Document:

exv10w6

 

Exhibit 10.6

ACKNOWLEDGEMENT AND CONSENT

     In connection with that certain Omnibus Agreement, dated as of December 22, 2006, by and among
Quest Resource Corporation (“QRC”), Quest Midstream GP, LLC, Bluestem Pipeline, LLC, and Quest
Midstream Partners, L.P. (the “Agreement”), Quest Energy Partners, L.P. (the “Partnership”) hereby:

	 	(a)	 	acknowledges and confirms that it has reviewed the terms and conditions of the
Agreement;
	 
	 	(b)	 	acknowledges and confirms that it currently falls within the Agreement’s
definitions of “Affiliate” and “QRC Entity”;
	 
	 	(c)	 	consents to be severally bound to, and comply with, the terms of the Agreement
applicable to a QRC Entity, as long as it is considered an “Affiliate” and/or “QRC
Entity” as defined in the Agreement.

Dated as of: November 15, 2007

	 	 	 	 	 	 	 
	 	 	QUEST ENERGY PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By:   Quest Energy GP, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jerry D. Cash	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Jerry D. Cash	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	Chief Executive Officerexv10w7

 

Exhibit 10.7

QUEST ENERGY PARTNERS, L.P.

LONG-TERM INCENTIVE PLAN

     SECTION 1. Purpose of the Plan.

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

     SECTION 2. Definitions.

     As used in the Plan, the following terms shall have the meanings set forth below:

     “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.

     “Award” means an Option, UAR, Restricted Unit, Phantom Unit, Other Unit-Based Award or a Unit
Award granted under the Plan, and shall include any tandem DERs granted with respect to an Award.

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

     “Board” means the Board of Directors of the Company.

     “Change of 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” within the meaning of those terms as used in Sections
13(d) and 14(d)(2) of the Exchange Act, other than an Affiliate of the Company or the
Parent or its Affiliates, shall become the beneficial owner, by way of merger,
consolidation, recapitalization, reorganization or otherwise, of 50% or more of the
combined voting power of the equity interests in the Parent, 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, the Parent or an Affiliate of the Company, or the Parent; or
	 
	 	(iv)	 	a transaction resulting in a Person other than the Company or an Affiliate of
the Company being the general partner of the Partnership.

     Notwithstanding the foregoing, with respect to an Award that is subject to Section 409A of the
Code and with respect to which a Change of Control will accelerate payment, “Change of Control”
shall mean a “change of control event” as defined in the regulations and guidance issued under
Section 409A of the Code.

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

     “Committee” means the Board, the Compensation Committee of the board of directors of the
Parent or such other committee of the Board or the board of directors of Parent as may be appointed
by the Board to administer the Plan.

     “Consultant” means an individual, other than an Employee or a Director, providing bona fide
services to the Partnership or any of its subsidiaries as a consultant or an advisor, as
applicable, provided that such individual is a natural Person.

     “DER” or “Distribution Equivalent Right” means a right to receive an amount in cash equal to
the cash distributions made by the Partnership with respect to a Unit during a specified period.

     “Director” means a member of the Board who is not an Employee.

     “Employee” means any employee of the Company or Affiliate who performs direct services for the
benefit of the Partnership or any of its subsidiaries.

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

     “Fair Market Value” means the closing sales price of a Unit on the principal national
securities exchange or other market in which trading in Units occurs on the applicable date (or if
there is no trading in the Units on such date, on the next preceding date on which there was
trading) as reported in The Wall Street Journal (or other reporting service approved by the
Committee). In the event Units are not traded on a national securities exchange or other market at
the time a determination of fair market value is required to be made hereunder, the determination
of fair market value shall be made in good faith by the Committee.

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

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

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     “Parent” means Quest Resource Corporation.

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

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

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

     “Restricted Period” means the period established by the Committee with respect to an Award
during which the Award remains nontransferable and 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 under the Plan that is subject to a Restricted Period.

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

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

     “Unit” means a common unit of the Partnership.

     “UDR” or “Unit Distribution Right” means a distribution made by the Partnership with respect
to a Restricted Unit.

     “Unit Appreciation Right” or “UAR” means an Award that, upon exercise, entitles the holder to
receive in cash or Units in the discretion of the Committee, the excess of the Fair Market Value of
a Unit on the exercise date over the exercise price established for such Unit Appreciation Right.

     “Unit Award” means a grant of a Unit that is not subject to a Restricted Period.

     SECTION 3. Administration.

     (a) Governance. The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the Committee who are present
at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of
the Committee in writing, shall be the acts of the Committee.

     (b) Delegation. Subject to the following and applicable law, the Committee, in it
sole discretion, may delegate any or all of its powers and duties under the Plan, including the
power to grant Awards under the Plan, to the Chief Executive Officer of the Company, subject to
such limitations on such delegated powers and duties as the Committee may impose, if any. Upon any

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such delegation, all references in the Plan to the “Committee”, other than in Section 7, shall be
deemed to include the Chief Executive Officer, provided, however, that such delegation shall not
limit the Chief Executive Officer’s right to receive Awards under the Plan. Notwithstanding the
foregoing, the Chief Executive Officer may not grant Awards to, or take any action with respect to
any Award previously granted to, a person who is an officer subject to Rule 16b-3 or a member of
the Board.

     (c) Authority and Powers. 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
reconsider any inconsistency in the Plan or an Award Agreement in such manner and extent 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 Affiliate, any Participant, and any beneficiary of any Award.

     SECTION 4. Units.

     (a) Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c),
the number of Units that may be delivered with respect to Awards under the Plan is 2,115,950, of
which no more than 2,115,950 may be delivered with respect to Unit Awards and vested Restricted
Unit and Phantom Unit awards. If any Award (including Restricted Units) is terminated, forfeited
or expires for any reason without the delivery of Units covered by such Award or Units are withheld
from an Award to satisfy the exercise price or tax withholding obligation with respect to such
Award, such Units shall again be available for delivery pursuant to other Awards granted under the
Plan. Notwithstanding the foregoing, there shall not be any limitation on the number of Awards
that may be granted under the Plan and paid in cash, and any Units allocated to an Award payable in
cash or Units shall, to the extent paid in cash, be again available for delivery under the Plan
with respect to other Awards. With respect to UARs, the Company shall initially allocate the full
number of Units subject to the UAR, and shall, upon settlement of the UAR, add back to the number
of Units available under the Plan, the excess of (a) the number of Units initially allocated with
respect to the UAR over (b) the number of Units, if any, delivered in settlement of the UAR.

     (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 or from any

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Affiliate, the Partnership or any other Person, newly issued Units, or any combination of the
foregoing, as determined by the Committee in its sole discretion.

     (c) Adjustments. In the event that the Committee determines that any distribution
(whether in the form of cash, Units, other securities, or other property), recapitalization, split,
reverse split, reorganization, merger, Change of Control, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of
warrants or other rights to purchase Units or other securities of the Partnership, or other similar
transaction or event affects the Units such that an adjustment is determined by the Committee to be
appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such manner as it may
deem equitable, adjust any or all of (i) the number and type of Units (or other securities or
property) with respect to which Awards may be granted, (ii) the number and type of Units (or other
securities or property) subject to outstanding Awards, (iii) the grant or exercise price with
respect to any Award, or (iv) if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award; provided, that the number of Units subject to any Award shall
always be a whole number. With respect to any other similar event that would not result in a FAS
123R 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 in such manner
as it deems appropriate with respect to such other event. Any adjustment or modification made to
an Award that is subject to or exempt from Section 409A of the Code shall be made in a manner so as
to not result in any violation of Section 409A.

     SECTION 5. Eligibility.

     Any Employee, Consultant or Director shall be eligible to be designated a Participant and
receive an Award under the Plan.

     SECTION 6. Awards.

     (a) Options. The Committee shall have the authority to determine the Employees,
Consultants and Directors to whom Options shall be granted, the number of Units to be covered by
each Option, whether DERs are granted with respect to such Option, the purchase price for such
Units and the conditions and limitations applicable to the exercise of the Option, including the
following terms and conditions and such additional terms and conditions, as the Committee shall
determine, that are not inconsistent with the provisions of the Plan.

     (i) Exercise Price. The exercise price per Unit under an Option shall be
determined by the Committee at the time the Option is granted but in no event may the
exercise price per share be less than its Fair Market Value as of the date of grant.

     (ii) Time and Method of Exercise. The Committee shall determine (a) the time
or times at which an Option may be exercised in whole or in part, which may include, without
limitation, accelerated exercisability upon the achievement of specified performance goals
or other events, and, (b) in its discretion, the method or methods by which payment of the
exercise price with respect thereto may be made or deemed to have been made, which may
include, without limitation, cash, check acceptable to the

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Company, a cashless
broker-assisted exercise through a program approved by the Company, with the consent of the
Company, the withholding of Units that would otherwise be delivered to the Participant upon
the exercise of the Option, other securities or other property, or any combination thereof,
having a Fair Market Value on the exercise date equal to the relevant exercise price.

     (iii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment or consulting arrangement with the
Company and its Affiliates or membership on the Board, whichever is applicable, for any
reason during the applicable Restricted Period, all Options shall be forfeited by the
Participant. The Committee may, in its discretion, waive in whole or in part such
forfeiture with respect to a Participant’s Options.

     (iv) DERs. To the extent provided by the Committee, in its discretion, a grant
of Options may include a tandem DER grant, which may provide that such DERs shall be paid
directly to the Participant, be credited to a bookkeeping account (with or without interest
in the discretion of the Committee) subject to the same vesting restrictions as the tandem
Award, or be subject to such other provisions or restrictions as determined by the Committee
in its discretion. DERs may not be paid in a manner that will result in an Option otherwise
exempt from Section 409A of the Code becoming subject to Section 409A of the Code.

     (b) UARs. The Committee shall have the authority to determine the Employees,
Consultants and Directors to whom Unit Appreciation Rights shall be granted, the number of Units to
be covered by each grant, whether DERs are granted with respect to such Unit Appreciation Right,
the exercise price therefor and the conditions and limitations applicable to the exercise of the
Unit Appreciation Right, including the following terms and conditions and such additional terms and
conditions, as the Committee shall determine, that are not inconsistent with the provisions of the
Plan.

     (i) Exercise Price. The exercise price per Unit Appreciation Right shall be
determined by the Committee at the time the Unit Appreciation Right is granted but in no
event may the exercise price per UAR be less than the Fair Market Value of a Unit as of the
date of grant.

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

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

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     (iv) DERs. To the extent provided by the Committee, in its discretion, a grant
of Unit Appreciation Rights may include a tandem DER grant, which may provide that such DERs
shall be paid directly to the Participant, be credited to a bookkeeping account (with or
without interest in the discretion of the Committee) subject to the same vesting
restrictions as the tandem Unit Appreciation Rights Award, or be subject to such other
provisions or restrictions as determined by the Committee in its discretion. DERs may not be
paid in a manner that will result in a UAR otherwise exempt from Section 409 of the Code
becoming subject to Section 409A of the Code.

     (c) Phantom Units. The Committee shall have the authority to determine the Employees,
Consultants, and Directors to whom Phantom Units shall be granted, the number of Phantom Units to
be granted to each such Participant, the Restricted Period, the time or conditions under which the
Phantom Units may become vested or forfeited, which may include, without limitation, the
accelerated vesting upon the achievement of specified performance goals or other events, and such
other terms and conditions as the Committee may establish with respect to such Awards, including
whether DERs are granted with respect to such Phantom Units.

     (i) DERs. To the extent provided by the Committee, in its discretion, a grant
of Phantom Units may include a tandem DER grant, which may provide that such DERs shall be
paid directly to the Participant, be credited to a bookkeeping account (with or without
interest in the discretion of the Committee), be “reinvested” in Restricted Units or
additional Phantom Units and 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. Absent a contrary provision in the grant agreement, upon a
cash distribution with respect to a Unit, cash equal in amount to such distribution shall be
paid to the Participant with respect to each DER without restriction.

     (ii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment or consulting arrangement with the
Company and its Affiliates or membership on the Board, whichever is applicable, for any
reason during the applicable Restricted Period, all outstanding Phantom Units awarded the
Participant shall be automatically forfeited on such termination. The Committee may, in its
discretion, waive in whole or in part such forfeiture with respect to a Participant’s
Phantom Units.

     (iii) Lapse of Restrictions. At the time specified in the Award Agreement,
following the vesting of each Phantom Unit and subject to the provisions of Section 8(b),
the Participant shall be entitled to receive from the Company one Unit or cash equal to the
Fair Market Value of a Unit as of the vesting date, as determined by the Committee in its
discretion. To the extent the Award Agreement provides for a payment date of the Units or
cash in a tax year other than the tax year in which a Phantom Unit vests, the payment date
must be an otherwise eligible distribution date for nonqualified deferred compensation
arrangements in accordance with Code Section 409A. To the extent an Award Agreement is
silent as to the time following the vesting of each Phantom Unit cash or Units are to be
paid, payment will be made upon or as soon as reasonably practical following the vesting of
each Phantom Unit, subject to Section 8(b).

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     (d) Restricted Units. The Committee shall have the authority to determine the
Employees, Consultants and Directors to whom Restricted Units shall be granted, the number of
Restricted Units to be granted to each such Participant, the Restricted Period, the conditions
under which the Restricted Units may become vested or forfeited, which may include, without
limitation, the accelerated vesting upon the achievement of specified performance goals or other
events, and such other terms and conditions as the Committee may establish with respect to such
Awards.

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

     (ii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment or consulting with the Company and
its Affiliates or membership on the Board, whichever is applicable, for any reason during
the applicable Restricted Period, all outstanding Restricted Units awarded the Participant
shall be automatically forfeited on such termination. The Committee may, in its discretion,
waive in whole or in part such forfeiture with respect to a Participant’s Restricted Units.

     (iii) Lapse of Restrictions. Upon or as soon as reasonably practical following
the vesting of each Restricted Unit, subject to the provisions of Section 8(b), the
Participant shall be entitled to have the restrictions removed from his or her Unit
certificate so that the Participant then holds an unrestricted Unit.

     (e) Unit Awards. Unit Awards may be granted under the Plan to such Employees,
Consultants and/or Directors and in such amounts as the Committee, in its discretion, may select.

     (f) Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Plan to
such Employees, Consultants 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 such Other Unit-Based Award. Upon vesting, an Other Unit-Based Award may be paid
in cash, Common Units (including Restricted Units) or any combination thereof as provided by the
Committee.

     (g) General.

     (i) Awards May Be Granted Separately or Together. Except as provided below,
Awards may, in the discretion of the Committee, be granted either alone or in

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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. Notwithstanding the foregoing, UARs may not be granted in
tandem with an Option.

     (ii) Limits on Transfer of Awards.

     (A) Except as provided in paragraph (C) below, each Award shall be exercisable
or payable only by or to the Participant during the Participant’s lifetime, or by
the person to whom the Participant’s rights shall pass by will or the laws of
descent and distribution.

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

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

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

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

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

     (vi) Delivery of Units or other Securities and Payment by Participant of
Consideration. Notwithstanding anything in the Plan or any Award Agreement to the
contrary, if the Company is not reasonably able to obtain Units to deliver pursuant to such
Award without violating the rules or regulations of any applicable law or securities
exchange, no delivery shall occur until such time as the Committee, in good faith,
determines that the delivery of Units may be made without violating the rules or regulations
of any applicable law or securities exchange. No Units or other securities shall be
delivered pursuant to any Award until payment in full of any amount required to

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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.

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

     (A) provide for either (i) the termination of any Award in exchange for an
amount of cash, if any, equal to the amount that would have been attained upon the
exercise of such Award or realization of the Participant’s rights (and, for the
avoidance of doubt, if as of the date of the occurrence of such transaction or event
the Committee determines in good faith that no amount would have been attained upon
the exercise of such Award or realization of the Participant’s rights, then such
Award may be terminated by the Company without payment) or (ii) the replacement of
such Award with other rights or property selected by the Committee in its sole
discretion;

     (B) 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;

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

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

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

     Notwithstanding the foregoing, with respect to an above event that is an “equity
restructuring” event that would be subject to a compensation expense pursuant FAS 123R if a
discretionary change is made, the provisions in Section 4(c) shall control to the extent
they are in conflict with the discretionary provisions of this Section 6.

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

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

     (b) Amendments to Awards. Subject to Section 7(a), the Committee may waive any
conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided no
change, other than pursuant to Section 6(g)(vii) or, as determined by the Committee, in its sole
discretion, as being necessary or appropriate to comply with applicable law, including, without
limitation, Section 409A of the Code, in any Award shall materially reduce the benefit of a
Participant without the consent of such Participant.

     SECTION 8. General Provisions.

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

     (b) Tax Withholding. The Company or any Affiliate is authorized to withhold from any
Award, from any payment due or transfer made under any Award or from any compensation or other
amount owing to a Participant the amount (in cash, Units, other securities or property, or Units
that would otherwise be issued or delivered pursuant to such Award) of any applicable taxes payable
in respect of the grant of an Award, its exercise, the lapse of restrictions thereon, or any
payment or transfer under an Award or under the Plan and to take such other action as may be
necessary in the opinion of the Company to satisfy its withholding obligations for the payment of
such taxes.

     (c) No Right to Employment. The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company or any Affiliate or to remain on
the Board or a Consultant, as applicable. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.

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

     (e) Section 409A. This Plan is intended to meet or to be exempt from the requirements
of Section 409A of the Code and may be administered in a manner that is intended to meet those
requirements and will be construed and interpreted in accordance with such intent. All Awards
granted and payments hereunder will either be exempt from Section 409A of the Code or will be
subject to Section 409A of the Code and will be structured in a manner that will

-11-

 

meet the
requirements of Section 409A of the Code, including regulations or other guidance issued with
respect thereto. Any provision of this Plan that would cause an Award or payment to fail to satisfy
Section 409A of the Code will be amended (in a manner that as closely as practicable achieves the
original intent of the Award) to comply with Section 409A of the Code on a timely basis, which may
be made on a retroactive basis, in accordance with regulations and other guidance issued under
Section 409A of the Code.

     (f) 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 laws, 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.

     (g) 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 result in
recoverable short-swing profits 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.

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

     (i) 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.

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

     (k) Facility Payment. Any amounts payable hereunder to any person under legal
disability or who, in the judgment of the Committee, is unable to properly manage his 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 which the Committee may select, and the Company shall be relieved of
any further liability for payment of such amounts.

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

     SECTION 9. Term of the Plan.

     The Plan shall become effective on the date of its approval by the Board and shall continue
until the earlier of the date terminated by the Board or the Committee or Units are no longer
available for Awards under the Plan. However, unless otherwise expressly provided in the Plan or
in an applicable Award Agreement, 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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