Effective Date, in an amount equal to $158,523.75 (the “Guaranteed STIBP Bonus”), which such pro rata bonus shall be paid at the same time other bonuses are paid under the STIBP but in any event during calendar year 2015; provided that, Executive is continuously employed by one of the Partnership Entities through the payment date. Notwithstanding the continued employment requirement applicable to the Guaranteed STIBP Bonus, in the event of Executive’s termination of employment by the Partnership Entities for any reason (with or without cause) prior to the payment date, Executive shall be entitled to receive the Guaranteed STIBP Bonus in a single lump sum cash payment on the 60th day following Executive’s termination of employment; provided that, upon such termination of employment, Executive executes a release of all claims against the Partnership Entities (the form of which shall be delivered to Executive on the date of termination) within 45 days following Executive’s date of termination and does not subsequently revoke such release within the seven (7) day period following its execution. In the event of Executive’s termination of employment by Executive for any reason prior to an applicable payment date, the Guaranteed STIBP Bonus shall immediately be forfeited by Executive upon such termination. Notwithstanding the foregoing, subject to the satisfaction of applicable requirements under the STIBP, Executive shall remain eligible to receive additional amounts in excess of the Guaranteed STIBP Bonus for the time period beginning January 1, 2014 and ending on the Effective Date under the STIBP, subject to the terms and conditions, and payable at the times prescribed, under the STIBP.
(f)    Post-Effective Date Pro Rata Bonus. The Company and Executive acknowledge and agree that with respect to Executive’s eligibility for an annual bonus under the STIBP for calendar year 2014 for the time period following the Effective Date, Executive 

shall only be eligible to receive a pro rata bonus with respect to the time period beginning on the Effective Date and ending on December 31, 2014. Except as provided in the preceding sentence, all other terms and conditions applicable to Executive’s annual bonus for calendar year 2014 under the STIBP shall continue and remain unchanged in all other respects (including, but not limited to, performance and continued employment requirements). For the avoidance of doubt, (i) the only amount required to be paid to Executive under the STIBP for calendar year 2014 with respect to the time period preceding the Effective Date shall be the Guaranteed STIBP Bonus (but Executive shall remain eligible to receive additional amounts in excess of the Guaranteed STIBP Bonus with respect to such time period in accordance with Section 2(e)(ii) above) and (ii) if Executive becomes entitled to benefits under the COC Agreement prior to the date on which the Guaranteed STIBP Bonus is paid pursuant to Section 2(e)(ii) above, the Company and Executive acknowledge and agree that the Guaranteed STIBP Bonus shall not be considered an “Accrued Payment” (as defined in the COC Agreement) for purposes of the COC Agreement, and Executive shall not be entitled to receive any other amounts in respect of the STIBP for the time period preceding the Effective Date as an Accrued Payment under the COC Agreement. 
(g)    COC Agreement. 
(i)    Executive acknowledges and agrees that, as of the Effective Date, Executive has not experienced an event or been subjected to a condition that gives right to terminate employment for “Good Reason” (as defined under the COC Agreement) under the COC Agreement, whether due to a change in Executive’s status, title, position or responsibilities (which, for the avoidance of doubt, includes the change described in Section 2(a) above) or any other reason, including as a result of the Midstream Transaction. Solely with respect to whether an event has occurred or a condition has arisen prior to the Effective Date (including as a result of the Midstream Transaction) that could constitute “Good Reason” under the COC Agreement, Executive waives all rights and forfeits any and all claims and benefits under the COC Agreement with respect to any such event that may have occurred or condition that may have arisen in accordance with the acknowledgment in the preceding sentence. For the avoidance of doubt, this Section 2(g)(i) shall not have any effect on the “Protection Period” under the COC Agreement or Executive’s rights with respect to any future event that occurs or condition that arises on or after the Effective Date that could constitute “Good Reason” under the COC Agreement. 
(ii)    The Company and Executive acknowledge and agree that except as provided in Section 2(g)(i) above, the COC Agreement shall remain in full force and effect. For the avoidance of doubt, Executive shall remain eligible to receive the benefits described under the COC Agreement, subject to the adjustment to “Accrued Payments” set forth in Section 2(f) above, (A) in the event of a termination of employment without “Cause” or for “Good Reason” (as a result of an event that occurs or condition that arises on or after the Effective Date) during the applicable “Protection Period” following the Midstream Transaction and (B) upon a future “Change of Control” that is not the Midstream Transaction and accompanying 

“Termination Event” (each term in quotations as defined in the COC Agreement); provided, however, that Executive shall only be entitled to receive one set of applicable benefits under Section 3 of the COC Agreement upon the occurrence of an event or events that satisfy both (A) and (B).
(h)    Side Letter Agreement. Executive waives all rights and forfeits any and all claims and benefits under the Side Letter Agreement, including but not limited to the accelerated vesting of any unvested restricted units held by Executive on the date of Executive’s termination without Cause or for Good Reason during the Protection Period (as defined in the COC Agreement), and such restricted units shall continue to vest solely in accordance with their original terms and conditions (and, for the avoidance of doubt, be eligible for future acceleration pursuant to such original terms and conditions) as specified in the applicable award agreement(s). 
3.    Termination and/or Return of Retention Bonus Payments; Offset. In the event that Executive becomes entitled to receive payment of the amount described in Section 3(a)(ii)(ii) of the COC Agreement (the “COC Lump-Sum Amount”) exclusively on account of circumstances described in Section 2(g)(ii)(A) above to the exclusion of circumstances described in Section 2(g)(ii)(B) above, (a) the Company shall discontinue any remaining payments of the Retention Bonus under Section 2(e)(i) above and (b) Executive shall be required to return any portion of the Retention Bonus paid pursuant to Section 2(e)(i) above, less any taxes withheld from the portion paid to Executive. Notwithstanding the foregoing, any offset, reduction or elimination made pursuant to this Section 3 with respect to amounts payable that are subject to the requirements of Section 409A of the Code shall comply with Section 409A of the Code.  
4.    General Provisions.      
(a)    Taxes.  The Company is authorized to withhold from any payments made hereunder amounts of withholding and other taxes due or potentially payable in connection therewith, and to take such other action as the Company may deem advisable to enable the Company and Executive to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any payments made under this Agreement.     
(b)    Successors.  This Agreement and all rights hereunder are personal to Executive and shall not be assignable by Executive; provided, however, that any amounts that shall become payable under this Agreement prior to Executive’s death shall inure to the benefit of Executive’s heirs and other legal representatives, as the case may be.  This Agreement shall bind, and inure to the benefit of, the Company and any successor to the Partnership Entities.  The Company shall require any successor to the Partnership Entities to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place.  Upon such assumption by the successor, the Company automatically shall be released from all liability hereunder. In the event a successor does not assume this Agreement, any benefits that remain to be paid pursuant to Section 2(e) of this Agreement shall be paid immediately. 

(c)    Unfunded Obligation.  All benefits due to Executive under this Agreement are unfunded and unsecured and are payable out of the general funds of the Company.  
(d)    Limitation on Rights Conferred.  Neither this Agreement nor any action taken hereunder will be construed as (i) giving Executive the right to continue in the employ or service of the Company or an affiliate; (ii) interfering in any way with the right of the Company or any affiliate to terminate Executive’s employment or service at any time; or (iii) giving Executive any claim to be treated uniformly with other employees.
(e)    Entire Agreement.  Except as otherwise specifically provided herein, this Agreement, the COC Agreement and any other agreements specifically referenced herein, constitute the entire agreement between the parties respecting the subject matter hereof and supersede any prior agreements; provided, however, that, for purposes of this Section 4(e), the modifications, alterations and adjustments made to the COC Agreement and such other agreements by virtue of this Agreement (including, for the avoidance of doubt, any interpretative modifications, alterations or adjustments) shall be deemed incorporated into the COC Agreement and such other agreements as of the Effective Date and given full force and effect.  No amendment to this Agreement shall be deemed valid unless in writing and signed by the parties.  A waiver of any term, covenant, agreement or condition contained in this Agreement shall not be deemed a waiver of any other term, covenant, agreement or condition, and any waiver of any default in any such term, covenant, agreement or condition shall not be deemed a waiver of any later default thereof or of any other term, covenant, agreement or condition. 
(f)    Severability.  If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity will not affect the remaining provisions of this Agreement, but such provision will be fully severable and this Agreement will be construed and enforced as if the illegal or invalid provision had never been included herein.
(g)    Notices.  Any notice required or permitted to be given by this Agreement shall be effective only if in writing, delivered personally or by courier or by facsimile transmission or sent by express, registered or certified mail, postage prepaid, (i) to Executive at the last address he has filed with the Company, and (ii) to the Company at its principal executive offices, or at such other places that either party may designate by notice to the other.   
(h)    Application of Section 409A.  The amounts payable pursuant to Section 2 of this Agreement are intended to comply with, or satisfy the “short-term deferral” exemption under, Section 409A of the Code and are intended to be administered in compliance with such intent. For purposes of this Agreement, references to Executive’s termination of employment shall mean, and be interpreted in accordance with, Executive’s “separation from service” within the meaning of Treas. Reg. § 1.409A-1(h)(1)(ii). To the extent that Executive is a “specified employee” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) as of Executive’s date of termination, no amount that constitutes a deferral of compensation which is payable on account of Executive’s separation from service shall be paid to Executive before the date (the “Delayed Payment Date”) which is the first day of the seventh month after Executive’s date of termination or, if earlier, the date of Executive’s death following such date of termination.  All such amounts that would, but for this Section 4(h), become 

payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.  No interest will be paid by the Company with respect to any such delayed payments.  For purposes of Section 409A of the Code, each payment or amount due under this Agreement shall be considered a separate payment, and Executive’s entitlement to a series of payments under this Agreement is to be treated as an entitlement to a series of separate payments.  
(i)    Governing Law.  All questions arising with respect to the provisions of this Agreement and payments due hereunder will be determined by application of the laws of the State of Texas, without giving effect to any conflict of law provisions thereof, except to the extent Texas law is preempted by federal law.
(j)    Word Usage.  Words used in the masculine shall apply to the feminine, where applicable, and wherever the context of this Agreement dictates, the plural shall be read as the singular and the singular as the plural.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the Effective Date.  

EAGLE ROCK ENERGY G&P, LLC
By: ____/s/ Joseph A. Mills_____________
Name: Joseph A. Mills
Title: Chairman and Chief Executive Officer
Date: September 16, 2014

EXECUTIVE
__/s/ Roger A. Fox____________________
Roger A. Fox

EXHIBIT A
FORM PERFORMANCE UNIT AGREEMENT FOR OFFICERS
EAGLE ROCK ENERGY PARTNERS
LONG TERM INCENTIVE PLAN
(As Amended and Restated June 24, 2014)
PERFORMANCE UNIT AGREEMENT

This Performance Unit Agreement (this “Agreement”) is made and entered into by and between Eagle Rock Energy G&P LLC, a Delaware limited liability company (the “General Partner”), and Roger A. Fox (the “Service Provider”).  This Agreement is effective as of the 16th day of September, 2014 (the “Date of Grant”).  Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in Exhibit A attached hereto or in the Plan (as defined below), unless the context requires otherwise.

W I T N E S S E T H:
WHEREAS, Eagle Rock Energy Partners, L.P., a Delaware limited partnership (the “Partnership”), has adopted the Eagle Rock Energy Partners Long Term Incentive Plan, as amended and restated June 24, 2014 (the “Plan”) to, among other things, attract, retain and motivate certain employees, officers and directors of the Partnership, ERGP, the General Partner and their respective Affiliates (collectively, the “Partnership Entities,” which term shall include any successor to the Partnership, ERGP or the General Partner and any other entity that is an Affiliate of such successor entity or entities); and    

WHEREAS, the Board has authorized the grant of performance units, or phantom units subject to performance conditions, under the Plan to employees, officers and directors as part of their compensation for services provided to the Partnership Entities.

NOW, THEREFORE, in consideration of the Service Provider’s agreement to provide or to continue providing services, the Service Provider and the General Partner agree as follows:
  
1.    Grant of Performance Units.  The General Partner hereby grants to the Service Provider, effective as of the Date of Grant, an award (the “Award”) of 70,753 performance units (the “Target Performance Units”), subject to all of the terms and conditions set forth in the Plan and this Agreement, whereby each performance unit represents the right to receive one Unit of the Partnership (each, a “Performance Unit”); provided, that, depending on the level of performance determined to be attained with respect to the applicable performance conditions as described in Sections 4 and 5, the number of Units that may be earned hereunder in respect of the Award may range from 0% to 200% of the Target Performance Units then credited to the Service Provider’s 

Performance Unit Account (the “Earned Performance Units”), which Earned Performance Units are also subject to satisfaction of the applicable Continuous Service Requirement.  The Performance Units contemplated in this Agreement are described in the Plan as Phantom Units subject to restrictions that lapse based on the level of achievement of performance conditions and a continued service requirement.   

2.    Performance Unit Account.  Performance Units represent hypothetical Units and not actual Units. The General Partner shall establish and maintain a bookkeeping account on its records for the Service Provider (a “Performance Unit Account”) and shall record in such Performance Unit Account: (a) the number of Target Performance Units subject to the Award (including any additional Target Performance Units credited to the Service Provider pursuant to Section 3 hereof), (b) the number of Performance Units that have become Earned Performance Units, and (c) whether the Continuous Service Requirement applicable to Earned Performance Units has been satisfied.  The Service Provider shall not have any interest in any fund or specific assets of the Partnership by reason of this Award or the Performance Unit Account established for the Service Provider.  

3.    Rights of Service Provider.  No Units shall be issued to the Service Provider at the time the grant is made, and the Service Provider shall not be, nor have any of the rights and privileges of, a unitholder or limited partner of the Partnership with respect to any Performance Units recorded in the Performance Unit Account.  The Service Provider shall have no voting rights with respect to the Performance Units.  In the event (i) the Partnership pays any distributions in respect of its outstanding Units, and (ii) on such record date the Service Provider holds Performance Units granted pursuant to this Agreement that have not vested and been settled, then the Service Provider’s Performance Unit Account shall, as of the date such distribution is paid to unitholders of the Partnership, be credited with an additional number of Performance Units, rounded down to the nearest whole Unit, equal to (a) the aggregate amount of the distributions that would have been received by the Service Provider if the Service Provider were the record owner, as of such record date, of the number of Units underlying the number of Target Performance Units held in such Service Provider’s Performance Unit Account as of such record date, divided by (b) the Fair Market Value of a Unit on the date such distribution is paid to unitholders of the Partnership; provided, that, if the record date for such distribution occurs following the last day of the Performance Period but prior to the 12 month anniversary of the last day of the Performance Period, then any distributions that would have been received by the Service Provider if the Service Provider were the record owner, as of such date, of the number of Units underlying the number of Earned Performance Units with respect to which the Continuous Service Requirement has not been satisfied (i.e., initially 1/3 of the Earned Performance Units at the end of the Performance Period) as of such record date shall increase the number of such Earned Performance Units by a number equal to (a) the aggregate amount of the distributions that would have been so received by the Service Provider, divided by (b) the Fair Market Value of a Unit on the date such distribution is paid to the unitholders of the Partnership.  Any additional number of Performance Units credited in accordance with the preceding sentence shall be added to the number of Target Performance Units or Earned Performance Units, as applicable held in the Service Provider’s Performance Unit Account, shall increase the number of the Target Performance Units or Earned Performance Units, as applicable subject to the Award and shall be subject to all of the terms and conditions set forth in the Plan and this Agreement, 

including without limitation, those performance and other conditions described in Section 4, that are applicable to Target Performance Units or Earned Performance Units, as applicable.  

4.    Vesting of Performance Units.  The Performance Units are restricted in that they may be forfeited by the Service Provider and in that they may not, except as otherwise provided in the Plan, be transferred or otherwise disposed of by the Service Provider.  Subject to the terms and conditions of this Agreement, the forfeiture restrictions on the Performance Units shall lapse, and a number of Performance Units shall vest and become earned and nonforfeitable based on: (a) the extent to which the Partnership has satisfied the performance conditions set forth on Exhibit A, which, along with the corresponding percentage of the Target Performance Units then credited to the Performance Unit Account that have become earned in accordance with the table set forth on Exhibit A, shall be determined by the Committee in its sole discretion (for the avoidance of doubt, such number of Performance Units that become so earned are referred to herein as Earned Performance Units); and (b) the Service Provider’s satisfaction of the Continuous Service Requirement.  For purposes of this Award, the “Continuous Service Requirement” means (i) with respect to 2/3 of the Earned Performance Units as determined at the end of the Performance Period, the Service Provider’s continuous active service with the Partnership Entities through the last day of the Performance Period, and (ii) with respect to the remaining 1/3 of the Earned Performance Units as determined at the end of the Performance Period (and as may be subsequently grossed-up for distributions as discussed in Section 3 above), the Service Provider’s continuous active service with the Partnership Entities through the date that is the 12 month anniversary of the last day of the Performance Period.  Any Performance Units that do not become Earned Performance Units shall in all events terminate, expire and otherwise be forfeited by the Service Provider on the last day of the Performance Period.

5.    Effect of Change of Control and Termination of Service.

(a)Change of Control. Notwithstanding any provision herein to the contrary, if a Change of Control occurs prior to the end of the Performance Period (the date of such occurrence, the “Change of Control Date”) and the Service Provider has remained in continuous service with the Partnership Entities through the Change of Control Date, then, (i) the Service Provider shall be deemed to have earned a number of Performance Units equal to the number of Earned Performance Units the Service Provider would have earned in accordance with Section 4, but assuming that (A) the Performance Period ended on the Change of Control Date, and (B) the determination of whether, and to what extent, the Partnership has satisfied the performance conditions set forth on Exhibit A shall be based on actual performance against the stated criteria through the Change of Control Date; and (ii) the number of Earned Performance Units determined in accordance with clause (i) of this Section 5(a) (as may be grossed-up for further distributions in accordance with Section 3 above) shall become vested and nonforfeitable and the Continuous Service Requirement with respect to such Earned Performance Units shall be deemed satisfied if either (A) the Service Provider remains in continuous active service with the Partnership Entities from the Change of Control Date through (1) the last day of the Performance Period with respect to 2/3 of the Earned Performance Units, and (2) the date that is the 12 month anniversary of the last day of the Performance Period, with respect to the remaining 1/3 of the Earned Performance Units; or (B) the Service Provider’s employment or service relationship with the Partnership Entities is terminated on or after the Change of Control 

Date by a Partnership Entity without Cause or by the Service Provider for Good Reason; provided, that, if the Continuous Service Requirement is deemed satisfied by virtue of this clause (B), then the number of Earned Performance Units with respect to which payment shall be made pursuant to Section 6 hereof shall be a number equal to the sum of (x) the product of (i) 2/3 of the total number of Earned Performance Units determined under this Section 5(a) times (ii) a fraction, the numerator of which is the number of full months (counting the month in which the Service Provider’s termination of employment or service relationship occurs as a full month), beginning with the month in which the Performance Period commences, during which the Service Provider was employed by, or provided services to, the Partnership Entities (the “Service Months”), or such greater number up to 24 as determined by the Committee in its sole discretion, and the denominator of which is 24 and (y) the product of (i) 1/3 of the total number of Earned Performance Units determined under this Section 5(a) times (ii) a fraction, the numerator of which is the Service Months, or such greater number up to 36 as determined by the Committee in its sole discretion, and the denominator of which is 36; provided further, that, upon such termination of employment or service, the Service Provider executes a release of all claims against the Partnership Entities (the form of which shall be delivered to the Service Provider on the date of termination) within 45 days following the Service Provider’s date of termination and does not subsequently revoke such release within the seven (7) day period following its execution; provided, however, that, if the Service Provider does not execute such release or executes and later revokes such release, the Service Provider shall not have satisfied the Continuous Service Requirement pursuant to this clause (B). Notwithstanding any provision contained herein to the contrary, if a Change of Control occurs following the last day of the Performance Period but prior to the date that is the 12 month anniversary of the last day of the Performance Period, then, the number of Earned Performance Units determined in accordance with Section 4 with respect to which the Continuous Service Requirement has not been satisfied as of such Change of Control Date (i.e., 1/3 of the Earned Performance Units at the end of the Performance Period, as grossed-up for further distributions as provided in Section 3 above) shall become vested and nonforfeitable and the Continuous Service Requirement with respect to such Earned Performance Units shall be deemed satisfied if either (i) the Service Provider remains in continuous active service with the Partnership Entities from the Change of Control Date through the date that is the 12 month anniversary of the last day of the Performance Period; or (ii) the Service Provider’s employment or service relationship with the Partnership Entities is terminated on or after the Change of Control Date by a Partnership Entity without Cause or by the Service Provider for Good Reason; provided, that, if the Continuous Service Requirement is deemed satisfied by virtue of this clause (ii), then the number of Earned Performance Units with respect to which payment shall be made pursuant to Section 6 hereof shall be a number equal to the product of (A) such number of Earned Performance Units, times (B) a fraction, the numerator of which is the Service Months, or such greater number up to 36 as determined by the Committee in its sole discretion, and the denominator of which is 36; provided further, that, upon such termination of employment or service, the Service Provider executes a release of all claims against the Partnership Entities (the form of which shall be delivered to the Service Provider on the date of termination) within 45 days following the Service Provider’s date of termination and does not subsequently revoke such release within the seven (7) day period following its execution; provided, however, that if the Service Provider does not execute such release or executes and later revokes such release, the Service Provider shall not have satisfied the Continuous Service Requirement pursuant to this clause (ii).     

(b)Termination Generally.  Subject to Sections 5(a) and 5(c), (i) upon termination of the Service Provider’s employment or other service relationship with the Partnership Entities prior to the last day of the Performance Period, all of the Performance Units shall terminate automatically and be cancelled upon such termination, or (ii) upon termination of the Service Provider’s employment or other service relationship with the Partnership Entities following the last day of the Performance Period but prior to the date that is the 12 month anniversary of the last day of the Performance Period, the number of Earned Performance Units determined in accordance with Section 4 that remain unvested because the Continuous Service Requirement with respect to such Earned Performance Units has not been satisfied as of such date of termination, shall terminate automatically and be cancelled upon such termination, and , in each case, neither the Service Provider nor any of his or her heirs, beneficiaries, executors, administrators or other personal representatives shall have any rights with respect to such cancelled Performance Units.  Notwithstanding the foregoing, the Committee, in its sole and absolute discretion on such terms and conditions as it shall determine, may decide in certain situations not otherwise addressed in Sections 5(a) or 5(c) to vest and make payment with respect to all or any portion of the Performance Units granted pursuant to this Agreement that remain outstanding and unvested immediately prior to the Service Provider’s termination.  

(c)Termination due to Death or Disability.  If the Service Provider’s employment or service relationship with the Partnership Entities is terminated due to the Service Provider’s death or Disability (i) prior to the last day of the Performance Period, then (A) the Service Provider shall be deemed to have earned a number of Earned Performance Units equal to 100% of the Target Performance Units then credited to the Service Provider’s Performance Unit Account as of the date of such termination, and (B) the Continuous Service Requirement with respect to such Earned Performance Units shall be deemed satisfied and such number of Earned Performance Units shall be immediately vested and nonforfeitable as of the date of such termination, or (ii) following the last day of the Performance Period but prior to the date that is the 12 month anniversary of the last day of the Performance Period, then the number of Earned Performance Units determined in accordance with Section 4 that remain unvested as of the date of such termination shall become immediately vested and nonforfeitable on such date and the Continuous Service Requirement with respect to such Earned Performance Units shall be deemed satisfied.

(d)Definitions

(i)Cause. The term “Cause” means a determination made in good faith by two-thirds (2/3) of the Board that the Service Provider (A) willfully and continually failed to substantially perform the Service Provider’s duties with the Partnership Entities (other than a failure resulting from the Service Provider’s incapacity due to physical or mental illness) which failure continued for a period of at least thirty (30) days after a written notice of demand for substantial performance has been delivered to the Service Provider specifying the manner in which the Service Provider has failed to substantially perform, (B) willfully engaged in conduct which is demonstrably and materially injurious to the Partnership Entities, monetarily or otherwise, (C) has been convicted of, or has plead guilty or nolo contendere to, a misdemeanor involving moral turpitude or a felony, (D) has committed an act of 

fraud, or material embezzlement or material theft, in each case, in the course of the Service Provider’s employment relationship with the Partnership Entities, or (E) has materially breached (I) the Service Provider’s duties or obligations to the Partnership Entities under any applicable common law or the provisions of the governing documents of the Partnership Entities or (II) any obligations of the Service Provider under any agreement (including any non-compete, non-solicitation or confidentiality covenants) entered into between the Service Provider and any Partnership Entity; provided, however, that no termination of the Service Provider’s services shall be for Cause as set forth in clause (B), (D) or (E) above until (1) there shall have been delivered to the Service Provider a copy of a written notice setting forth that the Service Provider was guilty of the conduct described in clause (B), (D) or (E) above, as applicable, and specifying the particulars thereof in detail and (2) the Service Provider shall have been provided an opportunity to be heard by the Board (with the assistance of the Service Provider’s counsel if the Service Provider so desires).  No act or failure to act on the part of the Service Provider shall be considered “willful” unless the Service Provider has intentionally or deliberately acted or failed to act with knowledge that such action or failure to act was likely to be materially injurious to the Partnership Entities.  Notwithstanding anything contained herein or in the Plan to the contrary, no failure to perform by the Service Provider after a notice of termination is given shall constitute Cause.

(ii)Change of Control. The term “Change of Control” has the meaning given such term in the Plan; provided, that, for the avoidance of doubt, a sale or other disposition by one or more members of the NGP Group of all or substantially all of their aggregate ownership, as of the Date of Grant, of the Outstanding Equity and the Outstanding Voting Securities shall not, in and of itself, constitute a Change of Control for purposes of this Agreement.  

(iii)Disability.  The term “Disability” means (A) a physical or mental impairment of sufficient severity that, in the opinion of the Board, the Service Provider is unable to continue performing the duties assigned to the Service Provider prior to such impairment or the Service Provider’s condition entitles the Service Provider to disability benefits under any insurance or employee benefit plan of any Partnership Entity in which the Service Provider participates, and (B) the impairment or condition is cited by the employing Partnership Entity as the reason for the Service Provider’s termination.

(iv)Good Reason.  The term “Good Reason” means the occurrence of any of the following events or conditions: (A) a change in the Service Provider’s status, title, position or responsibilities (including reporting responsibilities) which represents a substantial reduction of the status, title, position or responsibilities as in effect immediately prior thereto, the assignment to the Service Provider of any duties or responsibilities that are inconsistent with such status, title, position or responsibilities, or any removal of the Service Provider from or failure to reappoint or reelect the Service Provider to any of such positions, except in 

connection with the termination of the Service Provider services for Cause, due to the Service Provider’s Disability or death, or by the Service Provider voluntarily without Good Reason, (B) a reduction in the Service Provider’s annual base salary, (C) a change in the geographic location at which the Service Provider must perform services (without the consent of the Service Provider) to a location more than thirty-five (35) miles from the location at which the Service Provider normally performs such services as of the Date of Grant, except for reasonably required business travel that is not materially greater than such travel requirements prior to the Date of Grant, (D) the failure by the Partnership Entities to continue in effect any material compensation or benefit plan in which the Service Provider was participating as of the Date of Grant or to provide the Service Provider with compensation and benefits at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each compensation or employee benefit plan, program and practice as in effect immediately prior to the Date of Grant (or as in effect following the Date of Grant, if greater), (E) any material breach by a Partnership Entity of any provision of the Plan or of any provision of the Service Provider’s employment agreement, if any, or (F) any purported termination of the Service Provider’s service relationship for Cause by a Partnership Entity that does not otherwise comply with the terms of the Plan, this Agreement or the Service Provider’s employment agreement, if any.  In the case of the Service Provider’s allegation of Good Reason, (1) the Service Provider shall provide notice to the Committee of the event alleged to constitute Good Reason within 90 days of the occurrence of such event, (2) the Partnership Entities shall have the opportunity to remedy the alleged Good Reason event within 30 days from receipt of notice of such allegation, and (3) if not remedied within that 30-day period, the Service Provider’s employment or service relationship with the Partnership Entities shall terminate on the day following the last day of such 30-day period.  

6.    Settlement Date; Manner of Settlement.  Payment in respect of Earned Performance Units for which the applicable Continuous Service Requirement has been satisfied shall be made no later than 60 days following the last day of the Performance Period, except that, notwithstanding the foregoing, (a) with respect to that portion of the Earned Performance Units for which the Continuous Service Requirement ends on the date that is the 12 month anniversary of the last day of the Performance Period, payment in respect to such Earned Performance Units shall be made no later than the 30th day following such 12 month anniversary date or, in the case of a termination of the Service Provider’s employment or service by a Partnership Entity without Cause or by the Service Provider for Good Reason, in either case, following a Change of Control Date that occurs after the end of the Performance Period but prior to the 12 month anniversary of the last day of the Performance Period, no later than the 60th day following the date of such termination; (b) in the event of a Change of Control occurring prior to the end of the Performance Period, payment in respect to Earned Performance Units pursuant to Section 5(a) shall be made no later than (i) the 30th day following the last day of the Performance Period or the date that is the 12 month anniversary of the last day of the Performance Period, whichever is the applicable vesting date on which the Continuous Service Requirement for such Earned Performance Units is satisfied, or (ii) if the Service Provider’s employment or service is terminated following the Change of Control Date either by a 

Partnership Entity without Cause or by the Service Provider for Good Reason, the 60th day following the date of such termination; and (c) in the event of the Service Provider’s death or Disability, payment in respect of Performance Units deemed to be earned pursuant to Section 5(c) shall be made no later than the 30th day following termination of the Service Provider’s employment or service due to death or Disability.  All payments with respect to Performance Units shall be made in Units.  If the settlement of any Performance Units would yield a fractional Unit, such fractional Unit shall be rounded up to the next whole Unit. The Service Provider agrees that any Units that he acquires upon payment of the Performance Units will not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable federal or state securities laws, the Plan or the rules, regulations and other requirements of the U.S. Securities and Exchange Commission (the “SEC”) and any stock exchange upon which the Units are then listed.  The Service Provider also agrees that 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.  In addition to the terms and conditions provided herein, the Partnership may require that the Service Provider make such covenants, agreements, and representations as the Committee, in its sole discretion, deems advisable in order to comply with any such laws, rules, regulations, or requirements.

7.    Limitations on Transfer.  The Service Provider agrees that he shall not dispose of (meaning, without limitation, sell, transfer, pledge, exchange, hypothecate or otherwise dispose of) any Performance Units or other rights hereby acquired prior to the date the Performance Units are vested and settled.  Any attempted disposition of the Performance Units in violation of the preceding sentence shall be null and void and the Performance Units that the Service Provider attempted to dispose of shall be forfeited.

8.    Adjustment.  The number of Performance Units granted to the Service Provider pursuant to this Agreement shall be adjusted to reflect distributions of the Partnership paid in units, unit splits or other changes in the capital structure of the Partnership, all in accordance with the Plan.  All provisions of this Agreement shall be applicable to such new or additional or different units or securities distributed or issued pursuant to the Plan to the same extent that such provisions are applicable to the units with respect to which they were distributed or issued.  

9.    Violation of Law, Regulation or Rule.  The General Partner shall not be required to deliver any Units hereunder if, upon the advice of counsel for the General Partner, such acquisition or delivery would violate the Securities Act of 1933 or any other applicable federal, state, or local law or regulation or the rules of the exchange upon which the Partnership’s Units are traded.  

10.    Copy of Plan.  By the execution of this Agreement, the Service Provider acknowledges receipt of a copy of the Plan.  

11.    Notices.  Whenever any notice is required or permitted hereunder, such notice must be in writing and personally delivered or sent by mail.  Any such notice required or permitted to be delivered hereunder shall be deemed to be delivered on the date on which it is personally delivered or, whether actually received or not, on the third business day (on which banking institutions in the State of Texas are open) after it is deposited in the United States mail, certified or registered, postage 

prepaid, addressed to the person who is to receive it at the address which such person has theretofore specified by written notice delivered in accordance herewith.  The General Partner or the Service Provider may change at any time and from time to time by written notice to the other, the address which it or he previously specified for receiving notices.  The General Partner and the Service Provider agree that any notices shall be given to the General Partner or to the Service Provider at the following addresses: 

General Partner:    Eagle Rock Energy G&P, LLC
Attn: Charles C. Boettcher
P.O. Box 2968
Houston, Texas 77252-2968
Phone: (281) 408-1260
Fax: (281) 715-4142

Service Provider:    At the Service Provider’s current address as shown in the General Partner’s records.  

12.    General Provisions.  

a.Administration.  This Agreement shall at all times be subject to the terms and conditions of the Plan.  The Committee shall have sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of a majority of the Committee with respect thereto and with respect to this Agreement shall be final and binding upon the Service Provider and the General Partner.  

b.No Effect on Service.  Nothing in this Agreement or in the Plan shall be construed as giving the Service Provider the right to be retained in the employ or service of the Partnership Entities. Furthermore, the Partnership Entities may at any time terminate the service relationship with the Service Provider free from any liability or any claim under the Plan or this Agreement, unless otherwise expressly provided in the Plan, this Agreement or other written agreement.

c.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without regard to conflicts of law principles thereof.

d.Amendments.  This Agreement may be amended only by a written agreement executed by the General Partner and the Service Provider, except that the Committee may unilaterally waive any conditions or rights under, amend any terms of, or alter this Agreement provided no such change (other than pursuant to Section 4(c) or 7(c) of the Plan) materially reduces the rights or benefits of the Service Provider with respect to the Performance Units without his consent.  

e.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the General Partner or the Partnership and upon any person lawfully claiming under the Service Provider.  

f.Entire Agreement.  This Agreement and the Plan constitute the entire agreement of the parties with regard to the subject matter hereof, and contain all the covenants, promises, representations, warranties and agreements between the parties with respect to the Performance 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.  

g.No Liability for Good Faith Determinations.  Neither the Partnership Entities nor the members of the Committee and the Board shall be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Performance Units granted hereunder.

h.No Guarantee of Interests.  The Board and the Partnership Entities do not guarantee the Units from loss or depreciation.

i.Tax Withholding.  Upon any taxable event arising in connection with the Performance Units, the Partnership Entities shall have the authority and the right to deduct or withhold, or to require the Service Provider to remit to a Partnership Entity, an amount sufficient to satisfy all applicable federal, state and local taxes (including the Service Provider’s employment tax obligations) required by law to be withheld with respect to such event. In satisfaction of the foregoing requirement, unless other arrangements have been made by the Service Provider that are acceptable to the applicable Partnership Entity and unless otherwise determined by the Board (which such determination may not be delegated), the General Partner or one of its Affiliates shall withhold Units otherwise issuable in respect of such Performance Units having a Fair Market Value on the date of withholding equal to the aggregate amount of taxes required to be withheld with respect to such event based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income.

j.Insider Trading Policy.  The terms of the Partnership’s insider trading policy with respect to Units are incorporated herein by reference. 

k.Term Validity.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under any applicable law, then such provision will be deemed to be modified to the minimum extent necessary to render it legal, valid and enforceable; and if such provision cannot be so modified, then this Agreement will be construed as if not containing the provision held to be invalid, and the rights and obligations of the parties will be construed and enforced accordingly. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control.

l.Headings.  The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof.

m.Gender.  Words used in the masculine shall apply to the feminine where applicable, and wherever the context of this Agreement dictates, the plural shall be read as the singular and the singular as the plural.

n.Clawback.  Notwithstanding any provisions in the Plan or this Agreement to the contrary, any portion of the payments and benefits provided under this Agreement or pursuant to the sale of any Units issued hereunder shall be subject to any clawback or other recovery by the Partnership Entities to the extent necessary to comply with applicable law including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any SEC rule.

o.Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format, the Service Provider agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Partnership may be required to deliver (including, without limitation, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other award made or offered by the Partnership. Electronic delivery may be via a Partnership electronic mail system or by reference to a location on a Partnership intranet to which the Service Provider has access.  The Service Provider hereby consents to any and all procedures the Partnership has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Partnership may be required to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.

p.Section 409A. None of the Performance Units or any other amounts paid or credited pursuant to this Agreement are intended to constitute or provide for a deferral of compensation that is subject to Section 409A of the Code. To the extent that the Committee determines that any Performance Units or other amounts are not exempt from Section 409A of the Code, the Committee may (but shall not be required to) amend this Agreement in a manner intended to comply with the requirements of Section 409A of the Code or an exemption therefrom (including amendments with retroactive effect), or take any other actions as it deems necessary or appropriate to (a) exempt the Performance Units or other amounts from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Performance Units, or (b) comply with the requirements of Section 409A of the Code.  To the extent applicable, this Agreement shall be interpreted in accordance with the provisions of Section 409A of the Code.  Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit hereunder constitutes non-exempt “nonqualified deferred compensation” for purposes of Section 409A of the Code, (A) if such payment or benefit would otherwise be payable or distributable hereunder by reason of the Service Provider’s termination of employment or service, then all references to the Service Provider’s termination of employment or service shall be construed to mean a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), and the Service Provider shall not be considered to have a termination of employment or service unless such termination constitutes a Separation from Service with respect to the Service Provider, and (B) if such payment or benefit would otherwise be payable or distributable hereunder upon a Change of Control, then no such payment or distribution shall be made unless such Change of Control also constitutes a “change in the ownership of a corporation,” a “change in the effective control of a corporation,” or a “change in the ownership of a substantial portion of a corporation’s assets,” in each case, within the meaning of Treasury Regulation Section 1.409A-3(i)(5), as applied to non-corporate entities, or unless another payment date in Section 6 that is also a permissible 

payment event under Section 409A of the Code earlier occurs. Notwithstanding anything to the contrary in this Agreement, no amounts payable under this Agreement on account of the Service Provider’s Separation From Service shall be paid to the Service Provider prior to the expiration of the six (6) month period following the Service Provider’s Separation From Service to the extent that the Partnership Entities determine that paying such amounts prior to the expiration of such six (6) month period would result in a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amount is delayed as a result of the preceding sentence, then on the first business day following the end of the applicable six (6) month period (or such earlier date upon which such amount may be paid under Section 409A of the Code without resulting in a prohibited distribution), the amount shall be paid to the Service Provider. 

IN WITNESS WHEREOF, the General Partner has caused this Agreement to be executed by its officer thereunto duly authorized, and the Service Provider has set his hand as to the date and year first above written.  

EAGLE ROCK ENERGY G&P, LLC

By:    
    
Name:     Joseph A. Mills
    
Title:     Chairman and Chief Executive Officer

SERVICE PROVIDER

_____________________________________________
Roger A. Fox

EXHIBIT A 
TO FORM PERFORMANCE UNIT AGREEMENT FOR OFFICERS

		
	1.
	Definitions

		
	(a)
	“Beginning Price” means the average volume-weighted closing price per Unit for the 30 consecutive trading days immediately preceding the first day of the Performance Period.

		
	(b)
	“Ending Price” means the average volume-weighted closing price per Unit for the last 30 consecutive trading days of the Performance Period.

		
	(c)
	“Performance Peer Group” means the following peer companies, which may be updated from time to time by the Committee in its sole discretion; provided, however, that in order to be included in the calculation pursuant to Section 2 of this Exhibit A, a company must remain in the Performance Peer Group on the last day of the Performance Period:

		
	(i)
	Atlas Resource Partners;

		
	(ii)
	Breitburn Energy Partners;

		
	(iii)
	Constellation Energy Partners;

		
	(iv)
	EV Energy Partners;

		
	(v)
	Legacy Reserves;

		
	(vi)
	Linn Energy;

		
	(vii)
	LRR Energy;

		
	(viii)
	Memorial Production Partners;

		
	(ix)
	Mid-Con Energy Partners;

		
	(x)
	New Source Energy Partners;

		
	(xi)
	QR Energy; and

		
	(xii)
	Vanguard Natural Resources. 

		
	(d)
	“Performance Period” means the period beginning July 1, 2014 and ending June 30, 2016; provided that the Performance Period may end earlier than the stated date in accordance with Section 5(a) of the Agreement.

		
	(e)
	“Total Unitholder Return” or “TUR” means, as to the Partnership and each company in the Performance Peer Group, (i) the Ending Price minus the Beginning Price plus (ii) any distributions (whether cash or unit-based) made per Unit during the Performance Period.

		
	2.
	Calculation of TUR Ranking.  At the end of the Performance Period, the TUR of the Partnership and of each company in the Performance Peer Group shall be calculated by the Committee in its good faith discretion. The percentile ranking of the Partnership’s TUR as compared to the TUR of each member of the Performance Peer Group, based on the number of members in the Performance Peer Group on the last day of the Performance Period, shall (except as otherwise provided in Section 5(c) of the Agreement) determine the percentage of Target Performance Units then credited to a Service Provider’s Performance Unit Account that become Earned Performance Units using the table below.  The Committee shall have sole discretion for determining the Partnership’s TUR percentile ranking and the number of Earned Performance Units, and any such determinations shall be conclusive. For the 

avoidance of doubt, in determining the Partnership’s TUR percentile ranking, the relevant factor in the Committee’s determination is the percentage of members of the Performance Peer Group for which the TUR of the Partnership exceeds the TUR of members of the Performance Peer Group over the Performance Period such that, if the TUR of the Partnership is higher than all members of the Performance Peer Group over the Performance Period, the Partnership shall have achieved the 100th percentile ranking by virtue of having a TUR that is higher than 100% of the Performance Peer Group. 
	
		
	TUR Percentile Ranking within Performance Peer Group over Performance Period
	Percentage of Target Performance Units Earned*

	100th percentile
	200.0%

	95th percentile
	185.7%

	90th percentile
	171.4%

	85th percentile
	157.1%

	80th percentile
	142.9%

	75th percentile
	128.6%

	70th percentile
	114.3%

	65th percentile
	100.0%

	60th percentile
	90.0%

	55th percentile
	80.0%

	50th percentile
	70.0%

	Less than 50th percentile
	0.00%

* If the Partnership’s TUR percentile ranking is above the 50th percentile and between two percentile points in the above table, the actual number of Earned Performance Units will be calculated using straight line interpolation between the two such percentile points.  

EXHIBIT B
FORM RESTRICTED UNIT AGREEMENT FOR OFFICERS
EAGLE ROCK ENERGY PARTNERS 
LONG TERM INCENTIVE PLAN
(As Amended and Restated June 24, 2014)

RESTRICTED UNIT AGREEMENT

This Restricted Unit Agreement (this “Agreement”) is made and entered into by and between Eagle Rock Energy G&P LLC, a Delaware limited liability company (the “General Partner”), and Roger A. Fox (the “Service Provider”).  This Agreement is entered into as of the 16th day of September, 2014 (the “Date of Grant”).  Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan (as defined below), unless the context requires otherwise.  

W I T N E S S E T H:
WHEREAS, Eagle Rock Energy Partners, L.P., a Delaware limited partnership (the “Partnership”), has adopted the Eagle Rock Energy Partners Long Term Incentive Plan, as amended and restated June 24, 2014 (the “Plan”), to, among other things, attract, retain and motivate certain employees, officers and directors of the Partnership, ERGP, the General Partner and their respective Affiliates (collectively, the “Partnership Entities,” which term shall include any successor to the Partnership, ERGP or the General Partner and any other entity that is an Affiliate of such successor entity or entities); and

WHEREAS, the Board has authorized the grant of restricted units under the Plan to employees, officers and directors as part of their compensation for services provided to the Partnership Entities.

NOW, THEREFORE, in consideration of the Service Provider’s agreement to provide or to continue providing services to the Partnership Entities, the Service Provider and the General Partner agree as follows:  

SECTION 1.    Grant.

The General Partner hereby grants to the Service Provider as of the Date of Grant an award of 70,753 Units, subject to the terms and conditions set forth in the Plan, which is incorporated herein by reference, and in this Agreement, including, without limitation, those restrictions described in Section 2 (the “Restricted Units”).  

SECTION 2.    Restricted Units.  

The Restricted Units are restricted in that they may be forfeited to the General Partner and in that they may not, except as otherwise provided in Section 6, be transferred or otherwise disposed of by the Service Provider until such restrictions are removed or expire as described in Sections 4 and 5 of this Agreement.  The General Partner shall issue in the Service Provider’s name the Restricted Units and shall retain the Restricted Units until the restrictions on such Restricted Units expire or until the Restricted Units are forfeited as described in Sections 4 and 5 of this Agreement.  The Service Provider agrees that the General Partner will hold the Restricted Units pursuant to the terms of this Agreement until such time as the Restricted Units are either delivered to the Service Provider or forfeited pursuant to this Agreement.   

SECTION 3.    Rights of Service Provider; Unit Distribution Rights.  

Effective as of the Date of Grant, the Service Provider shall be treated for all purposes as a Unit holder with respect to all of the Restricted Units granted to him pursuant to Section 1 (except that the Service Provider shall not be treated as the owner of the Units for federal income tax purposes until the Restricted Units vest (unless the Service Provider makes an election under section 83(b) of the Code, in which case the Service Provider shall be treated as the owner of the Units for all purposes on the Date of Grant)) and shall, except as provided herein, have all of the rights and obligations of a unit holder with respect to all such Restricted Units, including any right to vote with respect to such Restricted Units and to receive any UDRs thereon if, as, and when declared and paid by the Partnership, including, without limitation, any UDRs consisting of the distribution of special purchase or other rights.  Notwithstanding the preceding provisions of this Section 3, the Restricted Units shall be subject to the restrictions described herein, including, without limitation, those described in Section 2.    

SECTION 4.    Forfeiture and Expiration of Restrictions.  Subject to the terms and conditions of this Agreement, the restrictions described in Section 2 shall lapse and the Restricted Units shall become vested and nonforfeitable (“Vested Units”), provided the Service Provider has continuously provided services to the Partnership Entities, without interruption, from the Date of Grant through each applicable vesting date (each, a “Vesting Date”), in accordance with the following schedule: 
	
		
	Vesting Date
	Cumulative Vested Percentage

	On November 15, 2015
	33%

	On November 15, 2016
	66%

	On November 15, 2017
	100%

		
	
	

SECTION 5.    Effect of Change of Control and Termination of Service.  

(a)Change of Control.  Notwithstanding anything herein to the contrary, if a Change of Control occurs prior to the final Vesting Date (the date of such occurrence, the “Change of Control Date”) and the Service Provider’s employment or service relationship is terminated on or after the Change of Control Date by a Partnership Entity without Cause or by the Service Provider for Good Reason, then the restrictions on a number of Restricted Units shall automatically lapse on the 60th day following the date of such termination such that the number of Restricted Units for which the restrictions have 

lapsed as of the 60th day following the Service Provider’s date of termination will be equal to the product of (i) the total number of Restricted Units granted to the Service Provider pursuant to this Agreement, times (ii) a fraction, the numerator of which is the number of full months (counting the month in which the Service Provider’s termination of employment or service relationship occurs as a full month), beginning with the month in which the Date of Grant occurred, during which the Service Provider was employed by, or provided services to, the Partnership Entities, or such greater number up to 36 as determined by the Committee in its sole discretion, and the denominator of which is 36; provided, that, upon such termination of employment or service, the Service Provider executes a release of all claims against the Partnership Entities (the form of which shall be delivered to the Service Provider on the date of termination) within 45 days following the Service Provider’s date of termination and does not subsequently revoke such release within the seven (7) day period following its execution; provided further, that, if the Service Provider does not execute such release or executes and later revokes such release, the Service Provider shall not be entitled to receive the accelerated vesting described in this Section 5(a). 

(b)Termination Generally. Subject to Sections 5(a) and 5(c), upon termination of the Service Provider’s employment or service relationship with the Partnership Entities, all Restricted Units granted pursuant to this Agreement that have not yet vested as of the date of termination shall terminate automatically and be cancelled upon such termination and neither the Service Provider nor any of his or her heirs, beneficiaries, executors, administrators or other personal representatives shall have any rights with respect to such cancelled Restricted Units. Notwithstanding the foregoing, the Committee, in its sole and absolute discretion on such terms and conditions as it shall determine, may decide in certain situations not otherwise addressed in Sections 5(a) or 5(c) to vest all or any portion of the Restricted Units granted pursuant to this Agreement that remain outstanding and unvested immediately prior to the Service Provider’s termination.  

(c) Termination due to Death or Disability. If the Service Provider’s employment or service relationship with the Partnership Entities is terminated due to the Service Provider’s death or Disability prior to the final Vesting Date, then all Restricted Units granted pursuant to this Agreement that have not yet vested as of the date of termination shall immediately become fully vested and nonforfeitable as of the date of such termination. 

(d)Definitions.  For purposes of this Agreement, the following terms shall have the meanings set forth below: 

		
	
	(i)    Cause.  The term “Cause” means a determination made in good faith by two-thirds (2/3) of the Board that the Service Provider (A) willfully and continually failed to substantially perform the Service Provider’s duties with the Partnership Entities (other than a failure resulting from the Service Provider’s incapacity due to physical or mental illness) which failure continued for a period of at least thirty (30) days after a written 

notice of demand for substantial performance has been delivered to the Service Provider specifying the manner in which the Service Provider has failed to substantially perform, (B) willfully engaged in conduct which is demonstrably and materially injurious to the Partnership Entities, monetarily or otherwise, (C) has been convicted of, or has plead guilty or nolo contendere to, a misdemeanor involving moral turpitude or a felony, (D) has committed an act of fraud, or material embezzlement or material theft, in each case, in the course of the Service Provider’s employment relationship with the Partnership Entities, or (E) has materially breached (I) the Service Provider’s duties or obligations to the Partnership Entities under any applicable common law or the provisions of the governing documents of the Partnership Entities or (II) any obligations of the Service Provider under any agreement (including any non-compete, non-solicitation or confidentiality covenants) entered into between the Service Provider and any Partnership Entity; provided, however, that no termination of the Service Provider’s services shall be for Cause as set forth in clause (B), (D) or (E) above until (1) there shall have been delivered to the Service Provider a copy of a written notice setting forth that the Service Provider was guilty of the conduct described in clause (B), (D) or (E) above, as applicable, and specifying the particulars thereof in detail and (2) the Service Provider shall have been provided an opportunity to be heard by the Board (with the assistance of the Service Provider’s counsel if the Service Provider so desires).  No act or failure to act on the part of the Service Provider shall be considered “willful” unless the Service Provider has intentionally or deliberately acted or failed to act with knowledge that such action or failure to act was likely to be materially injurious to the Partnership Entities.  Notwithstanding anything contained herein or in the Plan to the contrary, no failure to perform by the Service Provider after a notice of termination is given shall constitute Cause.   
		
	
	   

(ii)    Change of Control. The term “Change of Control” has the meaning given such term in the Plan; provided, that, for the avoidance of doubt, a sale or other disposition by one or more members of the NGP Group of all or substantially all of their aggregate ownership, as of the Date of Grant, of the Outstanding Equity and the Outstanding Voting Securities shall not, in and of itself, constitute a Change of Control for purposes of this Agreement.  

(iii)    Disability.  The term “Disability” means (A) a physical or mental impairment of sufficient severity that, in the opinion of the Board, the Service Provider is unable to continue performing the duties assigned to the Service Provider prior to such impairment or the Service Provider’s condition entitles the Service Provider to disability benefits under any insurance or employee benefit plan of any Partnership Entity in which the Service Provider participates, and (B) the impairment or condition is cited by the employing Partnership Entity as the reason for the Service Provider’s termination.

(iv)    Good Reason.  The term “Good Reason” means the occurrence of any of the following events or conditions: (A) a change in the Service Provider’s status, title, position or responsibilities (including reporting responsibilities) which represents a substantial reduction of the status, title, position or responsibilities as in effect immediately prior thereto, the assignment to the Service Provider of any duties or responsibilities that are inconsistent with such status, 

title, position or responsibilities, or any removal of the Service Provider from or failure to reappoint or reelect the Service Provider to any of such positions, except in connection with the termination of the Service Provider services for Cause, due to the Service Provider’s Disability or death, or by the Service Provider voluntarily without Good Reason, (B) a reduction in the Service Provider’s annual base salary, (C) a change in the geographic location at which the Service Provider must perform services (without the consent of the Service Provider) to a location more than thirty-five (35) miles from the location at which the Service Provider normally performs such services as of the Date of Grant, except for reasonably required business travel that is not materially greater than such travel requirements prior to the Date of Grant, (D) the failure by the Partnership Entities to continue in effect any material compensation or benefit plan in which the Service Provider was participating as of the Date of Grant or to provide the Service Provider with compensation and benefits at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each compensation or employee benefit plan, program and practice as in effect immediately prior to the Date of Grant (or as in effect following the Date of Grant, if greater), (E) any material breach by a Partnership Entity of any provision of the Plan or of any provision of the Service Provider’s employment agreement, if any, or (F) any purported termination of the Service Provider’s service relationship for Cause by a Partnership Entity that does not otherwise comply with the terms of the Plan, this Agreement or the Service Provider’s employment agreement, if any.  In the case of the Service Provider’s allegation of Good Reason, (1) the Service Provider shall provide notice to the Committee of the event alleged to constitute Good Reason within 90 days of the occurrence of such event, (2) the Partnership Entities shall have the opportunity to remedy the alleged Good Reason event within 30 days from receipt of notice of such allegation, and (3) if not remedied within that 30-day period, the Service Provider’s employment or service relationship with the Partnership Entities shall terminate on the day following the last day of such 30-day period.  

SECTION 6.    Limitations on Transfer.
		
	
	

The Service Provider agrees that he shall not dispose of (meaning, without limitation, sell, transfer, pledge, exchange, hypothecate or otherwise dispose of) any Restricted Units hereby acquired prior to the applicable Vesting Dates, including pursuant to a domestic relations order issued by a court of competent jurisdiction, unless such transfer is expressly approved in writing by the Committee.  Any attempted disposition of the Restricted Units in violation of the preceding sentence shall be null and void.

SECTION 7.    Nontransferability of Agreement.  
		
	
	

This Agreement and all rights under this Agreement shall not be transferable by the Service Provider other than by will or pursuant to applicable laws of descent and distribution.  Any rights and privileges of the Service Provider in connection herewith shall not be transferred, assigned, pledged or hypothecated by the Service Provider or by any other person or persons, in any way, whether by operation of law, or otherwise, and shall not be subject to execution, attachment, garnishment or similar process.  In the event of any such occurrence, the Restricted Units shall automatically be forfeited.  Notwithstanding the foregoing, all or some of the 

Restricted Units or rights under this Agreement may be transferred if such transfer is approved in writing by the Committee.

SECTION 8.    Adjustment of Restricted Units.  

The number of Restricted Units granted to the Service Provider pursuant to this Agreement shall be adjusted to reflect unit splits or other changes in the capital structure of the Partnership, all in accordance with the Plan.  All provisions of this Agreement shall be applicable to such new or additional or different units or securities distributed or issued pursuant to the Plan to the same extent that such provisions are applicable to the Units with respect to which they were distributed or issued.  

SECTION 9.    Delivery of Vested Units.  

Promptly following the expiration of the restrictions on the Restricted Units as contemplated in Sections 4 and/or 5 of this Agreement, and subject to Section 10, the General Partner shall cause to be issued and delivered to the Service Provider or the Service Provider’s designee the number of Restricted Units as to which restrictions have lapsed, free of any restrictive legend relating to the lapsed restrictions, and shall pay to the Service Provider any previously unpaid UDRs distributed with respect to the Restricted Units.  Neither the value of the Restricted Units nor the UDRs shall bear any interest owing to the passage of time. 
		
	
	  

SECTION 10.    Securities Act.  

The General Partner shall have the right, but not the obligation, to cause the Restricted Units to be registered under the appropriate rules and regulations of the SEC.  The General Partner shall not be required to deliver any Units hereunder if, in the opinion of counsel for the General Partner, such delivery would violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations.  By accepting this grant, the Service Provider agrees that any Units that the Service Provider may acquire upon vesting 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.  
  
SECTION 11.  Copy of Plan.  

By the execution of this Agreement, the Service Provider acknowledges receipt of a copy of the Plan.  

SECTION 12.  Notices.  

Whenever any notice is required or permitted hereunder, such notice must be in writing and personally delivered or sent by mail.  Any such notice required or permitted to be delivered hereunder shall be deemed to be delivered on the date on which it is personally delivered or, whether actually received or not, on the third business day (on which banking institutions in the State of Texas are open) after it is deposited in the United States mail, certified or registered, 

postage prepaid, addressed to the person who is to receive it at the address which such person has theretofore specified by written notice delivered in accordance herewith.  The General Partner or the Service Provider may change at any time and from time to time by written notice to the other, the address which it or he previously specified for receiving notices.  The General Partner and the Service Provider agree that any notices shall be given to the General Partner or to the Service Provider at the following addresses: 

General Partner:    Eagle Rock Energy G&P, LLC
Attn: Charles C. Boettcher
P.O. Box 2968
Houston, Texas 77252-2968
Phone: (281) 408-1260
Fax: (281) 715-4142

Service Provider:    At the Service Provider’s current address as shown in the General Partner’s records.  

SECTION 13.  General Provisions.    
(a)    Administration.  This Agreement shall at all times be subject to the terms and conditions of the Plan.  The Committee shall have sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of the Committee with respect thereto and with respect to this Agreement shall be final and binding upon the Service Provider and the General Partner.  
(b)    Continuation of Service.  This Agreement shall not be construed to confer upon the Service Provider any right to continue in the service of the Partnership Entities.
(c)    Governing Law.  This Agreement shall be interpreted and administered under the laws of the State of Texas, without giving effect to any conflict of laws provisions. 
(d)    Amendments.  This Agreement may be amended only by a written agreement executed by the General Partner and the Service Provider, except that the Committee may unilaterally waive any conditions or rights under, amend any terms of, or alter this Agreement provided no such change (other than pursuant to Section 4(c) or 7(c) of the Plan) materially reduces the rights or benefits of the Service Provider with respect to the Restricted Units without his consent.  
(e)    Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the General Partner and upon any person lawfully claiming under the Service Provider.  
(f)    Entire Agreement.  This Agreement constitutes the entire agreement of the parties with regard to this subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to the Restricted 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.  
(g)    No Liability for Good Faith Determinations.  Neither the Partnership Entities, nor the members of the Committee or the Board, nor any officer of the General Partner, shall be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Restricted Units granted hereunder.
(h)    No Guarantee of Interests.  The Board and the Partnership Entities do not guarantee the Units from loss or depreciation.
(i)    Withholding Taxes.  Upon any taxable event arising in connection with the Restricted Units, the Partnership Entities shall have the authority and the right to deduct or withhold, or to require the Service Provider to remit to a Partnership Entity, an amount sufficient to satisfy all applicable federal, state and local taxes (including the Service Provider’s employment tax obligations) required by law to be withheld with respect to such event. In satisfaction of the foregoing requirement, unless other arrangements have been made by the Service Provider that are acceptable to the applicable Partnership Entity and unless otherwise determined by the Board (which such determination may not be delegated), the General Partner or one of its Affiliates shall withhold Units otherwise issuable in respect of such Restricted Units having a Fair Market Value on the date of withholding equal to the aggregate amount of taxes required to be withheld with respect to such event based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income.
(j)    Insider Trading Policy.  The terms of the General Partner’s Insider Trading Policy with respect to Units are incorporated herein by reference.  
(k)    Term Validity.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under any applicable law, then such provision will be deemed to be modified to the minimum extent necessary to render it legal, valid and enforceable; and if such provision cannot be so modified, then this Agreement will be construed as if not containing the provision held to be invalid, and the rights and obligations of the parties will be construed and enforced accordingly. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control.    
(l)    Clawback.  Notwithstanding any provisions in the Plan or this Agreement to the contrary, any portion of the payments and benefits provided under this Agreement or pursuant to the sale of any Units issued hereunder shall be subject to any clawback or other recovery by the Partnership Entities to the extent necessary to comply with applicable law including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any SEC rule.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the General Partner has caused this Agreement to be executed by its officer thereunto duly authorized, and the Service Provider has set his hand as to the date and year first above written.  

EAGLE ROCK ENERGY G&P, LLC

    

By:_________________________________________    
    
Name: Joseph A. Mills

Title:  Chairman and Chief Executive Officer

____________________________________________    
                         Roger A. Fox

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