BREITBURN ENERGY PARTNERS L.P. RESTRICTED PHANTOM UNIT AGREEMENT
Exhibit
10.1
Executive
Form
2006
LONG-TERM INCENTIVE PLAN
Pursuant
to this Restricted Phantom Unit Agreement, dated as of [DATE] (the “Agreement”),
BreitBurn
GP, LLC (the
“Company”),
as the
general partner of BreitBurn Energy Partners L.P., a Delaware limited
partnership (the“Partnership”), hereby
grants to [___________] (the “Participant”)
the
following award of Restricted Phantom Units (“RPUs”),
pursuant and subject to the terms and conditions of this Agreement and the
Partnership’s 2006 Long-Term Incentive Plan (the “Plan”),
the
terms and conditions of which are hereby incorporated into this Agreement
by
reference. Each
RPU
shall constitute a Phantom Unit under the terms of the Plan and is hereby
granted in tandem with a corresponding DER, as further detailed in Section
3
below. Except as otherwise expressly provided herein, all capitalized terms
used
in this Agreement, but not defined, shall have the meanings provided in the
Plan. For purposes of this Agreement, the terms “Employer,”
“Cause,”
“Good
Reason”
and
“Disability”
shall
have the meanings ascribed to such terms in the Employment Agreement between
the
Employer and the Participant, dated [__________], 200__ (the “Employment
Agreement”).
GRANT
NOTICE
Subject
to the terms and conditions of this Agreement, the principal features of
this
Award are as follows:
Number
of RPUs:
[_____]
Grant
Date:
[_____]
Vesting
of RPUs:
One–third of the RPUs (rounded down to the next whole number of units, except
in
the case of the final vesting date) shall vest on each of [January 1, 2009,
January 1, 2010 and January 1, 2011]1
(each,
a
“Vesting
Date”),
subject to the Participant’s continued service as an Employee, Director or
Consultant through each such date. In addition, the RPUs shall be subject
to
accelerated vesting as set forth in Section 4 below.
Termination
of RPUs:
In the
event of the Participant’s Separation from Service (as defined in the Employment
Agreement) for any reason other than those set forth in Section 4 of the
“Terms
and Conditions of Restricted Phantom Units,” all RPUs that have not vested prior
to or in connection with such Separation from Service shall thereupon
automatically be forfeited by the Participant without further action and
without
payment of consideration therefor.
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Subsequent grant vesting schedules to be adapted.
Payment
of RPUs:
Vested
RPUs shall be paid to the Participant in the form of Units as set forth in
Section 5 below.
DERs:
Each
RPU granted under this Agreement shall be issued in tandem with a corresponding
DER, which shall entitle the Participant to receive payments in an amount
equal
to Partnership distributions in accordance with Section 3 of this
Agreement.
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TERMS
AND CONDITIONS OF RESTRICTED PHANTOM UNITS
1. Grant.
The
Partnership hereby grants to the Participant, as of the Grant Date, an award
of
[________] RPUs, subject to all of the terms and conditions contained in
this
Agreement and the Plan.
2. RPUs.
Subject
to Section 4 below, each RPU that vests shall represent the right to receive
payment, in accordance with Section 5 below, in the form of one Unit. Unless
and
until an RPU vests, the Participant will have no right to payment in respect
of
any such RPU. Prior to actual payment in respect of any vested RPU, such
RPU
will represent an unsecured obligation of the Partnership, payable (if at
all)
only from the general assets of the Partnership.
3. Grant
of Tandem DER.
Each
RPU granted hereunder is hereby granted in tandem with a corresponding DER,
which DER shall remain outstanding from the Grant Date until the earlier
of the
payment or forfeiture of the RPU to which it corresponds. Pursuant to each
DER,
the Participant shall be entitled to receive, no later than sixty days after
the
end of each calendar quarter, payments in an amount equal to any distributions
made by the Partnership in respect of the underlying Unit during such quarter,
if any, payable in the same form and amounts as distributions paid to the
holders of Units. DERs shall not entitle the Participant to any payments
relating to distributions occurring after the earlier to occur of the applicable
RPU payment date or the forfeiture of the RPU underlying such DER. The DERs
and
any amounts that may become distributable in respect thereof shall be treated
separately from the RPUs and the rights arising in connection therewith for
purposes of the designation of time and form of payments required by Code
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
4. Vesting
and Termination.
The
RPUs shall vest in such amounts and at such times as are set forth in the
Grant
Notice above, provided,
that
the RPUs shall vest in full upon any earlier occurrence of (a) the Participant’s
Separation from Service without Cause, for Good Reason or due to the
Participant’s death or Disability, or (b) a Change of Control and, in any case,
shall be subject to the payment provisions contained in Section 5 below.
No
portion of the RPUs which has not become vested at the date of the Participant’s
Separation from Service shall thereafter become vested. In the event of the
Participant’s Separation from Service for any reason other than as set forth in
(a) and (b) of this Section, all RPUs that have not vested prior to or in
connection with such Separation from Service shall thereupon automatically
be
forfeited by the Participant without further action and without payment of
consideration therefor.
5. Payment
of RPUs; Issuance of Units.
(a) General.
Unpaid,
vested RPUs shall be paid to the Participant in the form of Units in a lump-sum
during the sixty-day period commencing with the earliest to occur of the
following dates (the “Payment
Date”):
(i)
the applicable Vesting Date specified in the Grant Notice; or (ii) subject
to
Section 5(b) below, the date of Participant’s Separation from Service. Payments
of any RPUs that vest in accordance herewith shall be made to the Participant
(or in the event of the Participant’s death, to the Participant’s estate) in
whole Units in accordance with this Section 5.
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(b) Potential
Six-Month Delay.
Notwithstanding anything to the contrary in this Agreement, no amounts payable
under this Agreement shall be paid to the Participant during the six-month
period following his Separation from Service to the extent that the Company
reasonably determines that paying such amounts prior to the expiration of
such
six-month period would result in a prohibited distribution under Section
409A(a)(2)(b)(i) of the Code. If the payment of any such amounts is delayed
as a
result of the previous sentence, then on the first business day following
the
end of the applicable six-month period (or
such
earlier date upon which such amounts can be paid under Code Section 409A
without
resulting in a prohibited distribution, including as a result of the
Participant’s
death),
such
amounts shall be paid to the Participant.
6. Tax
Withholding.
The
Company and/or its Affiliates shall have the authority and the right to deduct
or withhold, or to require the Participant to remit to the Company and/or
its
Affiliates, an amount sufficient to satisfy all applicable federal, state
and
local taxes (including the Participant’s employment tax obligations) required by
law to be withheld with respect to any taxable event arising in connection
with
the RPUs. Without limiting the generality of Section 8(b) of the Plan, to
the
extent that such obligation arises at the time that the RPUs are paid to
the
Participant in Units, the Company and/or its Affiliates may withhold Units
otherwise issuable in respect of such RPUs having a Fair Market Value equal
to
the sums required to be withheld in satisfaction of the foregoing requirement.
Notwithstanding any other provision of the Plan or this Agreement, the number
of
Units which may be so withheld in order to satisfy the Participant’s income and
payroll tax liabilities with respect to the issuance, vesting or payment
of the
RPUs shall be limited to the number of Units which have a Fair Market Value
on
the date of withholding equal to the aggregate amount of such liabilities
based
on the minimum statutory withholding rates for income and payroll tax purposes
that are applicable to such supplemental taxable income.
7. Rights
as Unit Holder.
Neither
the Participant nor any person claiming under or through the Participant
shall
have any of the rights or privileges of a holder of Units in respect of any
Units that may become deliverable hereunder unless and until certificates
representing such Units shall have been issued or recorded in book entry
form on
the records of the Partnership or its transfer agents or registrars, and
delivered in certificate or book entry form to the Participant or any person
claiming under or through the Participant.
8. Non-Transferability.
RPUs
may not be sold, pledged, assigned or transferred in any manner other than
by
will or the laws of descent and distribution. Neither the RPUs nor any interest
or right therein shall be liable for the debts, contracts or engagements
of the
Participant or his or her successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment
or
any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the preceding
sentence.
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9. Distribution
of Units.
The
Units issued pursuant to this Agreement shall be held in book entry form
and no
certificates shall be issued therefor; provided,
that
certificates may be issued representing
such Units at the request of the Participant and in accordance with the
Partnership’s governing documents, as amended and supplemented from time to
time. Notwithstanding anything herein to the contrary, (a) no payment shall
be
made under this Agreement in the form of Units unless such Units issuable
upon
such payment are then registered under the Securities Act of 1933, as amended
(the “Securities
Act”)
or, if
such Units are not then so registered, the Company has determined that such
payment and issuance would be exempt from the registration requirements of
the
Securities Act, and (b) the Partnership shall not be required to issue or
deliver any Units (whether in certificated or book-entry form) pursuant to
this
Agreement unless (i) such issuance and delivery are in compliance with all
applicable laws and regulations and, if applicable, the requirements of any
exchange on which the Units are listed or traded, and (ii) any consent or
approval of any governmental or regulatory authority necessary or desirable
as a
condition to such issuance and delivery to the Participant (or his or her
estate) has been obtained. Any certificates delivered pursuant to this Agreement
shall be subject to any stop-transfer orders and other restrictions as the
Company deems necessary or advisable to comply with federal, state or local
securities or other laws, rules and regulations and the rules of any national
securities exchange or automated quotation system on which the Units are
listed,
quoted or traded. The Company may place legends on any certificate to reference
restrictions applicable to the Units. In addition to the terms and conditions
provided herein, the Company may require that the Participant make such
covenants, agreements, and representations as the Company, in its sole
discretion, deems advisable in order to comply with any such laws, regulations
or requirements. The Company shall have the right to require the Participant
to
comply with any timing or other restrictions with respect to the settlement
of
any RPUs pursuant to this Agreement, including a window-period limitation,
as
may be imposed in its discretion.
No
fractional Units shall be issued or delivered pursuant to the RPUs.
10. Partnership
Agreement.
Units
issued upon payment of the RPUs shall be subject to the terms of the Plan
and
the terms of the Partnership Agreement. Upon the issuance of Units to the
Participant, the Participant shall, automatically and without further action
on
his or her part, be deemed to be a party to, signatory of and bound by the
Partnership Agreement.
11. No
Effect on Employment.
Nothing
in this Agreement or in the Plan shall confer upon the Participant any right
to
serve or continue to serve as an Employee, Director or Consultant.
12. Severability.
If any
provision in this Agreement is held invalid or unenforceable, such provision
will be severable from, and such invalidity or unenforceability will not
be
construed to have any effect on, the remaining provisions of this Agreement,
which shall remain in full force and effect.
13. Tax
Consultation.
None of
the Partnership, the Company or any of their Affiliates has made any warranty
or
representation to Participant with respect to the income tax consequences
of the
issuance of the RPUs, the Units or the transactions contemplated by this
Agreement, and Participant is in no manner relying on such entities or their
representatives for an assessment of such tax consequences. The Participant
understands that the Participant may suffer adverse tax consequences in
connection with the RPUs granted pursuant to this Agreement. The Participant
represents that the Participant has consulted with any tax consultants that
the
Participant deems advisable in connection with the RPUs and that the Participant
is not relying on the Partnership for tax advice.
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14. Amendments,
Suspension and Termination.
To the
extent permitted by the Plan, this Agreement may be wholly or partially amended
or otherwise modified, suspended or terminated at any time or from time to
time
by the Committee. Except as provided in the preceding sentence, this Agreement
cannot be modified, altered or amended, except by an agreement, in writing,
signed by both the Partnership and the Participant.
15. Satisfaction
of Obligations.
The
Participant hereby acknowledges and agrees that the grant of RPUs contained
in
this Agreement shall be in full and final satisfaction of any and all
obligations of the Company and its Affiliates to grant RPUs to the Participant
under the terms of the Employment Agreement.
16. Conformity
to Securities Laws.
The
Participant acknowledges that the Plan and this Agreement are intended to
conform to the extent necessary with all provisions of the Securities Act
and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, and all applicable state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the RPUs are granted, only
in such
a manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and this Agreement shall be deemed
amended
to the extent necessary to conform to such laws, rules and
regulations.
17. Code
Section 409A.
The
RPUs and the amounts payable under this Agreement may constitute or provide
for
“nonqualified deferred compensation” which is intended to comply with the
requirements of Code Section 409A. To the extent that the Committee determines
that any RPUs or any amounts payable under this Agreement may not be compliant
with Code Section 409A, the Committee and the Participant shall cooperate
and
work together in good faith to timely amend this Agreement in a manner intended
to comply with the requirements of Code Section 409A or an exemption therefrom
(including
amendments with retroactive effect), or take any other actions as they deem
necessary or appropriate to (a) exempt the RPUs from Code Section 409A and/or
preserve the intended tax treatment of the benefits provided with respect
to the
RPUs, or (b) comply with the requirements of Code Section 409A. To the extent
applicable, this Agreement shall be interpreted in accordance with the
provisions of Code Section 409A.
18. Adjustments.
The
Participant acknowledges that the RPUs are subject to modification and
termination in certain events as provided in this Agreement and Section 7
of the
Plan.
19. Successors
and Assigns.
The
Partnership may assign any of its rights under this Agreement to single or
multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Partnership. Subject to the restrictions on
transfer contained herein, this Agreement shall be binding upon the Participant
and his or her heirs, executors, administrators, successors and
assigns.
20. Governing
Law.
The
laws of the State of Delaware shall govern the interpretation, validity,
administration, enforcement and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts
of
laws.
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21. Captions.
Captions provided herein are for convenience only and are not to serve as
a
basis for interpretation or construction of this Agreement.
[Signature
page follows]
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The
Participant’s signature below indicates the Participant’s agreement with and
understanding that this award is subject to all of the terms and conditions
contained in the Plan and in this Agreement, and that, in the event that
there
are any inconsistencies between the terms of the Plan and the terms of this
Agreement, the terms of the Plan shall control. The Participant further
acknowledges that the Participant has read and understands the Plan and this
Agreement, which contains the specific terms and conditions of this grant
of
RPUs. If the Participant is married, his or her spouse has signed the Consent
of
Spouse attached to this Agreement as Exhibit
A.
The
Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising
under
the Plan or this Agreement.
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PARTICIPANT:
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[Name]
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BREITBURN
GP, LLC
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Name:
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Title:
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EXHIBIT A
CONSENT
OF SPOUSE
I,
____________________, spouse of ____________________, have read and approve
the
foregoing Restricted Phantom Unit Agreement (the “Agreement”).
In
consideration of the issuance to my spouse of the Restricted Phantom Units
(“RPUs”)
set
forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact
in
respect to the exercise of any rights under the Agreement and agree to be
bound
by the provisions thereof insofar as I may have any rights therein or in
or to
any RPUs or Units issued pursuant thereto under the community property laws
or
similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the Agreement.
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Dated:
_______________, _____
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Signature
of Spouse
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