Document:

Exhibit 10.4

 

KKR & CO. L.P.

2010 EQUITY INCENTIVE PLAN

 

1.             Purpose of the Plan

 

The KKR & Co. L.P.
2010 Equity Incentive Plan (the “Plan”) is designed to promote the long
term financial interests and growth of KKR & Co. L.P., a Delaware
limited partnership (the “Partnership”) and its Affiliates by (i) attracting
and retaining directors, officers, employees, consultants or other service
providers of the Partnership or any of its Affiliates, including but not
limited to directors of KKR Management LLC, the Partnership’s general partner
(the “General Partner”) and (ii) aligning the interests of such
individuals with those of the Partnership and its Affiliates by providing them
with equity-based awards based on the common units of limited partner interest
in the Partnership (the “Common Units”).

 

2.             Definitions

 

The following capitalized
terms used in the Plan have the respective meanings set forth in this Section:

 

(a)           Act:  The Securities Exchange Act of 1934, as
amended, or any successor thereto.

 

(b)           Administrator: The Board, or
the committee or subcommittee thereof to whom authority to administer the Plan
has been delegated pursuant to Section 4 hereof.

 

(c)           Affiliate:  With respect to any specified Person, any
other Person that directly or indirectly through one or more intermediaries
Controls, is Controlled by or is under common control with such specified
Person. As used herein, the term “Control” (including the terms “Controlled
by” and “under common Control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities,
as trustee or executor, by contract or otherwise, including the ownership,
directly or indirectly, of securities having the power to elect a majority of
the board of directors or similar body governing the affairs of such Person.

 

(d)           Award:  Individually or collectively,
any Option, Unit Appreciation Right, or Other Unit-Based Awards based on or
relating to the Common Units issuable under the Plan.

 

(e)           Board:  The board of directors of the General
Partner.

 

(f)            Change in Control:  Except as otherwise set forth in any
applicable Award agreement, (i) the occurrence of any Person, other than a
Person approved by the General Partner, becoming the general partner of the
Partnership, (ii) the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation) in one or more
series of related transactions of all or substantially all of the combined
assets of the Group Partnerships taken as a whole to any Person other than a
Permitted Person, (iii) the

 

 

consummation of any transaction or a series of related transactions
(including any merger or consolidation) that results in any Person (other than
a Permitted Person) becoming the beneficial owner of a majority of the
controlling interests in any one or more Group Partnerships that together hold
all or substantially all of the combined assets of the Group Partnerships taken
as a whole, or (iv) the occurrence of any other event as determined by the
Board to constitute a Change in Control. Solely for the purpose of this
definition, the term “person” shall have the meaning given to such term
under Section 13(d)(3) of the Act or any successor provision thereto;
and for purposes of the Plan, the term “beneficial owner” shall have the
meaning given to such term under Rule 13d-3 promulgated under the Act or
any successor provision thereto, and the combined assets of the Group Partnerships
shall exclude the portion of any such assets that are allocable to holders of
any non-controlling interests in any consolidated subsidiaries.

 

(g)           Code:  The Internal Revenue Code of 1986, as
amended, or any successor thereto.

 

(h)           Effective Date:  The date on which the Board adopts the Plan,
or such later date as is designated by the Board, provided that in no event
shall such date be prior to the date that limited partnership interests of the
Partnership become listed and traded on the New York Stock Exchange or The
NASDAQ Stock Market.

 

(i)            Employee Exchange Agreement:  That certain Exchange Agreement, dated as of
[           ], 2010, by and
among KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings
L.P., and KKR Holdings L.P.

 

(j)            Employment:  The term “Employment” as used herein shall be
deemed to refer to (i) a Participant’s employment if the Participant is an
employee of the Partnership or any of its Affiliates, (ii) a Participant’s
services as a consultant or partner, if the Participant is consultant to, or
partner of, the Partnership or of any of its Affiliates, and (iii) a
Participant’s services as an non-employee director, if the Participant is a
non-employee member of the Board.

 

(k)           Fair Market Value:  Of a Common Unit on any given date means (i) the
closing sale price per Common Unit on the New York Stock Exchange or The NASDAQ
Stock Market (a “U.S. Exchange”) on that date (or, if no closing sale
price is reported, the last reported sale price), (ii) if the Common Units
are not listed for trading on a U.S. Exchange, the closing sale price (or, if
no closing sale price is reported, the last reported sale price) as reported on
that date in composite transactions for the principal national securities
exchange registered pursuant to the Act on which the Common Units are listed, (iii) if
the Common Units are not so listed on a U.S. Exchange, the last quoted bid
price for the Common Units on that date in the over-the-counter market as
reported by Pink Sheets LLC or a similar organization, or (iv) if the
Common Units are not so quoted by Pink Sheets LLC or a similar organization,
the average of the mid-point of the last bid and ask prices for the Common
Units on that date from a nationally recognized independent investment banking
firm selected by the General Partner for this purpose.

 

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(l)            Group Partnerships:  KKR Management Holdings
L.P., a Delaware limited partnership, and KKR Fund Holdings L.P., a Cayman Island exempted
limited partnership, along with any partnership designated in the future as a “Group
Partnership” by the Partnership.

 

(m)          Group Partnership Unit:  A “Group Partnership Unit” as defined in the
Pre-Listing Plan.

 

(n)           KKR Group:  The Group Partnerships, the direct and
indirect parents of the Group Partnerships (the “Parents”), any direct
or indirect subsidiaries of the Parents or the Group Partnerships, the general
partner or similar controlling entities of any investment fund or vehicle that
is managed, advised or sponsored by the KKR Group (the “Funds”) and any
other entity through which any of the foregoing directly or indirectly conducts
its business, but shall exclude any company over which a Fund exercises a
significant degree of control as an investor.

 

(o)           Option:  An option to purchase Common Units granted
pursuant to Section 6 of the Plan.

 

(p)           Option Price:  The purchase price per Common Unit of an
Option, as determined pursuant to Section 6(a) of the Plan.

 

(q)           Other Unit-Based Awards:  Awards granted pursuant to Section 8 of
the Plan.

 

(r)            Participant:  A director, officer, employee, consultant or
other service provider of the Partnership or of any of its Affiliates,
including but not limited to any director of the General Partner, who is
selected by the Administrator to participate in the Plan.

 

(s)           Permitted Person:  The term “Permitted Person” means (i) an
individual who (a) is an executive of the KKR Group, (b) devotes
substantially all of his or her business and professional time to the
activities of the KKR Group and (c) did not become an executive of the KKR
Group or begin devoting substantially all of his or her business and
professional time to the activities of the KKR Group in contemplation of a
Change in Control or (ii) any Person in which any one or more such individuals
directly or indirectly holds a majority of the controlling interests.

 

(t)            Person:  Any individual, corporation, partnership, limited
partnership, limited liability company, limited company, joint venture, trust,
unincorporated or governmental organization or any agency or political
subdivision thereof.

 

(u)           Pre-Listing Award:  Any equity-based award (whether an option,
unit appreciation right, restricted equity unit, phantom equity unit, or other
equity-based award based in whole or in part on the fair market value of any
equity unit or otherwise) granted pursuant to the Pre-Listing Plan.

 

(v)           Pre-Listing Plan:  KKR Management Holdings L.P. 2009 Equity
Incentive Plan.

 

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(w)          Unit Appreciation Right:  A unit appreciation right granted pursuant to Section 7
of the Plan.

 

3.             Common Units Subject to the Plan

 

Subject to Section 9
hereof, the total number of Common Units which shall be available for issuance
under the Plan shall be, as of the Effective Date, 15% of the Common Units
outstanding as of the Effective Date on a fully converted and diluted basis
(the “Initial Plan Amount”), of which all or any portion may be issued
as Common Units.  Notwithstanding
the foregoing, beginning with the first fiscal year of the Partnership
occurring after the Effective Date and continuing with each subsequent fiscal
year of the Partnership occurring thereafter, the aggregate number of Common
Units covered by the Plan will be increased, on the first day of each
fiscal year of the Partnership occurring during the term of the Plan, by
a number of Common Units equal to the positive difference, if any, of (x) 15%
of the aggregate number of Common Units outstanding on the last day of the
immediately preceding fiscal year of the Partnership minus (y) the Initial
Plan Amount, as such amount may have been increased by this sentence in any
prior fiscal year, unless the Administrator should decide to increase the
number of Common Units covered by the Plan by a lesser amount on any such
date.  The issuance of Common Units or
the payment of cash upon the exercise of an Award or any Pre-Listing Award or
in consideration of the settlement, cancellation or termination of an Award or
any Pre-Listing Award shall reduce the total number of Common Units covered by
and available for issuance under the Plan, as applicable (with any Awards or
Pre-Listing Awards settled in cash reducing the total number of Common Units by
the number of Common Units determined by dividing the cash amount to be paid
thereunder by the Fair Market Value of one Common Unit on the date of payment),
and the issuance of Group Partnership Units in consideration of the settlement,
cancellation or termination of any Pre-Listing Award shall reduce the total
number of Common Units covered by and available for issuance under the Plan by
a number of Common Units equal to the number of Group Partnership Units so
issued multiplied by the Exchange Rate (as defined in the Employee
Exchange Agreement).  Common Units which
are subject to Awards which are cancelled, forfeited, terminated or otherwise
expired by their terms without the payment of consideration, and Common Units
which are used to pay the exercise price of any Award, may be granted again
subject to Awards under the Plan.  For the avoidance of doubt, Common
Units which are subject to Awards other than Options or Unit Appreciation
Rights which are withheld to pay tax withholding obligations will be deemed not
to have been delivered and will be available for further Awards under the Plan.

 

For
purposes of this Section 3, the number of Common Units that, as of a
particular date, will be considered to be “covered by” the Plan will be equal
to the sum of (i) the number of Common Units available for issuance
pursuant to the Plan but which are not subject to an outstanding Award or
Pre-Listing Award as of such date, (ii) the number of Common Units subject
to outstanding Awards or Pre-Listing Awards as of such date and (iii) the
number of Group Partnership Units subject to outstanding Pre-Listing Awards as
of such date multiplied by the Exchange Rate (as defined in the Employee
Exchange Agreement) as in effect on such date. 
For purposes of this Section 3, (A) an Option or Unit
Appreciation Right that has been granted under the Plan or the Pre-Listing Plan
will be considered to be an “outstanding” Award or Pre-Listing Award, as
applicable, until is it exercised or cancelled, forfeited, terminated or
otherwise expires by its terms, (B) a Common Unit that has been granted as
an Award under the Plan that is 

 

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subject
to vesting conditions will be considered an “outstanding” Award until the
vesting conditions have been satisfied or the Award otherwise terminates or
expires unvested by its terms, (C) a Group Partnership Unit that has been
granted as a Pre-Listing Award under the Pre-Listing Plan that is subject to
vesting conditions will be considered an “outstanding” Pre-Listing Award until
the vesting conditions have been satisfied or the Pre-Listing Award otherwise
terminates or expires unvested by its terms and (D) any Award or
Pre-Listing Award other than an Option, Unit Appreciation Right, Common Unit or
Group Partnership Unit that is subject to vesting conditions will be considered
to be an “outstanding” Award or Pre-Listing Award, as applicable, until it has
been settled.

 

4.             Administration

 

(a)           Administration and
Delegation.  The Plan
shall be administered by the Administrator. 
The Administrator may delegate the authority to grant Awards under the
Plan to any employee or group of employees of the Partnership or of any
Affiliate of the Partnership; provided  that such delegation and
grants are consistent with applicable law and guidelines established by the
Board from time to time.  The Administrator
may delegate the day-to-day administration of the Plan to any employee or group
of employees of the Partnership or the General Partner or any of their
respective Affiliates or a nationally recognized third-party stock plan
administrator.

 

(b)           Substitution of Prior Awards.  Awards may, in the discretion of the
Administrator, be made under the Plan in assumption of, or in substitution for,
outstanding awards previously granted by the Partnership, any Affiliate of the
Partnership or any entity acquired by the Partnership or with which the
Partnership combines.  The number of
Common Units underlying such substitute awards shall be counted against the
aggregate number of Common Units available for Awards under the Plan.

 

(c)           Interpretation; Corrections;
Final and Binding Decisions.  The Administrator is authorized to interpret
the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan.  The Administrator may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or Award
agreement in the manner and to the extent the Administrator deems necessary or
desirable, without the consent of any Participant.  Any decision of the Administrator in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries and successors).

 

(d)           Establishment of Award Terms.  The Administrator shall have the full power
and authority to establish the terms and conditions of any Award consistent
with the provisions of the Plan and to waive any such terms and conditions at
any time (including, without limitation, accelerating or waiving any vesting
conditions).

 

(e)           Payment of Taxes Due.  The Administrator shall require payment of
any amount it may determine to be necessary to withhold for federal, state,
local or other taxes as a result of the exercise, grant or vesting of an
Award.  To the extent that such
withholding arises 

 

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in connection with the settlement of an Award with Common Units, the
Administrator may, in its sole discretion, cause such payments to be funded by
reducing the Common Units delivered upon settlement by an amount of Common
Units having a Fair Market Value equal to the amount of payments that would
then be due (and if an Award is settled in cash, the Administrator may withhold
cash in respect to such taxes due). The Administrator shall establish the
manner in which any such tax obligation may be satisfied by the Participant.

 

5.             Limitations

 

No Award may be granted
under the Plan after the tenth anniversary of the Effective Date, but Awards
theretofore granted may extend beyond that date.

 

6.             Terms and Conditions of Options

 

Options granted under the
Plan shall be non-qualified options for federal income tax purposes, and shall
be subject to the foregoing and the following terms and conditions and to such
other terms and conditions, not inconsistent therewith, as the Administrator
shall determine:

 

(a)           Option Price.  The Option Price per Common Unit shall be determined
by the Administrator, provided that, solely for the purposes of an
Option granted under the Plan to a Participant who is a U.S. taxpayer, in no
event will the Option Price be less than 100% of the Fair Market Value on the
date an Option is granted.

 

(b)           Exercisability.  Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be
determined by the Administrator, but in no event shall an Option be exercisable
more than ten years after the date it is granted.

 

(c)           Exercise of Options.

 

(i)            Except as otherwise provided
in the Plan or in an Award agreement, an Option may be exercised for all, or
from time to time any part, of the Common Units for which it is then
exercisable.  For purposes of this Section 6
of the Plan, the exercise date of an Option shall be the later of the date a
notice of exercise is received by the Partnership and, if applicable, the date
payment is received by the Partnership pursuant to clauses (A), (B), (C) or
(D) in the following sentence.

 

(ii)           The Option Price for the
Common Units as to which an Option is exercised shall be paid to the
Partnership, and in the manner designated by the Administrator, pursuant to one
or more of the following methods: (A) in cash or its equivalent (e.g., by
personal check); (B) in Common Units having a Fair Market Value equal to
the aggregate Option Price for the Common Units being purchased and satisfying
such other requirements as may be imposed by the Administrator; provided
that such Common Units have been held by the Participant for such period
as may be established from time to time by the Administrator in order to avoid
adverse accounting treatment applying generally accepted accounting principles;
(C) partly in cash and partly in such Common Units; (D) if there is a
public market for the Common Units at such time, through the delivery of
irrevocable instructions to a broker to sell Common Units obtained upon the
exercise of the Option and to deliver promptly to the Partnership an 

 

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amount out of the proceeds of such sale equal to the aggregate Option
Price for the Common Units being purchased, or (E) to the extent permitted
by the Administrator, through net settlement in Common Units.

 

(iii)          To the extent compliant with
applicable laws, no Participant shall have any rights to distributions or other
rights of a holder with respect to Common Units subject to an Option until the
Participant has given written notice of exercise of the Option, paid in full
the Option Price for such Common Units and, if applicable, has satisfied any
other conditions imposed by the Administrator pursuant to the Plan.

 

(d)           Attestation.  Wherever in this Plan or any agreement
evidencing an Award a Participant is permitted to pay the Option Price of an
Option or taxes relating to the exercise of an Option by delivering Common
Units, the Participant may, subject to procedures satisfactory to the
Administrator, satisfy such delivery requirement by presenting proof of beneficial
ownership of such Common Units, in which case the Partnership shall treat the
Option as exercised without further payment and/or shall withhold such number
of Common Units from the Common Units acquired by the exercise of the Option,
as appropriate.

 

7.             Terms and Conditions of Unit Appreciation
Rights

 

(a)           Grants.  The Administrator may grant (i) a Unit
Appreciation Right independent of an Option or (ii) a Unit Appreciation
Right in connection with an Option, or a portion thereof.  A Unit Appreciation Right granted pursuant to
clause (ii) of the preceding sentence (A) may be granted at the
time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same number of
Common Units covered by an Option (or such lesser number of Common Units as the
Administrator may determine) and (C) shall be subject to the same terms
and conditions as such Option except for such additional limitations as are
contemplated by this Section 7 (or such additional limitations as may be
included in an Award agreement).

 

(b)           Exercise Price.  The exercise price per Common Unit of a Unit
Appreciation Right shall be an amount determined by the Administrator; provided,
however, that in the case of a Unit Appreciation Right granted in
conjunction with an Option, or a portion thereof, the exercise price may not be
less than the Option Price of the related Option; provided, further
that, solely for the purposes of a Unit Appreciation Right granted under the
Plan to a Participant who is a U.S. taxpayer, in the case of a Unit
Appreciation Right that was not granted in conjunction with an Option, the
exercise price per Unit Appreciation Right shall not be less than 100% of the
Fair Market Value on the date the Unit Appreciation Right is granted.

 

(c)           Terms of Grant:  Each Unit Appreciation Right granted
independent of an Option shall entitle a Participant upon exercise to an amount
equal to (i) the excess of (A) the Fair Market Value on the exercise
date of one Common Unit over (B) the exercise price per Common Unit, times
(ii) the number of Common Units covered by the Unit Appreciation
Right.  Each Unit Appreciation Right
granted in conjunction with an Option, or a portion thereof, shall entitle a
Participant to surrender to the Partnership the unexercised Option, or any
portion thereof, and to receive from the Partnership in exchange therefore an
amount equal to (i) the excess of (A) the Fair Market Value on the
exercise date of one Common Unit 

 

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over (B) the Option Price per Common Unit, times (ii) the
number of Common Units covered by the Option, or portion thereof, which is
surrendered.  Payment shall be made in
Common Units or in cash, or partly in Common Units and partly in cash (any such
Common Units valued at such Fair Market Value), all as shall be determined by
the Administrator.

 

(d)           Exercisability:  Unit Appreciation Rights may be exercised
from time to time upon actual receipt by the Partnership of written notice of
exercise stating the number of Common Units with respect to which the Unit
Appreciation Right is being exercised. 
The date a notice of exercise is received by the Partnership shall be
the exercise date.  The Administrator, in
its sole discretion, may determine that no fractional Common Units will be
issued in payment for Unit Appreciation Rights, but instead cash will be paid
for the fractional Common Units and the number of Common Units to be delivered
will be rounded downward to the next whole Common Unit.

 

(e)           Limitations.  The Administrator may impose, in its
discretion, such conditions upon the exercisability of Unit Appreciation Rights
as it may deem fit, but in no event shall a Unit Appreciation Right be
exercisable more than ten years after the date it is granted.

 

8.             Other Unit-Based Awards

 

The Administrator, in its
sole discretion, may grant or sell Awards of Common Units, restricted Common
Units, deferred restricted Common Units, phantom restricted Common Units or
other Common Unit-based awards based in whole or in part on the Fair Market
Value of the Common Units (“Other Unit-Based Awards”).  Such Other Unit-Based Awards shall be in such
form, and dependent on such conditions, as the Administrator shall determine,
including, without limitation, the right to receive, or vest with respect to,
one or more Common Units (or the equivalent cash value of such Common Units)
upon the completion of a specified period of service, the occurrence of an
event and/or the attainment of performance objectives.  Other Unit-Based Awards may be granted alone
or in addition to any other Awards granted under the Plan.  Subject to the provisions of the Plan, the
Administrator shall determine to whom and when Other Unit-Based Awards will be
made, the number of Common Units to be awarded under (or otherwise related to)
such Other Unit-Based Awards; whether such Other Unit-Based Awards shall be
settled in cash, Common Units, or other assets or a combination of cash, Common
Units and other assets; and all other terms and conditions of such Awards
(including, without limitation, the vesting provisions thereof and provisions
ensuring that all Common Units so awarded and issued shall be fully paid and
non-assessable).

 

9.             Adjustments Upon Certain Events

 

Notwithstanding any other provisions
in the Plan to the contrary, the following provisions shall apply to all Awards
granted under the Plan:

 

(a)           Equity Restructurings. In the event
of any extraordinary Common Unit distribution or split, recapitalization,
rights offering, split-up or spin-off or any other event that constitutes an “equity
restructuring” (as defined under Financial Accounting Standards Board (FASB)
Accounting Standards Codification 718) with respect to Common Units, the
Administrator shall, in the manner determined appropriate or desirable by the
Administrator 

 

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and without liability to any person, adjust any or all of (i) the
number of Common Units or other securities of the Partnership (or number and
kind of other securities or property) with respect to which Awards may be
granted under the Plan, and (ii) the terms of outstanding Awards,
including, but not limited to (A) the number of Common Units or other
securities of the Partnership (or number and kind of other securities or
property) subject to outstanding Awards or to which outstanding Awards relate, (B) the
Option Price or exercise price of any Option or Unit Appreciation Right and (C) any
performance targets or other applicable terms.

 

(b)           Mergers, Reorganizations and
Other Corporate Transactions. In the event of any
reorganization, merger, consolidation, combination, repurchase or exchange of
Common Units or other securities of the Partnership, issuance of warrants or
other rights to purchase Common Units or other securities of the Partnership,
or other similar corporate transaction or event that affects the Common Units
such that an adjustment is determined by the Administrator in its discretion to
be appropriate or desirable, the Administrator in its sole discretion and
without liability to any person shall make such substitution or adjustment, if
any, as it deems to be equitable as to (i) the number of Common Units or
other securities of the Partnership (or number and kind of other securities or
property) with respect to which Awards may be granted under the Plan, and (ii) the
terms of any outstanding Award, including (A) the number of Common Units
or other securities of the Partnership (or number and kind of other securities
or property) subject to outstanding Awards or to which outstanding Awards
relate, (B) the Option Price or exercise price of any Option or Unit
Appreciation Right and (C) any performance targets or other applicable
terms.

 

(c)           Change in Control. In the event
of a Change in Control after the Effective Date, (i) if determined by the
Administrator in the applicable Award agreement or otherwise, any outstanding
Awards then held by Participants which are unexercisable or otherwise unvested
or subject to lapse restrictions shall automatically be deemed exercisable or
otherwise vested or no longer subject to lapse restrictions, as the case may
be, as of immediately prior to such Change in Control and (ii) the
Administrator may (subject to Sections 16 and 18), but shall not be obligated
to: (A) accelerate, vest or cause the restrictions to lapse with respect
to all or any portion of an Award; (B) cancel such Awards for fair value
(as determined in the sole discretion of the Administrator) which, in the case
of Options and Unit Appreciation Rights, may equal the excess, if any, of value
of the consideration to be paid in the Change in Control transaction to holders
of the same number of Common Units subject to such Options or Unit Appreciation
Rights (or, if no consideration is paid in any such transaction, the Fair
Market Value of the Common Units subject to such Options or Unit Appreciation
Rights) over the aggregate exercise price of such Options or Unit Appreciation
Rights; (C) provide that any Options or Unit Appreciation Right having an
exercise price per Common Unit that is greater than the per Common Unit value
of the consideration to be paid in the Change in Control transaction to a
holder of a Common Unit shall be cancelled without payment of any consideration
therefor; (D) provide for the issuance of substitute Awards that will
substantially preserve the otherwise applicable terms of any affected Awards
previously granted hereunder as determined by the Administrator in its sole
discretion; or (E) provide that for a period of at least 15 days prior to
the Change in Control, such Options shall be exercisable as to all shares
subject thereto and that upon the occurrence of the Change in Control, such
Options shall terminate and be of no further force and effect.

 

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10.          No Right to Employment or Awards

 

The granting of an Award
under the Plan shall impose no obligation on the Partnership or any Affiliate
to continue the Employment of a Participant and shall not lessen or affect the
Partnership’s or Affiliate’s right to terminate the Employment of such
Participant.  No Participant or other
Person shall have any claim to be granted any Award (including as a result of
recurring prior Award), and there is no obligation for uniformity of treatment
of Participants, or holders or beneficiaries of Awards.  No Award shall constitute compensation for
purposes of determining any benefits under any benefit plan.  The terms and conditions of Awards and the
Administrator’s determinations and interpretations with respect thereto need
not be the same with respect to each Participant (whether or not such
Participants are similarly situated).

 

11.          Successors and Assigns

 

The Plan shall be binding on
all successors and assigns of the Partnership and a Participant, including without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the Participant’s creditors.

 

12.          Nontransferability of Awards

 

Unless otherwise determined
or approved by the Administrator, an Award shall not be transferable or
assignable by the Participant otherwise than by will or by the laws of descent
and distribution.  Any transfer or
assignment in violation of the prior sentence shall be null and void.  An Award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.

 

13.          Amendments or Termination

 

The Board may amend, alter
or discontinue the Plan or any outstanding Award, but no amendment, alteration
or discontinuation shall be made, without the consent of a Participant, if such
action would materially diminish any of the rights of the Participant under any
Award theretofore granted to such Participant under the Plan; provided, however,
that the Administrator may without the Participant’s consent (a) amend the
Plan or any outstanding Award in such manner as it deems necessary to permit
the granting of Awards meeting the requirements of the Code or other applicable
laws (including, without limitation, to avoid adverse tax consequences to the
Partnership or to Participants as provided in Section 14 and Section 18
below), and (b) amend any outstanding Awards in a manner that is not
adverse (other than in a de minimis manner)
to a Participant, except as otherwise may be permitted pursuant to Section 9
hereof or as is otherwise contemplated pursuant to the terms of the Award,
without the Participant’s consent.

 

14.          International Participants

 

With respect to Participants
who reside or work outside the United States of America, the Administrator may,
in its sole discretion, amend the terms of the Plan or Awards with respect to
such Participants in order to conform such terms with the requirements of local
law or to obtain more favorable tax or other treatment for a Participant, the
Partnership or an Affiliate.

 

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15.          Choice of Law

 

The Plan shall be governed
by and construed in accordance with the law of the State of New York without
giving effect to any otherwise governing principles of conflicts of law that
would apply the laws of another jurisdiction.

 

16.          Other Laws; Restrictions on Transfer of
Common Units

 

The Administrator may refuse
to issue or transfer any Common Units or other consideration under an Award if,
acting in its sole discretion, it determines that the issuance or transfer of
such Common Units or such other consideration might violate any applicable law
or regulation or entitle the Partnership to recover the same under Section 16(b) of
the Act, as amended, and any payment tendered to the Partnership by a
Participant, other holder or beneficiary in connection with the exercise of
such Award shall be promptly refunded to the relevant Participant, holder or
beneficiary. Without limiting the generality of the foregoing, no Award granted
hereunder shall be construed as an offer to sell securities of the Partnership,
and no such offer shall be outstanding, unless and until the Administrator in
its sole discretion has determined that any such offer, if made, would be in
compliance with all applicable requirements of the United States federal and
any other applicable securities laws.

 

17.          Effectiveness of the Plan

 

The Plan shall be effective
as of the Effective Date.

 

18.          Section 409A

 

To the extent applicable,
this Plan and Awards issued hereunder shall be interpreted in accordance with Section 409A
of the Code and Department of Treasury regulations and other interpretative
guidance issued thereunder, including without limitation any such regulations
or other guidance that may be issued after the Effective Date.   Notwithstanding other provisions of the Plan
or any Award agreements issued thereunder, no Award shall be granted, deferred,
accelerated, extended, paid out or modified under this Plan in a manner that
would result in the imposition of an additional tax under Section 409A of
the Code upon a Participant.  In the
event that it is reasonably determined by the Administrator that, as a result
of Section 409A of the Code, payments in respect of any Award under the
Plan may not be made at the time contemplated by the terms of the Plan or the
relevant Award agreement, as the case may be, without causing the Participant
holding such Award to be subject to taxation under Section 409A of the
Code, consistent with the provisions of Section 13(a) above, the
Partnership may take whatever actions the Administrator determines necessary or
appropriate to comply with, or exempt the Plan and Award agreement from the
requirements of Section 409A of the Code and related Department of
Treasury guidance and other interpretive materials as may be issued after the
Effective Date including, without limitation, (a) adopting such amendments
to the Plan and Awards and appropriate policies and procedures, including
amendments and policies with retroactive effect, that the Administrator
determines necessary or appropriate to preserve the intended tax treatment of
the benefits provided by the Plan and Awards hereunder and/or (b) taking
such other actions as the Administrator determines necessary or appropriate to
avoid the imposition of an additional tax under Section 409A of the Code,
which action may include, but is 

 

11

 

not
limited to, delaying payment to a Participant who is a “specified employee”
within the meaning of Section 409A of the Code until the first day
following the six-month period beginning on the date of the Participant’s
termination of Employment.  The Partnership shall use commercially
reasonable efforts to implement the provisions of this Section 18 in good
faith; provided that neither the Partnership, the Administrator nor any
employee, director or representative of the Partnership or of any of its
Affiliates shall have any liability to Participants with respect to this Section 18.

 

12Exhibit
4.1

 

	
  

  	
  INCORPORATED
  UNDER THE CANADA BUSINESS CORPORATIONS ACT CONSTITUÉE EN VERTU DE LA LOI
  CANADIENNE SUR LES SOCIÉTÉS PAR ACTIONS SEE REVERSE FOR CERTAIN DEFINITIONS
  VOIR AU VERSO POUR CERTAINES DÉFINITIONS transferable on the books of the
  Company only upon surrender of this certificate properly endorsed. This
  certificate is not valid unless countersigned by the Transfer Agent and
  Registrar of the Company. IN WITNESS WHEREOF the Company has caused this
  certificate to be signed on its behalf by the facsimile signatures of its
  duly authorized officers. C0000000230 | M
  **SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN544192305
  00000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Thera
  peutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero***
  *SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN5441923050
  0000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therap
  eutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****
  SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500
  000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therape
  utics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****SPECIMEN54419230500000000Lorus*Therapeutics*Inc.zero****S
  SPECIMEN **054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therape
  utics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000
  000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero***
  *054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeu
  tics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****0544192305000000
  00Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****
  054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeut
  ics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****05441923050000000
  0Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****0
  54419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeutics*Inc.zero****054419230500000000Lorus*Therapeuti
  * * * 0 * * * 00000000 Number Numéro Shares Actions FULLY PAID AND
  NON-ASSESSABLE COMMON SHARES WITHOUT PAR VALUE IN THE CAPITAL OF IS THE
  REGISTERED HOLDER OF EST LE PORTEUR INSCRIT DE THIS CERTIFIES THAT LES
  PRÉSENTES ATTESTENT QUE Dated: COUNTERSIGNED AND REGISTERED CONTRESIGNÉ ET
  IMMATRICULÉ COMPUTERSHARE TRUST COMPANY, N.A. (GOLDEN) TRANSFER AGENT AND
  REGISTRAR AGENT DE TRANSFERT ET AGENT COMPTABLE DES REGISTRES COUNTERSIGNED
  AND REGISTERED CONTRESIGNÉ ET IMMATRICULÉ COMPUTERSHARE INVESTOR SERVICES
  INC. SERVICES AUX INVESTISSEURS COMPUTERSHARE INC. (VANCOUVER) (TORONTO)
  (MONTREAL) TRANSFER AGENT AND REGISTRAR AGENT DE TRANSFERT ET AGENT COMPTABLE
  DES REGISTRES OR By / Par Authorized Officer - Représentant Autorisé By / Par
  Authorized Officer - Représentant autorisé President and Chief Executive
  Officer President et Chef de la diréction Chair of The Board of Directors
  Secrétaire Générale * * * * 0 * * * * * * * * * * * * * * 0 * * * * * * * * *
  * * * * * 0 * * * * * * * * * * * * * * 0 * * * * * * * * * * * * * * 0 * * *
  * * CUSIP 544192305 ISIN CA5441923052 transférables dans les registres de la
  Société seulement sur remise de ce certificat endossé en bonne et due forme.
  Ce certificat n'est valide que s'il a été contresigné par l'agent de
  transfert et agent comptable des registres de la Société. EN FOI DE QUOI la
  Société a fait signer le présent certificat en son nom au moyen des
  fac-similés de signature de ses dirigeants dûment autorisés. ACTIONS
  ORDINAIRES SANS VALEUR NOMINALE ENTIÈREMENT LIBÉRÉES DU CAPITAL-ACTIONS DE
  May 14, 2010 Le : 14 mai 2010 Lorus Therapeutics Inc. Lorus Therapeutics Inc.
  The shares represented by this certificate are transferable at the offices of
  Computershare Investor Services Inc. in Vancouver, BC, Montreal, QC and
  Toronto, ON or Computershare Trust Company, NA. in Golden, CO. Les actions
  représentées par ce certificat peuvent être transférées aux bureaux de
  Services aux Investisseurs Computershare Inc. à Vancouver, BC, Montréal, QC
  et Toronto, ON ou à Computershare Trust Company, NA. à Golden, CO.
  CSAE_WIP_LORQ_C03.MTL.PULLS/000001/000001/i 

  

 

	
  

  	
  The shares
  represented by this certificate have rights, privileges, restrictions and
  conditions attached thereto and the Company will furnish to a shareholder, on
  demand and without charge, a full copy of the text of: (a) the rights,
  privileges, restrictions and conditions attached to each class authorized to
  be issued and to each series in so far as the same have been fixed by the
  directors; and (b) the authority of the directors to fix the rights,
  privileges, restrictions and conditions of subsequent series. Les actions
  représentées par ce certificat sont assorties de droits, privilèges,
  restrictions et conditions et la Société fournira à tout actionnaire, sur
  demande et sans frais, une copie du texte intégral a) des droits, privilèges,
  restrictions et conditions rattachés à chaque catégorie d'actions dont
  l'émission est autorisée et à chaque série, dans la mesure fixée par les
  administrateurs; et b) de l'autorisation donnée aux administrateurs de fixer
  les droits, privilèges, restrictions et conditions des séries ultérieures. The
  following abbreviations shall be construed as though the words set forth
  below opposite each abbreviation were written out in full where such
  abbreviation appears: TEN COM - as tenants in common TEN ENT - as tenants by
  the entireties JT TEN - as joint tenants with rights of survivorship and not
  as tenants in common (Name) CUST (Name) UNIF - (Name) as Custodian for (Name)
  under the GIFT MIN ACT (State) (State) Uniform Gifts to Minors Act Additional
  abbreviations may also be used though not in the above list. For value
  received the undersigned hereby sells, assigns and transfers unto Insert name
  and address of transferee shares represented by this certificate and does
  hereby irrevocably constitute and appoint the attorney of the undersigned to
  transfer the said shares on the books of the Company with full power of
  substitution in the premises. Les abreviations suivantes doivent etre interpretees
  comme si les expressions correspondantes etaient ecrites en toutes lettres:
  TEN COM - a titre de proprietaires en commun TEN ENT - a titre de tenants
  unitaires JT TEN - a titre de coproprietaires avec gain de survie et non a
  titre de proprietaires en commun (Norn) CUST (Norn) UNIF - (Norn) a titre de
  depositaire pour (Norn) en vertu de la Uniform Gifts to GIFT MIN ACT (Etat) Minors
  Act de (fiat) Des abreviations autres que celles qui sont donnees ci-dessus
  peuvent aussi etre utilisees. Pour valeur recue, le soussigne vend, cède et
  transfère par les presentes à Insèrer le nom et I’adresse du cessionnaire
  actions reprèsentèes par le prèsent certificat et nomme irrèvocablement le
  fondè de pouvoir du soussigne chargè d’inscrire le transfert desdites actions
  aux registres de la compagnie, avec plein pouvoir de substitution à cet ègard.
  LE: DATED: Signature of Shareholder / Signature de I’actionnaire Signature of
  Guarantor / Signature du garant Signature Guarantee: The signature on this
  assignment must correspond with the name as written upon the face of the
  certificate(s), in every particular, without alteration or enlargement, or
  any change whatsoever and must be guaranteed by a major Canadian Schedule I
  chartered bank or a member of an acceptable Medallion Signature Guarantee
  Program (STAMP, SEMP, MSP). The Guarantor must affix a stamp bearing the
  actual words “Signature Guaranteed”. In the USA, signature guarantees must be
  done by members of a “Medallion Signature Guarantee Program” only. Signature
  guarantees are not accepted from Treasury Branches, Credit Unions or Caisses
  populaires unless they are members of the Stamp Medallion Program. Garantie
  de signature : La signature apposèe aux fins de cette cession doit
  correspondre exactement au nom qui est inscrit au recto du certificat, sans
  aucun changement, et doit ètre garantie par une banque a charte canadienne de
  I’Annexe 1 ou un membre d’un programme de garantie de signature Medallion
  acceptable (STAMP, SEMP, MSP). Le garant doit apposer un timbre portant la
  mention « Signature garantie » ou « Signature Guaranteed ». Aux Ètats-Unis,
  seuls les membres d’un « Medallion Signature Guarantee Program » peuvent
  garantir une signature. Les garanties de signature ne peuvent pas etre faites
  par des caisses d’epargne («Treasury Branches»), des caisses de credit («
  Credit Unions ») ou des Caisses populaires, à moins qu’elles ne soient
  membres du programme de garantie de signature Medallion STAMP. SECURITY
  INSTRUCTIONS - INSTRUCTIONS DE SÈCURITÈ THIS IS WATERMARKED PAPER, DONOT
  ACCEPT WITHOUT NOTING WATERMARK HOLD TO LIGHT TO VERIFY WATERMARK. PAPER
  FILIGRANÈ, NE PAS ACCEPTER SANS VÈRIFIER LA PRÈSENCE DU FlLIGRANE. POUR CE
  FAIRE. PLACER A LA LUMIÈRE. BI_COMP_V2_02

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