Document:

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (“Agreement”), dated as of May 20, 2013 is entered into between Royal Caribbean Cruises Ltd., a company organized and existing under the laws of Liberia (together with its successor and assigns, “Company”), and Jason T. Liberty (“Executive”).

 

Recitals

 

Executive and Company desire to enter into this Agreement for Company’s employment of Executive as a full time officer of Company, on the terms and conditions contained in this Agreement, which terms and conditions have been approved by the Compensation Committee of the Board of Directors of Company.  THIS AGREEMENT SUPERSEDES ANY PRIOR EMPLOYMENT AGREEMENT BETWEEN COMPANY AND EXECUTIVE.

 

Agreement

 

For and in consideration of the foregoing and of the mutual covenants of the parties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                      EMPLOYMENT.  Company hereby employs Executive to serve in the capacities described herein and Executive hereby accepts such employment and agrees to perform the services described herein upon the terms and conditions hereinafter set forth.

 

2.                                      TERM.  The term of this Agreement (the “Term”) shall commence on the date of this Agreement and shall continue until the occurrence of a “Termination Event”, as defined below, except that, until the occurrence of a Termination Event, at any date the Term shall consist of a period of two (2) years from that date.  As used in this Agreement, a “Termination Event” shall mean any of the events described in Section 7 hereof.

 

3.                                      POSITION, DUTIES AND LOCATION.

 

(a) Position.  Executive shall have the title appearing in the signature page of this Agreement.

 

(b) Duties and Location.  Executive’s employment duties and responsibilities will be those designated to him or her, from time to time, by Company and will, in all respects, be consistent with the duties and responsibilities of an individual serving as a full time officer of Company.  Executive will, at all times during the Term, comply with all ethics and employment policies of Company applicable to full time officers of Company, as such policies may be amended by Company from time to time, including, but not limited to any policy requiring ownership of Company equity by officers of Company.  When performing his or her duties hereunder, Executive shall report to such executive officer of the Company as may be designated by Company.  Executive agrees to devote his or her entire professional time, energy, and skills to such employment during the Term.  During the Term, Executive’s principal office, and principal place of employment, shall be in Southeast Florida.

 

 

(c) Permitted Activities.  Subject to Company’s ethics and employment policies, as from time to time constituted or amended, Executive shall (i) with the prior written approval of Company, be permitted to serve as a director of one or more other U.S. or non-U.S. companies during the Term, and (ii) engage in other charitable activities and community affairs; provided that, none of the foregoing activities shall interfere with the proper performance of his or her duties and responsibilities hereunder.

 

4.                                      COMPENSATION.

 

(a) Base Compensation.  Company shall pay Executive, and Executive agrees to accept, base compensation (“Base Compensation”) as designated from time to time in written communication from Company setting forth such Base Compensation.  Such Base Compensation shall be paid in accordance with the Company’s payroll cycle during the Term, subject to all applicable withholding taxes.  The Base Compensation may be reviewed by Company and by written notice from Company to Executive, may be increased, but not decreased, at any time during the Term at the sole discretion of Company.  No increase in the Base Compensation pursuant to this Section 4(a) shall at any time operate as a cancellation of this Agreement; any such increase shall operate merely as an amendment hereof, without any further action by Executive or Company.  If any such increase or increases shall be so authorized, all of the terms, provisions and conditions of this Agreement shall remain in effect as herein provided, except that the Base Compensation shall be deemed amended to set forth the higher amount of such Base Compensation to Executive.

 

(b) Bonus Compensation.  Executive shall be eligible to participate in any cash bonus compensation program available to full time officers of Company and eligible to receive an annual cash bonus during the Term on the same basis and under substantially the same terms as such similarly situated employees.  The bonus award of Executive shall be established from time to time by Company, in its sole and unfettered discretion.

 

(c) Equity and Long-Term Incentive Awards. Executive shall be eligible to participate in any equity or long-term incentive plans available to full time officers of Company and eligible to receive awards under such plans from time to time, as determined by Company, in its sole and unfettered discretion.  Any equity grant(s) held by Executive on the date of this Agreement shall be retained by Executive, subject to the terms and conditions of the plan(s) or agreement(s) under which such equity grant(s) were awarded or distributed.

 

5.                                      FRINGE BENEFITS.

 

(a) Generally.  Executive and his or her eligible dependents shall be entitled to participate in all pension, welfare, benefits, and fringe benefit programs or other employee perquisite programs approved by Company that now or hereafter may be made generally available to full time officers of Company and for which Executive or such dependents will qualify according to eligibility requirements under the provisions thereof.  The Company shall purchase Executive a policy of insurance on the life of Executive in the amount generally available to full time officers of Company, plus an amount equal to two (2) times Executive’s annual Base Compensation.  Benefits of any such policy of insurance shall be paid to beneficiaries designated by Executive.

 

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(b) Vacation.  During the term of this Agreement, Executive shall be entitled to paid vacation per calendar year in accordance with Company policies regarding vacation generally.

 

(c) Relocation.  If Executive is required by Company to relocate from his or her principal place of employment as set forth in Section 3(b), he or she shall be eligible for relocation benefits in accordance with Company policy regarding relocation generally available to full time officers of Company.

 

6.                                      EXPENSES.  During the period of his or her employment, Executive shall be reimbursed for his or her business-related expenses incurred on behalf of Company in accordance with the travel and entertainment expense policy of Company in effect at the time the expense was incurred.  Executive agrees to maintain such records and documentation of all such expenses to be reimbursed by Company hereunder as Company shall require and in such detail as Company may reasonably request.

 

7.                                      TERMINATION.

 

(a) Generally.  Executive’s employment under this Agreement may be terminated prior to expiration of the Term in accordance with the following paragraphs.

 

(b) Mutual.  Executive’s employment under this Agreement may be terminated upon the mutual written agreement of Company and Executive.

 

(c) Death or Disability.  In the event of the death of Executive, this Agreement shall terminate. If, during Executive’s employment under this Agreement, Executive shall become disabled, as defined by Company’s then applicable and governing long term disability plan or policy, and unable to perform his or her duties as required herein (“Disability”), then Company may, upon written notice to Executive, terminate Executive’s employment under this Agreement and this Agreement shall terminate upon such termination of employment.

 

(d) Cause.  Executive’s employment under this Agreement may be terminated by Company for Cause, as herein defined.  For purposes of this Agreement, the term “Cause” shall mean the existence or occurrence of one or more of the following conditions or events:

 

(i) Executive’s commission of fraud, deceit, misappropriation, theft, embezzlement, financial misrepresentation or other similar behavior or action in Executive’s dealings with or with respect to Company or its subsidiaries or affiliates or any entity with which Company or its subsidiaries or affiliates shall be engaged in or be attempting to engage in commerce;

 

(ii) Executive being convicted of or entering a plea of guilty or nolo contendere to any crime which constitutes a felony offense or any crime involving moral turpitude;

 

(iii) Executive’s actions or failure(s) to act constitute a material conflict of interest pursuant to Company’s ethics and employment policies, as from time to time constituted or amended;

 

(iv) Executive’s intentional, reckless, or grossly negligent conduct results in damage of a material nature to any property or business interests of Company or its subsidiaries or affiliates;

 

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(v) Executive’s actions or failure to act constitute a material breach of his or her duties hereunder; or

 

(vi) Executive’s failure to follow the lawful directives of Company, with respect to his or her duties hereunder or to comply with Company policies, as from time to time constituted or amended.

 

In the event Executive shall become the subject of an arrest, indictment, charge, or information, or any other judicial or quasi-judicial proceeding brought by any state or federal law enforcement or administrative agency, relating to the alleged commission by Executive of any crime described in Section 7(d)(ii), Company may, at its election, immediately suspend Executive, without compensation, pending an acquittal or satisfactory (to Company in its sole discretion) dismissal or other disposition of any of the foregoing.  In the event of any such acquittal or satisfactory dismissal or other disposition of charges following the suspension of Executive by Company as permitted by Section 7(d)(ii), upon reinstatement of Executive, Company’s obligation to compensate Executive during the suspension shall be the lesser of Executive’s unpaid annual Base Compensation during the period of suspension or Executive’s annual Base Compensation for a period of two (2) years from the date of the suspension.

 

No termination of Executive’s employment hereunder by Company for Cause shall be effective as a termination for Cause unless the provisions of this Section 7(d) shall first have been complied with.  Any termination of Executive’s employment by Company under this Section 7(d) shall be communicated by Notice of Termination to Executive given in accordance with Section 14 hereof.  A “Notice of Termination” means a written notice which (1) indicates the specific termination provision in this Agreement relied upon, (2) sets forth, in reasonable detail, the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (3) if the termination date is other than the date of receipt of such notice, specifies the termination date, which date shall not be more than sixty (60) calendar days after the giving of such notice.

 

Termination for Cause as a result of events set forth in Section 7(d) (i) through (iv) above shall be effective immediately upon delivery of the Notice of Termination pursuant to Section 7(a) hereof.  In the event of a Termination for Cause as a result of the events set forth in Section 7(d)(v) or (vi) above, Executive shall have fifteen (15) days (the “Cure Period”) from the date Executive receives a Notice of Termination to remedy and cure any alleged Cause supporting any termination pursuant to this Section 7(d)(v) or (vi).  If Executive fails to cure such alleged Cause within the Cure Period (during which time Company, at its sole discretion, may suspend Executive without compensation), Executive’s employment hereunder and this Agreement shall then immediately terminate for Cause.  If Executive cures the alleged Cause and Executive was suspended during the Cure Period, he or she shall be promptly reinstated and any suspended compensation shall be promptly paid to Executive.

 

(e) Without Cause.  Executive may be terminated by Company for any reason or for no reason at any time.

 

(f) Executive Termination for Good Reason.  Executive shall have the right to terminate his or her employment with the Company for Good Reason.  For purposes of this Agreement, “Good Reason” shall mean:

 

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(i)                                     the assignment to Executive of any duties inconsistent with Executive’s position (including status, offices, and titles), authority, duties or responsibilities as contemplated by this Agreement, or any other action by Company which results in a material diminution in such position, authority, duties or responsibilities, including without limitation, changes to Executive’s position in any succeeding surviving corporate entity in comparison to the position currently held with Company, excluding for this purpose isolated, insubstantial and inadvertent actions not taken in bad faith and which are remedied by Company promptly after receipt of such notice thereof given by Executive;

 

(ii)                                  any failure by Company to provide the employee with the compensation and benefits as provided for in this Agreement, other than isolated, insubstantial and inadvertent failures not occurring in bad faith and which are remedied by Company promptly after receipt of notice thereof given by Executive; or

 

(iii)                               any purported termination by Company of Executive’s employment otherwise than as expressly permitted by this Agreement.

 

No termination of Executive’s employment hereunder by Executive for Good Reason shall be effective unless the provisions of this Section 7(f) shall first have been complied with.  Any termination of Executive’s employment by Executive under this Section 7(f) shall be communicated by a Good Reason Termination Notice to Company given within thirty (30) days of the occurrence of the event listed above in accordance with Section 14.  A “Good Reason Termination Notice” means a written notice which (1) indicates the specific termination provision in this Agreement relied upon, (2) sets forth, in reasonable detail, the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (3) specifies a termination date, which date shall not be less than fifteen (15) nor more than thirty (30) calendar days after the giving of such notice. Company shall have fifteen (15) days (the “Company’s Cure Period”) from the date Company receives a Good Reason Termination Notice to remedy and cure any alleged Good Reason supporting any termination pursuant to this Section 7(f).  If Company fails to cure such alleged Good Reason within Company’s Cure Period, Executive’s employment hereunder and this Agreement shall then terminate for Good Reason as of the conclusion of Company’s Cure Period or the termination date set forth in the Good Reason Termination Notice, whichever is later.  If Company cures the alleged Good Reason, Executive shall then immediately resume his or her duties under this Agreement.

 

(g) Resignation.  Executive shall have the right to terminate his or her employment with the Company at any time for any reason whatsoever.

 

8.                                      COMPENSATION UPON TERMINATION.

 

(a) Generally.  Executive’s entitlement to compensation in the event of a Termination Event, shall be as set forth in this Section 8.

 

(b) Mutual.  If this Agreement and Executive’s employment hereunder is terminated by mutual agreement pursuant to Section 7(b) hereof, Executive’s compensation and benefits on a going forward basis shall be as agreed to by the parties at such time.

 

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(c) Death.  If this Agreement and Executive’s employment hereunder is terminated due to the death of Executive pursuant to Section 7(c), Company shall have no obligation to Executive or legal representatives of Executive other than (i) payment of termination compensation in the amount equal to two (2) times Executive’s annual Base Compensation in effect on the date of such termination, subject to applicable withholding taxes, and payable, in a lump sum(s) within sixty (60) days following the date of Executive’s death (the “Payment Date”); (ii) payment of Executive’s “target bonus,” as that term is used in Company’s current bonus plan for full time officers of Company, or its equivalent if the term or plan should be amended, which Executive would have been otherwise entitled to receive during the two (2) year period commencing on the date of such termination, payable on the Payment Date; (iii) payment of any accrued benefits or obligations owed to Executive; (iv) benefits (if any) provided in accordance with applicable plans, programs and arrangements of Company or as required by law; and (v) any outstanding equity grant(s) held by Executive at the time of such termination as governed by the agreement or plan pursuant to which such grant(s) was issued.

 

(d) Disability.  If Executive incurs a Disability,  Company shall have no obligation to Executive or legal representatives of Executive other than (i) payment of termination compensation in the amount equal to two (2) times Executive’s annual Base Compensation in effect on the date of the determination of the Disability, subject to applicable withholding taxes, and payable, subject to Section 8(g), in accordance with Company’s payroll cycle during the two (2) year period commencing on the date of the determination of the Disability; (ii) payment of the Executive’s “target bonus,” as that term is used in Company’s current bonus plan for full time officers of Company, or its equivalent if the term or plan should be amended, which Executive would have been otherwise entitled to receive each year during the two (2) year period commencing on the date of the determination of the Disability, payable, subject to Section 8(g), in each of the two years following the year of the determination of the Disability; (iii) payment of any accrued benefits or obligations owed to Executive; (iv) benefits (if any) provided in accordance with applicable plans, programs and arrangements of Company or as required by law; and (v) any outstanding equity grant(s) held by Executive at the time of such termination as governed by the agreement or plan pursuant to which such grant(s) was issued.

 

The terms of this Section 8(d) to the contrary notwithstanding, in the event that Executive’s disability satisfies the definition of disability under Section 409A of the Internal Revenue Code, Company shall pay the amounts specified in subsections (i) and (ii) of this Section 8(d) in a lump sum(s) within sixty (60) days following the date of determination of such Disability.

 

(e) Cause.  If this Agreement and Executive’s employment hereunder is terminated for Cause pursuant to Section 7(d) hereof, Company shall have no obligation to Executive or legal representatives of Executive other than (i) payment of Executive’s Base Compensation through such date of termination; (ii) payment of any accrued benefits or obligations owed to Executive; (iii) benefits (if any) provided in accordance with applicable plans, programs and arrangements of Company or as required by law; (iv) any outstanding equity grant(s) held by Executive at the time of such termination as governed by the agreement or plan pursuant to which such grant(s) was issued.

 

(f) Without Cause or for Good Reason.

 

A.                                    If this Agreement and Executive’s employment hereunder is terminated without Cause pursuant to Section 7(e) hereof or terminated by Executive for Good Reason

 

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pursuant to Section 7(f) hereof, Company shall have no obligation to Executive or legal representatives of Executive other than (conditioned upon Section 8(f)(B) below):

 

(i) payment of termination compensation in an amount equal to (a) two (2) times Executive’s annual Base Compensation in effect on the date of such termination (the “Base Compensation Severance”), plus (b) an amount equal to two (2) times Executive’s “target bonus” (as that term is used in the current bonus plan applicable to full time officers of Company, or its equivalent if the term or plan should be amended) for the year of such termination (the “Bonus Severance”).  The Base Compensation Severance shall be payable as follows: (x) an amount equal to the maximum separation pay amount for the Executive determined under Treas. Reg. § 1.409A-1(b)(9)(iii) and (v)(D) for the year in which the termination of employment occurs shall be paid over the two-year period following the date of termination and (y) the amount equal to the total amount of Base Compensation Severance, less the amount set forth in the preceding clause (x), shall be paid over the period commencing on the date of termination and ending on December 31 of the year following the year of termination.  All payments of Base Compensation Severance shall be payable in accordance with the Company’s payroll cycle in substantially equal amounts determined separately for each of the two payment periods designated in the foregoing clauses (x) and (y), commencing on the date of termination, subject to Section 8(f)(B) and Section 8(g).  The Bonus Severance shall be payable as follows:  (I) fifty percent (50%) of the Bonus Severance shall be paid in the February immediately following the date of termination and (II) fifty percent (50%) of the Bonus Severance shall be paid in the earlier of (x) the second February immediately following the date of termination or (y) the December of the year following the year in which the termination occurs.  All payments of Base Compensation Severance and Bonus Severance shall be subject to applicable withholding taxes.

 

(ii) continued coverage of medical benefits at the same cost as similarly situated active employees for a period of two (2) years or until such time as Executive commences new employment, whichever occurs first;

 

(iii) payment of any accrued benefits or obligations owed to Executive;

 

(iv) benefits (if any) provided in accordance with applicable plans, programs and arrangements of Company or as required by law;

 

(v) payment of reasonable professional search fees relating to Executive’s outplacement; and

 

(vi) any outstanding equity grant(s) held by Executive at the time such termination as governed by the agreement or plan pursuant to which such grant(s) was issued.

 

B.                                    In consideration of the compensation and benefits payable to Executive pursuant to subsections (i), (ii), and (v) of Section 8(f)(A), Executive shall, as a condition to payment of such compensation and benefits, execute a general release, in form and substance reasonably acceptable to the Company, releasing the Company and its affiliates from all claims and liabilities Executive may have against the Company in connection with Executive’s employment by the Company, except for any accrued obligations.  Except as otherwise provided in Section 8(g), the commencement of payments due under Sections 8(f)(A)(i)(x) and (y) shall commence no later than 60 days of the date of such termination provided that the Executive has executed and submitted the release and the period for revocation of the release pursuant to applicable law has expired within the 60-day period.  In any case where the period for execution

 

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and revocation of the release begins in one calendar year and ends in another calendar year, the commencement of payments shall be deferred until the second calendar year regardless of whether the release is executed in the first calendar year.  The aggregate of any amounts deferred pursuant to this Section 8(f)(B) shall be paid in one lump sum on the first payroll date on which payments commence hereunder.  Under no circumstances shall the Executive be permitted to designate the calendar year in which the payments commence.

 

(g)                                  Six-Month Deferral.  If Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Internal Revenue Code, Executive shall not be paid the amounts that would otherwise be payable to Executive pursuant Section 8(d)(i) and 8(d)(ii) or 8(f)(A)(i), as the case may be, for the first six months following termination of Executive’s employment.  The aggregate of such amounts shall instead be paid in one lump sum immediately following the expiration of the six month period.  The preceding payment restriction shall not apply to the extent that any portion of such payment, if made during the first six-month period, would be treated as exempt from the provisions of Section 409A or would otherwise be treated as permitted deferred compensation pursuant to any other applicable provisions of Section 409A or the rules and regulations promulgated thereunder (for example, as separation pay due to an involuntary termination pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations).

 

(h)                                 Resignation.  If this Agreement and Executive’s employment hereunder is terminated due to his or her resignation pursuant to Section 7(g) hereof, Company shall have no obligation to Executive or legal representatives of Executive other than (i) the payment of Executive’s Base Compensation through such date of termination; (ii) the payment of any accrued benefits or obligations owed to Executive; and (iii) benefits (if any) provided in accordance with applicable plans, programs and arrangements of Company or as required by law; and (iv) any outstanding equity grant(s) held by Executive at such time as governed by the agreement or plan pursuant to which such grant(s) was issued.

 

(i)                                     Discretionary One Time Bonus.  If this Agreement and Executive’s employment hereunder is terminated (i) by the Company without Cause, pursuant to Section 7(e) hereof; or (ii) by the Executive for Good Reason, pursuant to Section 7(f) hereof; at the conclusion of the two (2) year period commencing with the date of such termination, at the sole and unfettered discretion of the Company, Executive may be awarded a one-time termination bonus in an amount not to exceed one half of Executive’s annual Base Compensation in effect on the date of such termination, subject to applicable withholding taxes.  Such payment shall be made in a lump sum within sixty (60) days following the date of determination by the Company to make such payment.

 

(j)                                    No Mitigation.  Executive shall not be required to mitigate the amount of any payments provided for in Sections 8(f) by seeking other employment or otherwise, nor shall the amount of any payments or benefits provided for in Sections 8(f) be reduced by any compensation earned by Executive as a result of employment by another employer or by retirement benefits.

 

9.                                      CONFIDENTIAL INFORMATION.  Executive recognizes and acknowledges that he or she will have access to certain confidential information of Company, its subsidiaries and affiliates and of corporations with whom Company does business, and that such information constitutes valuable, special and unique property of Company, its subsidiaries, affiliates and such other corporations.  During the term of this Agreement and subsequent to the termination of this Agreement for any reason, Executive agrees not to disclose or use any confidential information

 

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except in the course of Executive’s employment by, and for the benefit of the Company or its subsidiaries or affiliates. “Confidential information” includes without limitation, information, observations, procedures, practices, and data, whether written or oral, regarding any of the business, operations or affairs of the Company, its subsidiaries and its affiliates, including, by way of example, strategies, planning, research, developments, product designs or specifications, manufacturing processes, “know-how,” prices, suppliers, customers, costs, workflow processes,  any knowledge or information with respect to confidential or trade secrets of Company, its subsidiaries and affiliates or any information that a reasonable person would conclude is intended to remain confidential due to its nature or the circumstances under which it was learned, it being understood that such confidential information does not include information that is publicly available unless such information became publicly available as a result of a breach of this Agreement.  Executive acknowledges and agrees that all notes, records, emails, reports, sketches, plans, unpublished memoranda or other documents belonging to Company, its subsidiaries and affiliates, but held by Executive, concerning any information relating to the business or operations of Company, its subsidiaries and affiliates, whether confidential or not, are the property of Company, its subsidiaries or affiliates and will be promptly delivered to Company upon Executive’s leaving the employ of Company or upon the request of Company at any time.

 

10.                               INTELLECTUAL PROPERTY.  As used in this Section 10 and the following Section 11, it is understood that “Business” is the actual or intended vacation cruise business of Company, its subsidiaries and affiliates (including ancillary vacation cruise related operations of Company, its subsidiaries and affiliates such as tours expeditions and destination vacations), as such Business is expanded or modified during the term of Executive’s employment.  Executive acknowledges and agrees that all discoveries, inventions, designs, improvements, formulas, formulations, ideas, devices, writings, publications, study protocols, study results, computer data or programs, or other intellectual property, whether or not subject to patent or copyright laws, which Executive shall conceive solely or jointly with others, in the course or scope of his or her employment with Company or its subsidiaries or affiliates or in any way related to the Business, whether during or after working hours, or with the use of equipment, materials or facilities of Company or its subsidiaries or affiliates (collectively referred to herein as “Intellectual Property”), shall be the sole and exclusive property of Company or its subsidiaries or affiliates without further compensation to Executive.  For purposes of this Agreement, any Intellectual Property, based upon proprietary or confidential information of Company, its subsidiaries or affiliates, developed within six (6) months after the termination of Executive’s employment, shall be presumed to be the property of Company, its subsidiaries or affiliates.  Executive agrees to promptly notify Company and fully disclose the nature of such Intellectual Property.  Executive shall take such steps as are deemed necessary to maintain complete and current records thereof, and Executive shall assign to Company or its designees, the entire right, title and interest in said Intellectual Property.

 

11.                               NON-COMPETITION.  Executive acknowledges that his or her services to be rendered hereunder are of a special and unusual character that have a unique value to Company and the conduct of its Business, the loss of which cannot adequately be compensated by damages in an action at law.  In view of the unique value to Company of the services of Executive for which Company has contracted hereunder, and because of the confidential information to be obtained by or disclosed to Executive as herein above set forth, and as a material inducement to Company to enter into this Agreement and to pay and make available to Executive the compensation and other benefits referred to herein, Executive covenants and agrees that Executive will not, directly

 

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or indirectly, whether as principal, agent, trustee or through the agency of any corporation, partnership, association or agent (other than as the holder of not more than five percent (5%) of the total outstanding stock of any company the securities of which are traded on a regular basis on recognized securities exchanges):

 

(a) while employed under this Agreement (i) work for (in any capacity, including without limitation as a director, officer or employee) any other entity engaged in cruises, with a minimum fleet size of 3,000 berths, or cruise related businesses of any such entity or (ii) recruit, or otherwise influence or attempt to induce employees of Company to leave the employment of Company; and

 

(b) for the two (2) year period immediately following the termination of Executive’s employment pursuant to this Agreement (the “Non-competition Period”), for any reason, serve as or be a consultant to or employee, officer, agent, director or owner of another entity engaged in cruises, with a minimum fleet size of 3,000 berths, or cruise related businesses of any such entity.  Executive further agrees that during the Non-competition Period, he or she shall not:  (i) employ or seek to employ any person who is then employed or retained by Company or its affiliates (or who was so employed or retained at any time within the six (6) month period prior to the last day of Executive’s employment with Company); or (ii) solicit, induce, or influence any proprietor, partner, stockholder, lender, director, officer, employee, joint venturer, investor, consultant, agent, lessor, supplier, customer or any other person or entity which has a business relationship with Company or its affiliates at any time during the Non-competition Period, to discontinue or reduce or modify the extent of such relationship with Company or any of its subsidiaries.

 

Executive has carefully read and considered the provisions of Sections 9, 10, and 11 hereof and agrees that the restrictions set forth in such sections are fair and reasonable and are reasonably required for the protection of the interests of Company, its officers, directors, shareholders, and other employees, for the protection of the business of Company, and to ensure that Executive devotes his or her entire professional time, energy, and skills to the business of Company.  Executive acknowledges that he or she is qualified to engage in businesses other than that described in this Section 11.  It is the belief of the parties, therefore, that the best protection that can be given to Company that does not in any way infringe upon the rights of Executive to engage in any unrelated businesses is to provide for the restrictions described above.  In view of the substantial harm which would result from a breach by Executive of Sections 9, 10 and 11, the parties agree that the restrictions contained therein shall be enforced to the maximum extent permitted by law as more particularly set forth in Section 13 below.  In the event that any of said restrictions shall be held unenforceable by any court of competent jurisdiction, the parties hereto agree that it is their desire that such court shall substitute a reasonable judicially enforceable limitation in place of any limitation deemed unenforceable and that as so modified, the covenant shall be as fully enforceable as if it had been set forth herein by the parties.

 

12.                               NON-DISPARAGEMENT.  During the duration of the Term and any Non-competition Period, Executive agrees that he or she shall not, at any time, make derogatory statements about the Company or its affiliates or otherwise disparage the business, name or reputation of the Company or its affiliates.

 

13.                               REMEDIES.  The provisions of Sections 9, 10, 11 and 12 of this Agreement shall survive the termination of this Agreement as set forth therein, regardless of the circumstances or reasons for such termination, and inure to the benefit of Company.  The restrictions set forth in Sections

 

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9, 10 and 11 and 12 are considered to be reasonable for the purposes of protecting the business of Company.  Company and Executive acknowledge that Company would be irreparably harmed and that monetary damages would not provide an adequate remedy to Company if the covenants contained in Sections 9, 10 and 11 and 12 were not complied with in accordance with their terms.  Accordingly, Executive agrees that Company shall be entitled to injunctive and other equitable relief to secure the enforcement of these provisions, in addition to any other remedy which may be available to Company.  The Company shall be entitled to receive from Executive reimbursement for reasonable attorneys’ fees and expenses incurred by Company in successfully enforcing these provisions to final judgment and Executive shall be entitled to receive from Company reasonable attorney’s fees and expenses incurred by Executive in the event Company is found to be not entitled to enforcement of these provisions.

 

14.                               NOTICES.  Any notice required or permitted to be given under this Agreement shall be in writing and sent by an overnight courier service that provides proof of receipt, mailed by registered or certified mail (postage prepaid, return receipt requested) or telecopied to the parties at the addresses below (or to such other address as either party shall designate by like notice):

 

	
 
    	
If to Executive:  To the address   set forth below his or her signature on the signature page hereof.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
With a copy to:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Telephone:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Facsimile:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
If to Company:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Royal Caribbean Cruises Ltd.
    	
 
    	
 
    
	
 
    	
1050 Caribbean Way
    	
 
    	
 
    
	
 
    	
Miami, FL 33132
    	
 
    	
 
    
	
 
    	
Attention:
    	
General Counsel
    	
 
    	
 
    
	
 
    	
Telephone:
    	
(305) 539-6000
    	
 
    	
 
    
	
 
    	
Facsimile:
    	
(305) 539-0562
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
With a copy to:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Royal Caribbean Cruises Ltd.
    	
 
    	
 
    
	
 
    	
1050 Caribbean Way
    	
 
    	
 
    
	
 
    	
Miami, FL 33132
    	
 
    	
 
    
	
 
    	
Attention:
    	
Vice President and
    	
 
    	
 
    
	
 
    	
 
    	
Global Chief Human Resource Officer
    	
 
    	
 
    
	
 
    	
Telephone:
    	
(305) 539-6000
    	
Facsimile:  (305) 539-0562
    	
 
    	
 
    
							

 

15.                               ENTIRE AGREEMENT; MODIFICATION.

 

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(a) This Agreement contains the entire agreement of Company and Executive with respect to the subject matter hereof, and Company and Executive hereby acknowledge and agree that this Agreement supersedes any prior statements, writings, promises, understandings or commitments with respect to the subject matter hereof.

 

(b) No future oral statements, promises or commitments with respect to the subject matter hereof, or other purported modification hereof, shall be binding upon the parties hereto unless the same is reduced to writing and signed by each party hereto.

 

16.                               ASSIGNMENT.  The rights and obligations of Company under this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs (in the case of Executive) and assigns.  No rights or obligations of Company under this Agreement may be assigned or transferred by Company, except that such rights or obligations may be assigned or transferred pursuant to a merger, consolidation or other combination, reconstruction or amalgamation or a sale or liquidation of all or substantially all of the business and assets of Company.  Executive may not assign his or her rights and obligations under this Agreement other than his or her rights to compensation and benefits, which may be transferred only by will or operation of law.

 

17.                               LEGAL EXPENSES.  Each party shall pay for all expenses incurred on its behalf in connection with this Agreement.

 

18.                               CONTINUATION OF PAYMENTS DURING DISPUTE.  Pending the resolution of any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including any question regarding its existence, validity or termination, or regarding a breach thereof or indemnification thereunder, Executive (and his or her successor and heirs) shall continue to receive all payments and benefits due under this Agreement or otherwise, except:  (i) to the extent a court of competent jurisdiction or arbiter, otherwise expressly provides, (ii) if the nature or basis of the dispute of any aspect thereof pertains to or involves payments or monies owed by Executive to Company (including payments or monies claimed by Company as being owed by Executive) Company may suspend payments to Executive pending resolution of such dispute, controversy or claim, (iii) if the nature or basis of the dispute or any aspect thereof pertains to or involves the Executive’s violation or alleged violation of the provisions of Sections 9, 10 and 11 and 12 of this Agreement, Company may suspend payments to Executive pending resolution of such dispute, controversy or claim, or (iv) as otherwise permitted elsewhere in this Agreement.

 

19.                               DISPUTE RESOLUTION.  Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including any question regarding its existence, validity or termination, or regarding a breach thereof or indemnification thereunder (a “Dispute”) shall be resolved pursuant to the following:

 

(a) Any party (a “Disputing Party”) may initiate consideration of a Dispute hereunder by giving written notice to the other party of the existence of a Dispute (a “Dispute Notice”).  Such notice shall set forth in reasonable detail the nature of the Dispute to be considered and shall be accompanied by a full disclosure of all factual evidence then available to the Disputing Party and by a statement of the applicable legal basis of the dispute; provided, however, that (i) to provide any such disclosure or to state any legal basis shall not operate as a waiver of such legal basis or operate to preclude the presentation or introduction of such factual evidence at a later time or in any subsequent proceeding or litigation or otherwise constitute a waiver of any

 

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right that a party may then or thereafter possess; and (ii) any settlement proposal made or proposed shall be deemed to have been made or proposed as part of a settlement discussion and may not be introduced in a legal proceeding without the prior written consent of the party making such proposal.  The parties shall thereafter engage in good faith negotiations between themselves or their representatives for a period not to exceed thirty (30) days.

 

(b) Upon the giving or receipt of a Dispute Notice and the expiration of the thirty (30) day period provided in Section 19(a) hereof, during which good faith negotiations must have taken place, the parties may then commence arbitration in accordance with this Section 19(b) and subsequent subsections.  Any dispute or claim arising from or relating to this Agreement, any dispute or claim arising from the rights and obligations created under this Agreement, or any dispute or claim relating to the breach of this Agreement, shall be settled by binding arbitration pursuant to the Commercial Arbitration Rules (and not the National Rules for the Resolution of Employment Disputes) of the American Arbitration Association.  A party with a dispute or claim shall provide written notice requesting dispute resolution pursuant to this Section (the “Notice”).  The arbitration panel shall be composed of three (3) arbitrators. The arbitration proceedings shall be conducted in Miami, Florida.  Each party shall appoint one arbitrator within fourteen (14) calendar days from the receipt of Notice.  These two arbitrators shall appoint the third arbitrator by mutual agreement within fourteen (14) calendar days of their own appointment.  If the two (2) arbitrators appointed by the parties cannot agree on the third arbitrator within the specified time frames, the American Arbitration Association shall appoint one or more qualified arbitrators, as the case may be, as provided for in the Commercial Arbitration Rules of the American Arbitration Association.

 

(c) Subject to the last sentence of this Section 19(c), each party shall be liable for 50% of the costs of the arbiters and of any other costs of the arbitration proceeding itself.  If either party refuses to pay such costs and the other party makes payment of all costs which would otherwise be due, the arbitration panel shall enter an award in favor of the party which complies with its obligation to pay such costs.  In accordance with Section 21(d) hereof, upon the entering of an award, the arbitration panel shall award the prevailing party all of its legal fees and costs incurred with respect to prosecuting or defending its case, including its share of the costs of the arbitration proceeding itself.

 

(d) The arbitration proceedings shall in all events include the right to a hearing, the right to cross-examine witnesses giving oral or written testimony, and the right to subpoena witnesses to testify at the hearing.

 

(e) The arbitration shall be final and binding on the parties without any right to appeal in any court of law.

 

(f) The covenant to arbitrate set forth in this Section 19 shall continue in effect after the expiration or termination of this Agreement.

 

(g) Notwithstanding any other provision in this Section 19, the Company shall be entitled to seek preliminary or permanent injunctive relief, or such other equitable relief, in a court of competent jurisdiction, in order to address and remedy violations or alleged violations by the Executive or the provisions of Sections 9, 10 and 11 and 12 of this Agreement.

 

20.                               INDEMNIFICATION.  Company shall defend and indemnify Executive, in accordance with the then governing Articles of Incorporation, as amended, and Bylaws, as amended, of

 

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Company, for any civil or dispute resolution proceeding involving Executive, by reason of the fact that Executive is or was serving as an officer of Company or is or was otherwise serving at the request of Company.

 

21.                               MISCELLANEOUS.

 

(a) This Agreement shall be subject to and governed by the laws of the State of Florida, without regard to the conflicts of laws principles thereof.

 

(b) The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or the interpretation of this Agreement.

 

(c) The failure of any party to enforce any provision of this Agreement shall in no manner affect the right to enforce the same, and the waiver by any party of any breach of any provision of this Agreement shall not be construed to be a waiver by such party of any succeeding breach of such provision or a waiver by such party of any breach of any other provision.

 

(d) In any dispute, arbitration and/or litigation arising out of this Agreement, including appeals, the prevailing party shall be entitled to recover all legal fees and costs incurred in such dispute, arbitration and/or litigation.

 

(e) In the event any one or more of the provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable valid, and enforceable provision which comes closest to the intent of the parties.

 

(f) This Agreement may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year first above written.

 

	
 
    	
ROYAL CARIBBEAN CRUISES LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Maria R. Del Busto
    
	
 
    	
 
    	
Maria R. Del Busto
    
	
 
    	
 
    	
Vice President & Global
    
	
 
    	
 
    	
Chief Human Resources Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
/s/ Jason T. Liberty
    
	
 
    	
Jason T. Liberty
    
	
 
    	
Title: Senior Vice President, CFO
    
	
 
    	
Address:
    
				

 

14Exhibit 10.1

 

PHILLIPS 66 PARTNERS LP

2013 INCENTIVE COMPENSATION PLAN

 

1. Objectives. This Phillips 66 Partners LP 2013 Incentive Compensation Plan (the “Plan”) has been adopted by Phillips 66 Partners GP LLC, a Delaware limited liability company (the “Company”), the general partner of Phillips 66 Partners LP, a Delaware limited partnership (the “Partnership”) in order to compensate Employees, Officers and Directors with a high degree of training, experience and ability; to attract new Employees, Officers and Directors whose services are considered particularly valuable to the business of the Company; to encourage the sense of proprietorship of such persons; and to promote the active interest of such persons in the development and financial success of the Partnership, the Company and their Affiliates. These objectives are to be accomplished by making Awards under this Plan and thereby providing Participants with a proprietary interest in, and alignment with, the growth and performance of the Partnership, the Company and their Affiliates.

 

2. Definitions. As used herein, the terms set forth below shall have the following respective meanings:

 

“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.

 

“ASC Topic 718” means Accounting Standards Codification Topic 718, Compensation — Stock Compensation, or any successor accounting standard.

 

“Authorized Officer” means the Chief Executive Officer of the Company (or any other officer of the Company to whom he or she shall delegate).

 

“Award” means an Option, Restricted Unit, Phantom Unit, DER, Substitute Award, Unit Appreciation Right, Other Unit-Based Award, Performance Unit or Profits Interest Unit granted under the Plan.

 

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

 

“Board” means the board of directors or board of managers, as the case may be, of the Company.

 

“Cause” means, unless otherwise set forth in an Award Agreement or other written agreement between the Company and the applicable Participant, a finding by the Committee, before or after the Participant’s termination of Service, of: (i) any material failure by the Participant to perform the Participant’s duties and responsibilities under any written agreement between the Participant and the Company or its Affiliate(s); (ii) any act of fraud, embezzlement, theft or misappropriation by the Participant relating to the Company, the Partnership or any of their Affiliates; (iii) the Participant’s commission of a felony or a crime involving moral turpitude; (iv) any gross negligence or intentional misconduct on the part of the Participant in the conduct of the Participant’s duties and responsibilities with the Company or any Affiliate(s) of the Company or which adversely affects the image, reputation or business of the Company, the Partnership or their Affiliates; or (v) any material breach by the Participant of any agreement between the Company or any of its Affiliates, on the one hand, and the Participant on the other. The findings and decision of the Committee with respect to such matter, including those regarding the acts of the Participant and the impact thereof, will be final for all purposes.

 

“Change in Control” means and shall be deemed to have occurred upon the occurrence of one or more of the following events:  (i) any Person or group, other than Phillips 66 or its Affiliates, becomes the beneficial owner, by way of merger, consolidation, recapitalization or otherwise, of 50% or more of the combined voting power of the equity interests in the Company or the Partnership, (ii) the limited partners of the Partnership approve, in one or a series of transactions, a plan of complete liquidation of the Partnership, (iii) the sale or other disposition by either the Company or the Partnership of all or substantially all of its assets in one or more transactions to any person other than the Company or an Affiliate of the Company, (iv) a transaction resulting in a Person other than the Company, Phillips 66 or one of their Affiliates being the general partner of the Partnership, (v) a transaction resulting in the general partner of the Partnership ceasing to be an Affiliate of Phillips 66, or (vi) a “Change in Control” as defined in the 2013 Omnibus Stock and Performance Incentive Plan of Phillips 66, as such plan may be amended,

 

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supplemented, restated or succeeded.  Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award which provides for the deferral of compensation and is subject to Section 409A, the transaction or event with respect to such Award must also constitute a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5), and as relates to the holder of such Award, to the extent required to comply with Section 409A.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commission” means the United States Securities and Exchange Commission or any successor organization.

 

“Committee” means the Board, except that it shall mean such committee or sub-committee of the Board as may be appointed by the Board to administer the Plan, or as necessary to comply with applicable legal requirements or listing standards.

 

“Director” means a member of the board of directors or board of managers, as the case may be, of the Company, the Partnership or any of their Affiliates who is not an Officer or other employee of the Company, the Partnership or any of their Affiliates, provided that such person is eligible to receive Awards that may be registered under a Registration Statement on Form S-8 (or any successor form) in accordance with applicable Commission or other rules or regulations.

 

“Disability” means a disability for which the Participant has been determined to be entitled to either (a) benefits under the applicable plan of long-term disability of the Company, the Partnership or any of their Affiliates or (b) disability benefits under the Social Security Act.  In the absence of any such determination, the Committee or its delegate may make a determination that a Participant has a Disability.  If a Disability constitutes a payment event with respect to any Award which provides for the deferral of compensation and is subject to Section 409A, then, to the extent required to comply with Section 409A, the Participant must also be considered “disabled” within the meaning of Section 409A(a)(2)(C) of the Code.

 

“Distribution Equivalent Right” or “DER” means a contingent right to receive an amount in cash, Units, Restricted Units and/or Phantom Units equal in value to the distributions made by the Partnership with respect to a Unit during the period such Award is outstanding.

 

“Employee” means an employee of the Company, the Partnership or any of their Affiliates, provided that such employee is eligible to receive Awards that may be registered under a Registration Statement on Form S-8 (or any successor form) in accordance with applicable Commission or other rules or regulations. The term Employee under this Plan may also include any other individual, such as a consultant, who may be considered an “employee” under a Registration Statement on Form S-8 (or any successor form) in accordance with applicable Commission or other rules or regulations.

 

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

 

“Fair Market Value” of a Unit means, as of a particular date: (i) if the Units are listed on a national securities exchange, the mean between the highest and lowest sales price per Unit on the consolidated transaction reporting system for the principal national securities exchange on which the Units are listed on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale is so reported, or, at the discretion of the Committee, any other reasonable and objectively determinable method based on the listed price per Unit which reflects the price prevailing on the exchange at the time of grant; (ii) if the Units are not so listed but are quoted on a national securities market, the closing sales price per Unit reported on such market for such date, or, if there shall have been no such sale so reported on that date, on the next succeeding date on which such a sale is so reported; or (iii) if the Units are not so listed or quoted, the most recent value determined by an independent appraiser appointed by the Company for such purpose. For any determination of Fair Market Value, if the commitment to measure the Fair Market Value is based on the average trading price over a specified period, such period cannot extend more than thirty (30) days before or thirty (30) days after the grant date and such commitment must be irrevocably established for specified Awards before the beginning of such period.

 

“Officer” means any individual who is appointed or elected to serve as an officer of the Company, the Partnership or any of their Affiliates, provided that such individual is eligible to receive Awards that may be registered under a Registration Statement on Form S-8 (or any successor form) in accordance with applicable Commission or other rules or regulations.

 

“Option” means an option to purchase Units granted pursuant to 6(a) of the Plan.

 

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“Other Unit-Based Award” means an Award granted pursuant to 6(f) of the Plan.

 

“Participant” means an Employee, Officer or Director granted an Award under the Plan and any authorized transferee of such individual.

 

“Partnership Agreement” means the Agreement of Limited Partnership of the Partnership, as it may be amended or amended and restated from time to time.

 

“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.

 

“Phantom Unit” means a notional interest granted under the Plan that, to the extent vested, 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.

 

“Phillips 66” means Phillips 66, a Delaware corporation, or its successor.

 

“Plan Year” means the calendar year.

 

“Profits Interest Unit” means to the extent authorized by the Partnership Agreement, an interest in the Partnership that is intended to constitute a “profits interest” within the meaning of the Code, Department of Treasury Regulations promulgated thereunder and any published guidance by the Internal Revenue Service with respect thereto.

 

“Recoupment Provision” means any clawback or recovery provision required by applicable law including United States federal and state securities laws or by any national securities exchange on which the Units of the Partnership are listed or any applicable regulatory requirement, or as set forth in any individual Award Agreement under the Plan.

 

“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.

 

“Restricted Unit” means a Unit granted pursuant to 6(b) of the Plan that is subject to a Restricted Period.

 

“Retirement” means termination of Service of an Employee on or after the time at which the Employee has attained age 55 and completed five years of service with the Partnership, the Company or their Affiliates, as applicable. Service is defined by the policies of the Partnership, the Company or their Affiliates.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

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

 

“Section 409A” means Section 409A of the Code and the Department of Treasury Regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date (as defined in 9 below).

 

“Service” means service as an Employee, Officer or Director.  The Committee, in its sole discretion, shall determine the effect of all matters and questions relating to terminations of Service, including, without limitation, the question of whether and when a termination of Service occurred and/or resulted from a discharge for Cause, and all questions of whether particular changes in status or leaves of absence constitute a termination of Service, provided that a termination of Service shall not be deemed to occur in the event of (a) a termination where there is simultaneous commencement by the Participant of a relationship with the Partnership, the Company or any of their Affiliates as an Employee, Officer or Director or (b) at the discretion of the Committee, a termination which results in a temporary severance of the service relationship.

 

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

 

“Unit” means a common unit of the Partnership.

 

“Unit Appreciation Right” or “UAR” means a contingent right that entitles the holder to receive the excess of the Fair Market Value of a Unit on the exercise date of the UAR over the exercise price of the UAR. Such excess value may take the form of Units or cash as determined by the Committee.

 

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

 

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3. Administration.

 

(a) The Plan shall be administered by the Committee, subject to subsection (b) below; provided, however, that in the event that the Board is not also serving as the Committee, the Board, in its sole discretion, may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan. The governance of the Committee shall be subject to the charter, if any, of the Committee as approved by the Board. 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 the Company, the Partnership, any of their Affiliates, any Participant and any beneficiary of any Participant.

 

(b) To the extent permitted by applicable law and the rules of any securities exchange on which the Units are listed, quoted or traded, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or one or more Officers the authority to grant or amend Awards or to take other administrative actions pursuant to 3(a); provided, however, that in no event shall an Officer be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (i) individuals who are subject to Section 16 of the Exchange Act, or (ii) Officers (or Directors) to whom authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent that it is permissible under applicable provisions of the Code and applicable securities laws and the rules of any securities exchange on which the Units are listed, quoted or traded. Any delegation hereunder shall be subject to such restrictions and limitations as the Board or Committee, as applicable, specifies at the time of such delegation, and the Board or Committee, as applicable, may at any time rescind the authority so delegated or appoint a new delegate.

 

4. Units Available for Awards.

 

(a) Limits on Units Deliverable. Subject to adjustment as provided in 4(c), the number of Units that will be available to be delivered with respect to Awards under the Plan is 2,500,000 common units. If any Award is forfeited, canceled, or otherwise terminates or expires without the actual delivery of Units pursuant to such Award (for the avoidance of doubt, the grant of Restricted Units is not a delivery of Units for this purpose unless and until such Restricted Units vest and any restrictions placed upon them under the Plan lapse), then to the extent of such forfeiture, cancellation, termination or expiration, the Units subject to such Award shall again be available for Awards under the Plan. To the extent permitted by applicable law and securities exchange rules, Substitute Awards and Units issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Partnership or any Affiliate thereof shall not be counted against the Units available for issuance pursuant to the Plan. There shall not be any limitation on the number of Awards that may be paid in cash.  Awards that are valued by reference to Units that may be settled in cash will reduce the number of Units available for issuance pursuant to the Plan.

 

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

 

(c) Anti-dilution Adjustments.

 

(i) Equity Restructuring. With respect to any “equity restructuring” event that could result in an additional compensation expense to the Company or the Partnership pursuant to the provisions of 

 

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ASC 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 event and shall adjust the number and type of Units (or other securities or property) with respect to which Awards may be granted under the Plan after such event. With respect to any other similar event that would not result in an ASC Topic 718 accounting charge if the adjustment to Awards with respect to such event were subject to discretionary action, the Committee shall have complete discretion to adjust Awards and the number and type of Units (or other securities or property) with respect to which Awards may be granted under the Plan in such manner as it deems appropriate with respect to such other event.

 

(ii) Other Changes in Capitalization. In the event of any non-cash distribution, Unit split, combination or exchange of Units, merger, consolidation or distribution (other than normal cash distributions) of Partnership assets to unitholders, or any other change affecting the Units of the Partnership, other than an “equity restructuring,” the Committee may make equitable adjustments, if any, to reflect such change with respect to (A) the aggregate number and kind of Units that may be issued under the Plan; (B) the number and kind of Units (or other securities or property) subject to outstanding Awards; (C) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (D) the grant or exercise price per Unit for any outstanding Awards under the Plan.

 

5. Eligibility.

 

In the sole discretion of the Committee, any Employee, Officer or Director shall be eligible to be designated a Participant and receive an Award under the Plan.

 

6. Awards.

 

(a) Options and UARs. The Committee shall have the authority to determine the Employees, Officers, and Directors to whom Options and/or UARs shall be granted, the number of Units to be covered by each Option or UAR, the exercise price therefor, the Restricted Period and other conditions and limitations applicable to the exercise of the Option or UAR, 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. Options which are intended to comply with Treasury Regulation Section 1.409A-1(b)(5)(i)(A) and UARs which are intended to comply with Treasury Regulation Section 1.409A-1(b)(5)(i)(B) or, in each case, any successor regulation, may be granted only if the requirements of Treasury Regulation Section 1.409A-1(b)(5)(iii), or any successor regulation, are satisfied. Options and UARs that are otherwise exempt from or compliant with Section 409A may be granted to any eligible Employee, Officer or Director.

 

(i) Exercise Price. The exercise price per Unit purchasable under an Option or subject to a UAR shall be determined by the Committee at the time the Option or UAR is granted but, except with respect to a Substitute Award, may not be less than the Fair Market Value of a Unit as of the date of grant of the Option or UAR.

 

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

 

(iii) Exercise of Options and UARs on Termination of Service. Each Option and UAR Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the Option or UAR following a termination of the Participant’s Service. Unless otherwise determined by the Committee, if the Participant’s Service is terminated for Cause, the Participant’s right to exercise the Option or UAR shall terminate as of the start of business on the effective date of the Participant’s termination.  Unless otherwise determined by the Committee, to the extent the Option or UAR is not 

 

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vested and exercisable as of the termination of Service, the Option or UAR shall terminate when the Participant’s Service terminates.

 

(iv) Term of Options and UARs. The term of each Option and UAR shall be stated in the Award Agreement, provided, that the term shall be no more than ten (10) years from the date of grant thereof.

 

(b) Restricted Units and Phantom Units. The Committee shall have the authority to determine the Employees, Officers and Directors to whom Restricted Units and/or Phantom Units shall be granted, the number of Restricted Units or Phantom Units to be granted to each such Participant, the applicable Restricted Period, the conditions under which the Restricted Units or Phantom Units may become vested or forfeited and such other terms and conditions, including, without limitation, restrictions on transferability, as the Committee may establish with respect to such Awards.

 

(i) Payment of Phantom Units. The Committee shall specify in an Award Agreement, or permit the Participant to elect in accordance with the requirements of Section 409A, the conditions and dates or events upon which the cash or Units underlying an Award of Phantom Units shall be issued, which dates or events shall not be earlier than the date on which the Phantom Units vest and become non-forfeitable and which conditions and dates or events shall be subject to compliance with Section 409A (unless the Phantom Units are exempt therefrom).

 

(ii) Vesting of Restricted Units. Upon or as soon as reasonably practicable following the vesting of each Restricted Unit, subject to satisfying the tax withholding obligations of 8(b), the Participant shall be entitled to have the restrictions removed from his or her Unit certificate (or book-entry account, as applicable) so that the Participant then holds an unrestricted Unit.

 

(c) DERs. The Committee shall have the authority to determine the Employees, Officers and/or Directors to whom DERs are granted, whether such DERs are in tandem with other Awards or constitute separate Awards, whether the DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of the Committee), any vesting restrictions and payment provisions applicable to the DERs, and such other provisions or restrictions as determined by the Committee in its discretion, all of which shall be specified in the applicable Award Agreements. Distributions in respect of DERs shall be credited as of the distribution dates during the period between the date an Award is granted to a Participant and the date such Award vests, is exercised, is distributed or expires, as determined by the Committee. Such DERs shall be converted to cash, Units, Restricted Units and/or Phantom Units by such formula and at such time and subject to such limitations as may be determined by the Committee. Tandem DERs may be subject to the same or different vesting restrictions as the tandem Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion. Notwithstanding the foregoing, DERs shall only be paid in a manner that is either exempt from or in compliance with Section 409A.

 

(d) Unit Awards. Awards of Units may be granted under the Plan (i) to such Employees, Officers and/or Directors and in such amounts as the Committee, in its discretion, may select, and (ii) subject to such other terms and conditions, including, without limitation, restrictions on transferability, as the Committee may establish with respect to such Awards.

 

(e) Profits Interest Units. Any Award consisting of Profits Interest Units may be granted to an Employee, Officer or Director for the performance of services to or for the benefit of the Partnership (i) in the Participant’s capacity as a partner of the Partnership, (ii) in anticipation of the Participant becoming a partner of the Partnership, or (iii) as otherwise determined by the Committee. At the time of grant, the Committee shall specify the date or dates on which the Profits Interest Units shall vest and become non-forfeitable, and may specify such conditions to vesting as it deems appropriate. Profits Interest Units shall be subject to such restrictions on transferability and other restrictions as the Committee may impose.

 

(f) Other Unit-Based Awards/Performance Units. Other Unit-Based Awards may be granted under the Plan to such Employees, Officers and/or Directors as the Committee, in its discretion, may select. An Other Unit-Based Award shall be an Award denominated or payable in, valued in or otherwise based on or related to Units, in whole or in part. The Committee shall determine the terms and conditions of any Other Unit-Based Award. Upon vesting, an Other Unit-Based Award may be paid in cash, Units (including Restricted Units) or any combination thereof as provided in the Award Agreement. Without limiting the type or number of Other Unit-Based Awards that may be made under the Plan, any Other Unit-Based Award may be in the form of an Other Unit-Based Award which vests based on performance criteria 

 

6

 

selected by the Committee (“Performance Units”). Employees who are Officers at the time a performance vested Award is made that will settle in full-value Units may be subject to an additional holding period after the performance period ends. The Committee shall set performance criteria in its sole discretion which, depending on the extent to which they are met, may determine the value and/or amount of such performance vested Awards that will be paid out to the Participant and/or the portion of a performance vested Award that may be exercised. Further, the Committee shall have the discretion to adjust the performance goals (either up or down) as well as the level of the performance vested Award that a Participant may earn if it determines that the occurrence of external changes or other unanticipated business conditions have materially affected the fairness of the goals and/or have unduly influenced the Company’s ability to meet them, including without limitation, events such as material acquisitions, force majeure events, unlawful acts committed against the Company or its property, labor disputes, legal mandates, asset write-downs, litigation, claims, judgments or settlements, the effect of changes in tax law or other such laws or provisions affecting reported results, accruals for reorganization and restructuring programs, changes in the capital structure of the Company and extraordinary accounting changes. In addition, performance goals and performance vested Awards shall be calculated without regard to any changes in accounting standards or codifications that may be required by the Financial Accounting Standards Board (or any successor organization) after such performance goals are established.

 

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

 

(h) General.

 

(i) Award Agreements. Each Award shall be evidenced in either an individual Award Agreement or within a separate plan, policy, agreement or other written document, which shall reflect any vesting conditions or restrictions imposed by the Committee covering a period of time specified by the Committee and shall also contain such terms, conditions and limitations as shall be determined by the Committee in its sole discretion, including but not limited to applicable Recoupment Provisions. Where signature or electronic acceptance of the Award Agreement by the Participant is required, any such Awards for which the Award Agreement is not signed or electronically accepted shall be forfeited.

 

(ii) Forfeitures. Except as otherwise provided in the terms of an Award Agreement, upon termination of a Participant’s Service for any reason during an applicable Restricted Period, all outstanding, unvested Awards held by such Participant shall be automatically forfeited by the Participant. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to any such Award; provided, that any such waiver shall be effective only to the extent that such waiver will not cause any Award intended to satisfy the requirements of Section 409A to fail to satisfy such requirements.

 

(iii) 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 Company or any Affiliate. Awards granted in addition to or in tandem with other Awards or awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

 

(iv) Director Awards. The Committee may, in its discretion, provide that Awards granted to Directors shall be granted pursuant to a non-discretionary formula established by the Committee by resolution, subject to the limitations of the Plan. Any such resolution shall set forth the type of Awards to be granted to Directors, the number of Units to be subject to Director Awards, the conditions on which such Awards shall be granted, vest, become exercisable and/or payable and expire, and such other terms and conditions as the Committee shall determine in its discretion. The Committee may also establish a written policy for grants to Directors which shall set forth the type and terms of Awards granted to Directors and such policy may be modified by the Committee from time to time in its discretion.

 

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(v) Limits on Transfer of Awards.

 

(A) Except as provided in paragraph (B) below, each Option and UAR 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 and no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company, the Partnership or any Affiliate.

 

(B)  The Committee may provide in an Award Agreement or in its discretion that an Award may, on such terms and conditions as the Committee may from time to time establish, be transferred by a Participant without consideration to any “family member” of the Participant, as defined in the instructions to use of the Form S-8 Registration Statement under the Securities Act, as applicable, or any other transferee specifically approved by the Committee after taking into account any state, federal, local or foreign tax and securities laws applicable to transferable Awards.  In addition, vested Units may be transferred to the extent permitted by the Partnership Agreement and not otherwise prohibited by the Award Agreement or any other agreement or policy restricting the transfer of such Units.

 

(vi) Term of Awards. Subject to 6(a)(iv) above, the term of each Award, if any, shall be for such period as may be determined by the Committee.

 

(vii) Unit Certificates. Unless otherwise determined by the Committee or required by any applicable law, rule or regulation, neither the Company nor the Partnership shall deliver to any Participant certificates evidencing Units issued in connection with any Award and instead such Units shall be recorded in the books of the Partnership (or, as applicable, its transfer agent or equity plan administrator). All certificates for Units or other securities of the Partnership delivered under the Plan and all Units issued pursuant to book entry procedures 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/or other requirements of the SEC, any securities 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 or book entry to make appropriate reference to such restrictions.

 

(viii) Consideration for Grants. To the extent permitted by applicable law, Awards may be granted for such consideration, including services, as the Committee shall determine.

 

(ix) Delivery of Units or other Securities and Payment by Participant of Consideration. Notwithstanding anything in the Plan or any Award Agreement to the contrary, subject to compliance with Section 409A, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Units pursuant to the exercise or vesting of any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such Units is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any securities exchange on which the Units are listed or traded, and the Units are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Board or the Committee may require that a Participant make such reasonable covenants, agreements and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations or requirements. Without limiting the generality of the foregoing, the 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 Company is not reasonably able to obtain or deliver Units 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 Company.

 

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7. Amendment and Termination; Certain Transactions.

 

Except as required by applicable law or the rules of the principal securities exchange, if any, on which the Units are traded:

 

(a) Amendments to the Plan. Subject to 7(b) below, the Board or the Committee may amend, alter, suspend, discontinue or terminate the Plan in any manner without the consent of any partner, Participant, other holder or beneficiary of an Award, or any other Person. The Board shall obtain approval of the unitholders of the Partnership for any Plan amendment to the extent necessary to comply with applicable law or securities exchange listing standards or rules.

 

(b) Amendments to Awards. Subject to 7(a) above, the Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided that no change, other than pursuant to 7(c) below, in any Award shall materially reduce the rights or benefits of a Participant with respect to an Award without the consent of such Participant. No Option Award may be repriced, replaced, regranted through cancellation or modified without approval of the unitholders of the Partnership (except as contemplated in 7(c) below), if the effect would be to reduce the exercise price for the Units underlying such Award.

 

(c) Actions Upon the Occurrence of Certain Events. Upon the occurrence of a Change in Control, any transaction or event described in 4(c) above, any change in applicable laws or regulations affecting the Plan or Awards hereunder, or any change in accounting principles affecting the financial statements of the Company or the Partnership, the Committee, in its sole discretion, without the consent of any Participant or holder of an Award, and on such terms and conditions as it deems appropriate, may take any one or more of the following actions:

 

(i) provide for either (A) the termination of any Award in exchange for a payment in an amount, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights under such Award (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 payable upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Committee in its sole discretion having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of the Participant’s rights had such Award been currently exercisable or payable or fully vested;

 

(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, the number and kind of outstanding Awards, the terms and conditions of (including the exercise price) and/or the vesting and performance criteria included in, outstanding Awards;

 

(iv) provide that such Award shall vest or become 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 and shall terminate upon such event and may also provide, in the Committee’s sole discretion, to pay or substitute the full value of such Award.

 

(d) Notwithstanding the foregoing, (i) with respect to an above event that constitutes an “equity restructuring” that would be subject to a compensation expense pursuant to ASC Topic 718, the provisions in 4(c) above shall control to the extent they are in conflict with the discretionary provisions of this 7, provided, however, that nothing in 7(c) or 4(c) above shall be construed as providing any Participant or any beneficiary of an Award any rights with respect to the “time value,” “economic opportunity” or “intrinsic value” of an Award or limiting in any manner the Committee’s actions that may be taken with respect to an Award as set forth in this 7 or in 4(c) above; and (ii) no action shall be taken under this 7 which shall cause an Award to result in taxation under Section 409A, to the extent applicable to such Award.

 

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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, including the treatment upon termination of Service. 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 Company, the Company or any Affiliate thereof is authorized to deduct or withhold, or cause to be deducted or withheld, 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 or Units, including Units that would otherwise be issued pursuant to such Award or other property) of any applicable taxes payable in respect of an Award, including its grant, its exercise, the lapse of restrictions thereon or any payment or transfer thereunder or under the Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy its withholding obligations for the payment of such taxes. In the event that Units that would otherwise be issued pursuant to an Award are used to satisfy such withholding obligations, the number of Units which may be so withheld or surrendered shall be limited to the number of Units which have a Fair Market Value on the date of withholding equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income.

 

(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 Company, the Partnership or any of their Affiliates, or to remain on the Board, as applicable. Furthermore, the Company, the Partnership and/or an Affiliate thereof may at any time dismiss a Participant from Service free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award Agreement or other written agreement between any such entity and the Participant.

 

(d) Limitation of Liability. No member of the Board or the Committee or Officer to whom the Board or the Committee has delegated authority in accordance with the provisions of 3 of this Plan shall be liable for anything done or omitted to be done by him or her by any member of the Board or the Committee or by any Officer in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or as expressly provided by statute.

 

(e) No Rights as Unitholder. Except as otherwise provided herein, a Participant shall have none of the rights of a unitholder with respect to Units covered by any Award unless and until the Participant becomes the record owner of such Units.

 

(f) Section 409A. To the extent that the Committee determines that any Award granted under the Plan is subject to Section 409A, the Award Agreement evidencing such Award shall include the terms and conditions required by Section 409A. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date (as defined in 9 below), the Committee determines that any Award may be subject to Section 409A, the Committee may adopt such amendments to the Plan and the applicable Award Agreement, adopt other policies and procedures (including amendments, policies and procedures with retroactive effect) and/or take any other actions that the Committee determines are necessary or appropriate to preserve the intended tax treatment of the Award, including without limitation, actions intended to (i) exempt the Award from Section 409A, or (ii) comply with the requirements of Section 409A; provided, however, that nothing herein shall create any obligation on the part of the Committee, the Partnership, the Company or any of their Affiliates to adopt any such amendment, policy or procedure or take any such other action, nor shall the Committee, the Partnership, the Company or any of their Affiliates have any liability for failing to do so. Notwithstanding any provision in the Plan to the contrary, the time of payment with respect to any Award that is subject to Section 409A shall not be accelerated, except as permitted under Treasury Regulation Section 1.409A-3(j)(4). Notwithstanding any provision of this Plan to the contrary, if a Participant is a “Specified Employee” within the meaning of Section 409A as of the date of such Participant’s termination of Service and the Company determines, in good faith, that immediate payment of any amounts or benefits under this Plan would cause a violation of Section 409A, then any amounts or benefits which are payable under this Plan upon the Participant’s “separation from service” within the meaning of Section 409A that: (i) are subject to the provisions of Section 409A; (ii) are not otherwise exempt under Section 409A; and (iii) would otherwise be payable during the first six-month period following such separation from service, shall be paid as soon as 

 

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practicable on the first business day next following the earlier of: (1) the date that is six months and one day following the date of termination; or (2) the date of the Participant’s death.

 

(g) Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Units and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all applicable federal, state, local and foreign laws, rules and regulations (including but not limited to state, federal and foreign securities law and margin requirements), the rules of any securities exchange or automated quotation system on which the Units are listed, quoted or traded, and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company or the Partnership, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the Person acquiring such securities shall, if requested by the Company or the Partnership, provide such assurances and representations to the Company or the Partnership as the Company or the Partnership may deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. In the event an Award is granted to or held by a Participant who is employed or providing services outside the United States, the Committee may, in its sole discretion, modify the provisions of the Plan or of such Award as they pertain to such Participant to comply with applicable foreign law or to recognize differences in local law, currency or tax policy. The Committee may also impose conditions on the grant, issuance, exercise, vesting, settlement or retention of Awards in order to comply with such foreign law and/or to minimize the Company’s or the Partnership’s obligations with respect to tax equalization for Participants employed outside their home country.

 

(h) 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.

 

(i) 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.

 

(j) 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 to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company 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.

 

(k) 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 Company, the Partnership or any of their Affiliates, on the one hand, and a Participant or any other Person, on the other hand. To the extent that any Person acquires a right to receive payments pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Partnership or any participating Affiliate of the Partnership.

 

(l) 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.

 

(m) 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 hereof.

 

(n) No Guarantee of Tax Consequences. None of the Board, the Committee, the Company or the Partnership provides or has provided any tax advice to any Participant or any other Person or makes or has 

 

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made any assurance, commitment or guarantee that any federal, state or local tax treatment will (or will not) apply or be available to any Participant or other Person.

 

(o) Non-United States Participants. The Board or Committee may grant Awards to persons outside the United States under such terms and conditions as may, in the judgment of the Board or Committee, as applicable, be necessary or advisable to comply with the laws of the applicable foreign jurisdictions and, to that end, may establish sub-plans, modified vesting, exercise or settlement procedures and other terms and procedures. Notwithstanding the above, neither the Board nor the Committee may take any actions under this Plan, and no Awards shall be granted, that would violate the Exchange Act, the Code or any other applicable law.

 

(p) 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 or her financial 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 Partnership, the Company and all of their Affiliates shall be relieved of any further liability for payment of such amounts.

 

(q)  Lock Up Agreement.  Each Participant shall agree, if so requested by the Company or the Partnership and any underwriter in connection with any public offering of securities of the Partnership or any Affiliate, not to directly or indirectly offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of or otherwise dispose of or transfer any Units held by it for such period, not to exceed one hundred eighty (180) days following the effective date of the relevant registration statement filed under the Securities Act in connection with such public offering, as such underwriter shall specify reasonably and in good faith.

 

9. Term of the Plan.

 

The Plan shall be effective on the date on which the Plan is adopted by the Board (the “Effective Date”) and shall continue until terminated by the Board. However, any Award granted prior to such termination, and the authority of the Board or 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.

 

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