Document:

Converted by EDGARwiz

Prestige Capital Corporation 

400 KELBY STREET, 14TH FLOOR, FORT LEE, NEW JERSEY 07024    (201) 944-4455

Purchase and Sale Agreement (“Agreement”)

1.  ASSIGNMENT.  PRESTIGE CAPITAL CORPORATION (“Prestige”) hereby buys and FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. (“Seller”) hereby sells, transfers and assigns to Prestige all of Seller’s right, title and interest in and to those specific accounts receivable owing to Seller as set forth on the assignment forms provided by Seller to Prestige from time to time (the “Assignments”) together with all rights of action accrued or to accrue thereon, including without limitation, full power to collect, sue for, compromise, assign or in any other manner enforce collection thereof in Prestige’s name or otherwise.  All of Seller’s accounts receivable and contract rights which are presently or at any time hereafter assigned by Seller, and accepted by Prestige, are collectively referred to as the “Accounts”.

2.  ADVANCE.  Upon Prestige’s receipt and acceptance of each Assignment, Prestige shall pay to Seller SEVENTY-FIVE percent (75%) of the net face value (i.e. the face value less any offset for that same period) of the Accounts and SIXTY-FIVE percent (65%) of the net face value of any unbilled yet earned amounts associated with the Accounts therein described (the “Down Payment”).  The total of all advances made by Prestige on unbilled yet earned amounts associated with the Accounts shall not, at any time, exceed $1,000,000.   In addition, upon acceptance of this Agreement, Prestige will provide a one-time overadvance of up to $250,000 (the “Overadvance”). The Overadvance shall not, at any time, exceed 20% of the Accounts plus 20% of the remaining accounts receivable of Seller not sold to Prestige and will be repaid in 25 consecutive weekly installments commencing one week from the initial funding.   Notwithstanding anything to the contrary contained in this Agreement, Prestige will increase the advance rates to 80% and 70%, respectively, so long as the Overadvance is repaid in full and dilution (defined as non-payment of an Account in the amount billed due to disputes, adjustments, etc.) on factored invoices is less than 5%.  Furthermore, the maximum outstanding balance of Seller to Prestige shall be $10,000,000 (“Maximum Advance”).  

3.  RESERVE. Prestige will hold in reserve the difference between the Purchase Price (hereinafter defined) and the Down Payment (the “Reserve”) and provided there are no outstanding chargebacks or disputes, will pay to Seller, the Reserve, less any sums due Prestige hereunder, once the Accounts have been collected in good funds, charged back and/or deemed collected by Prestige due to an account debtor’s insolvency.  Notwithstanding anything to the contrary contained in this Agreement, all collections received by Prestige on Accounts: (a) via wire transfer shall be wired within three business days of receipt by Prestige; (b) via ACH payment will be wired within four business days of receipt by Prestige; (c) via check will be wired within five business days of receipt by Prestige; provided there are no outstanding chargebacks or disputes with respect to the Accounts.  For purposes of this Agreement, the term “Purchase Price” shall mean the net face value of Accounts, less; Prestige’s discount fee described in paragraph 4 below, returns, credits, allowances and discounts; and less all other sums charged or chargeable to Seller’s account under the terms of this Agreement.

4.  DISCOUNT.  Prestige’s purchase of the Accounts from Seller shall be at a discount fee, which is deducted from the face value of each Account upon collection.  The discount fee, which shall be based on the number of days an Account is outstanding from the date of the Down Payment, shall be as follows:  If paid within 15 days a discount fee of 1.10%; if paid within 35 days a discount fee of 1.8%; if paid within 45 days a discount fee of 2.7%; if paid within 60 days a discount fee of 3.6%; if paid within 75 days a discount fee of 4.5%; if paid within 90 days a discount fee of 5.4%; and an additional 1.5% for each 15 day period thereafter until the account is paid or the accrued fee equals a maximum of 15%.   Notwithstanding anything to the contrary contained in this Agreement, Prestige will reduce the above fees by 10% on all factored invoices for the initial 60 days of the Agreement.  In addition to the foregoing, there shall be a one time fee for the Overadvance of $18,000 or, if the Overadvance is less than $250,000, a one time fee equal to 18/250ths of the actual amount of the Overadvance. This one time fee will be payable by Seller to Prestige 180 days from the closing date; provided, however, that if the full amount of the Overadvance is repaid by Seller on or before 90 days of the closing date, the applicable Overadvance fee shall be reduced by 25%.

11/15/2011

                           

    Pg 1 of 5 

5.  WARRANTIES, REPRESENTATION AND COVENANTS.  As an inducement for Prestige’s entering into this Agreement and with full knowledge that the truth and accuracy of the warranties, representations and covenants in this Agreement are being relied upon by Prestige, instead of the delay of a complete credit investigation, Seller warrants, represents and covenants that:

(a)

Seller is properly licensed and authorized to engage in its telecommunications business as presently conducted;

(b)

Seller is the sole and absolute owner of the Accounts and has the full legal right to make said sale, assignment and transfer;

(c)

The correct amount of each Account will be set forth on the Assignments;

(d)

Each Account is an accurate and undisputed statement of the net indebtedness from an account debtor for a sum certain, without any net indebtedness due from Seller to that account debtor in the period(s) following the date of the statement that are greater than 20% of the net indebtedness reflected on the statement for that Account;

(e)

Each Account is an accurate statement of a bona fide sale, delivery and acceptance of merchandise or performance of service by Seller to an account debtor;

(f)

Seller does not own, control or exercise dominion in any way whatsoever, over the business of any Account;

(g)

All financial records, statements, books or other documents shown to Prestige by Seller at any time either before or after the signing of this Agreement are true and accurate in all material respects;

(h)

Seller will not under any circumstance or in any manner whatsoever, interfere with any of Prestige’s rights under this Agreement;

(i)

Subsequent to the effective date of this Agreement, Seller will not, at any time, permit any lien, security interest or encumbrance (except when such lien, security interest or encumbrance is by an existing or new shareholder, director, or officer of Seller and timely notice of such action is given to Prestige) to be created upon any of its accounts receivable without the prior written consent of Prestige, which consent shall not be unreasonably withheld;

(j)

Seller will not change or modify the terms of the Accounts with any account debtor unless Prestige first consents, in writing;

(k)

Seller will notify Prestige, in writing, in advance of: any change in Seller’s place of business; Seller having or acquiring more than one place of business; any change in Seller’s chief executive office; and/or any change in the office or offices where Seller’s books and records concerning accounts receivable are kept;

(l)

Seller will immediately notify Prestige of any proposed or actual change of the Seller’s and/or any account debtor’s identity, legal entity or corporate structure of which Seller has actual knowledge;

(m)

All invoices assigned to Prestige will state plainly on their face that they are payable only and directly to the specific bank account designated and controlled by Prestige; and

(n)

No account shall be on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis;

The warranties, representations and covenants contained in this paragraph 5 shall be continuous and be deemed to be renewed each time Seller assigns Accounts to Prestige.  Notwithstanding the provisions contained in paragraph 6 of this Agreement, Prestige shall have recourse against the Seller in the event that any of the warranties, representations and covenants set forth in this paragraph 5 are breached and Prestige is thereby damaged.

6.  NO RECOURSE.  Prestige shall have no recourse against Seller if payments are not received due to the “Insolvency” of an account debtor within 90 days of invoice date.  For purposes of the foregoing, Insolvency shall be deemed to have occurred only when:  (a) a voluntary or involuntary bankruptcy proceeding for the relief of an account debtor under either Chapter 7 or Chapter 11 shall have been instituted in a United States Bankruptcy Court; (b) a receiver is appointed for the whole or any part of the property of an account debtor; (c) an account debtor’s assets shall have been sold under a writ of execution or attachments, or a writ of execution shall have been returned unsatisfied; (d) an account debtor shall have absconded; or (e) an account debtor’s assets shall have been sold under levy by any taxing authority or by a landlord.

7.  CHARGE-BACK.  In the event that any Account is not paid within 90 days of invoice date for any reason whatsoever (other than as a result of an account debtor’s Insolvency), including, without limitation, any alleged defense, counterclaim, offset, dispute or other claim (real or merely asserted) whether arising from or relating to the sale of goods or rendition of services or arising from or relating to any other transaction or occurrence, then in any such event Prestige shall have the right to chargeback such Account to Seller.  No chargeback shall be deemed a reassignment to Seller of the Account involved.  Seller acknowledges that all amounts chargeable to Seller’s account under this Agreement shall be payable by Seller on demand.

11/15/2011

                           

    Pg 2 of 5 

8.  NOTICE OF DISPUTE.  Seller must immediately notify Prestige of any material disputes between any account debtor and Seller.

9.  SETTLEMENT OF DISPUTE.  Prestige may, at its option and with prior written notification to Seller, settle any dispute with any account debtor.  Such settlement does not relieve Seller of any of its obligations under this Agreement.

10.  SOLE PROPERTY. Once Prestige has purchased the Accounts, the payment from account debtors relative to the Accounts is the sole property of Prestige.  Any interference by Seller with this payment will result in civil and/or criminal liability.

11.  SECURITY INTEREST.  As a further inducement for Prestige to enter into this Agreement, and as security for the prompt performance, observance and payment of all obligations owing by Seller to Prestige, Seller hereby grants to Prestige a continuing first priority security interest in and lien upon all accounts receivable of Seller and a continuing subordinated security interest in and lien upon all inventory, machinery and equipment, instruments, documents, chattel paper and general intangibles (as such terms are defined in the Uniform Commercial Code) now owned by Seller, wherever located, and all replacements and substitutions therefore, accessions thereto, and products and proceeds thereof, and all property of Seller at any time in Prestige’s possession. Such security interests are collectively referred to as the “Collateral”.

12.  FINANCING STATEMENTS.  Seller will, at its expense perform all reasonable acts and execute all documents requested by Prestige at any time to evidence, perfect and maintain Prestige’s security interest and other rights in the Collateral and the priority thereof.

13.  HOLD IN TRUST.   Seller will hold in trust and safekeeping, as the property of Prestige and immediately turn over to Prestige, the identical check or other form of payment received by Seller if payment on the Accounts comes into Seller’s possession.  Should Seller come into possession of a check comprising payments owing to both Seller and Prestige, Seller shall turn over said check to Prestige.  In the event payments by check belonging to Prestige are improperly deposited by Seller into Seller’s bank account more than twice during the initial Term or more than twice during any Renewal Term, Prestige reserves the right to impose a penalty upon Seller of up to 20% of the face amount of any check so improperly deposited.

14.  FINANCIAL RECORDS.   Seller will furnish to Prestige financial statements and such other information as is, from time to time, requested by Prestige.

15.  BOOK ENTRY.  Seller will immediately, upon the sale of the Accounts, make the proper entry on its books and records disclosing the absolute sale of the Accounts to Prestige.

16.  LIMITED POWER OF ATTORNEY.  In order to implement this Agreement, Seller irrevocably appoints Prestige its special attorney in fact or agent with power to:

(a)

Strike out Seller’s address on any correspondence to any account debtor and put on Prestige’s address;

(b)

Receive and open all mail addressed to Seller via Prestige’s address;

(c)

Endorse the name of Seller or Seller’s trade name on any checks or other evidences of payment that may come into the possession of Prestige solely in connection with the Accounts;

(d)

In Seller’s name, or otherwise, demand, sue for, collect any and all monies due in connection with the Accounts; and 

(e)

Compromise, prosecute or defend any action, claim or proceeding relative to the Accounts;

The authority granted to Prestige above shall remain in full force and effect until the Accounts are paid in full and the entire indebtedness of Seller to Prestige is discharged.

17.  NOTIFICATION; VERIFICATION OF ACCOUNTS

(a)

Without in any way limiting the terms and provisions of paragraph 5 (m) hereinabove, Prestige may upon prior written notification to Seller of a default and a period of 5 business days for Seller to cure such default, in its sole discretion, notify any account debtor to make payment on any of Seller’s open invoices to Prestige; and

(b)

Prestige, may at its sole cost and expense at any time verify the Accounts utilizing an audit control company, any agent of 

       Prestige or any other means deemed appropriate by Prestige.

18.  NO ASSUMPTION.  Nothing contained in this Agreement shall be deemed to impose any duty or obligation upon Prestige in favor

of any account debtor and/or any other party in connection with the Accounts.

19.  FUTURE ASSIGNMENTS.  Seller may from time to time, at Seller’s option, sell, transfer and assign different Accounts to Prestige.  The future sale of any Accounts shall be subject to and governed by this Agreement and such Accounts shall be identified by separate and subsequent Assignments.

11/15/2011

                           

    Pg 3 of 5 

20.  DISCRETION.  Nothing contained in this Agreement shall be construed to impose any obligation upon Prestige to purchase Accounts from Seller.  Prestige shall at its sole discretion determine which Accounts it shall purchase.  Further, Prestige shall have the absolute right at any time to cease accepting any further assignments from Seller.

21.  LEGAL FEES; EXPENSES.  Seller will pay on demand any and all reasonable collection expenses and reasonable attorneys’ fees that Prestige incurs in the event it should become necessary for Prestige to enforce its rights against Seller, the Guarantors, or any account debtor under this Agreement.

22.  BINDING ON FUTURE PARTIES.  This Agreement shall inure to the benefit of and is binding upon the heirs, executors, administrators, successors and assigns of the parties hereto, except that Seller may not assign or transfer any or all of its rights and obligations under this Agreement to any party without the prior written consent of Prestige.

23.  WAIVER; ENTIRE AGREEMENT.  No failure or delay on Prestige’s part in exercising any right, power or remedy granted to Prestige herein, will constitute or operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right set forth herein.  This Agreement contains the entire agreement and understanding of the parties hereto and no amendment, modification or waiver of, or consent with respect to, any provision of this Agreement, will in any event be effective unless the same is in writing and signed and delivered by each of the Parties.

24.  NEW JERSEY LAW.  This Agreement shall be deemed executed in the State of New Jersey and, in all respects shall be governed and construed in accordance with the laws of the State of New Jersey.

25.  INDEMNITY.  Seller shall hold Prestige harmless from and against any action or other proceeding brought by any account debtor against Prestige arising from Prestige’s lawfully collecting or attempting to collect any of the Accounts.

26.  TERM.  This Agreement will remain in effect for nine months from the date that this Agreement becomes effective (the “Term”).  Thereafter, the Term will be automatically extended for successive periods of nine (9) months each unless either party provides the other with a written notice of cancellation of at least sixty (60) days prior to the expiration of the initial Term or any renewal Term; provided, however, Prestige may cancel this Agreement at any time upon sixty (60) days notice to Seller.  In the event of a breach by Seller of any term or provision of this Agreement or upon Seller’s insolvency or the insolvency of any guarantor of Seller’s obligations herein, Prestige shall have the right to cancel this Agreement upon written notice to Seller, at which time each of the Parties’ obligations to each other shall be immediately due and payable.  In the event of cancellation, the provisions of this Agreement shall remain in full force and effect until all of the Accounts have been paid in full and all amounts due to Seller from Prestige have been paid.

27.  EARLY TERMINATION.  In the event that Seller wishes to terminate the Agreement prior to the expiration of the initial Term, then in addition to paying Prestige all other obligations due under this Agreement, Seller shall also pay Prestige an early termination fee equal to $17,500 per month for each month remaining under the initial Term.   Notwithstanding the foregoing, Prestige will waive the early termination fee should Seller replace this facility with any financing, other than factoring, at any time after the initial four months of the initial Term.

28.  INVALID PROVISIONS.  If any provision of this Agreement shall be declared illegal or contrary to law, it is agreed that such provision shall be disregarded and this Agreement shall, to the extent reasonably and lawfully permitted, continue in force as though said provision had not been incorporated herein.

29.  EFFECTIVE.  This Agreement shall become effective when it is accepted and executed by an authorized officer of Prestige.  Facsimile machine or PDF copies of an original signature by either party on this Agreement shall be binding as if said copies were original signatures.

11/15/2011

                           

    Pg 4 of 5 

30.  JURY WAIVER.  The parties hereto hereby mutually waive trial by jury in the event of any litigation with respect to any matter connected with this agreement.

Executed this        12th        day of    September                                                   , 2011

           FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

By:  ________________________________________

            GORDON HUTCHINS, JR., President/COO

Accepted this                  day of                                                    , 2011

            PRESTIGE CAPITAL CORPORATION

By:   ________________________________________

             HARVEY L. KAMINSKI, President/CEO

Each of the undersigned hereby personally guarantees and shall be jointly and severally liable for any damages suffered by Prestige Capital Corporation by virtue of the breach of any warranty, representation or covenant made by Seller in subparagraphs 5 (c), (e), (f), (h), (i), (j), above, provided that the undersigned’s liability as set forth above shall only apply in the event the undersigned had knowledge or should have had knowledge (by reason of his respective position with the Seller) of the breach.  In the event that one of the undersigned, as the case may be, is no longer an employee of the Seller and Prestige receives written notification thereof (“Notification”), his respective guarantee set forth in this paragraph shall not apply to any Assignment to Prestige by the Seller that takes place subsequent to the date of Notification.  Furthermore, in the event Prestige intends to enforce the guarantee set forth above, it shall do so only 60 days subsequent to written notice to the undersigned of a breach of warranty by the Seller. 

Date: ____________________________________ By: ________________________________________________________________

MATTHEW D. ROSEN, Individually

Date: ____________________________________  By: ________________________________________________________________

GORDON HUTCHINS, JR., Individually

The undersigned hereby personally guarantees and shall be liable for any damages suffered by Prestige Capital Corporation by virtue of the breach of any warranty, representation or covenant made by Seller in subparagraph 5 (d) above, irrespective of any knowledge thereof.  In the event that the undersigned is no longer an employee of the Seller and Prestige receives written notification thereof (“Notification”), his respective guarantee set forth in this paragraph shall not apply to any Assignment to Prestige by the Seller that takes place subsequent to the date of Notification.  Furthermore, in the event Prestige intends to enforce the guarantee set forth above, it shall do so only 60 days subsequent to written notice to the undersigned of a breach of warranty by the Seller. 

Date: ____________________________________  By: ________________________________________________________________

GORDON HUTCHINS, JR., Individually

11/15/2011

                           

    Pg 5 of 5Exhibit 10.1

 

LRE GP, LLC

 

LONG-TERM INCENTIVE PLAN

 

Section 1.              Purpose of the Plan. The LRE GP, LLC Long-Term Incentive Plan (the “Plan”) has been adopted on  November 10, 2011 (the “Effective Date”) by LRE GP, LLC, a Delaware limited liability company, the general partner (“General Partner”) of LRR Energy, L.P., a Delaware limited partnership (the “Partnership”). The Plan is intended to promote the interests of the General Partner, the Partnership and their Affiliates by providing to Employees, Consultants and Directors incentive compensation awards based on Units to encourage superior performance. The Plan is also contemplated to enhance the ability of the General Partner, the Partnership and their Affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the Partnership and to encourage them to devote their best efforts to advancing the business of the Partnership.

 

Section 2.              Definitions. As used in the Plan, the following terms shall have the meanings set forth below:

 

(a)           “409A Award” has the meaning specified in Section 6(h)(vii).

 

(b)           “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

(c)           “Award” means an Option, Unit Appreciation Right, Restricted Unit, Phantom Unit, Substitute Award, Unit Award or Other Unit Based Award granted under the Plan, and shall include any tandem DERs granted with respect to an Award.

 

(d)           “Award Agreement” means the written or electronic agreement by which an Award shall be evidenced.

 

(e)           “Board” means the Board of Directors of the General Partner.

 

(f)            “Change of Control” means, and shall be deemed to have occurred upon one or more of the following events: (i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act, other than members of the General Partner, the Partnership, or an Affiliate of either the General Partner or the Partnership, shall become the beneficial owner, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the voting power of the voting securities of the General Partner or the Partnership; (ii) the members of the General Partner or the limited partners of the Partnership approve, in one or a series of transactions, a plan of complete liquidation of the General Partner or the Partnership; (iii) the sale or other disposition by the General Partner or the Partnership of all or substantially all of its assets in one or more transactions to any Person other than one or more of its Affiliates; or (iv) the General Partner or an Affiliate of the General Partner or the Partnership ceases to be the general partner of the Partnership.

 

 

(g)           “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

(h)           “Committee” means the Board or such committee as may be appointed by the Board to administer the Plan.

 

(i)            “Consultant” means an individual who renders consulting or advisory services to the General Partner or an Affiliate thereof.

 

(j)            “DER” means a distribution equivalent right, being a contingent right, granted in tandem with a specific Award (other than a Restricted Unit or Unit Award), to receive with respect to each Unit subject to the Award an amount in cash equal to the cash distributions made by the Partnership with respect to a Unit during the period such Award is outstanding.

 

(k)           “Director” means a member of the Board or the board of an Affiliate of the General Partner who is not an Employee or a Consultant (other than in that individual’s capacity as a Director).

 

(l)            “Effective Date” has the meaning set forth in Section 1.

 

(m)          “Employee” means an employee of the General Partner or an Affiliate of the General Partner, including Lime Rock Management LP and Lime Rock Resources Operating Company, Inc.

 

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

 

(o)           “Fair Market Value” means, on any relevant date, the closing sales price of a Unit on the principal national securities exchange or other market in which trading in Units occurs on the last market trading day prior to the applicable day (or, if there is no trading in the Units on such date, on the next preceding day on which there was trading) as reported in The Wall Street Journal (or other reporting service approved by the Committee). If Units are not traded on a national securities exchange or other market at the time a determination of Fair Market Value is required to be made hereunder, the determination of Fair Market Value shall be made by the Committee in good faith using a “reasonable application of a reasonable valuation method” within the meaning of Treasury Regulation Section 1.409A-l(b)(5)(iv)(B).

 

(p)           “General Partner” has the meaning set forth in Section 1.

 

(q)           “Option” means an option to purchase Units granted under the Plan.

 

(r)            “Other Unit Based Awards” means Awards granted to an Employee, Director or Consultant pursuant to Section 6(e).

 

(s)           “Participant” means an Employee, Consultant or Director granted an Award under the Plan.

 

(t)            “Partnership” has the meaning set forth in Section 1.

 

2

 

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

 

(v)           “Phantom Unit” means a notional Unit granted under the Plan which upon vesting entitles the Participant to receive a Unit or an amount of cash equal to the Fair Market Value of a Unit, as determined by the Committee in its discretion.

 

(w)          “Plan” has the meaning set forth in Section 1.

 

(x)            “Restricted Period” means the period established by the Committee with respect to an Award during which the Award remains subject to forfeiture and is either not exercisable by or payable to the Participant, as the case may be.

 

(y)           “Restricted Unit” means a Unit granted under the Plan that is subject to a Restricted Period.

 

(z)            “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange Act or any successor rule or regulation thereto as in effect from time to time.

 

(aa)         “SEC” means the Securities and Exchange Commission, or any successor thereto.

 

(bb)         “Substitute Award” means an award granted pursuant to Section 6(g) of the Plan.

 

(cc)         “UDR” means a distribution made by the Partnership with respect to a Restricted Unit.

 

(dd)         “Unit” means a common unit representing a limited partner interest of the Partnership.

 

(ee)         “Unit Appreciation Right” means a contingent right granted to an Employee, Director or Consultant pursuant to Section 6(b) that entitles the holder to receive, in cash or Units, as determined by the Committee in its sole discretion, an amount equal to the excess of the Fair Market Value of a Unit on the exercise date of the Unit Appreciation Right (or another specified date) over the exercise price of the Unit Appreciation Right.

 

(ff)           “Unit Award” means an award granted pursuant to Section 6(d) of the Plan.

 

Section 3.              Administration.

 

(a)           Authority of the Committee. The Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. Subject to the following and any applicable law, the Committee, in its sole discretion, may delegate any or all of its powers and duties under the Plan, including the power to grant Awards under the Plan, to either or both of the Co-Chief Executive Officers of the General Partner, subject to such limitations on such delegated powers and duties as the

 

3

 

Committee may impose, if any. Upon any such delegation, all references in the Plan to the “Committee,” other than in Section 7, shall be deemed to include such Co-Chief Executive Officers. Any such delegation shall not limit such Co-Chief Executive Officer’s right to receive Awards under the Plan; provided, however, such Co-Chief Executive Officer may not grant Awards to himself, a Director or any executive officer of the General Partner or an Affiliate of the General Partner, or take any action with respect to any Award previously granted to himself, an individual who is an executive officer or a Director. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (vii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or an Award Agreement in such manner and to such extent as the Committee deems necessary or appropriate. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including, without limitation, the General Partner, the Partnership, any of their Affiliates, any Participant, and any beneficiary of any Participant.

 

(b)           Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the General Partner, the Partnership or their Affiliates, the General Partner’s or the Partnership’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee and any officer or employee of the General Partner, the Partnership or any of their Affiliates acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the General Partner with respect to any such action or determination.

 

Section 4.              Units.

 

(a)           Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c), the number of Units that may be delivered with respect to Awards under the Plan is 1,500,000. Units withheld from an Award or surrendered by a Participant to satisfy the Partnership’s or an Affiliate’s tax withholding obligations or to satisfy the payment of any exercise price with respect to the Award (including the withholding of Units with respect to Restricted Units) shall not be considered to be Units delivered under the Plan for this purpose and shall again be available for Awards under the Plan. If any Award is forfeited, cancelled, exercised, or otherwise terminates or expires without the actual delivery of Units pursuant to such Award (the grant of

 

4

 

Restricted Units is not a delivery of Units for this purpose), the Units subject to such Award shall again be available for Awards under the Plan (including Units not delivered in connection with the exercise of an Option or Unit Appreciation Right). There shall not be any limitation on the number of Awards that may be granted and paid in cash.

 

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

 

(c)           Anti-dilution Adjustments. With respect to any “equity restructuring” event that could result in an additional compensation expense to the General Partner or the Partnership pursuant to the provisions of FASB Accounting Standards Codification, Topic 718 if adjustments to Awards with respect to such event were discretionary, the Committee shall equitably adjust the number and type of Units covered by each outstanding Award and the terms and conditions, including the exercise price and performance criteria (if any), of such Award to equitably reflect such restructuring event and shall adjust the number and type of Units (or other securities or property) with respect to which Awards may be granted after such event. With respect to any other similar event that would not result in an accounting charge under FASB Accounting Standards Codification, Topic 718 if the adjustment to Awards with respect to such event were subject to discretionary action, the Committee shall have complete discretion to adjust Awards in such manner as it deems appropriate with respect to such other event.

 

Section 5.              Eligibility. Any Employee, Consultant or Director shall be eligible to be designated a Participant and receive an Award under the Plan. Notwithstanding the foregoing, Employees, Consultants and Directors that provide services to Persons that are not considered a single employer with the Partnership under Code Section 414(b) or Code Section 414(c) shall not be eligible to receive Awards that are subject to Code Section 409A until the Affiliate adopts this Plan as a participating employer in accordance with Section 10. Further, if the Units issuable pursuant to an Award are intended to be registered with the SEC on Form S-8, then only Employees, Consultants, and Directors of the Partnership or a parent or subsidiary of the Partnership (within the meaning of General Instruction A.1(a) to Form S-8) will be eligible to receive such an Award.

 

Section 6.              Awards.

 

(a)           Options. The Committee may grant Options that are intended to comply with Treasury Regulation Section 1.409A-l(b)(5)(i)(A) only to Employees, Consultants or Directors performing services for the Partnership or a corporation or other type of entity in a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, starting with the Partnership and ending with the corporation or other entity for which the Employee, Consultant or Director performs services. For purposes of this Section 6(a), “controlling interest” means (i) in the case of a corporation, ownership of stock possessing at least 50% of total combined voting power of all classes of stock of such corporation entitled to vote or at least 50% of the total value of shares of all classes of stock of such corporation; (ii) in the case of a partnership, ownership of at least 50% of the profits interest or capital interest of such partnership; (iii) in the case of a sole

 

5

 

proprietorship, ownership of the sole proprietorship; or (iv) in the case of a trust or estate, ownership of an actuarial interest (as defined in Treasury Regulation Section 1.414(c)-2(b)(2)(ii)) of at least 50% of such trust or estate. The Committee may grant Options that are otherwise exempt from or compliant with Code Section 409A to any eligible Employee, Consultant or Director. The Committee shall have the authority to determine the number of Units to be covered by each Option, the purchase price therefor and the Restricted Period and other conditions and limitations applicable to the exercise of the Option, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan.

 

(i)            Exercise Price. The exercise price per Unit purchasable under an Option that does not provide for the deferral of compensation under Treasury Regulation Section 1.409A-1(b)(5)(i)(A) shall be determined by the Committee at the time the Option is granted but, except with respect to Substitute Awards, may not be less than the Fair Market Value of a Unit as of the date of grant of the Option. The exercise price per Unit purchasable under an Option that does not provide for the deferral of compensation by reason of satisfying the short-term deferral rule set forth in Treasury Regulation Section 1.409A-1(b)(4) or that is compliant with Code Section 409A shall be determined by the Committee at the time the Option is granted.

 

(ii)           Time and Method of Exercise. The Committee shall determine the exercise terms and the Restricted Period with respect to an Option grant, which may include, without limitation, a provision for accelerated vesting upon the achievement of specified performance goals or other events, and the method or methods by which payment of the exercise price with respect thereto may be made or deemed to have been made, which may include, without limitation, cash, check acceptable to the General Partner, withholding Units from an Award, a “cashless-broker” exercise through procedures approved by the General Partner, or any combination of methods, having a Fair Market Value on the exercise date equal to the relevant exercise price.

 

(iii)          Forfeitures. Except as otherwise provided in the terms of the Option grant, upon termination of a Participant’s employment with the General Partner and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all unvested Options shall be forfeited by the Participant. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Options; provided that the waiver contemplated under this Section 6(a)(iii) shall be effective only to the extent that such waiver will not cause the Participant’s Options that are designed to satisfy Code Section 409A to fail to satisfy such section.

 

(b)           Unit Appreciation Rights. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Unit Appreciation Rights shall be granted, the number of Units to be covered by each grant, whether Units or cash shall be delivered upon exercise, the exercise price therefor and the conditions and limitations applicable to the exercise of the Unit Appreciation Rights, including the terms and conditions in Section 6(b)(i) - (iii) below and such additional terms and conditions as the Committee shall determine, that are not inconsistent with the provisions of the Plan. The Committee may grant Unit Appreciation Rights

 

6

 

which are intended to comply with Treasury Regulation Section 1.409A-1(b)(5)(i)(A) only to Employees, Consultants or Directors performing services for the Partnership or a corporation or other type of entity in a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, starting with the Partnership and ending with the corporation or other entity for which the Employee, Consultant or Director performs services. For purposes of this Section 6(b), “controlling interest” shall have the same meaning set forth in Section 6(a). The Committee may grant Unit Appreciation Rights that are otherwise exempt from or compliant with Code Section 409A to any eligible Employee, Consultant or Director.

 

(i)            Exercise Price. The exercise price per Unit Appreciation Right shall be determined by the Committee at the time the Unit Appreciation Right is granted and may be more or less than the Fair Market Value of a Unit as of the date of grant of the Award. Notwithstanding the foregoing, the exercise price per Unit that may be acquired under a Unit Appreciation Right that does not provide for the deferral of compensation under Treasury Regulation Section 1.409A-1(b)(5)(i)(A) shall not be less than the Fair Market Value of a Unit as of the date of grant of the Unit Appreciation Right.

 

(ii)           Time of Exercise. The Committee shall determine the Restricted Period and the time or times at which a Unit Appreciation Right may be exercised in whole or in part, which may include, without limitation, accelerated vesting upon the achievement of specified performance goals or other events.

 

(iii)          Forfeitures. Except as otherwise provided in the terms of the Unit Appreciation Right grant, upon termination of a Participant’s employment with or service to the General Partner, the Partnership and their Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding Unit Appreciation Rights awarded to the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Unit Appreciation Rights.

 

(c)           Restricted Units and Phantom Units. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Restricted Units or Phantom Units shall be granted, the number of Restricted Units or Phantom Units to be granted to each such Participant, the Restricted Period, the conditions under which the Restricted Units or Phantom Units may become vested or forfeited and such other terms and conditions as the Committee may establish with respect to such Awards.

 

(i)            UDRs. To the extent provided by the Committee, in its discretion, a grant of Restricted Units may provide that distributions made by the Partnership with respect to the Restricted Units shall be subject to the same forfeiture and other restrictions as the Restricted Unit and, if restricted, such distributions shall be held, without interest, until the Restricted Unit vests or is forfeited with the UDR being paid or forfeited at the same time, as the case may be. Absent such a restriction on the UDRs in the Award Agreement, UDRs shall be paid to the holder of the Restricted Unit without restriction at the same time as cash distributions are paid by the Partnership to its unitholders.

 

7

 

Notwithstanding the foregoing, UDRs shall only be paid in a manner that is either exempt from or in compliance with Code Section 409A.

 

(ii)           Forfeitures. Except as otherwise provided in the terms of the Restricted Units or Phantom Units Award Agreement, upon termination of a Participant’s employment with, or consultant services to, the General Partner and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding, unvested Restricted Units and Phantom Units awarded the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Restricted Units and/or Phantom Units; provided that the waiver contemplated under this Section 6(c)(ii) shall be effective only to the extent that such waiver will not cause the Participant’s Restricted Units and/or Phantom Units that are designed to satisfy Code Section 409A to fail to satisfy such section.

 

(iii)          Lapse of Restrictions.

 

(A)          Phantom Units. Upon the vesting of each Phantom Unit, subject to the provisions of Section 8(b), the Participant shall be entitled to receive one Unit or cash equal to the Fair Market Value of a Unit, as determined by the Committee in its discretion.

 

(B)           Restricted Units. Upon the vesting of each Restricted Unit, subject to satisfying the tax withholding obligations of Section 8(b), the Participant shall be entitled to have the restrictions removed from his or her Unit certificate so that the Participant then holds an unrestricted Unit.

 

(d)           Unit Awards. A Unit Award of Units not subject to a Restricted Period may be granted under the Plan to any Employee, Consultant or Director as a bonus or additional compensation or in lieu of cash compensation the individual is otherwise entitled to receive, in such amounts as the Committee determines to be appropriate.

 

(e)           Other Unit Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Units, as deemed by the Committee to be consistent with the purposes of this Plan, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Units, purchase rights for Units, Awards with value and payment contingent upon performance of the Partnership or any other factors designated by the Committee, and Awards valued by reference to the book value of Units or the value of securities of or the performance of specified Affiliates of the General Partner or the Partnership. The Committee shall determine the terms and conditions of such Awards. Units delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(e) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Units, other Awards, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under this Plan, may also be granted pursuant to this Section 6(e).

 

8

 

(f)            DERs. To the extent provided by the Committee, in its discretion, an Award (other than a Restricted Unit or Unit Award) may include a tandem DER grant, which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of the Committee) subject to the same vesting restrictions as the tandem Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion. Absent a contrary provision in the Award Agreement, DERs shall be paid to the Participant without restriction at the same time as cash distributions are paid by the Partnership to its unitholders. Notwithstanding the foregoing, DERs shall only be paid in a manner that is either exempt from or in compliance with Code Section 409A.

 

(g)           Substitute Awards. Awards may be granted under the Plan in substitution for similar awards held by individuals who become Employees, Consultants or Directors as a result of a merger, consolidation or acquisition by the Partnership or an Affiliate of the Partnership of another entity or the assets of another entity. Such Substitute Awards that are Options may have exercise prices less than the Fair Market Value of a Unit on the date of the substitution if such substitution complies with Code Section 409A and the Treasury Regulations thereunder.

 

(h)           General.

 

(i)            Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Partnership or any Affiliate of the Partnership. Awards granted in addition to or in tandem with other Awards or awards granted under any other plan of the Partnership or any Affiliate of the Partnership may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

 

(ii)           Limits on Transfer of Awards.

 

(A)          Except as provided in Section 6(h)(ii)(C), each Option and Unit Appreciation Right shall be exercisable only by the Participant during the Participant’s lifetime, or by the Person to whom the Participant’s rights shall pass by will or the laws of descent and distribution.

 

(B)           Except as provided in Section 6(h)(ii)(C), no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the General Partner, the Partnership or any Affiliate of the General Partner or the Partnership.

 

(C)           To the extent specifically provided by the Committee with respect to an Option or Unit Appreciation Right, an Option or Unit Appreciation Right may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish.

 

9

 

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

 

(iv)          Unit Certificates. All certificates for Units or other securities of the Partnership delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Units or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to make appropriate reference to such restrictions.

 

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

 

(vi)          Delivery of Units or other Securities and Payment by Participant of Consideration. Notwithstanding anything in the Plan or any Award Agreement to the contrary, delivery of Units pursuant to the exercise or vesting of an Award may be deferred for any period during which, in the good faith determination of the Committee, the General Partner is not reasonably able to obtain Units to deliver pursuant to such Award without violating applicable law or the applicable rules or regulations of any governmental agency or authority or securities exchange. No Units or other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including, without limitation, any exercise price or tax withholding) is received by the General Partner.

 

(vii)         Change of Control. Except as otherwise provided in this paragraph (vii) or as otherwise provided by the Committee pursuant to Section 7(c), Awards under the Plan will vest or become exercisable, as applicable, upon a Change of Control.  No Award that constitutes a “deferral of compensation” within the meaning of Treasury Regulation Section 1.409A-1(b), whether by design, due to a subsequent modification in the terms and conditions of such Award or as a result of a change in applicable law following the date of grant of such Award, and that is not exempt from Section 409A of the Code pursuant to an applicable exemption (any such Award, a “409A Award”) shall become exercisable, or be settled or otherwise paid or distributed, pursuant to the Plan or the applicable Award Agreement, as a result of a Change of Control, unless the event constituting such Change of Control also constitutes a “change in the ownership or effective control” or “a change in the ownership of a substantial portion of the assets” of the General Partner or the Partnership within the meaning of Treasury Regulation Section 1.409A-3(i)(5); except that, to the extent permitted under Section 409A and the Treasury Regulations promulgated thereunder, the time of exercise, payment or settlement of a 409A Award shall be accelerated, or payment shall be made under the Plan in respect of such Award, upon the occurrence of a Change of Control, as determined by the Committee in its discretion, to the extent necessary to pay income, withholding, employment or other taxes imposed on such 409A Award. To the extent any 409A Award does not become exercisable or is not settled or otherwise payable upon a Change of Control as a result of the limitations described in the preceding sentence, it shall become exercisable or be settled or otherwise payable upon the occurrence of an

 

10

 

event that qualifies as a permissible time of distribution in respect of such 409A Award under Section 409A and the Treasury Regulations promulgated thereunder, the Plan and the terms of the governing Award Agreement.

 

(viii)        Additional Agreements. Each Employee, Consultant or Director to whom an Award is granted under this Plan may be required to agree in writing, as a condition to the grant of such Award or otherwise, to subject an Award that is exercised or settled following such Person’s termination of services with the General Partner, the Partnership or their Affiliates to a general release of claims and/or a noncompetition agreement in favor of the General Partner, the Partnership, and their Affiliates, with the terms and conditions of such agreement(s) to be determined in good faith by the Committee.

 

Section 7.              Amendment and Termination. Except to the extent prohibited by applicable law:

 

(a)           Amendments to the Plan. Except as required by the rules of the principal securities exchange on which the Units are traded and subject to Section 7(b), the Board may amend, alter, suspend, discontinue, or terminate the Plan in any manner, including increasing the number of Units available for Awards under the Plan, without the consent of any partner, Participant, other holder or beneficiary of an Award, or any other Person.

 

(b)           Amendments to Awards. Subject to Section 7(a), the Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided no change, other than pursuant to Section 4(c) or 7(c), in any Award shall materially reduce the benefit to a Participant without the consent of such Participant. Notwithstanding the foregoing, the Board may amend the Plan or an Award to cause such Award to be exempt from Code Section 409A or to comply with the requirements of Code Section 409A or any other applicable law.

 

(c)           Actions Upon the Occurrence of Certain Events. Upon the occurrence of a Change of Control, any change in applicable law or regulation affecting the Plan or Awards thereunder, or any change in accounting principles affecting the financial statements of the Partnership, the Committee, in its sole discretion, without the consent of any Participant or holder of the Award, and on such terms and conditions as it deems appropriate, may take any one or more of the following actions in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or an outstanding Award:

 

(i)            provide for either (A) the termination of any Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of such transaction or event the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the General Partner without payment); provided, that, in the event the occurrence giving rise to the Committee’s exercise of its powers under this Section 7(c) is a transaction pursuant to which the Partnership or the General Partner is survived by a successor entity with a readily tradable security, the Committee shall not have the

 

11

 

authority to terminate and cash out any such Award pursuant to this Section 7(c)(i)(A) but will instead but required to provide for the assumption of such Awards by the successor or survivor entity in accordance with Section 7(c)(ii), or (B) the replacement of such Award with other rights or property selected by the Committee in its sole discretion;

 

(ii)           provide that such Award be assumed by the successor or survivor entity, or a parent or subsidiary thereof, or be exchanged for similar options, rights or awards covering the equity of the successor or survivor, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of equity interests and prices;

 

(iii)          make adjustments in the number and type of Units (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Awards or in the terms and conditions of (including the exercise price), and the vesting and performance criteria included in, outstanding Awards, or both;

 

(iv)          provide that such Award shall be exercisable or payable, notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and

 

(v)           provide that the Award cannot be exercised or become payable after such event, i.e., shall terminate upon such event.

 

Notwithstanding the foregoing, (i) any such action contemplated under this Section 7 shall be effective only to the extent that such action will not cause any Award that is designed to satisfy Code Section 409A to fail to satisfy such section, and (ii) with respect to an above event that is an “equity restructuring” event that would be subject to a compensation expense pursuant to FASB Accounting Standards Codification, Topic 718, the provisions in Section 4(c) shall control to the extent they are in conflict with the discretionary provisions of this Section 7.

 

Section 8.              General Provisions.

 

(a)           No Rights to Award. No Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient.

 

(b)           Tax Withholding. Unless other arrangements have been made that are acceptable to the General Partner, the Partnership or one of their Affiliates, as applicable, the General Partner, the Partnership or such Affiliate, as applicable, is authorized to withhold from any Award, from any payment due or transfer made under any Award or from any compensation or other amount owing to a Participant the amount (in cash, Units, Units that would otherwise be issued pursuant to such Award or other property) of any applicable taxes payable in respect of the grant of an Award, its exercise, the lapse of restrictions thereon, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the General Partner, the Partnership or the applicable Affiliate to satisfy its withholding obligations for the payment of such taxes. Notwithstanding the foregoing, with respect to any Participant who is subject to Rule 16b-3, such tax withholding automatically shall be effected by “netting” or withholding Units otherwise deliverable to the Participant on the vesting or payment of such Award.

 

12

 

(c)           No Right to Employment or Services. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the General Partner, the Partnership or any of their Affiliates or to remain on the Board, as applicable. Furthermore, the General Partner, the Partnership or any of their Affiliates may at any time dismiss a Participant from employment free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award Agreement or other agreement.

 

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

 

(e)           Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

 

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

 

(g)           No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the General Partner, the Partnership or any of their Affiliates and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the General Partner, the Partnership or any of their Affiliates pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the General Partner, the Partnership or such Affiliate.

 

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

 

(i)            Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

 

(j)            Facility Payment. Any amounts payable hereunder to any person under legal disability or who, in the judgment of the Committee, is unable to manage properly his financial

 

13

 

affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner that the Committee may select, and the General Partner shall be relieved of any further liability for payment of such amounts.

 

(k)           Participation by Affiliates. In making Awards to Employees employed by an entity other than the General Partner, the Committee shall be acting on behalf of such entity, and to the extent the Partnership has an obligation to reimburse such entity for compensation paid for services rendered for the benefit of the Partnership, such payments or reimbursement payments may be made by the Partnership directly to such entity.

 

(l)            Gender and Number. Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.

 

(m)          Code Section 409A. Notwithstanding any other provision of the Plan to the contrary, any Award subject to Code Section 409A is intended to satisfy the application of Code Section 409A to the Award and the Plan should be construed as such.

 

(n)           No Guarantee of Tax Consequences. None of the Board, the Committee, the Partnership nor the General Partner makes any commitment or guarantee that any federal, state or local tax treatment will (or will not) apply or be available to any Participant.

 

(o)           Specified Employee under Code Section 409A. Subject to any other restrictions or limitations contained herein, in the event that a “specified employee” (as defined under Code Section 409A and the Treasury Regulations thereunder) becomes entitled to a payment under an Award which is a 409A Award on account of a “separation from service” (as defined under Code Section 409A and the Treasury Regulations thereunder), such payment shall not occur until the date that is six months plus one day from the date of such separation from service. Any amount that is otherwise payable within the six month period described herein will be aggregated and paid in a lump sum without interest.

 

Section 9.              Term of the Plan. The Plan shall be effective on the date of its approval by the Board and shall continue until the earliest of (i) the date terminated by the Board, (ii) all Units available under the Plan have been paid to Participants, or (iii) the 10th anniversary of the date the Plan is approved by the Board. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, however, any Award granted prior to such termination, and the authority of the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such termination date.

 

Section 10.            Claw-back Policy.  All Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any Units underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Partnership or the General Partner, including, without limitation, any claw-back policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.

 

14

 

Section 11.            Adoption by Affiliates. With the consent of the Committee, any Affiliate of the Partnership or the General Partner that is not considered a single employer with the Partnership under Code Section 414(b) or Code Section 414(c) may adopt the Plan for the benefit of its Employees, Consultants or Directors by written instrument delivered to the Committee before the grant to such Affiliate’s Employees, Consultants or Directors under the Plan of any 409A Award.

 

****

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00196-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00196-of-00352.parquet"}]]