Document:

Exhibit 4.2

 

EVOLVING SYSTEMS, INC.

AMENDED AND RESTATED

2007 STOCK INCENTIVE PLAN

 

Adopted by the Board of Directors on March 12,
2007

Amended by the Board of Directors on March 2,
2010

 

1.                                      GENERAL

 

(a)                                  Purpose.  The primary
purposes of the Evolving Systems, Inc. 2007 Stock Incentive Plan are to
attract, retain and motivate employees, directors and consultants, to
compensate them for their contributions to the growth and profits of the
Company and its Affiliates and to encourage them to own Common Stock.

 

(b)                                 Types of Awards.  The
Plan permits the award of (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted
Stock, (v) Restricted Stock Units, (vi) Performance Awards, and (vii) Other
Stock-Based Awards.

 

2.                                      DEFINITIONS

 

Except
as otherwise provided in an applicable Award Agreement, the following
capitalized terms shall have the meanings indicated below for purposes of the
Plan and any Award:

 

(a)                                  “Affiliate” means a parent or
subsidiary of the Company, with “parent” meaning an entity that controls the
Company directly or indirectly, through one or more intermediaries, and “subsidiary”
meaning an entity that is controlled by the Company directly or indirectly,
through one or more intermediaries. 
Solely with respect to the grant of an Incentive Stock Option, Affiliate
means any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and
(f), respectively, of the Code.

 

(b)                                 “Award” means any award of an
Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,
Performance Award, or Other Stock-Based Award.

 

(c)                                  “Award Agreement” means the written or
electronic document setting forth the terms and conditions of an Award.  The Award Agreement is subject to the terms
and conditions of the Plan.

 

(d)                                 “Board” means the Board of
Directors of Evolving Systems, Inc.

 

(e)                                  “Change of Control” means the occurrence of any
of the following events:

 

(i) 
the date any person or group acquires, or has acquired during the 12-month
period ending on the date of the most recent acquisition by the person or
group, assets from the Company that have a total gross fair market value equal
to or more than 40% of the total gross fair market value of all assets of the
Company immediately prior to the acquisition;

 

(ii) the
date any person or group within the meaning of the Exchange Act acquires
ownership of our stock that, together with stock held by the person or group,
constitutes more 

 

 

than
50% of the total fair market value or total voting power entitled to vote in
the election of directors or any other change in ownership described in Treas.
Reg. Section 1.409A-3(i)(5)(v);

 

(iii) the
date any person or group acquires, or has acquired during the 12-month period
ending on the date of the most recent acquisition by the person or group,
ownership of stock possessing 30% or more of the total voting power of the
stock of the Company;

 

(iv) the
date a majority of members of the Board is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of the
members of our Board before the date of the appointment or election; or

 

(v) any
other change in effective control described in Treas. Reg. Section 1.409A(i)(5)(vi).

 

(f)                                    “Code” means the Internal Revenue
Code of 1986, as amended, and the applicable rulings, regulations and guidance
thereunder.

 

(g)                                 “Committee” means the Compensation
Committee of the Board which shall consist of four (4) members of the
Board, and, so long as the Singer Children’s Management Trust (the “Trust”) is
the beneficial owner of no less than twenty percent (20%) of the Company’s
issued and outstanding Common Stock, shall further consist of at least two (2) members
of the Board that have been nominated by the Trust.

 

(h)                                 “Common Stock” means a share of Evolving
Systems, Inc., common stock, $0.001 par value per share.

 

(i)                                     “Company” means Evolving Systems, Inc.,
a Delaware corporation.

 

(j)                                     “Consultant” means any person, including
an advisor, engaged by the Company or an Affiliate to render consulting or
advisory services and who is compensated for such services.

 

(k)                                  “Continuous Service” means continuous service as
an Employee, Director or Consultant to the Company or an Affiliate.  Unless otherwise stated in the applicable
Award Agreement, a Participant’s change in position or duties with the Company
or any Affiliate shall not result in interrupted or terminated service, so long
as such Participant continues service as an Employee, Director or
Consultant.  Whether a termination or
interruption in service shall have occurred for purposes of the Plan shall be
determined by the Committee (or its designee), which determination shall be final,
binding and conclusive.

 

(l)                                     “Covered Employee” means the chief executive
officer and other highest compensated officers of the Company for whom total
compensation is required to be reported to stockholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code and other
employees who may become subject to such reporting.

 

(m)                               “Director” means a member of the
Board.

 

(n)                               “Dividend Equivalents” means any
right granted under Section 11 of the Plan.

 

(o)                                 “Employee” means any person employed
by the Company or an Affiliate, determined in accordance with the Company’s
standard personnel policies and practices.

 

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(p)                                 “Exchange Act” means the U.S. Securities
Exchange Act of 1934, as it may be amended from time to time, or any successor
act thereto.

 

(q)                                 “Fair Market Value” means, as of any date, the
value of the Common Stock of the Company determined as follows:

 

(i)                                     If the Common
Stock is listed on any established stock exchange, or traded on the Nasdaq
Market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in Common Stock) on the determination date, as reported in The Wall Street Journal or such other
source as the Board deems reliable. 
Unless otherwise provided by the Committee, if there is no closing sales
price (or closing bid if no sales were reported) for the Common Stock on the
determination date, then the Fair Market Value shall be the closing sales price
(or closing bid if no sales were reported) on the last preceding date for which
such quotation exists.

 

(ii)                                  In the absence
of such markets for the Common Stock, the Fair Market Value shall be determined
in good faith by the Committee.

 

(r)                                    “Full-Value Award” means an Award of
Restricted Stock, Restricted Stock Units, Performance Award or Other
Stock-Based Award.

 

(s)                                  “Incentive Stock Option” means an
Option granted under Section 6 of the Plan that is intended to meet the
requirements of Section 422 of the Code, or any successor provision
thereto.

 

(t)                                    “Non-statutory Stock Option” means an
Option granted under Section 6 of the Plan that is not intended to be an
Incentive Stock Option.

 

(u)                                 “Option” or “Stock Option” means
a right to purchase one or more shares of Common Stock.

 

(v)                                 “Other Stock-Based Award” means any
right granted under Section 10 of the Plan.

 

(w)                               “Participant” means an eligible
individual who is granted an Award under the Plan.

 

(x)                                   “Performance Award” means any right granted
under Section 9 of the Plan.

 

(y)                                 “Performance Criteria” means any
quantitative or qualitative measures, as determined by the Committee, which may
be used to measure the level of performance of the Company, an Affiliate or any
individual Participant during a Performance Period, including any Qualifying
Performance Criteria.

 

(z)                                   “Performance Period” means any period as
determined by the Committee in its sole discretion.

 

(aa)                            “Person” means any individual,
corporation, partnership, association, joint-stock company, trust,
unincorporated organization, or government or political subdivision thereof.

 

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(bb)                          “Qualifying Performance Criteria” means one or
more of the following performance criteria applied to the individual, the
Company as a whole, an Affiliate, a business unit, or any combination thereof,
and measured quarterly, annually or cumulatively over a period of years, on an
absolute basis or relative to a pre-established target, to a previous quarter
or year’s results or to a designated comparison group, in each case as
specified by the Committee in the Award Agreement: (i) revenue
(ii) earnings before interest, taxes, depreciation and amortization
(EBITDA), (iii) adjusted EBITDA (earnings before interest, taxes,
depreciation, amortization, impairment, stock compensation and gain/loss on
foreign exchange transaction, (iv) net earnings, (v) net income,
(vi) product-related targets and (vii) cash flow, subject to
adjustment by the Committee to remove the effect of charges for restructurings,
discontinued operations, extraordinary items and all items of gain, loss or
expense determined to be extraordinary or unusual in nature or infrequent in
occurrence, related to the disposal of a segment or a business, or related to a
change in accounting principle or otherwise.

 

(cc)                            “Plan” means this Evolving Systems, Inc.
2007 Stock Incentive Plan.

 

(dd)                          “Restricted Stock” means an Award of shares of
Common Stock granted under Section 8 of the Plan.

 

(ee)                            “Restricted Stock Unit” means a right
granted under Section 8 of the Plan that is denominated in shares of
Common Stock.

 

(ff)                                “Share Reserve” means as defined in Section 4
of the Plan.

 

(gg)                          “Stock Appreciation Right” means any
right granted under Section 7 of the Plan.

 

(hh)                          “Substitute Award” means an Award granted in
substitution for, or in assumption of, outstanding awards previously granted by
an entity acquired by the Company or an Affiliate or with which the Company or
Affiliate combines.

 

3.                                      PLAN ADMINISTRATION

 

(a)                                  Authority of the Committee.  Except as otherwise provided herein, the Plan
shall be administered by the Committee, which shall have the power to interpret
the Plan and to adopt such rules and guidelines for implementing the terms
of the Plan as it may deem appropriate. 
The Committee, shall have the ability to modify the Plan provisions, to
the extent necessary, or delegate such authority, to accommodate any changes in
law and regulations in jurisdictions in which Participants will receive
Awards.  Subject to the terms of the Plan
and applicable law, the Committee shall have full power and authority to:

 

(i)                                     designate
Participants;

 

(ii)                                  determine the
type or types of Awards to be granted to each Participant under the Plan;

 

(iii)                               determine the
number of shares of Common Stock to be covered by (or with respect to which
payments, rights, or other matters are to be calculated in connection with)
Awards;

 

(iv)                              determine the
terms and conditions of any Award;

 

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(v)                                 determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, shares of Common Stock, other securities, or other Awards,
or canceled, forfeited, or suspended, and the method or methods by which Awards
may be settled, exercised, canceled, forfeited, or suspended;

 

(vi)                              determine
whether, to what extent, and under what circumstances cash, shares of Common
Stock, other securities, other Awards, and other amounts payable with respect
to an Award under the Plan shall be deferred either automatically or at the
election of the holder thereof or of the Committee;

 

(vii)                           interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan;

 

(viii)                        establish,
amend, suspend, or waive such rules and guidelines;

 

(ix)                                appoint such
agents as it shall deem appropriate for the proper administration of the Plan;

 

(x)                                   make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan; and

 

(xi)                                correct any
defect, supply any omission, or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem desirable to carry the Plan
into effect.

 

(b)                                 Administrative Actions. Unless
otherwise expressly provided in the Plan, Subject to the limitations described
in subsection (a) above, 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, any Affiliate, any Participant, any holder or beneficiary of any
Award, any stockholder, and any employee of the Company or of any Affiliate.

 

(c)                                  No Liability.  No member of
the Committee shall be liable for any action or determination made in good
faith with respect to the Plan, any Award or any Award Agreement.

 

(d)                                 Action
by the Committee. 
Notwithstanding anything to the contrary expressed or implied in this
Plan, any and all actions by the Committee required or permitted under this
Plan shall require the unanimous approval of all Committee members.

 

4.                                      SHARES SUBJECT TO THE PLAN

 

(a)                                  Shares Available. 
Subject to adjustment as provided in Section 14
of the Plan, the maximum aggregate number of shares of Common Stock that may be
issued pursuant to Awards granted under the Plan (exclusive of shares of Common
Stock that have been issued pursuant to Awards (“Existing Awards”) that have
been granted under the Plan prior to April 20, 2010 and that have not,
prior to such date (x) expired or been cancelled or otherwise terminated,
without having been exercised or redeemed in full, (y) been reacquired by
the Company prior to vesting or (z) been repurchased by the Company at
cost prior to vesting) shall be 250,000 shares (“Share Reserve”). 
Each share of Common Stock issued pursuant to an Award
shall reduce the 

 

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Share
Reserve by one (1) share.  To
the extent that a distribution pursuant to an Award is made in cash, the Share
Reserve shall be reduced by the number of shares of Common Stock subject to the
redeemed or exercised portion of the Award. 
Notwithstanding any other provision of the Plan to the contrary, the
maximum aggregate number of shares of Common Stock that may be issued under the
Plan pursuant to Incentive Stock Options (exclusive of shares of Common Stock
that have been issued pursuant to Existing Awards) is 250,000 shares, subject
to adjustment as provided in Section 14 of the Plan.

 

(b)                                 Individual
Annual Award Limits.   The following calendar year annual limits
apply to grants of Awards unless the Committee specifically determines at the
time of grant that the Award is not intended to qualify as performance-based
compensation under the Plan: 
(i) 125,000 shares, subject to adjustment as provided in Section 14,
for grants of stock options, stock appreciation rights, restricted stock
awards, restricted stock units, performance shares and other stock-based
awards; and (ii) $0.00 in annual Performance Awards payable in cash or
other cash-based awards.

 

(c)                                  Changes to the Share Reserve.  If an Award
granted under the Plan shall for any reason (i) expire, be canceled or
otherwise terminate, in whole or in part, without having been exercised or
redeemed in full, (ii) be reacquired by the Company prior to vesting, or (iii) be
repurchased at cost by the Company prior to vesting, the shares of Common Stock
not acquired by the Participant under such Award shall revert or be added to
the Share Reserve and become available for issuance under the Plan; provided, however, that shares of Common
Stock shall not revert or be added to the Share Reserve that had been
(A) awarded under an Existing Award, (B) tendered in payment of an
Option, (C) withheld by the Company to satisfy any tax withholding
obligation, or (D) purchased by the Company with the proceeds from the
exercise of Options, and provided, further,
that shares of Common Stock covered by a Stock Appreciation Right, to the
extent the right is exercised and settled in shares of Common Stock, and
whether or not shares of Common Stock are actually issued to the Participant
upon exercise of the Stock Appreciation Right, shall be considered issued or
transferred pursuant to the Plan.

 

(d)                                 Source of Shares.  Any shares of Common Stock delivered pursuant
to an Award may consist, in whole or in part, of authorized and unissued shares
or reacquired shares, bought on the market or otherwise.

 

(e)                                  Substitute Awards. 
In the case of Substitute Awards, the shares of
Common Stock subject to the Substitute Award shall not reduce the Share
Reserve.  If a Substitute Award shall for
any reason expire, be canceled or otherwise terminate, in whole or in part, be
settled in cash or otherwise settled by issuance of fewer shares, the shares of
Common Stock not acquired by the Participant shall not be added to the Share
Reserve.  Further, any shares of Common
Stock withheld or delivered to pay tax withholding obligations relating to a
Substitute Award shall not reduce the Share Reserve.

 

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5.                                      ELIGIBILITY

 

Individuals
eligible to participate in this Plan include Employees, Directors and
Consultants of the Company, or any Affiliate; provided,
however, to the extent required under Section 409A of the Code,
an Affiliate of the Company shall include only an entity in which the Company
possesses at least twenty percent (20%) of the total combined voting power of
the entity’s outstanding voting securities or such other threshold ownership
percentage permitted under Section 409A of the Code.

 

6.                                      STOCK OPTIONS

 

(a)                                  Grant of Options.  The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions, and any other
terms and conditions not inconsistent with the provisions of the Plan, as the
Committee shall determine.  Incentive
Stock Options may be granted only to eligible Employees of the Company or of
any parent corporation or subsidiary corporation (as permitted by Section 422
of the Code).

 

(b)                                 Award Agreement.  Each Option granted under the Plan shall be
evidenced by an Award Agreement.  The
Award Agreement shall specify whether the Option is intended to be an Incentive
Stock Option or a Nonstatutory Stock Option.

 

(i)                                     Exercise Price.  The purchase price per share of Common Stock
that may be purchased by an Option shall be determined by the Committee; provided, however, and except with respect
to Substitute Awards or as provided in Section 14, that such purchase
price shall not be less than 100% of the Fair Market Value of a share of Common
Stock on the date of grant of such Option.

 

(ii)                                  Term.  The term of each Option shall not exceed ten (10) years
from the date of grant.

 

(iii)                               Vesting; Restrictions on Exercise.  The Award Agreement shall set forth any
installment or other restrictions on exercise of the Option during the term of
the Option.  Each Option shall become
exercisable and shall vest over such period of time, or upon such events or
such Performance Criteria, as determined by the Committee.

 

(iv)                              Time and Method of Exercise.  The Committee shall establish in the
applicable Award Agreement the time or times at which an Option may be
exercised in whole or in part, and the method or methods by which, and the form
or forms, including, without limitation, cash, shares of Common Stock, or other
Awards or any combination thereof, having a Fair Market Value on the exercise
date equal to the relevant exercise price, in which payment of the exercise
price with respect thereto may be made or deemed to have been made.

 

(v)                                 Termination of Continuous Service.  Each Award Agreement shall
set forth the extent, if any, to which the Participant shall have the right to
exercise the Option following termination of the Participant’s Continuous
Service.  Such provisions shall be
determined in the sole discretion of the Committee, need not be uniform among
all Options issued pursuant to the Plan, and may reflect distinctions based on
the reasons for termination of Continuous Service.

 

7

 

In
the absence of specific provisions in an Award Agreement setting forth rights
to exercise following termination of a Participant’s Continuous Service, the
following shall apply:

 

(A)                              Termination
of Continuous Service Other than as a Result of Disability or Death.  In the event a Participant’s Continuous
Service terminates (other than upon the Participant’s death or disability), the
Participant may exercise his or her Option (to the extent that the Participant
was entitled to exercise it as of the date of termination) but only within such
period of time ending on the earlier of (a) the date three (3) months
after the termination of the Participant’s Continuous Status as an Employee,
Director or Consultant (or such longer or shorter period specified in the
Option Agreement), or (b) the expiration of the term of the Option as set
forth in the Option Agreement.  If, at
the date of termination, the Participant is not entitled to exercise his or her
entire Option, the shares covered by the un-exercisable portion of the Option
shall revert to and again become available for issuance under the Plan.  If, after termination, the Participant does
not exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate, and the shares covered by such Option
shall not become available for issuance under the Plan.

 

(B)                                Disability
of a Participant.  In the event a Participant’s Continuous
Service terminates as a result of the Participant’s disability, the Participant
may exercise his or her Option (to the extent that the Participant was entitled
to exercise it as of the date of termination), but only within such period of
time ending on the earlier of (i) the date twelve (12) months following
such termination (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth
in the Option Agreement.  If, at the date
of termination, the Participant is not entitled to exercise his or her entire
Option, the shares covered by the un-exercisable portion of the Option shall
revert to and again become available for issuance under the Plan. If, after
termination, the Participant does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the shares covered by
such Option shall not become available for issuance under the Plan.

 

(C)                                Death
of a Participant.  In the event of
the death of a Participant during, or within a period specified in the Option
Agreement after the termination of, the Participant’s Continuous Service, the
Option may be exercised (to the extent the Participant was entitled to exercise
the Option as of the date of death) by the Participant’s estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Participant’s death pursuant
to subsection 15(b), but only within the period ending on the earlier of (1) the
date eighteen (18) months following the date of death (or such longer or
shorter period specified in the Option Agreement), or (2) the expiration
of the term of such Option as set forth in the Option Agreement.  If, at the time of death, the Participant was
not entitled to exercise his or her entire Option, the shares covered by the
un-exercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate, and the shares
covered by such Option shall not become available for issuance under the Plan.

 

8

 

(c)                                  Limitations
on Incentive Stock Options.

 

(i)                                     Initial Exercise.  The aggregate Fair Market Value of the shares
of Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by a Participant in any calendar year, under the Plan or
otherwise, shall not exceed $100,000. 
For this purpose, the Fair Market Value of the shares of Common Stock
shall be determined as of the date of grant and each Incentive Stock Option
shall be taken into account in the order granted.

 

(ii)                                  Ten Percent Stockholders.  An Incentive Stock Option granted to a
Participant who is the holder of record of more than ten percent (10%) of the
combined voting power of all classes of stock of the Company shall have an
exercise price at least equal to 110% of the Fair Market Value of a share of
Common Stock on the date of grant and the term of the Option shall not exceed
five (5) years.

 

(iii)                               Notification of Disqualifying Disposition.  If any Participant shall make any disposition
of shares of Common Stock acquired pursuant to the exercise of an Incentive
Stock Option under the circumstances described in Section 421(b) of
the Code (relating to certain disqualifying dispositions), the Participant
shall notify the Company of such disposition within ten (10) days thereof.

 

7.                                      STOCK APPRECIATION RIGHTS

 

(a)                                  Grant of Stock Appreciation Rights.  The Committee is hereby authorized to grant
Stock Appreciation Rights to Participants. 
Subject to the terms of the Plan and any applicable Award Agreement, a
Stock Appreciation Right granted under the Plan shall confer on the holder
thereof a right to receive, upon exercise thereof, the excess of (i) the
Fair Market Value of a share of Common Stock on the date of exercise over (ii) the
grant price of the Stock Appreciation Right as specified by the Committee.

 

(b)                                 Award Agreement.  Each Stock Appreciation Right granted under
the Plan shall be evidenced by an Award Agreement.

 

(i)                                     Grant Price.  The grant price shall be determined by the
Committee; provided, however, and
except as provided in Section 14, that such price shall not be less than
100% of the Fair Market Value of one share of Common Stock on the date of
grant, except that if a Stock Appreciation Right is at any time granted in
tandem with an Option, the grant price of the Stock Appreciation Right shall
not be less than the exercise price of such Option.

 

(ii)                                  Term.  The term of each Stock Appreciation Right
shall not exceed ten (10) years from the date of grant.

 

(iii)                               Time and Method of Exercise.  The Committee shall establish in the
applicable Award Agreement the time or times at which a Stock Appreciation
Right may be exercised in whole or in part. 
At the discretion of the Committee, the payment upon exercise may be in
cash, shares of Common Stock or any combination thereof, or in any other manner
approved by the Committee in its sole discretion.  The Committee’s determination as to the form
of settlement shall be set forth in the Award Agreement.

 

9

 

(iv)          Termination of Continuous Service.  Each Award Agreement shall set forth the
extent, if any, to which the Participant shall have the right to exercise the
Stock Appreciation Right following termination of the Participant’s Continuous
Service.  Such provisions shall be
determined in the sole discretion of the Committee, need not be uniform among
all Stock Appreciation Rights issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Continuous Service.

 

8.             RESTRICTED
STOCK AND RESTRICTED STOCK UNITS

 

(a)           Grant of Restricted Stock or Restricted Stock Units.  The Committee
is hereby authorized to grant Awards of Restricted Stock and Restricted Stock
Units to Participants.

 

(b)           Award Agreement.  Each grant of Restricted Stock or Restricted
Stock Units shall be evidenced by an Award Agreement.

 

(i)            Restrictions on Transfer.  Shares of Restricted Stock and Restricted
Stock Units shall be subject to such restrictions as the Committee may
establish in the applicable Award Agreement (including, without limitation, any
limitation on the right to vote a share of Restricted Stock or the right to
receive any dividend or other right), which restrictions may lapse separately
or in combination at such time or times, in such installments or otherwise, as
the Committee may deem appropriate. 
Unrestricted shares of Common Stock, evidenced in such manner as the
Committee shall deem appropriate, shall be delivered to the holder of
Restricted Stock promptly after such restrictions have lapsed.

 

(ii)           Share Registration.  Any Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee may deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates.  In the
event any stock certificate is issued in respect of shares of Restricted Stock
granted under the Plan, such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.

 

(iii)          Forfeiture.  Upon
termination of Continuous Service during the restriction period, except as
determined otherwise by the Committee, all shares of Restricted Stock and all
Restricted Stock Units that are then subject to restrictions shall be forfeited
and reacquired by the Company.

 

9.             PERFORMANCE
AWARDS

 

(a)           Grant of Performance Awards.  The Committee is hereby authorized to grant
Performance Awards to Participants. 
Performance Awards include arrangements under which the grant, issuance,
retention, vesting and/or transferability of any Award is subject to such
Performance Criteria and such additional conditions or terms as the Committee
may designate.

 

(b)           Award Agreement.  Each grant of a Performance Award shall be
evidenced by an Award Agreement.  Subject
to the terms of the Plan and any applicable Award Agreement, a Performance
Award granted under the Plan:

 

10

 

(i)            may be
denominated or payable in cash, shares of Common Stock (including, without
limitation, Restricted Stock), other securities, or other Awards; and

 

(ii)           shall confer on
the holder thereof rights valued as determined by the Committee and payable to,
or exercisable by, the holder of the Performance Award, in whole or in part,
upon the achievement of such performance goals during such Performance Periods
as the Committee shall establish.

 

(c)           Covered Employee. 
The Committee may from time to time grant Awards to
Covered Employees that are intended to satisfy the performance-based
compensation requirements of Section 162(m) of the Code.  For purposes of such Awards, the Committee
shall consider all of the requirements of Section 162(m), including the
Qualifying Performance Criteria, approvals and certification by solely outside
directors, the individual Award limits and any other requirements under Section 162(m) of
the Code.

 

10.          OTHER STOCK-BASED AWARDS

 

The
Committee is hereby authorized to grant to Participants such other Awards that
are denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, shares of Common Stock, as are deemed by the
Committee to be consistent with the purposes of the Plan; provided,
however, that such grants must comply with applicable law.  Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the terms and
conditions of such Awards.  Shares of Common
Stock or other securities delivered pursuant to a purchase right granted under
this Section 10 shall be purchased for such consideration, which may be
paid by such method or methods and in such form or forms, including, without
limitation, cash, shares of Common Stock, other securities, or other Awards, or
any combination thereof, as the Committee shall determine.

 

11.          DIVIDEND EQUIVALENTS

 

The
Committee is hereby authorized to grant to Participants the right, if so
determined by the Committee, to receive, currently, or on a deferred basis,
dividends or Dividend Equivalents, with respect to the shares of Common Stock
covered by the Award.  The Committee may
provide that any dividends paid on shares of Common Stock subject to an Award
must be reinvested in additional shares of Common Stock, which may or may not
be subject to the same vesting conditions and restrictions applicable to the
Award.  Notwithstanding the award of
Dividend Equivalents or dividends, a Participant shall not be entitled to
receive a special or extraordinary dividend or distribution unless the
Committee shall have expressly authorized such receipt.  All distributions, if any, received by a
Participant with respect to an Award as a result of any split, Common Stock
dividend, combination of shares of Common Stock, or other similar transaction
shall be subject to the restrictions applicable to the original Award.

 

12.          TAX WITHHOLDING

 

The
Company or any Affiliate shall be authorized to withhold from any Award granted
or any payment due or transfer made under any Award or under the Plan the
amount (in cash, shares of 

 

11

 

Common
Stock, other securities, or other Awards) of withholding taxes due in respect
of an Award, its exercise, or any payment or transfer under such Award or under
the Plan and to take such other action as may be necessary in the opinion of
the Company or Affiliate to satisfy statutory withholding obligations for the
payment of such taxes.

 

13.          CANCELLATION AND RE-GRANT OF
OPTIONS

 

(a)           Subject to
subsection (b) of this Article 13, the Board shall have the authority
to effect, at any time and from time to time (i) the repricing of any
outstanding Options under the Plan and/or (ii) with the consent of the
affected holders of Options, the cancellation of any outstanding Options and
the grant in substitution of new Options under the Plan covering the same or
different numbers of shares of Common Stock, but having an exercise price per
share not less than 100% of the Fair Market Value, or, in the case of a ten
percent (10%) stockholder (as defined in subsection 6(c)), not less than 110%
of the Fair Market Value) per share of Common Stock on the new grant date.

 

(b)           Prior to the
implementation of any such repricing or cancellation of one or more outstanding
Options as described in Section 13(c), the Board shall obtain the approval
of the stockholders of the Company to the extent required by the New York Stock
Exchange, Nasdaq or other securities exchange listing requirements applicable
to the Company, or applicable law.

 

(c)           To the extent
required by Section 162(m) of the Code, shares subject to an Option
canceled under this Section 13 shall continue to be counted against the
maximum award of Options permitted to be granted during any calendar year to an
individual Participant pursuant to Section 4(b) of the Plan.  The repricing of an Option hereunder
resulting in a reduction of the exercise price shall be deemed to be a
cancellation of the original Option and the grant of a new Option; in the event
of such repricing, both the original and the new Options shall be counted
against the maximum awards of Options permitted to be granted during any
calendar year to an individual Participant pursuant to Section 4(b) of
the Plan.  The provisions of this
Section 13(c) shall be applicable only to the extent required by Section 162(m) of
the Code.

 

14.          ADJUSTMENTS UPON CHANGES IN
STOCK

 

(a)           Changes in Capital. 
If any change is made in the Common Stock subject to
the Plan, or subject to any Award, without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan and the maximum
number of shares subject to award to any person during any calendar year, and
the outstanding Awards will be appropriately adjusted in the class(es) and
number of shares and price per share of stock subject to such outstanding
Awards.  Such adjustments shall be made
by the Committee proportionately, so as to put the Participant in the same economic
position both prior to and after the change in capital.  The determination of the Committee shall be
final, binding and conclusive.  (The
conversion of 

 

12

 

any
convertible securities of the Company shall not be treated as a “transaction
not involving the receipt of consideration by the Company.”)

 

(b)           Change of Control. 
In the event of a Change of Control, to the extent
permitted by applicable law: (i) any surviving corporation (or an
Affiliate thereof) shall assume any Awards outstanding under the Plan or shall
substitute similar Awards for those outstanding under the Plan and
(ii) such Awards shall continue in full force and effect.  In the event any surviving corporation (or an
Affiliate) refuses to assume or continue such Awards, or to substitute similar
Awards for those outstanding under the Plan, then vesting (or release from the
repurchase option) shall accelerate such that such Awards are fully vested at
such event and shall be exercisable for a period of 15 days after notice from
the Company.  If not so exercised within
the 15 day period, then such Awards shall be terminated.

 

15.          GENERAL PROVISIONS

 

(a)           Forms of Payment for Awards.  Subject to the terms of the Plan and any
applicable Award Agreement, payments or transfers to be made by the Company or
an Affiliate upon the grant, exercise, or payment of an Award may be made in
such form or forms as the Committee shall determine, including, without
limitation, cash, shares of Common Stock, rights in or shares issuable under
the Award or other Awards, other securities, or other Awards or any combination
thereof, and may be in a single payment or transfer, in installments, or on a
deferred basis, in each case in accordance with the rules and procedures
established by the Committee.  Such rules and
procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents in respect of installment or
deferred payments.

 

(b)           Limits on Transfer of Awards.  Except as provided by the Committee, no Award,
and no right under any such Award, shall be assignable, alienable, saleable, or
transferable by a Participant otherwise than by will or by the laws of descent
and distribution; provided, however, that, if so
determined by the Committee, a Participant may, in the manner established by
the Committee, designate a beneficiary or beneficiaries to exercise the rights
of the Participant with respect to any Award upon the death of a
Participant.  Each Award, and each right
under any Award, shall be exercisable, during the Participant’s lifetime, only
by the Participant or, if permissible under applicable law, by the Participant’s
guardian or legal representative.  No
Award, and no right under any such Award, may be pledged, alienated, attached,
or otherwise encumbered, and any purported pledge, alienation, attachment, or
encumbrance thereof shall be void and unenforceable against the Company or any
Affiliate.

 

(c)           Conditions and Restrictions Upon Securities Subject to
Awards.  The
Committee may provide that the shares of Common Stock issued upon exercise of
an Option or Stock Appreciation Right or otherwise subject to or issued under
an Award shall be subject to such further agreements, restrictions, conditions
or limitations as the Committee in its discretion may specify prior to the
exercise of such Option or Stock Appreciation Right or the grant, vesting or
settlement of such Award, including without limitation, conditions on vesting
or transferability 

 

13

 

and
forfeiture or repurchase provisions or provisions on payment of taxes arising
in connection with an Award.  Without
limiting the foregoing, such restrictions may address the timing and manner of
any resales by the Participant or other subsequent transfers by the Participant
of any shares of Common Stock issued under an Award, including without
limitation: (i) restrictions under an insider trading policy or pursuant
to applicable law; (ii) restrictions designed to delay and/or coordinate
the timing and manner of sales by Participant and holders of other Company
equity compensation arrangements; (iii) restrictions as to the use of a
specified brokerage firm for such resales or other transfers; and (iv) provisions
requiring shares to be sold on the open market or to the Company in order to
satisfy tax withholding or other obligations.

 

(d)           Share Certificates.  All shares or other securities 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
Securities and Exchange Commission, any stock exchange upon which such shares
of Common Stock or other securities are then listed, and any applicable
Federal, state, or local securities laws, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.  Notwithstanding any
other provision of this Plan to the contrary, the Company may elect to satisfy
any requirement under this Plan for the registration or delivery of stock
certificates through the use of book-entry registration.

 

(e)           Changes in Accounting or Tax Rules.  Except as provided otherwise at the time an
Award is granted, notwithstanding any other provision of the Plan to the
contrary, if, during the term of the Plan, any changes in the financial or tax
accounting rules applicable to any Award shall occur which, in the sole
judgment of the Committee, may have a material adverse effect on the reported
earnings, assets or liabilities of the Company, the Committee shall have the
right and power to modify, as necessary, any then outstanding and unexercised
Options, Stock Appreciation Rights and other outstanding Awards as to which the
applicable services or other restrictions have not been satisfied.

 

(f)            Non-exclusivity of the Plan.  The adoption of the Plan shall not be
construed as creating any limitations upon the right and authority of the
Committee to adopt such other incentive compensation arrangements (which
arrangements may be applicable either generally to a class or classes of
individuals or specifically to a particular individual or particular
individuals) as the Committee in its discretion determines desirable.

 

(g)           Other Award Agreement Provisions.  Each Award Agreement may contain such other
terms and conditions not inconsistent with the Plan as may be determined by the
Committee, in its sole discretion.

 

(h)           Other Employee Benefits.  The amount of any compensation deemed to be
received by a Participant as a result of the exercise of an Option or Stock
Appreciation Right, the sale of shares received upon such exercise, the vesting
of any Restricted Stock, receipt of Performance Shares, distributions with
respect to Restricted Stock Units, Performance Awards, or Other Stock-Based
Awards shall not constitute “earnings” or “compensation” with respect to 

 

14

 

which
any other employee benefits of such employee are determined, including without
limitation, benefits under any pension, profit sharing, 401(k), life insurance
or salary continuation plan.

 

(i)            Severability.  If any provision of the Plan or any Award
Agreement shall be determined to be illegal or unenforceable by any court of
law in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.

 

(j)            Governing Law.  The validity and construction of this Plan
and the Award Agreements shall be construed in accordance with and governed by
the laws of the State of Delaware other than any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of this
Plan and the Award Agreements to the substantive laws of any other
jurisdiction.

 

(k)           Section 409A.  Notwithstanding anything in this Plan to the
contrary, the Plan and Awards made under the Plan are intended to comply with
the requirements imposed by Section 409A of the Code.  If any Plan provision or Award under the Plan
would result in the imposition of an additional tax under Section 409A of
the Code, the Company and the Participant intend that the Plan provision or
Award will be reformed to avoid imposition, to the extent possible, of the
applicable tax and no action taken to comply with Section 409A of the Code
shall be deemed to adversely affect the Participant’s rights to an Award.  The Participant further agrees that the
Committee, in the exercise of its sole discretion and without the consent of
the Participant, may amend or modify an Award in any manner and delay the
payment of any amounts payable pursuant to an Award to the minimum extent
necessary to meet the requirements of Section 409A of the Code as the
Committee deems appropriate or desirable.

 

(l)            Stockholder Rights.  No Participant nor any other holder of an
Award granted under the Plan shall be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares subject to such Award
unless and until such person has satisfied all requirements for exercise of the
Award or lapse of restrictions pursuant to its terms.

 

16.          AMENDMENT, MODIFICATION AND
TERMINATION

 

(a)           Amendment, Modification, and Termination.  Subject to Sections 3, 15(k) and 16(b),
and only upon unanimous approval of the entire Board, the Board may at any time
terminate, and from time to time may amend or modify the Plan; provided, however, that no amendment or modification may
become effective without approval of the stockholders of the Company if
stockholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, or if the Company, on the advice of
counsel, determines that stockholder approval is otherwise necessary or
desirable.

 

(b)           Awards Previously Granted.  Except as otherwise may be required under Section 15(k),
notwithstanding Section 16(a), to the contrary, no amendment, modification
or termination of the Plan or Award Agreement shall adversely affect in any
material way any previously granted Award, without the written consent of the
Participant holding such Award.

 

15

 

17.          STOCKHOLDER APPROVAL;
EFFECTIVE DATE OF PLAN

 

The Plan shall be effective immediately upon
approval by the stockholders.  Unless
sooner terminated by the Board, this Plan shall terminate automatically on
March 11, 2017.  After the Plan is
terminated, no Awards may be granted. 
Awards outstanding at the time the Plan is terminated shall remain
outstanding in accordance with the terms and conditions of the Plan and the
Award Agreement.

 

16Exhibit 4.1

 

 

 

DISTRIBUTION REINVESTMENT PLAN

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Summary

  	
  1

  
	
  Questions and Answers

  	
  2

  
	
  Distribution Reinvestment Plan

  	
  6

  
	
   

  	
  1.

  	
  The Plan

  	
  6

  
	
   

  	
  2.

  	
  Eligibility

  	
  6

  
	
   

  	
  3.

  	
  How the Plan Works

  	
  6

  
	
   

  	
  4.

  	
  How to Enroll

  	
  7

  
	
   

  	
  5.

  	
  Certain Limitations

  	
  8

  
	
   

  	
  6.

  	
  Statements of Account

  	
  9

  
	
   

  	
  7.

  	
  Termination of Participation

  	
  9

  
	
   

  	
  8.

  	
  Safekeeping of Units Held Under the Plan

  	
  9

  
	
   

  	
  9.

  	
  Certificates for Units

  	
  10

  
	
   

  	
  10.

  	
  Sale of Units Held Under the Plan

  	
  10

  
	
   

  	
  11.

  	
  Voting of Units Held Under the Plan

  	
  11

  
	
   

  	
  12.

  	
  Unit Distributions and Unit Splits

  	
  11

  
	
   

  	
  13.

  	
  Rights Offering

  	
  11

  
	
   

  	
  14.

  	
  Death or Incompetence of a Participant

  	
  11

  
	
   

  	
  15.

  	
  Amendment, Suspension or Termination of the Plan

  	
  11

  
	
   

  	
  16.

  	
  Notices

  	
  12

  
	
   

  	
  17.

  	
  Income Tax Considerations Relating to the Plan

  	
  12

  
	
   

  	
  18.

  	
  Administration

  	
  15

  
	
   

  	
  19.

  	
  Liability of the Partnership and the Administrator

  	
  16

  
	
   

  	
  20.

  	
  Governing Law

  	
  16

  
	
   

  	
  21.

  	
  Effective Date

  	
  16

  

 

i

 

 

DISTRIBUTION REINVESTMENT PLAN

 

SUMMARY

 

The
following describes the Distribution Reinvestment Plan of Brookfield
Infrastructure Partners L.P. which became effective on June 29, 2010.  For further details, please read the full
text of the Plan as well as the questions and answers that follow.  Unitholders should consult their tax advisors
about the tax consequences which will result from their participation in the
Plan.

 

The
Distribution Reinvestment Plan is a convenient and cost-effective way to
increase your investment in Brookfield Infrastructure Partners L.P.

 

You
have the option of either receiving cash distributions or automatically
reinvesting all or a portion of your cash distributions in our units.

 

The
Plan helps you increase your investment in our units by offering you convenience:

 

·                       Distributions
are reinvested automatically

 

·                       Your investment
in our units is administered for you

 

·                       You receive
regular statements and income tax forms

 

·                       You may elect
at any time to sell some or all or your units held under the Plan

 

·                       You may deposit
the certificates for any or all of the units you own for safekeeping

 

and
attractive cost savings:

 

·                       No trading fees
and no service charges, except in connection with the sale of units held under
the Plan

 

 

 

DISTRIBUTION REINVESTMENT PLAN

 

QUESTIONS AND ANSWERS

 

What is the Distribution Reinvestment Plan?

 

The
Distribution Reinvestment Plan (the “Plan”) of Brookfield Infrastructure
Partners L.P. (the “partnership”) enables holders of the partnership’s units (“units”)
to acquire additional units by reinvesting their cash distributions.

 

What are the advantages of the Plan?

 

As
units acquired under the Plan are treasury units purchased directly from the
partnership, participants in the Plan (“participants”) do not pay trading fees
or service charges of any kind, except in connection with the sale of units held
under the Plan.  All other administrative
costs of the Plan are borne by the partnership.

 

Full
investment of all cash distributions is possible since fractional units will be
credited to a participant’s account.

 

Who is eligible to participate?

 

Any
registered or beneficial holder of units who is a resident of Canada or the
United States may participate in the Plan. Holders who are not residents of
Canada or the United States may participate in the Plan provided that there are
not any laws or governmental regulations that may limit or prohibit them from
participating in the Plan. The partnership reserves the right to terminate
participation in the Plan of any holder if it is deemed advisable under any
foreign laws or regulations.

 

How does an eligible unitholder become a participant in the Plan?

 

A
registered unitholder may enroll in the Plan by logging into his or her account
on the internet, by telephone or by completing the enrollment form and
returning it to The Bank of New York Mellon (the “Administrator”). A completed
enrollment form must be received by the Administrator no later than five
business days prior to the record date for any cash distribution (which will
usually be the last business day prior to the month in which the distribution
is payable) in order for that distribution to be reinvested under the Plan.

 

If
a participant is a beneficial owner whose units are registered in the name of
The Depository Trust Company (“DTC”) or a name other than the participant’s own
name, he or she may participate in the Plan by (i) directing his or her
broker to electronically transfer all or any 

 

2

 

number
of whole units into his or her name directly through the Direct Registration
System and then enrolling such units in the Plan or (ii) making
appropriate arrangements with the broker, investment dealer, financial
institution or other nominee who holds the participant’s units to enroll in the
Plan on the participant’s behalf.

 

Will it be possible for participants to receive a proportion of their
distributions in cash and have the remainder reinvested?

 

Yes.  Unitholders may elect to reinvest the cash
distributions paid on all or any portion of the units registered in their names
by so indicating on the enrollment form. 
Where no preference is indicated, 100% of a participant’s cash
distributions will be reinvested.

 

Regular
quarterly statements of account will be mailed to each participant (or, in the
case of DTC participants, DTC will receive such statement on behalf of
beneficial owners participating in the Plan).

 

How will new units be purchased for participants?

 

The
partnership will pay to the Administrator the cash distributions paid on the
units registered in the name of a participant, in addition to the cash
distributions paid on the units held by the Administrator for the account of a
participant under the Plan.  Depending
upon the election of the participant, the Administrator will apply these funds
to purchase units from the partnership which will then be held by the
Administrator for the account of the participant.

 

What will be the price of new units purchased under the Plan?

 

Units
purchased under the Plan will be issued from treasury at a price per unit
calculated by reference to the volume weighted average of the trading price (in
U.S. dollars) for the units on the New York Stock Exchange for the five trading
days immediately preceding the date the relevant distribution is paid by the
partnership.

 

How will units be held under the Plan?

 

Units
acquired by a registered holder under the Plan will be maintained in that
holder’s Plan account in non-certificated form for safekeeping. Units purchased
on behalf of beneficial owners of units who are participating in the Plan
through their broker will be maintained in their broker’s Plan account.

 

Registered
unitholders who own units in certificated form may deposit their certificates
with the Administrator for safekeeping, free of charge.

 

Will certificates be issued for the new units?

 

No. 
However, a registered unitholder may at any time obtain a certificate for any
number of whole units held for the account of the participant under the Plan by
notifying the Administrator over the internet, by telephone or in writing.

 

3

 

Are there restrictions on dealing with units purchased under the Plan?

 

Yes.
Units held for a participant’s account may not be pledged.  Therefore, prior to pledging units, a
registered holder must request that his or her units be electronically
transferred to his or her brokerage account or that a unit certificate be
issued.  Certificates will not be issued
for fractional units.  Participants who
are beneficial owners must make appropriate arrangements with the broker,
investment dealer, financial institution or other nominee who holds the
participant’s units prior to such transactions.

 

How does a participant terminate participation in the Plan?

 

Participation
in the Plan may be terminated at any time by giving notice to the Administrator
(or in the case of beneficial owners, by making arrangements to terminate
participation through their nominee).

 

When
participation is terminated, or upon suspension or termination of the Plan by
the partnership, the Administrator will continue to hold the participant’s
units in book-entry form unless he or she requests a unit certificate for any
whole units and a cash payment for any fractional unit.

 

Alternatively,
registered unitholders may request that all or part of their units be sold or
have the Administrator electronically transfer his or her units to his or her
brokerage account.  When units are sold
through the Administrator, a holder will receive the proceeds less a handling
charge of US$15.00 and any trading fees.

 

When is termination effective?

 

Termination
will be effective immediately upon receipt of notice of termination by the
Administrator.

 

What statements will be sent to participants?

 

After
each distribution payment date, a statement of account will be mailed to each
participant (or, in the case of DTC participants, DTC will receive such
statement on behalf of beneficial owners participating in the Plan). The
statements are a continuing record of purchases made under the Plan and should
be retained for tax purposes.  In
addition, the partnership will annually provide each participant with
appropriate information for tax reporting purposes.

 

What are the tax consequences of participation in the Plan?

 

Distribution
reinvestment pursuant to the Plan does not relieve participants of any tax
implications associated with such distributions. A summary explanation of the
tax implications of participation in the Plan can be found in section 17 of the
Plan, under the heading “Income Tax Considerations Relating to the Plan”. All
participants are advised to consult with their own tax advisors to determine
the particular tax consequences that may result from their participation in the
Plan and the subsequent sale by them of units purchased pursuant to the Plan.

 

4

 

Where should further inquiries be directed?

 

	
  Inquiries should be addressed to the Administrator
  as follows:

  
	
   

  	
   

  	
   

  
	
  Internet:

  	
   

  	
  www.bnymellon.com/shareowner/isd

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  You
  can enroll in the Plan, obtain information, and perform certain transactions
  on your Plan account by accessing Investor ServiceDirect®. To gain access,
  you will need to use the Investor Identification Number (IID) which can be
  found in a bolded box on your check stub, statement, or advice to establish a
  PIN. In order to access your account, you will be required to complete an
  account activation process. This one-time authentication process will be used
  to validate your identity in addition to your IID and self-assigned PIN.

  
	
   

  	
   

  	
   

  
	
  By
  telephone:

  	
   

  	
  1-877-243-3717

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1-800-231-5469
  (for the hearing impaired)

  
	
   

  	
   

  	
   

  
	
  By
  mail:

  	
   

  	
  The
  Bank of New York Mellon

  
	
   

  	
   

  	
  c/o
  BNY Mellon Shareowner Services

  
	
   

  	
   

  	
  P.O. Box
  358035

  
	
   

  	
   

  	
  Pittsburgh,
  PA 15252-8035

  
	
   

  	
   

  	
   

  
	
  By
  email:

  	
   

  	
  shrrelations@bnymellon.com

  
	
   

  	
   

  	
   

  
	
  Inquiries can also be addressed to the partnership
  as follows:

  
	
   

  	
   

  	
   

  
	
  By
  telephone:

  	
   

  	
  Brookfield
  Infrastructure Partners L.P.

  
	
   

  	
   

  	
  1-866-989-0311
  (North America)

  
	
   

  	
   

  	
  1-416-363-9491
  (Global)

  

 

5

 

 

DISTRIBUTION REINVESTMENT
PLAN

 

1.                                      The
Plan

 

The
Distribution Reinvestment Plan (the “Plan”) of Brookfield Infrastructure
Partners L.P. (the “partnership”) provides a convenient means for eligible
holders of units of the partnership (“units”) to purchase additional units by
reinvesting their cash distributions.

 

The
declaration and payment of distributions on the partnership’s units is at the
discretion of the partnership’s general partner.  The partnership presently pays quarterly
distributions on its units on March 31, June 30, September 30
and December 31 of each year.

 

Under
the Plan, units will be acquired at 100% of their “Market Price” (as defined
below).  As these units will be treasury
units purchased directly from the partnership, no trading fees or service
charges will be payable, except in connection with the sale of units held under
the Plan.  All other administrative costs
of the Plan will be paid by the partnership.

 

Through
the reinvestment of cash distributions, the partnership will acquire additional
capital funds which will be used for general corporate purposes.

 

2.                                      Eligibility

 

Any
beneficial or registered holder of units who is a resident of Canada or the
United States and meets the requirements below is eligible to become a
participant in the Plan (a “participant”). Holders who are not residents of
Canada or the United States may participate in the Plan provided that there are
not any laws or governmental regulations that may limit or prohibit them from
participating in the Plan. The partnership reserves the right to terminate
participation in the Plan of any holder if it is deemed advisable under any
foreign laws or regulations.

 

3.                                      How the
Plan Works

 

A
participant may elect to reinvest the cash distributions paid on all or any
portion of the units owned by him or her. 
Depending upon the election, the cash distributions paid on all or a
portion of the units owned by the participant, including all units acquired
under the Plan and held for the account of the participant, will be applied
automatically on each distribution payment date (an “Investment Date”) to
purchase additional units under the Plan.

 

Units
purchased under the Plan on any Investment Date will be issued from treasury at
a price per unit (the “Market Price”) calculated by reference to the volume
weighted average of the trading price (in U.S. dollars) for the units on the
New York Stock Exchange (the “NYSE”) for the five trading days immediately
preceding the relevant Investment Date.

 

6

 

On
each Investment Date, the partnership will pay to The Bank of New York Mellon,
the administrator of the Plan, (the “Administrator”) the cash distributions
otherwise payable to a participant in respect of the units the participant has
elected to include in the Plan. Any amount required under applicable tax laws
to be withheld by the partnership from cash distributions paid to any
participant and remitted to a taxing authority will be withheld and remitted as
required, with the balance being paid to the Administrator for reinvestment on
behalf of the participant or distribution to the participant.  Depending upon the election of the
participant, the cash distributions paid on all or a portion of units
registered in the name of the participant or held by the Administrator for the
account of the participant will be used by the Administrator to purchase units
from the partnership for the account of the participant.

 

Units
purchased under the Plan will be registered in the name of the participant, and
the participant’s account maintained by the Administrator will be credited with
the number of units, including fractions computed to four decimal places, equal
to the cash distributions (or the relevant percentage of cash distributions
reinvested pursuant to the participant’s election) paid on the participant’s
units divided by the relevant Market Price.

 

4.                                      How to
Enroll

 

Registered Unitholders

 

An
eligible registered unitholder may enroll in the Plan at any time by logging
into his or her account on the internet, by telephone or by completing an
enrollment form and sending it to the Administrator.  A copy of the Plan is available on the
partnership’s website, www.brookfieldinfrastructure.com, and can also be
obtained from the Administrator at any time. 
Unitholders should not send distribution checks to the Administrator or
the partnership.

 

The
enrollment form must be signed by all registered holders of units which are
registered in more than one name.  Also,
if a unitholder’s total holding is registered in different names (e.g., full
name on some unit certificates and initials and surname on other unit
certificates), a separate enrollment form must be completed for each different
registration name. If distributions from all unitholdings are to be reinvested
under one account, registration must be identical.

 

A
completed enrollment form must be received by the Administrator no later than
five business days prior to the record date for any cash distribution (which
will usually be the last business day prior to the month in which the
distribution is payable) in order for that distribution to be reinvested under
the Plan.

 

Once
a registered unitholder has enrolled in the Plan, participation will continue
until the participant terminates his or her participation (as set forth below)
or until the Plan is suspended or terminated.

 

Beneficial Owners of Units

 

If
a unitholder is a beneficial owner of units, he or she should contact his or
her broker, investment dealer, financial institution or other nominee who holds
his or her units to provide instructions regarding his or her participation in
the Plan and to inquire about any applicable 

 

7

 

deadlines
that the nominee may impose or be subject to and to confirm what fees, if any,
the nominee may charge to enroll all or any portion of such unitholder’s units
in the Plan on his or her behalf or whether the nominee’s policies might result
in any costs otherwise becoming payable by the unitholder.

 

If
a participant is a beneficial owner whose units are registered in the name of
The Depository Trust Company (“DTC”) or a name other than the participant’s own
name, he or she may participate in the Plan by (i) directing his or her
broker to electronically transfer all or any number of whole units into his or
her name directly through the Direct Registration System and then enrolling
such units in the Plan or (ii) making appropriate arrangements with the
broker, investment dealer, financial institution or other nominee who holds the
participant’s units to enroll in the Plan on the participant’s behalf, either
as a nominee that delivers a completed and executed enrollment form to the
Administrator in the manner provided in the Plan, or, if applicable, as a DTC
participant through enrollment by DTC.

 

If
a participant is a beneficial owner of units and wishes to enroll in the Plan
through a DTC participant in respect of his or her units registered through
DTC, appropriate instructions must be received by DTC from the DTC participant
not later than such deadline as may be established by DTC from time to time, in
order for the instructions to take effect on the Investment Date to which that
distribution record date relates.

 

Instructions
received by DTC after its internal deadline will not take effect until the next
following Investment Date. DTC participants holding units on behalf of
beneficial owners of units registered through DTC must arrange for DTC to
enroll such units in the Plan on behalf of such beneficial owners in respect of
each distribution payment date.

 

DTC
will provide instructions to the Administrator regarding the extent of its
participation in the Plan, on behalf of beneficial owners of units, in respect
of every Investment Date on which cash distributions otherwise payable to DTC,
as unitholder of record, are to be reinvested under the Plan.

 

Any
units acquired outside of the Plan which are not registered in exactly the same
name or manner as units enrolled in the Plan will not be automatically enrolled
in the Plan.  If a participant purchases
additional units outside the Plan, he or she is advised to contact the
Administrator to ensure that all units the participant owns are enrolled in the
Plan.

 

5.                                      Certain
Limitations

 

A
participant may not transfer the right to participate in the Plan to another
person.

 

Subject
to applicable law and regulatory policy, the partnership reserves the right to
determine, from time to time, a minimum number of units that a participant must
hold in order to be eligible to participate in, or continue to participate in,
the Plan. Without limitation, the partnership further reserves the right to
refuse participation in the Plan to, or terminate the participation of, any
person who, in the partnership’s sole opinion, is participating in the Plan
primarily with a view to arbitrage trading, whose participation in the Plan is
part of a scheme to avoid applicable legal requirements or engage in unlawful
behavior or has been artificially accumulating the 

 

8

 

partnership’s
securities, for the purpose of taking undue advantage of the Plan to the
partnership’s detriment. The partnership may also deny the right to participate
in the Plan to any person or terminate the participation of any participant in the
Plan if the partnership deems it advisable under any laws or regulations.

 

6.                                      Statements
of Account

 

As
soon as reasonably practicable after each Investment Date, a statement of
account will be mailed to each participant setting out the amount of the relevant
cash distribution reinvested, the applicable Market Price, the number of units
purchased under the Plan on the Investment Date and the total number of units,
computed to four decimal places, held for the account of the participant under
the Plan (or, in the case of DTC participants, DTC will receive such statement
on behalf of beneficial owners participating in the Plan).

 

The
statements are a continuing record of the cost of the units purchased under the
Plan and should be retained for income tax purposes.  In addition, the partnership will annually
provide each participant with appropriate information for tax reporting
purposes.

 

7.                                      Termination
of Participation

 

A
participant may terminate his or her participation in the Plan at any time by
providing notice to the Administrator (or in the case of beneficial owners, by
making arrangements to terminate participation through their nominee).  Termination will be effective immediately
upon receipt of notice of termination by the Administrator.  The notice of termination must be signed by
all registered holders of units which are registered in more than one name.

 

Upon
termination, the Administrator will continue to hold the participant’s units in
book-entry form unless he or she requests a unit certificate for any whole
units and a cash payment for any fractional unit.  The cash payment will be calculated on the
basis of the closing price of the units on the NYSE on the business day
immediately preceding the date of termination. 
All subsequent distributions will be paid directly to the
unitholder.  Participation in the Plan
may be renewed by registered holders at any time by signing a new enrollment
form and returning it to the Administrator.

 

Alternatively,
unitholders may request that all or part of their units be sold or have the
Administrator electronically transfer his or her units to his or her brokerage
account.  When units are sold through the
Administrator, a holder will receive the proceeds less a handling charge of
US$15.00 and any trading fees.

 

8.                                      Safekeeping
of Units Held Under the Plan

 

Units
acquired by a registered holder under the Plan will be maintained in such
holder’s Plan account (and will be enrolled in the Plan) in non-certificated
form for safekeeping.  Safekeeping
protects units against physical loss, theft or accidental destruction and also
provides a convenient way for registered unitholders to keep track of their
units. Only units held in safekeeping may be sold through the Plan.

 

9

 

Registered
unitholders who own units in certificated form may deposit their certificates
with the Administrator for safekeeping, free of charge.  The Administrator will provide mail loss
insurance coverage for certificates with a value not exceeding U.S.$100,000 in
any one shipping package.  Certificates
should be delivered to the Administrator at 500 Ross Street, Room 0675,
Pittsburgh, PA 15262 by registered mail, a courier service or other receipted
delivery service.  Mail loss insurance
covers only the replacement of units and in no way protects against any loss
resulting from fluctuations in the value of units.

 

Units
purchased on behalf of beneficial owners of units who are participating in the
Plan through their broker will be maintained in their broker’s Plan account.

 

9.                                      Certificates
for Units

 

A
registered holder may, at any time, obtain unit certificates for any number of
whole units held for the participant’s account under the Plan by notifying the
Administrator.  In no event will
certificates be issued for fractional units. 
Certificates for units acquired under the Plan will not be issued to
participants unless specifically requested.

 

Units
held for the account of a participant under the Plan may not be pledged.  Consequently, prior to pledging units, a
registered holder must request that his or her units be electronically
transferred to his or her brokerage account or that a unit certificate be
issued.

 

Accounts
under the Plan are maintained in the names in which the units of the
participants were registered at the time they enrolled in the Plan.  Consequently, certificates for units will be
similarly registered when issued.

 

10.                               Sale of
Units Held Under the Plan

 

Registered
unitholders who participate in the Plan can sell their units at any time by
contacting the Administrator.  Sale
requests will be processed and units will, subject to market conditions and
other facts, generally be sold within 24 hours of receipt and processing of a
unitholder’s request.  The Administrator
cannot and does not guarantee the actual sale date or price, nor can it stop or
cancel any outstanding sale or issuance requests.  All requests are final.  The Administrator will mail a check to a holder
that has made a sales request (less a handling charge of US$15.00 and any
trading fees) on the settlement date, which is three business days after the
holder’s units have been sold.  Holders
should allow an additional five to seven business days from the settlement date
to receive the check.

 

Alternatively,
a registered unitholder may choose to withdraw units from their Plan account
and sell them through a broker of their choice. 
In this case the holder may have the units electronically transferred to
his or her broker or request a certificate for his or her units from the Administrator
prior to the sale.

 

Beneficial
owners of units who are participating in the Plan through their broker should
contact their broker to sell their units.

 

10

 

11.                               Voting
of Units Held Under the Plan

 

Whole
units held for the account of a participant under the Plan on any record date
for a vote of unitholders (as with units not subject to the Plan) may be voted
by the participant, either in person or by proxy.  Units for which instructions are not received
will not be voted.  Fractional units may
not be voted.

 

12.                               Unit
Distributions and Unit Splits

 

Unit
distributions declared on the units and any units resulting from the
subdivision of the units will be credited to the account of the participant
based on whole and fractional units held for the account of the participant
under the Plan.

 

13.                               Rights
Offering

 

If
the partnership makes available to holders of units of record any right to
subscribe for additional units or other securities, rights certificates in
respect of the number of whole units then held for the account of the
participant under the Plan will be forwarded to each participant. Where
practicable, rights in respect of fractional units held for the account of a
participant will be sold by the Administrator for the participant’s account and
the net proceeds forwarded to the participant.

 

14.                               Death
or Incompetence of a Participant

 

Participation
in the Plan will not be affected by a participant’s death or incompetence and
participation will remain effective until it is terminated in accordance with
the provisions of the Plan.

 

15.                               Amendment,
Suspension or Termination of the Plan

 

Subject
to any required regulatory or stock exchange approval, the partnership reserves
the right to amend, modify, suspend or terminate the Plan at any time, but such
actions shall have no retroactive effect that would prejudice a participant’s
interests. The Administrator will notify participants in writing of any
modifications made to the Plan that in the partnership’s opinion may materially
prejudice participants. Generally, no notice will be given to participants
regarding any amendments to the Plan intended to cure, correct or rectify any
ambiguities, defective or inconsistent provisions, errors, mistakes or omissions.

 

If
the Plan is suspended or terminated by the partnership, the Administrator will
continue to hold the participant’s units in book-entry form unless he or she
requests a unit certificate for any whole units and a cash payment for any
fractional unit based upon the closing price of the units on the NYSE on the
trading day immediately preceding the effective date of termination or
suspension of the Plan.

 

If
the Plan is suspended or terminated by the partnership, no investment will be
made under the Plan on any subsequent Investment Date.  Distributions that are paid after the
effective date of any suspension or termination of the Plan will be remitted by
the partnership or the Administrator, as the case may be, directly to each
participant.

 

11

 

16.                               Notices

 

All
notices required to be given to a participant will be mailed to the participant
at his or her latest address shown on the records of the Administrator.  All notices to the Administrator or the
partnership should be provided in accordance with the instructions on page 5
of this brochure.

 

17.                               Income
Tax Considerations Relating to the Plan

 

THE
FOLLOWING SUMMARY OF TAX CONSEQUENCES IS OF A GENERAL NATURE ONLY AND IS NOT
INTENDED TO BE LEGAL OR TAX ADVICE TO ANY PARTICULAR PARTICIPANT. IT IS THE
RESPONSIBILITY OF PARTICIPANTS IN THE PLAN TO CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN IN THEIR
RESPECTIVE COUNTRY OF RESIDENCE.

 

Canadian Federal Income Tax Considerations

 

The
following is a summary of certain Canadian federal income tax considerations
relevant to participation in the Plan. This summary is based on the current
provisions of the Income Tax Act (Canada)
(the “Tax Act”) and the regulations thereunder, all specific proposals to amend
the Tax Act and the regulations which have been publicly announced by or on
behalf of the Minister of Finance (Canada) prior to the date hereof and the
current published administrative and assessing policies and practices of the
Canada Revenue Agency (the “CRA”).  This
summary does not otherwise take into account or anticipate any changes in the
law or in the administrative or assessing policies and practices of the CRA, is
not exhaustive of all possible Canadian federal income tax considerations and
does not take into account or anticipate any provincial, territorial or foreign
tax considerations which may be applicable to any particular participant.

 

For
purposes of the Tax Act, all amounts relating to the acquisition, holding or
disposition of units must be expressed in Canadian dollars including any
distributions, adjusted cost base and proceeds of disposition. For purposes of
the Tax Act, amounts denominated in a currency other than Canadian dollars
generally must be converted into Canadian dollars using the rate of exchange
quoted by the Bank of Canada at noon on the date such amounts arose, or such
other rate of exchange as is acceptable to the CRA.

 

Canadian Residents

 

Unitholders
are required to include in their income the amount of any income or loss
allocated to them from the partnership for the participant’s taxation year in
which the partnership’s fiscal year ends, irrespective of the amount of the
cash distributions paid by the partnership. Accordingly, the income or loss
allocated to participants for each fiscal year by the partnership will be
computed without regard to their participation in the Plan.

 

Distributions
from our partnership reduce the adjusted cost base of the participant’s units
by the amount of such distributions received by the participant, whether the
participant’s units are held inside or outside of the Plan.  As a result, upon the receipt of a
distribution from the partnership (whether or not the distribution is
reinvested under the Plan), the aggregate adjusted cost base of 

 

12

 

the
participant’s units held at that time (whether inside or outside of the Plan)
will be reduced by the amount of the distribution.

 

Upon
the purchase of new units on the reinvestment of the distribution under the
Plan, the amount so reinvested will become the cost of such new units acquired
under the Plan. Pursuant to the adjusted cost base averaging provisions of the
Tax Act, the cost of all units held by the participant as capital property at
that time (whether inside or outside of the Plan) must be averaged to determine
the adjusted cost base under the Tax Act of each such Unit held by the
participant.

 

A
participant will not realize any taxable income upon receipt of a certificate
for whole units from the Plan or upon the electronic transfer of units from the
Plan to the participant’s brokerage account. 
Where a participant receives a cash payment for a fractional unit, a
capital gain or a capital loss may arise if the cash payment for the fractional
unit exceeds or is less than the adjusted cost base in respect of such
fraction.  In addition, a participant who
holds units as capital property may realize a capital gain or capital loss on
the disposition of units acquired through the Plan (including a disposition on
a participant’s behalf by the Administrator) to the extent that the proceeds of
disposition, net of any reasonable costs of the disposition, exceed or are less
than the adjusted cost base of the units so disposed of.

 

One-half
of any capital gain (a “taxable capital gain”) realized by a participant on the
disposition of units must be included in the participant’s income for the year
in which the disposition occurs and one-half of any capital loss (an “allowable
capital loss”) must be deducted against taxable capital gains realized in the
year of disposition.  Allowable capital
losses in excess of taxable capital gains realized in a taxation year may be
carried back and deducted in any of the three preceding taxation years or
carried forward and deducted in any following taxation year against net taxable
capital gains realized in any of those years, subject to the detailed
provisions of the Tax Act.

 

Non-Residents

 

Participants
who are not resident or deemed to be resident in Canada should refer to the
section entitled “Canadian Federal Income Tax Considerations — Taxation of
Non-Canadian Limited Partners” in the partnership’s Annual Report on Form 20-F
dated June 1, 2010 for a summary of the Canadian federal income tax
consequences to them of acquiring, holding and disposing of units and should
consult their own tax advisors for advice concerning the Canadian federal
income tax consequences to them of participation in the plan.

 

United States Federal Income Tax Considerations

 

The
following is a summary of certain United States federal income tax consequences
relating to participation in the Plan. This summary is based on provisions of
the U.S. Internal Revenue Code of 1986, as amended, or the U.S. Internal
Revenue Code, on the regulations promulgated thereunder and on published
administrative rulings, judicial decisions and other applicable authorities,
all as in effect on the date hereof and all of which are subject to change at
any time (possibly with retroactive effect). This summary is necessarily
general and may not apply to all categories of investors, some of which may be
subject to special rules (including, without 

 

13

 

limitation,
tax-exempt organizations, investors that own more than 5% of the partnership’s
units, dealers in securities or currencies, financial institutions or financial
services entities, life insurance companies, holders of the partnership’s units
held as part of a straddle, hedge, constructive sale or conversion transaction
with other investments, U.S. participants (as defined below) whose functional
currency is not the U.S. dollar, persons who have elected mark-to-market
accounting, persons who hold the partnership’s units through a partnership or
other entity which is a pass-through entity for U.S. federal income tax
purposes, or persons for whom the partnership’s units are not a capital asset).
The actual tax consequences of the ownership and disposition of the partnership’s
units will vary depending on your circumstances.

 

For
purposes of this discussion, a “U.S. participant” is a beneficial owner of one
or more units held as a capital asset and purchased pursuant to the Plan that
is, for U.S. federal income tax purposes: (1) an individual citizen or
resident of the United States; (2) a corporation (or other entity treated
as a corporation for U.S. federal income tax purposes) created or organized in
or under the laws of the United States, any state thereof, or the District of
Columbia; (3) an estate the income of which is subject to U.S. federal
income taxation regardless of its source; or (4) a trust which is either (i) subject
to the primary supervision of a court within the United States and one or more
U.S. persons have the authority to control all substantial decisions of the
trust or (ii) has a valid election in effect under applicable U.S.
Treasury regulations to be treated as a U.S. person. A “non-U.S. participant”
is a beneficial owner of one or more units held as a capital asset and
purchased pursuant to the Plan that is not a U.S. participant and who, in
addition, is not (i) a partnership or other fiscally transparent entity, (ii) an
individual present in the United States for 183 days or more in a taxable year
who meets certain other conditions under the substantial presence test under Section 7701(b)(3) of
the U.S. Internal Revenue Code and U.S. Treasury Regulation Section 301.7701(b)-1(c),
or (iii) subject to rules applicable to certain expatriates who meet
the expatriation rules in Section 877 of the U.S. Internal Revenue
Code or former long-term residents of the United States.

 

If
a partnership participates in the Plan, the tax treatment of a partner of such
partnership will generally depend upon the status of the partner and activities
of the partnership. If you are a partner of a partnership holding the
partnership’s units, you should consult your own tax advisors.

 

This
discussion does not constitute tax advice and is not intended to be a
substitute for tax planning.  Prospective
participants in the Plan are urged to consult their own tax advisors concerning
the U.S. federal, state and local income tax consequences particular to their
participation in the Plan, as well as any consequences under the laws of any
other taxing jurisdiction.

 

U.S. Participants

 

A
U.S. participant will be treated as receiving a distribution for U.S. federal
income tax purposes in an amount equal to the cash distributions payable on the
units owned by the participant on the applicable Investment Date plus the
amount of any tax withheld therefrom, regardless of the amount such participant
elects to reinvest through the Plan. A U.S. participant’s basis in any units
acquired through the Plan will be determined by his or her “unitary” tax basis
in all units owned by such U.S. participant. See “Certain Material U.S. Federal
Income Tax Considerations 

 

14

 

—
Consequences to U.S. Holders — Holding of our units - Basis” in the partnership’s
Annual Report on Form 20-F dated June 1, 2010. A U.S. participant’s
holding period for such units will be determined based on a “split” holding
period in all units owned by such U.S. participant. See “Certain Material U.S.
Federal Income Tax Considerations — Consequences to U.S. Holders — Special
Considerations for Purchasers of Additional Units” in the partnership’s Annual
Report on Form 20-F dated June 1, 2010.

 

Any
distribution to a U.S. participant described in the preceding paragraph will be
treated for U.S. federal income tax purposes in the same manner as cash
distributions described in “Certain Material U.S. Federal Income Tax
Considerations — Consequences to U.S. Holders — Holding of our units — Income
and Loss” in the partnership’s Annual Report on Form 20-F dated June 1,
2010.

 

U.S.
participants should refer to the section entitled “Certain Material U.S.
Federal Income Tax Considerations” in the partnership’s Annual Report on Form 20-F
dated June 1, 2010, for a summary of the general United States federal
income tax consequences to them of acquiring, holding and disposing of units,
which is also applicable with respect to units acquired under the Plan.  U.S. participants should consult their own
tax advisors for advice concerning the specific United States federal income
tax consequences to them of participation in the Plan.

 

Non-U.S. Participants

 

Non-U.S.
participants should refer to the section entitled “Certain Material U.S.
Federal Income Tax Considerations — Consequences to Non-U.S. Holders” in the
partnership’s Annual Report on Form 20-F dated June 1, 2010, for a
summary of the general United States federal income tax consequences to them of
acquiring, holding and disposing of units, which is also applicable with
respect to units acquired under the Plan. Non-U.S. participants should consult
their own tax advisors for advice concerning the specific United States federal
income tax consequences to them of participation in the plan.

 

Internal Revenue Service Circular
230 Notice

 

To ensure compliance with Internal Revenue
Service Circular 230, you are hereby notified that (A) any discussion of
U.S. federal tax issues set forth herein is not intended or written to be used,
and cannot be used, by unitholders for the purpose of avoiding penalties that
may be imposed on such unitholders under the Internal Revenue Code, (B) such
discussion is written to support the promotion or marketing of the transactions
or matters addressed herein, and (C) unitholders should seek advice based
on their particular circumstances from an independent tax advisor.

 

18.                               Administration

 

The
Administrator will act as administrator of the Plan for the partnership.  The Administrator along with its designated
affiliates and other agents will maintain an account for each participant and
perform certain services for the Plan. 
The Administrator will keep all records necessary for the administration
of the Plan.

 

15

 

The
partnership reserves the right to interpret and regulate the Plan as it deems
necessary or desirable.

 

Unless
the context requires otherwise, words importing the singular number only shall
include the plural and vice versa, words importing the masculine gender shall
include feminine and neuter genders and vice versa, and works importing persons
shall include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations.

 

19.                               Liability
of the Partnership and the Administrator

 

The
partnership and the Administrator, in administering the Plan, are not liable
for any act or omission to act, including, without limitation, any claims of
liability: (a) with respect to receipt or non-receipt of any payment, form
or other writing purported to have been sent to the partnership or the
Administrator; (b) actions taken as a result of inaccurate and incomplete
information or instructions; (c) in respect of any decision to amend,
suspend, terminate or replace the Plan in accordance with the terms hereof; (d) in
respect of the involuntary termination of a participant’s participation in the
Plan in the circumstances described herein; (e) with respect to the prices
at which units are purchased for a participant’s account and the times such
purchases are made; or (f) in respect of income taxes or other liabilities
payable by any participant or beneficial owner in connection with their
participation in the Plan.

 

Participants
should recognize that neither the partnership nor the Administrator can assure
profit or protect against a loss on units acquired or sold under the Plan.

 

Both
the partnership and the Administrator shall have the right to reject any
request regarding enrollment in, withdrawal from or termination of, the Plan if
such request is not received in proper form. Any such request will be deemed to
be invalid until any irregularities have been resolved to the partnership’s
satisfaction and/or the Administrator’s satisfaction. Neither the partnership
nor the Administrator is under any obligation to notify any unitholder of an
invalid request.

 

20.                               Governing
Law

 

The
Plan shall be governed and construed in accordance with the laws of Bermuda.

 

21.                               Effective
Date

 

The
effective date of the Plan is June 29, 2010.

 

16

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