ARC LOGISTICS LONG TERM INCENTIVE PLAN PHANTOM UNIT AGREEMENT
Exhibit 10.2
ARC LOGISTICS
LONG TERM INCENTIVE PLAN
This Phantom Unit Agreement (this “Agreement”) is made and entered into by and between Arc Logistics GP LLC, a Delaware limited liability company (the “General Partner”), and [ ] (the “Director”). This Agreement is effective as of the [ ] day of [ ], 20[ ] (the “Date of Grant”). Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan (as defined below), unless the context requires otherwise.
W I T N E S S E T H:
WHEREAS, Arc Logistics Partners LP, a Delaware limited partnership (the “Partnership”), acting through the Board of Directors of the General Partner (the “Board”), has adopted the Arc Logistics Long Term Incentive Plan (the “Plan”) to, among other things, attract, retain and motivate certain employees, consultants and directors of the Partnership, the General Partner and their respective Affiliates (collectively, the “Partnership Entities”); and
WHEREAS, the Committee has authorized the grant of Phantom Units of the Partnership to directors, employees, officers and consultants as part of their compensation for services provided to the Partnership Entities.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other valuable consideration hereinafter set forth, the Director and the General Partner agree as follows:
1. Grant of Phantom Units. The General Partner hereby grants to the Director [ ] Phantom Units (the “Award”), subject to all of the terms and conditions set forth in the Plan, this Agreement and the Time of Settlement Election Form (the “Election Form”) (if any), including without limitation, those restrictions described in Section 4, whereby each Phantom Unit represents the right to receive one Unit of the Partnership and/or cash in an amount equal to the Fair Market Value of one Unit (each, a “Phantom Unit”).
2. Phantom Unit Account. Phantom Units represent hypothetical Units and not actual Units. The General Partner shall establish and maintain a bookkeeping account on its records for the Director (a “Phantom Unit Account”) and shall record in such Phantom Unit Account: (a) the number of Phantom Units granted to the Director and (b) the amount deliverable to the Director at settlement on account of Phantom Units that have vested. The Director shall not have any interest in any fund or specific assets of the Partnership by reason of this Award or the Phantom Unit Account established for the Director.
3. Rights of Director. No Units shall be issued to the Director at the time the grant is made, and the Director shall not be, nor have any of the rights and privileges of, a unitholder or limited partner of the Partnership with respect to any Phantom Units recorded in the Phantom Unit Account. The Director shall have no voting rights with respect to the Phantom Units. In
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the event the Partnership pays any distributions in respect of its outstanding Units and, on the record date for such distribution, the Director holds Phantom Units granted pursuant to this Agreement that have not vested and been settled, the Partnership shall deliver to the Director an amount in cash or property in the same form the distribution was delivered to unitholders generally based on the number of Units related to the portion of the Director’s Phantom Units that have not been settled as of the record date for the distribution (the “DER”), such distribution equivalents to be delivered to the Director on or promptly following the date that the Partnership pays such cash distribution (however, in no event shall the DER payment be made later than 30 days following the date on which the Partnership pays such distribution to unitholders generally). Notwithstanding the date of payment, the Director will vest in such DER as of the record date for such distribution. No interest will accrue on any such right between the issuance of the distribution to unitholders generally and the settlement of the DER.
4. Vesting of Phantom Units. The Phantom Units are restricted in that they may be forfeited by the Director and in that they may not, except as otherwise provided in the Plan, be transferred or otherwise disposed of by the Director. Subject to the terms and conditions of this Agreement, the forfeiture restrictions on the Phantom Units shall lapse, and the Phantom Units shall vest as set forth in the following vesting chart:
| Vesting Date |
Percentage of Phantom Units that become Vested |
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| On the first anniversary of the Date of Grant |
33 1⁄3 | % | ||
| On the second anniversary of the Date of Grant |
33 1⁄3 | % | ||
| On the third anniversary of the Date of Grant |
33 1⁄3 | % | ||
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| Total |
100 | % | ||
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Notwithstanding the vesting chart set forth in this Section 4 (the “Vesting Chart”), such restrictions will lapse, and the Phantom Units shall vest in accordance with this Section 4 only if the Director has continuously provided services to the Partnership Entities (except to the extent such continuous service shall not be a vesting requirement in connection with a Change of Control as provided in Section 5(a) hereof) from the Date of Grant until the applicable date of vesting (each, a “Vesting Date”). Any Phantom Units that have not vested or been settled as of the close of business on the later of (a) the third (3rd) anniversary of the last Vesting Date to occur or (b) solely with respect to Phantom Units that have not been settled and for which an Election Form has been executed, the day following the date elected for settlement in such Election Form (whichever of (a) or (b) is applicable, the “Expiration Date”) shall in all events terminate, expire and otherwise be forfeited by the Director on the Expiration Date.
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5. Change of Control and Termination of Service.
(a) Change of Control. Notwithstanding the Vesting Chart set forth in Section 4 of this Agreement, upon the occurrence of a Change of Control prior to the final Vesting Date, all Phantom Units subject to this Agreement will immediately become vested and nonforfeitable (to the extent not vested or forfeited prior to that date); provided, however, that if such service relationship is terminated by the applicable Partnership Entity prior to and in connection with such Change of Control (or anticipated Change of Control), then all Phantom Units subject to this Agreement shall immediately become vested and nonforfeitable (to the extent not vested prior to that date) contemporaneously with such Change of Control.
(b) Death and Disability. If the Director’s service relationship with the Partnership Entities is terminated due to death or Disability prior to the final Vesting Date, then all Phantom Units subject to this Agreement will immediately become vested and nonforfeitable (to the extent not vested or forfeited prior to that date) as of the date the Director’s service terminates.
(c) Other Terminations. If the Director’s service relationship with the Partnership Entities is terminated for any reason other than as described in Section 5(b) or in the proviso to Section 5(a) of this Agreement prior to the final Vesting Date, then all Phantom Units granted pursuant to this Agreement that have not yet vested shall become null and void as of the date the Director’s service terminates; provided, however, that the Committee, in its sole and absolute discretion, may decide to vest all or any portion of the Phantom Units that remain unvested as of the date the Director’s service terminates or may allow such Phantom Units to remain outstanding and vest pursuant to the Vesting Chart set forth in Section 4 hereof or pursuant to such other terms and conditions as established by the Committee. The portion of the Phantom Units, if any, that do not become vested in accordance with the foregoing (including in accordance with the proviso to Section 5(a) hereof, pursuant to which Phantom Units shall vest in connection with a Change in Control following the date the Director’s service terminates) shall become null and void as of the date the Director’s service terminates; provided, however, that, the portion, if any, of the Phantom Units that vest as of such date shall survive.
6. Settlement Date; Manner of Settlement. The settlement date or dates of the Units related to the Director’s Phantom Units will be the date or dates on which the restrictions on such Phantom Units expire and the Phantom Units become vested as provided in Sections 4 and 5 of this Agreement or, if applicable, at the time elected pursuant to the Election Form. To the extent that the Award consists of 1,000 Phantom Units or more, any Phantom Units that vest shall be paid to the Director in the form of Units on the settlement date(s). To the extent that the Award consists of less than 1,000 Phantom Units, any Phantom Units that vest shall be paid to the Director in cash on the settlement date(s). The value of any Phantom Units paid in cash shall equal the number of vested Phantom Units multiplied by the Fair Market Value of a Unit. The value of any fractional Phantom Unit shall be paid in cash on the settlement date(s). The value of any fractional Phantom Unit paid in cash shall equal the percentage of a Unit represented by a fractional Phantom Unit multiplied by the Fair Market Value of the Unit. The Director agrees that any vested Units that the Director acquires upon vesting of the Phantom Units will not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable federal or state securities laws, the Plan or the rules, regulations and other requirements of the U.S. Securities and Exchange Commission (the “SEC”) and any stock exchange upon which the Units are then listed. The Director also agrees that any certificates representing the Units
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acquired under this award may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws. In addition to the terms and conditions provided herein, the Partnership may require that the Director make such covenants, agreements, and representations as the Committee, in its sole discretion, deems advisable in order to comply with any such laws, rules, regulations, or requirements.
7. Limitations on Transfer. The Director agrees that he shall not dispose of (meaning, without limitation, sell, transfer, pledge, exchange, hypothecate or otherwise dispose of) any Phantom Units or other rights hereby acquired prior to the date the Phantom Units are vested and settled. Any attempted disposition of the Phantom Units in violation of the preceding sentence shall be null and void and the Phantom Units that the Director attempted to dispose of shall be forfeited.
8. Adjustment. The number of Phantom Units granted to the Director pursuant to this Agreement shall be adjusted to reflect distributions of the Partnership paid in units, unit splits or other changes in the capital structure of the Partnership, all in accordance with the Plan. All provisions of this Agreement shall be applicable to such new or additional or different units or securities distributed or issued pursuant to the Plan to the same extent that such provisions are applicable to the units with respect to which they were distributed or issued.
9. Violation of Law, Regulation or Rule. The General Partner shall not be required to deliver any Units hereunder if, upon the advice of counsel for the General Partner, such acquisition or delivery would violate the Securities Act of 1933 or any other applicable federal, state, or local law or regulation or the rules of the exchange upon which the Partnership’s Units are traded.
10. Copy of Plan. By the execution of this Agreement, the Director acknowledges receipt of a copy of the Plan. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any applicable law, then such provision will be deemed to be modified to the minimum extent necessary to render it legal, valid and enforceable; and if such provision cannot be so modified, then this Agreement will be construed as if not containing the provision held to be invalid, and the rights and obligations of the parties will be construed and enforced accordingly.
11. Notices. Whenever any notice is required or permitted hereunder, such notice must be in writing and personally delivered or sent by mail. Any such notice required or permitted to be delivered hereunder shall be deemed to be delivered on the date on which it is personally delivered or, whether actually received or not, on the third business day (on which banking institutions in the State of New York are open) after it is deposited in the United States mail, certified or registered, postage prepaid, addressed to the person who is to receive it at the address which such person has theretofore specified by written notice delivered in accordance herewith. The General Partner or the Director may change at any time and from time to time by written notice to the other, the address which it or he previously specified for receiving notices. The General Partner and the Director agree that any notices shall be given to the General Partner or to the Director at the following addresses:
| General Partner: | Arc Logistics GP LLC | |
| Attn: General Counsel | ||
| 000 Xxxxx Xxxxxx, 00xx Xxxxx | ||
| Xxx Xxxx, XX 00000 | ||
| Director: | At the Director’s current address as shown in the General Partner’s records. | |
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12. General Provisions.
(a) Administration. This Agreement shall at all times be subject to the terms and conditions of the Plan. The Committee shall have sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of a majority of the Committee with respect thereto and with respect to this Agreement shall be final and binding upon the Director and the General Partner. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control.
(b) No Effect on Service. Nothing in this Agreement or in the Plan shall be construed as giving the Director the right to be retained in service of the Partnership Entities. Furthermore, the Partnership Entities may at any time terminate the service relationship with the Director free from any liability or any claim under the Plan or this Agreement, unless otherwise expressly provided in the Plan, this Agreement or other written agreement.
(c) Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of law principles thereof.
(d) Amendments. This Agreement may be amended only by a written agreement executed by the General Partner and the Director, except that the Committee may unilaterally waive any conditions or rights under, amend any terms of, or alter this Agreement provided no such change (other than pursuant to Section 7(b), 7(c), 7(d), 7(e), or 7(g) of the Plan) materially reduces the rights or benefits of the Director with respect to the Phantom Units without his consent.
(e) Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the General Partner or the Partnership and upon any person lawfully claiming under the Director.
(f) Entire Agreement. This Agreement and the Plan (and, if applicable, the Election Form) constitute the entire agreement of the parties hereto with regard to the subject matter hereof, and contain all the covenants, promises, representations, warranties and agreements between the parties with respect to the Phantom Units granted hereby. Without limiting the scope of the preceding sentence, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect.
(g) No Liability for Good Faith Determinations. Neither the Partnership Entities nor the members of the Committee and the Board shall be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Phantom Units granted hereunder.
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(h) No Guarantee of Interests. The Committee, the Board and the Partnership Entities do not guarantee the Units from loss or depreciation.
(i) Xxxxxxx Xxxxxxx Policy. The terms of the Partnership’s xxxxxxx xxxxxxx policy with respect to Units are incorporated herein by reference.
(j) Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.
(k) Headings. The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof.
(l) Gender. Words used in the masculine shall apply to the feminine where applicable, and wherever the context of this Agreement dictates, the plural shall be read as the singular and the singular as the plural.
(m) Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format, the Director agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Partnership may be required to deliver (including, without limitation, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other award made or offered by the Partnership. Electronic delivery may be via a Partnership electronic mail system or by reference to a location on a Partnership intranet to which the Director has access. The Director hereby consents to any and all procedures the Partnership has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Partnership may be required to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.
(n) Section 409A. None of the Phantom Units, the DERs or any amounts paid pursuant to this Agreement are intended to constitute or provide for a deferral of compensation that is subject to Section 409A of the Code, except to the extent the Director elects a deferred payment date pursuant to the Election Form (if applicable). To the extent that the Committee determines that the Phantom Units or DERs are not exempt from (or, if an election is made pursuant to the Election Form, compliant with) Section 409A of the Code, the Committee may (but shall not be required to) amend this Agreement or the Election Form, if applicable, in a manner intended to comply with the requirements of Section 409A of the Code or an exemption therefrom (including amendments with retroactive effect), or take any other actions as it deems necessary or appropriate to (a) exempt the Phantom Units or DERs from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Phantom Units or DERs, or (b) comply with the requirements of Section 409A of the Code. To the extent applicable, this Agreement and the Election Form (if any) shall be interpreted in accordance with the provisions of Section 409A of the Code.
[Signature Page Follows]
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IN WITNESS WHEREOF, the General Partner has caused this Agreement to be executed by its officer thereunto duly authorized, and the Director has set his hand as to the date and year first above written.
| ARC LOGISTICS GP LLC | ||
| By: |
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| Name: |
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| Title: |
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| DIRECTOR | ||
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| [Name] | ||
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