Document:

exv10w1

 

Exhibit 10.1

TARGA RESOURCES PARTNERS LP

INDEMNIFICATION AGREEMENT

     THIS AGREEMENT (this “Agreement”) is effective February ___, 2007, between Targa Resources
Partners LP, a Delaware limited partnership (the “MLP”), Targa Resources GP LLC, a Delaware limited
liability company (the “Company”), and the undersigned director or officer of the Company
(“Indemnitee”).

     WHEREAS, the MLP Partnership Agreement (as defined below) provides for indemnification of each
director and officer of the Company and the MLP, as well as persons serving in various other
capacities, to the maximum extent permitted by law;

     WHEREAS, the Indemnitee is entitled to indemnification pursuant to the MLP Partnership
Agreement;

     WHEREAS, the Company LLC Agreement (as defined below) provides indemnification of each
director and officer of the Company, as well as persons serving in other capacities, to the maximum
extent authorized by law;

WHEREAS, the Indemnitee is entitled to indemnification pursuant to the Company LLC Agreement;

     WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to the MLP and the Company in an
effective manner, the MLP and the Company wish to provide in this Agreement for the indemnification
of and the advancing of expenses to Indemnitee to the fullest extent permitted by law (whether
partial or complete) and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the MLP’s and/or the Company’s
directors’ and officers’ liability insurance policies;

     WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service
for or on behalf of the MLP and/or the Company on condition that the Indemnitee be so indemnified;

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the MLP,
the Company and Indemnitee do hereby covenant and agree as follows:

     1. Definitions. As used in this Agreement:

     (a) The term “Proceeding” shall include any threatened, pending or completed action, suit,
inquiry or proceeding, whether brought by or in the right of the MLP or the Company or any
predecessor, subsidiary or affiliated company or otherwise and whether of a civil, criminal,
administrative, arbitrative or investigative nature, in which Indemnitee is or will be involved as
a party, as a witness or otherwise, by reason of the fact that Indemnitee is or was a director or
officer of the MLP or the Company, by reason of any action taken by him or of any inaction on his
part while acting as a director or officer or by reason of the fact that he is or was serving at
the request of the MLP or the Company as a director, officer, trustee, employee or agent of another
corporation, partnership, joint venture, trust, limited liability company or other

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enterprise; in each case whether or not he is acting or serving in any such capacity at the
time any liability or expense is incurred for which indemnification or reimbursement can be
provided under this Agreement; provided that any such action, suit or proceeding which is brought
by Indemnitee against the MLP or the Company or any predecessor, subsidiary or affiliated company
or directors or officers of the MLP or the Company or any predecessor, subsidiary or affiliated
company, other than an action brought by Indemnitee to enforce his rights under this Agreement,
shall not be deemed a Proceeding without prior approval by a majority of the Board of Directors of
the Company.

     (b) The term “Expenses” shall include, without limitation, any judgments, fines and penalties
against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a
Proceeding; and all attorneys’ fees and disbursements, accountants’ fees, private investigation
fees and disbursements, retainers, court costs, transcript costs, fees of experts, fees and
expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements, or expenses, reasonably
incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in a Proceeding or establishing
Indemnitee’s right of entitlement to indemnification for any of the foregoing.

     (c) References to Indemnitee’s being or acting as “a director or officer of the MLP or the
Company” or “serving at the request of the MLP or the Company as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust, limited liability
company or other enterprise” shall include in each case service to or actions taken while and as a
result of being a director, officer, trustee, employee or agent of any predecessor, subsidiary or
affiliated company of the MLP or the Company.

     (d) References to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the MLP or the Company” shall include any service as a director,
officer, employee or agent of the MLP or the Company which imposes duties on, or involves services
by, such director, officer, trustee, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries.

     (e) The term “substantiating documentation” shall mean copies of bills or invoices for costs
incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement
agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills,
invoices, court or agency orders or decrees or settlement agreements, represent costs or
liabilities meeting the definition of “Expenses” herein.

     (f) The terms “he” and “his” have been used for convenience and mean “she” and “her” if
Indemnitee is a female.

     (g) The term “MLP Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of the MLP, dated as of February ___, 2007, as amended or restated from time to time.

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     (h) The term “Company LLC Agreement” means the Limited Liability Company Agreement of the
Company, dated as of October 23, 2006, as amended or restated from time to time.

     (i) The term “LLC Statute” means the Delaware Limited Liability Company Act.

     (j) The term “Partnership Statute” means the Delaware Revised Uniform Limited Partnership Act.

     (k) The term “Board of Directors” means the Board of Directors of the Company.

     2. Indemnity of Indemnitee. Each of the MLP and the Company hereby agrees (subject to the
provisions of Section 5 below) to hold harmless and indemnify Indemnitee against Expenses to the
fullest extent authorized or permitted by law (including the applicable provisions of the
Partnership Statute and the LLC Statute). The phrase “to the fullest extent permitted by law”
shall include, but not be limited to (a) to the fullest extent permitted by any provision of the
Partnership Statute and the LLC Statute that authorizes or permits additional indemnification by
agreement, or the corresponding provision of any amendment to or replacement of the Partnership
Statute and the LLC Statute and (b) to the fullest extent authorized or permitted by any amendments
to or replacements of the Partnership Statute and the LLC Statute adopted after the date of this
Agreement that increase the extent to which an entity may indemnify its officers and directors.
Any amendment, alteration or repeal of the Partnership Statute and the LLC Statute that adversely
affects any right of Indemnitee shall be prospective only and shall not limit or eliminate any such
right with respect to any Proceeding involving any occurrence or alleged occurrence of any action
or omission to act that took place prior to such amendment or repeal.

     3. Additional Indemnity. Each of the MLP and the Company hereby further agrees (subject to the
provisions of Section 5 below) to hold harmless and indemnify Indemnitee against Expenses incurred
by reason of the fact that Indemnitee is or was a director or officer of the MLP or the Company, or
is or was serving at the request of the MLP or the Company as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust, limited liability
company or other enterprise, including, without limitation, any predecessor, subsidiary or
affiliated entity of the MLP or the Company, provided that the Indemnitee shall not be indemnified
and held harmless if there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of the matter for which the Indemnitee is
seeking indemnification pursuant to this Agreement, the Indemnitee acted in bad faith or engaged in
fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the
Indemnitee’s conduct was unlawful. The termination of any Proceeding by judgment, order of the
court, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that Indemnitee acted in bad faith or engaged in fraud or willful
misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct
was unlawful.

     4. Contribution. If the indemnification provided under Section 2 is unavailable by reason of a
court decision, based on grounds other than any of those set forth in Section 5 below,

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then, in respect of any Proceeding in which the MLP or the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the MLP and the Company shall contribute to
the amount of Expenses actually and reasonably incurred and paid or payable by Indemnitee in such
proportion as is appropriate to reflect (a) the relative benefits received by the MLP or the
Company on one hand and Indemnitee on the other from the transaction from which such Proceeding
arose and (b) the relative fault of the MLP or the Company on the one hand and of Indemnitee on the
other in connection with the events that resulted in such Expenses as well as any other relevant
equitable considerations. The relative fault of the MLP or the Company on the one hand and of
Indemnitee on the other shall be determined by reference to, among other things, the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such Expenses. Each of the MLP and the Company agrees that it would not
be just and equitable if contribution pursuant to this Section 4 were determined by pro rata
allocation or any other method of allocation that does not take into account of the foregoing
equitable considerations.

     5. Exceptions. Any other provision herein to the contrary notwithstanding, the MLP and the Company
shall not be obligated pursuant to the terms of this Agreement:

     (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee
with respect to proceedings or claims initiated or brought voluntarily by Indemnitee and not by way
of defense, except with respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement;

     (b) Insured Claims. To indemnify Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) to the extent such expenses or liabilities have been paid directly to
Indemnitee by an insurance carrier under a policy of directors’ and officers’ liability insurance;

     (c) Claims Under Section 16(b). To indemnify Indemnitee for expenses or the payment
of profits arising from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute;

     (d) Unlawful Claims. To indemnify Indemnitee to the extent such indemnification is
prohibited by applicable law; or

     (e) Unauthorized Settlement. To indemnify Indemnitee with regard to any judicial
award if the MLP or the Company was not given a reasonable and timely opportunity, to participate
in the defense of such action or to indemnify Indemnitee for any amounts paid in settlement of any
Proceeding effected without the MLP’s or the Company’s prior written consent.

     6. Choice of Counsel. If Indemnitee is a director but not an officer of the MLP or the Company,
he, together with the other directors who are not officers of the MLP or the Company and are
seeking indemnification (the “Outside Directors”), shall be entitled to employ, and be reimbursed
for the fees and disbursements of, a single counsel separate from that chosen

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by Indemnitees who are officers of the MLP or the Company. The principal counsel for Outside
Directors (“Principal Counsel”) shall be determined by majority vote of the Outside Directors who
are seeking indemnification, and the Principal Counsel for the Indemnitees who are not Outside
Directors (“Separate Counsel”) shall be determined by majority vote of such Indemnitees, in each
case subject to the consent of the MLP or the Company (not to be unreasonably withheld or delayed).
The obligation of the MLP and the Company to reimburse Indemnitee for the fees and disbursements
of counsel hereunder shall not extend to the fees and disbursements of any counsel employed by
Indemnitee other than Principal Counsel or Separate Counsel, as the case may be, unless Indemnitee
has interests that are different from those of the other Indemnitees or defenses available to him
that are in addition to or different from those of the other Indemnitees such that Principal
Counsel or Separate Counsel, as the case may be, would have an actual or potential conflict of
interest in representing Indemnitee.

     7. Advances of Expenses.

     (a) Expenses (other than judgments, penalties, fines and settlements) incurred by Indemnitee
shall be paid by the MLP and the Company, in advance of the final disposition of the Proceeding,
within three business days after receipt of Indemnitee’s written request accompanied by
substantiating documentation and Indemnitee’s written affirmation as described in subsection (c)
below. No objections based on or involving the question whether such charges meet the definition
of “Expenses,” including any question regarding the reasonableness of such Expenses, shall be
grounds for failure to advance to such Indemnitee, or to reimburse such Indemnitee for, the amount
claimed within such three business day period, and the undertaking of Indemnitee set forth in this
Section 7 to repay any such amount to the extent it is ultimately determined that Indemnitee is not
entitled to indemnification shall be deemed to include an undertaking to repay any such amounts
determined not to have met such definition.

     (b) Indemnitee hereby undertakes to repay to the MLP and the Company (i) any advances or
payment of Expenses made pursuant to this Section 7 and (ii) any judgments, penalties, fines and
settlements paid to or on behalf of Indemnitee hereunder, in each case to the extent that it is
ultimately determined in a final judgment or other final adjudication of a court of competent
jurisdiction that Indemnitee is not entitled to indemnification.

     (c) As a condition to the advancement of such Expenses or the payment of such judgments,
penalties, fines and settlements, Indemnitee shall execute an acknowledgment wherein Indemnitee
affirms that such Expenses or such judgments, penalties, fines and settlements, as the case may be,
are delivered pursuant and are subject to the provisions of this Agreement.

     8. Right of Indemnitee to Indemnification Upon Application; Procedure Upon Application. Any
indemnification payment under this Agreement, other than pursuant to Section 7 hereof, shall be
made no later than 30 days after receipt by the MLP and the Company of the written request of
Indemnitee, accompanied by substantiating documentation, unless a determination is made within said
30-day period that Indemnitee has not met the relevant standards for indemnification set forth in
Section 3 hereof by (a) the Board of Directors by a majority vote of a quorum consisting of
directors who are not or were not parties to such Proceeding, (b) a committee of the Board of
Directors designated by majority vote of the Board

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of Directors, even though less than a quorum, (c) if there are no such directors, or if such
directors so direct, independent legal counsel in a written opinion or (d) the equity owners.

     The right to indemnification or advances as provided by this Agreement shall be enforceable by
Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is
not appropriate shall be on the MLP and the Company. Neither the failure of the MLP or the Company
(including its Board of Directors, any committee thereof, independent legal counsel or its equity
owners) to have made a determination prior to the commencement of such action that indemnification
is proper in the circumstances because Indemnitee has met the applicable standards of conduct, nor
an actual determination by the MLP and the Company (including its Board of Directors, any committee
thereof, independent legal counsel or its equity owners) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.

     9. Indemnification Hereunder Not Exclusive. The indemnification and advancement of expenses
provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may be entitled under the MLP Partnership Agreement, the Company LLC Agreement, the Partnership
Statute, the LLC Statute, any directors and officers insurance maintained by or on behalf of the
MLP or the Company, any agreement, or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office; provided, however, that this Agreement
supersedes all prior written indemnification agreements between the MLP or the Company (or any
predecessor thereof) and Indemnitee with respect to the subject matter hereof. However, Indemnitee
shall reimburse the MLP and the Company for amounts paid to Indemnitee pursuant to such other
rights to the extent such payments duplicate any payments received pursuant to this Agreement.

     10. Continuation of Indemnity. All agreements and obligations of the MLP and the Company contained
herein shall continue during the period Indemnitee is a director or officer of the MLP or the
Company (or is or was serving at the request of the MLP or the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, limited liability
company or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject
to any possible Proceeding (notwithstanding the fact that Indemnitee has ceased to serve the MLP or
the Company).

     11. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the MLP and the Company for a portion of Expenses, but not, however, for the
total amount thereof, the MLP and the Company shall nevertheless indemnify Indemnitee for the
portion of such Expenses to which Indemnitee is entitled.

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     12. Acknowledgements. Each of the MLP and the Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve or to continue to serve as a director or officer of the MLP and/or the Company,
and acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve or in
continuing to serve as a director or officer of the MLP and/or the Company.

     13. Enforcement. In the event Indemnitee is required to bring any action or other proceeding to
enforce rights or to collect moneys due under this Agreement and is successful in such action, the
MLP and the Company shall reimburse Indemnitee for all of Indemnitee’s expenses in bringing and
pursuing such action.

     14. Severability. If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable (a) the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be in any way affected or impaired thereby, and (b) to the fullest extent
possible, the provisions of this Agreement shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable. Each section of this Agreement
is a separate and independent portion of this Agreement. If the indemnification to which
Indemnitee is entitled with respect to any aspect of any claim varies between two or more sections
of this Agreement, that section providing the most comprehensive indemnification shall apply.

     15. Liability Insurance. To the extent the MLP or the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum extent of the
coverage available and maintained by the MLP or the Company for any director or officer of the MLP
or the Company or any applicable subsidiary or affiliated company.

     16. Miscellaneous.

     (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Delaware, without giving effect to principles of conflict
of law.

     (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by any party to enforce any rights under this Agreement shall not be
construed as a waiver of any rights of such party.

     (c) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

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     (d) Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to
have been given (i) when delivered personally to the recipient, (ii) one business day after the
date when sent to the recipient by reputable overnight courier service (charges prepaid), or (iii)
five business days after the date when mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other communications shall
be sent to the parties at the addresses indicated on the signature page hereto, or to such other
address as any party hereto may, from time to time, designate in writing delivered pursuant to the
terms of this Section 16(d).

     (e) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.

     (f) Successors and Assigns. This Agreement shall be binding upon the MLP and the
Company and their respective successors and assigns and shall inure to the benefit of Indemnitee
and Indemnitee’s heirs, legal representatives and assigns.

     (g) Subrogation. In the event of payment under this Agreement, the MLP and the
Company shall be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to
secure such rights and to enable the MLP and the Company to effectively bring suit to enforce such
rights.

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

	 	 	 	 	 
	 	TARGA RESOURCES PARTNERS LP

By Targa Resources GP LLC, 
       its general partner

 

 

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 
	 	 	Address: 	1000 Louisiana, Suite 4300

Houston, Texas 77002

	 	 	 	 	 
	 	TARGA RESOURCES GP LLC

 

 

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 
	 	 	Address: 	1000 Louisiana, Suite 4300

Houston, Texas 77002

	 	 	 
	 

	 	INDEMNITEE:
	  
	 	 

	 	 	 	 
	 

	 	 
	 

	 	[Name]

	 	 	 	 	 
	 	     Address:  	 	 
	 	  	 	 
	 	 	  	 	 
	 	 	  	 	 
	 

9exv10w2

 

Exhibit 10.2

TARGA RESOURCES PARTNERS

LONG-TERM INCENTIVE PLAN

     SECTION 1. Purpose of the Plan.

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

     SECTION 2. Definitions.

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

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

     “Award” means an Option, Restricted Unit, Performance Unit, Other Unit-Based Award, or
Replacement Award, and shall also include any tandem DERs granted with respect to a Performance
Unit.

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

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

     “Change of Control” means, and shall be deemed to have occurred upon the occurrence of one or
more of the following events:

     (i) any “person” or “group” within the meaning of those terms as used in Sections 13(d)
and 14(d)(2) of the Exchange Act, other than an Affiliate of the Company or the Partnership,
shall become the beneficial owner, by way of merger, consolidation, recapitalization,
reorganization or otherwise, of 50% or more of the combined voting power of the equity
interests in the Company or the Partnership;

 

 

     (ii) the limited partners of the Partnership approve, in one or a series of
transactions, a plan of complete liquidation of the Partnership;

     (iii) the sale or other disposition by either the Company or the Partnership of all or
substantially all of its assets in one or more transactions to any Person other than the
Company or an Affiliate of the Company; or

     (iv) a transaction resulting in a Person other than the Company or an Affiliate of the
Company being the general partner of the Partnership.

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

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

     “Committee” means the Compensation Committee of the Board or, if none, the Board or such
committee of the Board, if any, as may be appointed by the Board to administer the Plan.

     “Consultant” means an independent contractor, other than a Director, who performs services for
the benefit of the Company, the Partnership or an Affiliate of either.

     “DER” or “Distribution Equivalent Right” means a contingent right, granted in tandem with a
specific Performance Unit, to receive an amount in cash equal to the cash distributions made by the
Partnership with respect to a Unit during the period such DER is outstanding.

     “Director” means a member of the Board or a board of directors of an Affiliate who is not an
Employee.

     “Employee” means any employee of the Company, the Partnership or an Affiliate of either who
performs services for the benefit of the Company, the Partnership or an Affiliate of either.

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

     “Fair Market Value” means the closing sales price of a Unit on the principal national
securities exchange or other market in which trading in Units occurs on the applicable date (or if
there is no trading in the Units on such date, on the next preceding date on which there was
trading) as reported in The Wall Street Journal (or other reporting service approved by the
Committee). In the event Units are not traded on a national securities exchange or other market at
the time a determination of fair market value is required to be made hereunder, the determination
of fair market value shall be made in good faith by the Committee. Notwithstanding the foregoing,
with respect to an Award granted on the effective date of the initial public offering of Units,
Fair Market Value on such date shall mean the initial offering price per Unit as stated on the
cover page of the S-1 for such offering.

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

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

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

     “Performance Unit” means a phantom (notional) unit granted under the Plan which entitles the
Participant to receive an amount of cash equal to the Fair Market Value of one Unit upon vesting of
the Performance Unit; however, the Committee, in its discretion, may elect to pay such vested
Performance Unit with a Unit in lieu of cash.

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

     “Replacement Award” means an Award granted pursuant to Section 6(e) of the Plan.

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

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

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

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

     “Unit” means a common unit of the Partnership.

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

     SECTION 3. Administration.

     (a) Governance. The Plan shall be administered by the Committee.

     (b) Delegation. Subject to the following and applicable law, the Committee, in it
sole discretion, may delegate any or all of its powers and duties under the Plan, including the
power to grant Awards under the Plan, to the Chief Executive Officer of the Company, subject to
such limitations on such delegated powers and duties as the Committee may impose, if any. Upon any
such delegation, all references in the Plan to the “Committee”, other than in Section 7, shall be
deemed to include the Chief Executive Officer; provided, however, that such delegation shall not
limit the Chief Executive Officer’s right to receive Awards under the Plan. Notwithstanding the
foregoing, the Chief Executive Officer may not grant Awards to, or take any action with respect to
any Award previously granted to, a person who is an officer subject to Rule 16b-3 or a member of
the Board.

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     (c) Authority and Powers. Subject to the terms of the Plan and applicable law, and
in addition to other express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority to: (i) designate Participants; (ii) determine the
type or types of Awards to be granted to a Participant; (iii) determine the number of Units to be
covered by Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to
what extent, and under what circumstances Awards may be settled, exercised, canceled, or forfeited;
(vi) interpret and administer the Plan and any instrument or agreement relating to an Award made
under the Plan; (vii) establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the Plan; and (viii) make
any other determination and take any other action that the Committee deems necessary or desirable
for the administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and
shall be final, conclusive, and binding upon all Persons, including the Company, the Partnership,
any Affiliate, any Participant, and any beneficiary of any Participant.

     SECTION 4. Units.

     (a) Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c),
the number of Units that may be delivered with respect to Awards under the Plan may not exceed
1,680,000 Units; provided, however, if any Award (including Restricted Units) is terminated,
forfeited or expires for any reason without the delivery of Units covered by such Award or Units
are withheld from an Award to satisfy the exercise price or the employer’s tax withholding
obligation with respect to such Award, such Units shall again be available for delivery pursuant to
other Awards granted under the Plan. Notwithstanding the foregoing, (i) there shall not be any
limitation on the number of Awards that may be granted under the Plan and paid in cash, and (ii)
any Units allocated to an Award shall, to the extent such Award is paid in cash, be again available
for delivery under the Plan with respect to other Awards.

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

     (c) Adjustments. In the event that the Committee determines that any distribution
(whether in the form of cash, Units, other securities, or other property), recapitalization, split,
reverse split, reorganization, merger, Change of Control, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of
warrants or other rights to purchase Units or other securities of the Partnership, or other similar
transaction or event affects the Units such that an adjustment is determined by the Committee to be
appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such manner as it may
deem equitable, adjust any or all of (i) the number and type of Units (or other securities or
property) with respect to which Awards may be granted, (ii) the number and type of Units (or other
securities or property) subject to outstanding Awards, (iii) the grant or exercise price with
respect to any Award, or (iv) if deemed appropriate, make provision for a cash payment to the

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holder of an outstanding Award; provided, that the number of Units subject to any Award shall
always be a whole number. With respect to any other similar event that would not result in a FAS
123R accounting charge if the adjustment to Awards with respect to such event were subject to
discretionary action, the Committee shall have complete discretion to adjust Awards in such manner
as it deems appropriate with respect to such other event.

     SECTION 5. Eligibility.

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

     SECTION 6. Awards.

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

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

     (ii) Time and Method of Exercise. The Committee shall determine (a) the time
or times at which an Option may be exercised in whole or in part, which may include, without
limitation, accelerated exercisability upon the achievement of specified performance goals
or other events, and, (b) in its discretion, the method or methods by which payment of the
exercise price with respect thereto may be made or deemed to have been made, which may
include, without limitation, cash, check acceptable to the Company, a “cashless-broker”
exercise through a program approved by the Company, with the consent of the Company, the
withholding of Units that would otherwise be delivered to the Participant upon the exercise
of the Option, other securities or other property, or any combination thereof, having a Fair
Market Value on the exercise date equal to the relevant exercise price.

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

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

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	 	 	establish with respect to such Awards, including whether DERs are granted with respect to such
Performance Units.

     (i) DERs. Unless and to the extent provided otherwise by the Committee in its
discretion, a grant of Performance Units shall include a tandem DER grant, which provides
that such DERs shall be credited to a bookkeeping account (without interest) and shall be
paid to the Participant in cash upon the vesting of the tandem Performance Unit. However,
the Committee, in its discretion, may provide such other terms, including different vesting
and payment forms and mediums and the “investment” of such DERs in additional Performance
Units, as it may choose with respect to DERs and may also provide that a grant of
Performance Units does not include tandem DERs.

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

     (iii) Lapse of Restrictions. Upon or as soon as reasonably practical following
the vesting of each Performance Unit, subject to the provisions of Section 8(b), the
Participant shall be entitled to receive from the Company cash equal to the Fair Market
Value of one Unit as of the vesting date; however, the Committee, in its discretion, may
elect to pay such vested Performance Unit in the form of one Unit in lieu of cash.

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

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

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

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

     (d) Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Plan to
such Employees, Consultants and Directors as the Committee, in its discretion, may select. An
Other Unit-Based Award shall be an award denominated or payable in, valued in or otherwise based on
or related to Units, in whole or in part and shall include unrestricted Units paid in lieu of any
bonus or incentive compensation otherwise payable in cash. The Committee shall determine the terms
and conditions, if any, of any such Other Unit-Based Award. An Other Unit-Based Award may be paid
in cash, Common Units (including Restricted Units) or any combination thereof as determined by the
Committee, in its discretion.

     (e) Replacement Awards. Awards may be granted under the Plan in substitution or
replacement for similar equity awards cancelled or forfeited by Employees, Consultants and
Directors as a result of a merger or acquisition by the Partnership or an Affiliate of an entity or
the assets of an entity. Such Replacement Awards may have such terms and conditions as the
Committee may determine and the exercise price of an Option may be less than the Fair Market Value
of a Unit on the date of such substitution or replacement.

     (f) General.

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

     (ii) Limits on Transfer of Awards.

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

-7-

 

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

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

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

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

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

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

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

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

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

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

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

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

Notwithstanding the foregoing, (i) with respect to an above event that is an “equity
restructuring” event that would be subject to a compensation expense pursuant FAS 123R if a
discretionary change is made, the provisions in Section 4(c) shall control to the extent
they are in conflict with the discretionary provisions of this Section 6 and (ii) upon a
Change of Control all Awards shall become vested and exercisable or payable, as the case may
be, unless, and to the extent, the Committee specifically provides to the contrary in the
Award Agreement with respect to a Change of Control.

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

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

     (b) Amendments to Awards. Subject to Section 7(a), the Committee may waive any
conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided

-9-

 

no change, other than pursuant to Section 6(f)(vii) or, as determined by the Committee, in its
sole discretion, as being necessary or appropriate to comply with applicable law, including,
without limitation, Section 409A of the Code, in any Award shall materially reduce the benefit of a
Participant without the consent of such Participant.

     SECTION 8. General Provisions.

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

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

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

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

     (e) Section 409A. This Plan is intended to meet the requirements of Section 409A of
the Code and may be administered in a manner that is intended to meet those requirements and will
be construed and interpreted in accordance with such intent. All Awards granted and payments
hereunder will either be exempt from Section 409A of the Code or will be subject to Section 409A of
the Code and will be structured in a manner that will meet the requirements of Section 409A of the
Code, including regulations or other guidance issued with respect thereto. Any provision of this
Plan that would cause an Award or payment to fail to satisfy Section 409A of the Code will be
amended (in a manner that as closely as practicable achieves the original intent of the Award) to
comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis,
in accordance with regulations and other guidance issued under Section 409A of the Code.

     (f) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award,
or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable laws, or if it

-10-

 

cannot be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be stricken as to
such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in
full force and effect.

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

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

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

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

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

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

     SECTION 9. Term of the Plan.

     The Plan shall become effective on the later of the date of its approval by the Board or the
initial public offering of Units and, except as provided below with respect to Performance Units,
shall terminate on, and no Awards may be granted after, the earliest of the date established by the
Board or the Committee, the 10th anniversary of the date the Plan was adopted by the
Company (or such earlier anniversary, if any, required by the rules of the exchange on which Units
are traded) or the date Units are no longer available for delivery pursuant to Awards under the
Plan. Notwithstanding the foregoing, the Board or the Committee may provide that the Plan

-11-

 

shall continue without regard to such termination with respect to the grant of Performance
Units, provided such Performance Units shall be payable only in cash. Unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted prior to any Plan
termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights under such Award,
shall extend beyond such termination date.

-12-

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