Common use of Incentive Units Clause in Contracts

Incentive Units. (a) The following Incentive Units are hereby created, subject to the adjustments provided for in this Section 3.3: (i) 990,414 “Legacy Tier I Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “Legacy Tier I Units;” (ii) 1,000,000 “Legacy Tier II Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “Legacy Tier II Units;” (iii) 1,000,000 “Legacy Tier III Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “Legacy Tier III Units;” (iv) 817,546 “New Tier I Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “New Tier I Units;” (v) 677,546 “New Tier II Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “New Tier II Units;” (vi) 677,546 “New Tier III Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “New Tier III Units;” and (vii) 677,546 “New Tier IV Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “New Tier IV Units.” (b) The Incentive Units are non-voting, and subject to vesting, forfeiture and termination as follows: (A) The Legacy Tier I Units held by each Employee shall vest ratably over a three-year period following the grant of the “Legacy Tier I Units” of Rice Appalachia Holdings, LLC that corresponds, pursuant to the Master Reorganization Agreement, to the Legacy Tier I Units granted thereunder to such Employee, with one-third vesting on the first anniversary of such grant, an additional one-third vesting on the second anniversary of such grant and the remaining one-third vesting on the third anniversary of such grant (with vesting between such anniversaries occurring pro rata determined by multiplying the number of such Incentive Units that would vest on the next annual vesting date by a fraction with a numerator equal to the number of full months which have then elapsed since the last vesting date and a denominator of 12, and rounding to the closest whole number). (B) The Legacy Tier II Units held by each Employee shall vest only upon and concurrently with NGP I receiving, pursuant to Section 4.3(a), $303,017,555.52 in the aggregate. (C) The Legacy Tier III Units held by each Employee shall vest only upon and concurrently with NGP I receiving, pursuant to Section 4.3(a), $404,023,407.36 in the aggregate. (D) The New Tier I Units held by each Employee shall vest ratably over a five-year period following the grant of the “New Tier I Units” of Rice Appalachia Holdings, LLC that corresponds, pursuant to the Master Reorganization Agreement, to the New Tier I Units granted thereunder to such Employee, with one-fifth vesting on the first anniversary of such grant, and an additional one-fifth vesting on the each of the second, third, fourth and fifth anniversaries of such grant (with vesting between such anniversaries occurring pro rata determined by multiplying the number of such Incentive Units that would vest on the next annual vesting date by a fraction with a numerator equal to the number of full months which have then elapsed since the last vesting date and a denominator of 12, and rounding to the closest whole number). (E) The New Tier II Units held by each Employee shall vest ratably over a five-year period following the grant of the “New Tier II Units” of Rice Appalachia Holdings, LLC that corresponds, pursuant to the Master Reorganization Agreement, to the New Tier II Units granted thereunder to such Employee, with one-fifth vesting on the first anniversary of such grant, and an additional one-fifth vesting on the each of the second, third, fourth and fifth anniversaries of such grant (with vesting between such anniversaries occurring pro rata determined by multiplying the number of such Incentive Units that would vest on the next annual vesting date by a fraction with a numerator equal to the number of full months which have then elapsed since the last vesting date and a denominator of 12, and rounding to the closest whole number). (F) The New Tier III Units held by each Employee shall vest only upon and concurrently with the occurrence of New Tier III Payout. (G) The New Tier IV Units held by each Employee shall vest only upon and concurrently with the occurrence of New Tier IV Payout. (ii) Unless otherwise agreed by the Board, all Incentive Units that have not yet vested in accordance with the vesting requirements set forth in Section 3.3(b)(i) that are held by an Employee shall automatically, without any action required of any Person, be forfeited and thereby become null and void, if and when such Person’s status as an Employee is terminated for any reason or without reason, including by termination, resignation, death or disability, and any vested, unforfeited Incentive Units held by such Person shall, upon such termination, remain non-voting. (iii) Anything herein to the contrary notwithstanding, unless otherwise agreed by the Board in the case of Section 3.3(b)(iii)(B), all Incentive Units held by an Employee (regardless of whether vested or unvested) shall automatically be forfeited and thereby become null and void if and when such Person’s status as an Employee is terminated: (A) for “cause,” which shall mean by reason of such holder’s: (1) conviction of, or plea of nolo contendere to, any felony or to any crime or offense causing substantial harm to PublicCo, the Company or any of their respective Affiliates or involving acts of theft, fraud, embezzlement, moral turpitude or similar conduct, (2) repeated intoxication by alcohol or drugs during the performance of such holder’s duties in a manner that materially and adversely affects the holder’s performance of such duties, (3) malfeasance, in the conduct of such holder’s duties, including (I) misuse or diversion of funds of PublicCo, the Company or any of their respective Affiliates, (II) embezzlement or (III) misrepresentations or concealments on any written reports submitted to the Company or its Affiliates, (4) violation of any provision of this Agreement or of such Person’s agreements with any of PublicCo, the Company or their respective Affiliates or (5) failure to perform the duties of such holder’s employment or service relationship with PublicCo, the Company or any of their respective Affiliates, or failure to follow or comply with the reasonable and lawful written directives of the Board or the managers or directors of the Person that employs such holder or for whom such holder provides services; or (B) by such Employee’s resignation or early termination of service relationship. (c) Upon any forfeiture or other termination of Incentive Units, the Company shall amend Exhibit A to reflect such occurrence. (d) The Company shall not issue any Incentive Units following the Effective Date.

Incentive Units. (a) The following Incentive Units are hereby created, subject to the adjustments provided for in this Section 3.3: (i) 990,414 “Legacy Tier I Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “Legacy Tier I Units;” (ii) 1,000,000 “Legacy Tier II Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “Legacy Tier II Units;” (iii) 1,000,000 “Legacy Tier III Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “Legacy Tier III Units;” (iv) 817,546 “New Tier I Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “New Tier I Units;” (v) 677,546 “New Tier II Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “New Tier II Units;” (vi) 677,546 “New Tier III Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “New Tier III Units;” and (vii) 677,546 “New Tier IV Units,” which are held, as of the date hereof, by those individuals set forth on Exhibit A in the amount opposite each such individual’s name in the column entitled “New Tier IV Units.” (b) The Incentive Units are non-voting, and subject to vesting, forfeiture and termination as follows: (A) The Legacy Tier I Units held by each Employee shall vest ratably over a three-year period following the grant of the “Legacy Tier I Units” of Rice Appalachia Holdings, LLC that corresponds, pursuant to the Master Reorganization Agreement, to the Legacy Tier I Units granted thereunder to such Employee, with one-third vesting on the first anniversary of such grant, an additional one-third vesting on the second anniversary of such grant and the remaining one-third vesting on the third anniversary of such grant (with vesting between such anniversaries occurring pro rata determined by multiplying the number of such Incentive Units that would vest on the next annual vesting date by a fraction with a numerator equal to the number of full months which have then elapsed since the last vesting date and a denominator of 12, and rounding to the closest whole number). (BA) The Legacy Tier II Units held by each Employee shall vest only upon and concurrently with NGP I receiving, pursuant to Section 4.3(a), $303,017,555.52 in the aggregate. (CB) The Legacy Tier III Units held by each Employee shall vest only upon and concurrently with NGP I receiving, pursuant to Section 4.3(a), $404,023,407.36 in the aggregate. (DC) The New Tier I Units held by each Employee shall vest ratably over a five-year period following the grant of the “New Tier I Units” of Rice Appalachia Holdings, LLC that corresponds, pursuant to the Master Reorganization Agreement, to the New Tier I Units granted thereunder to such Employee, with one-fifth vesting on the first anniversary of such grant, and an additional one-fifth vesting on the each of the second, third, fourth and fifth anniversaries of such grant (with vesting between such anniversaries occurring pro rata determined by multiplying the number of such Incentive Units that would vest on the next annual vesting date by a fraction with a numerator equal to the number of full months which have then elapsed since the last vesting date and a denominator of 12, and rounding to the closest whole number). (ED) The New Tier II Units held by each Employee shall vest ratably over a five-year period following the grant of the “New Tier II Units” of Rice Appalachia Holdings, LLC that corresponds, pursuant to the Master Reorganization Agreement, to the New Tier II Units granted thereunder to such Employee, with one-fifth vesting on the first anniversary of such grant, and an additional one-fifth vesting on the each of the second, third, fourth and fifth anniversaries of such grant (with vesting between such anniversaries occurring pro rata determined by multiplying the number of such Incentive Units that would vest on the next annual vesting date by a fraction with a numerator equal to the number of full months which have then elapsed since the last vesting date and a denominator of 12, and rounding to the closest whole number). (FE) The New Tier III Units held by each Employee shall vest only upon and concurrently with the occurrence of New Tier III Payout. (GF) The New Tier IV Units held by each Employee shall vest only upon and concurrently with the occurrence of New Tier IV Payout. (ii) Unless otherwise agreed by the Board, all Incentive Units that have not yet vested in accordance with the vesting requirements set forth in Section 3.3(b)(i) that are held by an Employee shall automatically, without any action required of any Person, be forfeited and thereby become null and void, if and when such Person’s status as an Employee is terminated for any reason or without reason, including by termination, resignation, death or disability, and any vested, unforfeited Incentive Units held by such Person shall, upon such termination, remain non-voting. (iii) Anything herein to the contrary notwithstanding, unless otherwise agreed by the Board in the case of Section 3.3(b)(iii)(B), all Incentive Units held by an Employee (regardless of whether vested or unvested) shall automatically be forfeited and thereby become null and void if and when such Person’s status as an Employee is terminated: (A) for “cause,” which shall mean by reason of such holder’s: (1) conviction of, or plea of nolo contendere to, any felony or to any crime or offense causing substantial harm to PublicCo, the Company or any of their respective Affiliates or involving acts of theft, fraud, embezzlement, moral turpitude or similar conduct, (2) repeated intoxication by alcohol or drugs during the performance of such holder’s duties in a manner that materially and adversely affects the holder’s performance of such duties, (3) malfeasance, in the conduct of such holder’s duties, including (I) misuse or diversion of funds of PublicCo, the Company or any of their respective Affiliates, (II) embezzlement or (III) misrepresentations or concealments on any written reports submitted to the Company or its Affiliates, (4) violation of any provision of this Agreement or of such Person’s agreements with any of PublicCo, the Company or their respective Affiliates or (5) failure to perform the duties of such holder’s employment or service relationship with PublicCo, the Company or any of their respective Affiliates, or failure to follow or comply with the reasonable and lawful written directives of the Board or the managers or directors of the Person that employs such holder or for whom such holder provides services; or (B) by such Employee’s resignation or early termination of service relationship. (c) Upon any forfeiture or other termination of Incentive Units, the Company shall amend Exhibit A to reflect such occurrence. (d) The Company shall not issue any Incentive Units following the Effective Date.