BREITBURN ENERGY PARTNERS, LP CONVERTIBLE PHANTOM UNIT AGREEMENT
Exhibit
10.9
Employment
Agreement Form
BREITBURN
ENERGY PARTNERS, LP
2006
LONG-TERM INCENTIVE PLAN
Pursuant
to this Convertible Phantom Unit Agreement, (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 Convertible Phantom Units (“CPUs”),
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
CPU
is hereby granted in tandem with a corresponding Performance Distribution Right
(“PDR”),
as
further detailed in Section 3 below. Each CPU and PDR shall constitute an “Other
Unit-Based Award” under the terms of the Plan. Except as otherwise expressly
provided herein (including on Exhibit A hereto), all capitalized terms used
in
this Agreement, but not otherwise defined, shall have the meanings provided
in
the Plan.
GRANT
NOTICE
Subject
to the terms and conditions of this Agreement, the principal features of this
Award are as follows:
Number
of CPUs:
[_____]
Grant
Date:
[_____]
Vesting
of CPUs:
The
CPUs shall vest and the number of CUEs underlying such CPUs shall be determined
in accordance with Section 3 below (if any) on the earliest to occur of (i)
the
first date on which the Partnership pays a quarterly per Unit distribution,
other than any extraordinary non-recurring distribution (each, a “Quarterly
Distribution”),
that,
when added to the aggregate per Unit Quarterly Distributions paid by the
Partnership for the three immediately preceding full calendar quarters, equals
or exceeds $3.10 per Unit (such date, the “Performance
Vesting Date”),
(ii)
an applicable accelerated vesting date set forth in Section 4 below, and (iii)
January 1, 2013, in each case subject to the Participant’s continued employment
with the Employer through any such date (any such date, a “Vesting
Date”).
For
vesting purposes, except as expressly provided in Section 3(b) below, any per
Unit distribution that is announced after an applicable Vesting Date, but prior
to the payment of Units underlying the vesting CPU, shall be disregarded for
purposes of determining the Unit conversion level applicable to such
CPU.
Separation
from Service:
In the
event of the Participant’s Separation from Service prior to January 1, 2013, the
vesting and termination of the CPUs shall be governed in accordance with the
provisions of Section 4 below.
Payment
of CPUs:
Vested
CPUs shall be paid to the Participant in the form of Units as set forth in
Section 5 below, subject to Section 18 below.
PDRs:
Each
CPU granted under this Agreement shall be issued in tandem with a corresponding
PDR, which shall entitle the Participant to receive payments determined by
reference to per Unit distributions in accordance with Section 2 of this
Agreement.
TERMS
AND CONDITIONS OF CONVERTIBLE PHANTOM UNITS
1. Grant
of CPUs.
The
Partnership hereby grants to the Participant, as of the Grant Date, an award
of
[________] CPUs, subject to all of the terms and conditions contained in this
Agreement and the Plan.
2. Grant
of Tandem PDR.
a. General.
Each
CPU granted hereunder is hereby granted in tandem with a corresponding PDR,
which PDR shall remain outstanding from the Grant Date until the earlier to
occur of a Payment Date (as defined below) or the forfeiture of the CPU to
which
such PDR corresponds. Pursuant to each PDR, the Participant shall be entitled
to
receive, no later than sixty days after the end of each calendar quarter through
which the PDR remains outstanding, payment in an amount equal to the product
of
(i) the aggregate per Unit distributions paid by the Partnership in respect
of
such quarter (including any extraordinary non-recurring distributions paid
during a quarter), if any, times (ii) the number of common unit equivalents
(“CUEs”)
underlying the relevant CPU during such quarter (as determined in accordance
with Section 2(b) below), payable in the same form as distributions paid to
the
holders of Units. PDRs shall not entitle the Participant to any payments
relating to distributions occurring after the earlier to occur of the applicable
Payment Date or the Participant’s forfeiture of the CPU to which such PDR
relates in accordance herewith.
b. Determination
of CUEs Underlying CPUs for PDR Purposes.
For
purposes of determining the payments, if any, in respect of PDRs for a given
calendar quarter under Section 2(a) above, the number of CUEs underlying a
CPU
shall equal the number of CUEs listed on the CUE Conversion Table (attached
as
Exhibit B hereto (the “CUE
Conversion Table”))
for
the corresponding dollar value (in the column entitled “Target Distribution
Level”) attained by multiplying the applicable Quarterly Distribution by
four.
c. Separate
Payments.
The
PDRs and any amounts that may become payable in respect thereof shall be treated
separately from the CPUs and the rights arising in connection therewith for
purposes of the designation of time and form of payments required by Code
Section 409A.
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3. Conversion
of Vested CPUs to Units.
a. General.
CPUs
that vest in accordance with this Agreement shall represent the right to receive
payment, in accordance with Section 5 below, in the form of a number of Units
equal to (i) the product of (A) the number of CPUs so vested, times (B) the
number of CUEs underlying such CPUs on the applicable Vesting Date (as
determined in accordance with Section 3(b) below), minus (ii) the applicable
number of PDR Equalization Units (as defined below), if any (such number of
Units, the “Resultant
Units”).
Unless and until a CPU vests, the Participant will have no right to payment
of
Units in respect of any such CPU. Prior to actual payment in respect of any
vested CPU, such CPU will represent an unsecured obligation of the Partnership,
payable (if at all) only from the general assets of the
Partnership.
b. Determination
of CUEs Underlying CPUs at Vesting.
The
number of CUEs underlying each CPU at vesting shall equal:
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i.
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In
the case of any CPU that vests as of a Performance Vesting Date that
occurs prior to each of (A) January 1, 2013 and (B) the Participant’s
Separation from Service, 4.768 CUEs per CPU;
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ii.
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In
the case of any CPU that vests on January 1, 2013, a number of CUEs
determined by matching the dollar value (in the column entitled “Target
Distribution Level”) of the sum of the Quarterly Distributions paid in
respect of calendar year 2012 with the corresponding number of CUEs
listed
on the CUE Conversion Table; and
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iii.
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In
the case of any CPU that vests upon a Separation from Service in
accordance with Section 4(a), 4(b), or 4(c) below, in any case, prior
to
January 1, 2013, a number of CUEs determined by (A) matching the
dollar
value (in the column entitled “Target Distribution Level”) of the product
of (x) four, multiplied by (y) the higher of (i) the per Unit Quarterly
Distribution paid or payable by the Partnership for the full calendar
quarter ended immediately prior to such Separation from Service (for
purposes of clarification, if the Quarterly Distribution for such
quarter
was zero, the Quarterly Distribution in this clause (i) shall be
zero), or
(ii) the per Unit Quarterly Distribution publicly announced by the
Partnership prior to such Separation from Service for the calendar
quarter
in which the Separation from Service occurs or for a subsequent calendar
quarter, in any case, with the corresponding number of CUEs listed
on the
CUE Conversion Table, and (B) multiplying such number of CUEs by
the
applicable CPU Acceleration Percentage (as determined in accordance
with
the CPU Acceleration Percentage Table attached hereto as Exhibit
C, based
on the date of such Separation from
Service).
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Except
with respect to a fourth quarter 2012 Quarterly Distribution in the case of
CPUs
vesting on January 1, 2013, which Quarterly Distribution is announced after
January 1, 2013, under no circumstances shall any Quarterly Distribution that
is
announced after the applicable Vesting Date be taken into consideration in
determining the number of CUEs underlying any CPUs at vesting.
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c. PDR
Equalization Units.
For
purposes of this Agreement, “PDR
Equalization Units”
means
a
number of Units equal to the quotient obtained by dividing (i) the dollar value
of the difference of (A) the actual aggregate amount paid in respect of all
PDRs
from the Grant Date through the Payment Date (the “Actual
PDR Payments”),
minus
(B) the aggregate amount that would have been paid during the period from the
Grant Date through the Payment Date in respect of the PDRs had they originally
been granted in tandem with that number of CPUs equal to the aggregate number
of
CUEs underlying the CPUs as of the applicable Vesting Date (the “Notional
PDR Payments”),
by
(ii) the Fair Market Value of a Unit on the Vesting Date. If the dollar value
of
the Actual PDR Payments does not exceed the dollar value of the Notional PDR
Payments with respect to any vesting CPU, then the PDR Equalization Units shall
equal zero with respect to such CPU.
4. Separation
from Service.
If the
Participant experiences a Separation from Service from the Employer prior to
the
vesting or termination of the CPUs, the following provisions shall control
the
vesting and forfeiture of the CPUs in connection with and following such
Separation from Service:
a. Good
Reason; Other than for Cause, Death or Disability.
If,
during the Employment Period, the Participant incurs a Separation from Service
by reason of a termination by the Employer without Cause (other than as a
consequence of the Participant’s death or Disability), or by reason of a
termination by the Participant for Good Reason, then, to
the
extent not previously vested or forfeited, the CPUs shall vest and the number
of
CUEs underlying such CPUs shall be determined as of the date of such Separation
from Service on a pro rata basis in accordance with Sections 3(a) and 3(b)(iii)
above, and any CPUs that do not so vest and convert into Units shall
automatically be cancelled and forfeited as of the date of such Separation
from
Service.
b. Death
or Disability.
If,
during the Employment Period, the Participant
incurs a Separation from Service due
to
the Participant’s death or Disability, then,
to
the
extent not previously vested or forfeited, the CPUs shall vest and the number
of
CUEs underlying such CPUs shall be determined as of the date of such Separation
from Service on a pro rata basis in accordance with Sections 3(a) and 3(b)(iii)
above (and, in the case of the Participant’s death, paid to Participant’s
estate), and any CPUs that do not so vest and convert into Units shall be
cancelled and forfeited as of the date of such Separation from
Service.
c. Non-renewal.
If the
Participant incurs a Separation from Service because the Employer or the
Participant elects not to renew the Employment Period in accordance with Section
2 of the Employment Agreement and, in the case of an Employer non-renewal,
at
the time of such non-renewal, the Participant was willing and able to continue
providing services in accordance with the terms and conditions of the Employment
Agreement (in any case, a “Non-Renewal”),
then,
to
the
extent not previously vested or forfeited, the CPUs shall vest and the number
of
CUEs underlying such CPUs shall be determined as of the date of such Separation
from Service on a pro rata basis in accordance with Sections 3(a) and 3(b)(iii)
above, provided,
that
the vesting and conversion described in this Section 4(c) shall only occur
if,
following notice of such Non-Renewal, the Participant does not voluntarily
terminate his employment (other than upon death or Disability) before the end
of
the Employment Period, as determined without regard to any extension of the
Employment Period that might otherwise occur following the date of such
Separation from Service in accordance with the second sentence of Section 2
of
the Employment Agreement. Any CPUs that do not vest and convert into Units
in
accordance with this Section 4(c) upon a Non-Renewal shall automatically be
cancelled and forfeited as of the date of such Separation from Service.
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d. Cause;
Resignation Other than for Good Reason.
If the
Participant’s employment with the Employer is terminated by the Employer for
Cause or by the Participant without Good Reason (and other than due to the
Participant’s death or Disability), then, to the extent not previously vested,
all CPUs subject to this Agreement shall be forfeited as of the date of
Separation from Service.
5. Payment
of CPUs; Issuance of Units.
CPUs
that vest shall be paid to the Participant in the form of Units in a lump-sum
amount determined in accordance with Section 3 above during the sixty-day period
following the applicable Vesting Date (the date on which Units are transferred
to the Participant, the “Payment
Date”).
All CPUs
shall be canceled and terminated upon such payment, and the Participant
shall have no further right or interest in respect thereof.
6. Forfeiture
and Termination of CPUs.
a. Termination
of Employment.
Without
limiting the foregoing, in the event of the Participant’s termination of
employment for any reason, (i) the CPUs, to the extent not vested as of the
date
of such termination of employment, and any corresponding PDRs (other than with
respect to amounts owing but not paid under such PDRs prior to such termination
of employment, if any), shall thereupon automatically and without further action
be cancelled and forfeited by the Participant, and the Participant shall have
no
further right or interest in or with respect to such unvested CPUs and
corresponding PDRs (other than with respect to amounts owing but not paid under
such PDRs prior to such termination of employment, if any), and (ii) no portion
of the CPUs which are unvested as of the date of such termination of employment
shall thereafter become vested.
b. Failure
to Achieve Minimum Performance.
In the
event that, as of January 1, 2013 or any earlier Vesting Date, the number of
Resultant Units is less than or equal to zero, the CPUs and any corresponding
PDRs shall thereupon automatically and without further action be cancelled
and
forfeited by the Participant, and the Participant shall have no further right
or
interest in such CPUs or any corresponding PDRs or with respect to either of
the
foregoing (other than with respect to amounts owing but not paid under such
PDRs
prior to such date, if any).
7. 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 CPUs and/or the PDRs. To the extent that such obligation arises at the
time
that the CPUs are paid to the Participant in Units, the Company and/or its
Affiliates may withhold Units otherwise issuable in respect of such CPUs having
a Fair Market Value equal to the sums required to be withheld in satisfaction
of
the foregoing requirements. 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 CPUs 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.
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8. 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.
9. Non-Transferability.
Except
as otherwise provided in this Section 9, (i) neither the CPUs nor the PDRs
may
be sold, pledged, assigned or transferred in any manner other than by will
or
the laws of descent and distribution, and (ii) neither the CPUs, PDRs 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. Notwithstanding the foregoing, subject to applicable law, the CPUs
and
PDRs may be transferred to an estate planning trust that constitutes a “family
member” of the Participant within the meaning of the instructions to Form S-8
under the Securities Act, subject to the following terms and conditions: (i)
any
CPUs or PDRs so transferred shall not be further assignable or transferable
by
the transferee other than by will or the laws of descent and distribution;
(ii)
any CPUs or PDRs so transferred shall continue to be subject to all the terms
and conditions of the CPUs and PDRs as applicable to the original Participant
(other than the ability to further transfer the CPUs and PDRs); and (iii) the
Participant and the transferee shall execute any and all documents requested
by
the Committee, including, without limitation documents to (A) confirm the status
of the transferee as a permitted transferee, (B) satisfy any requirements for
an
exemption for the transfer under applicable federal, state and foreign
securities laws, and (C) evidence the transfer.
10. 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 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 generally applicable timing or other restrictions with respect
to the settlement of any CPUs 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 CPUs .
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11. Partnership
Agreement.
Units
issued upon payment of the CPUs 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.
12. 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.
13. 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.
14. 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 CPUs, the PDRs, 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 CPUs and PDRs 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 CPUs
and
the PDRs and that the Participant is not relying on the Company, the Partnership
or their Affiliates for tax advice.
15. Amendments,
Suspension and Termination.
Except
as provided in the Section 18 hereof, this Agreement cannot be modified, altered
or amended, except by an agreement, in writing, signed by both the Partnership
and the Participant.
16. Satisfaction
of Obligations.
The
Participant hereby acknowledges and agrees that the grant of CPUs and PDRs
contained in this Agreement shall be in full and final satisfaction of any
and
all obligations of the Company and its Affiliates to grant CPUs and PDRs to
the
Participant under the terms of the Employment Agreement.
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17. 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 CPUs and PDRs 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,
but in a manner which is intended to preserve the economic value of the grant
to
the Participant.
18. Code
Section 409A.
a. General.
To the
extent that the Committee determines that the CPUs, the PDRs or any amounts
payable under this Agreement may not be compliant with or exempt from Code
Section 409A, the Committee and the Participant shall cooperate and work
together in good faith to timely amend this Agreement to the extent necessary
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 CPUs and PDRs from Code
Section 409A and/or preserve the intended tax treatment of the benefits provided
with respect to the CPUs and PDRs, or (b) comply with the requirements of Code
Section 409A, in any case, in a manner which is intended to preserve the
economic value of the Award to the Participant. To the extent applicable, this
Agreement shall be interpreted in accordance with the provisions of Code Section
409A.
b. Potential
Six-Month Delay. Notwithstanding
anything to the contrary in this Agreement, no amounts shall be paid to the
Participant under this Agreement during the 6-month period following his
Separation from Service to the extent that the Employer reasonably determines
that paying such amounts at the time or times indicated in this Agreement 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 such 6-month
period (or such earlier date upon which such amount can be paid under Code
Section 409A without resulting in a prohibited distribution, including as a
result of the Participant’s death), the Company shall pay to the Participant a
lump-sum amount equal to the cumulative amount that would have otherwise been
payable to the Participant during such 6-month period, plus interest thereon
from the date of the Participant’s Separation from Service through the payment
date at a rate equal to the then-current “applicable Federal rate” determined
under Section 7872(f)(2)(A) of the Code.
19. Adjustments.
The
Participant acknowledges that the CPUs and PDRs are subject to modification
and
termination in certain events as provided in this Agreement and Section 7 of
the
Plan, provided,
however,
that
notwithstanding anything contained in the Plan, any action taken with respect
to
the CPUs or PDRs under Section 7(c)(C) or Section 7(c)(E) of the Plan shall
be
made in a manner that is intended to preserve for the Participant the benefits
or potential benefits intended to be made available under the CPUs and PDRs
(including the then current value and economic terms thereof).
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20. Successors
and Assigns.
The
Company or the Partnership may assign any of their rights under this Agreement
to any
affiliate or successor to all or substantially all of the business or assets
of
the Company or the Partnership, and this Agreement shall inure to the benefit
of, and be binding upon, such successors and assigns. 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. In the event of the Participant’s death, his estate shall be entitled
to any payments otherwise due to the Participant hereunder.
21. No
Offset.
Neither
the Company nor the Partnership shall be permitted to reduce or offset the
amount of any payment due to the Participant hereunder on account of any claim
that the Company, the Partnership or any of their Affiliates may have against
the Participant.
22. 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.
23. Entire
Agreement.
This
Agreement, together with the Plan, constitutes the final, complete and exclusive
agreement between the Company, the Partnership and the Participant with respect
to the subject matter hereof and replaces and supersedes any and all other
agreements, offers or promises, whether oral or written, made to the Participant
by the Company, the Partnership or any representative or agent thereof,
including, without limitation, the Employment Agreement. Without limiting the
generality of the foregoing, to the extent that this Agreement is inconsistent
with the Employment Agreement regarding the terms and conditions of the CPUs
or
the PDRs, this Agreement shall control.
24. 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, except as expressly
provided in this Agreement (including, without limitation, Section 19 hereof),
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 CPUs and PDRs. If the Participant is married, his or her spouse
has signed the Consent of Spouse attached to this Agreement as Exhibit
D.
The
Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee made in good faith 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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CERTAIN
DEFINITIONS
“Cause”
means
the
following:
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i.
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the
willful and continued failure of the Participant to perform substantially
the Participant’s duties for the Employer or any BreitBurn Entity (as
described in Section 3(a) of the Employment Agreement) (other than
any
such failure resulting from incapacity due to physical or mental
illness),
after a written demand for substantial performance is delivered to
the
Participant by the Employer (after a vote to this effect by a majority
of
the Board (as defined in the Employment Agreement)) which specifically
identifies the manner in which the Board believes that the Participant
has
not substantially performed the Participant’s duties and the Participant
is given a reasonable opportunity of not more than twenty (20) business
days to cure any such failure to substantially
perform;
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ii.
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the
willful engaging by the Participant in illegal conduct or gross
misconduct, in each case which is materially and demonstrably injurious
to
the Employer or any BreitBurn Entity;
or
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iii.
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(A)
any act of fraud, or material embezzlement or material theft by the
Participant, in each case, in connection with the Participant’s duties
hereunder or in the course of the Participant’s employment hereunder or
(B) the Participant’s admission in any court, or conviction, or plea of
nolo contendere, of a felony involving moral turpitude, fraud, or
material
embezzlement, material theft or material misrepresentation, in each
case,
against or affecting the Employer or any BreitBurn
Entity.
|
For
purposes of this provision, no act or failure to act, on the part of the
Participant, shall be considered “willful” unless it is done, or omitted to be
done, by the Participant in bad faith or without reasonable belief that the
Participant’s action or omission was in the best interests of the Employer or
any BreitBurn Entity. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Employer or the Company, including,
without limitation, the Board, or based upon the advice of counsel for the
Employer or the Company shall be conclusively presumed to be done, or omitted
to
be done, by the Participant in good faith and in the best interests of the
Employer and the BreitBurn Entities. Notwithstanding the foregoing, termination
of the Participant’s employment shall not be deemed to be for Cause unless and
until there shall have been delivered to the Participant a copy of a resolution
of the Board duly adopted by an affirmative vote of the Board at a meeting
of
the Board held for such purpose (after reasonable notice is provided to the
Participant and the Participant is given an opportunity, together with counsel
for the Participant, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Participant is guilty of the conduct described
in clauses (i), (ii) or (iii) above, and specifying the particulars thereof
in
detail; provided,
that if
the Participant is a member of the Board, the Participant shall not vote on
such
resolution nor shall the Participant be counted.
11
“Commencement
Date”
means
[Date].1
“Disability”
means
a
“disability” within the meaning of Code Section 409A.
“Employer”
means
BreitBurn Management Company, LLC and/or BreitBurn GP, LLC, as the context
requires.
“Employment
Agreement”
means
the Employment
Agreement between the Employer and the Participant, dated [__________].
“Employment
Period”
means
the period beginning on the Commencement Date and ending on January 1, 2011
or
such earlier date upon which the Participant’s employment with the Employer is
terminated, subject to extension in accordance with Section 2 of the Employment
Agreement.
“Good
Reason”
means
the occurrence of any of the following without the Participant’s written
consent:
|
i.
|
a
material diminution in the Participant’s Base Salary (as defined in the
Employment Agreement);
|
|
ii.
|
a
material diminution in the Participant’s authority, duties, or
responsibilities;
|
|
iii.
|
a
material diminution in the authority, duties, or responsibilities
of the
supervisor to whom the Participant is required to
report;
|
|
iv.
|
a
material diminution in the budget over which the Participant retains
authority;
|
|
v.
|
a
material change in the geographic location at which the Participant
must
perform services under the Employment Agreement;
or
|
|
vi.
|
any
other action or inaction that constitutes a material breach by the
Employer of the Employment Agreement, including without limitation,
a
breach of Section 3(a)(v) thereof;
|
provided,
that
the Participant’s resignation shall only constitute a resignation for “Good
Reason” if (a) the Participant provides the Employer with written notice setting
forth the specific facts or circumstances constituting Good Reason within thirty
days after the initial existence of such facts or circumstances, (b) the
Employer has failed to cure such facts or circumstances within thirty days
after
receipt of such written notice, and (c) the date of the Participant’s Separation
from Service occurs no later than seventy-five days after the initial occurrence
of the event constituting Good Reason.
“Separation
from Service”
means
the Participant’s “separation from service” from the Employer within the meaning
of Code Section 409A(a)(2)(A)(i).
1
Use Commencement Date from applicable Employment Agreement.
12
EXHIBIT
B
TO
CONVERTIBLE PHANTOM UNIT AGREEMENTCUE
CONVERSION TABLE2
|
Target
Annual Distribution Level
|
CUEs
per CPU
|
|
|
$0.00
|
0.000
|
|
|
$1.24
|
0.133
|
|
|
$1.30
|
0.178
|
|
|
$1.37
|
0.237
|
|
|
$1.44
|
0.316
|
|
|
$1.52
|
0.422
|
|
|
$1.60
|
0.563
|
|
|
$1.68
|
0.750
|
|
|
$1.77
|
1.000
|
|
|
$2.20
|
1.000
|
|
|
$2.31
|
1.250
|
|
|
$2.43
|
1.563
|
|
|
$2.55
|
1.953
|
|
|
$2.67
|
2.441
|
|
|
$2.81
|
3.052
|
|
|
$2.95
|
3.815
|
|
|
$3.10
or greater
|
4.768
|
2
If the dollar value of the relevant distributions falls between the incremental
distribution levels contained in this CUE Conversion Table, then the number
of
CUEs underlying each CPU shall equal the number of CUEs associated with the
lower of the two Target Annual Distribution Levels.
13
EXHIBIT
C
CPU
ACCELERATION PERCENTAGE TABLE
|
If
a qualifying termination occurs on
or
prior to:
|
Then
the CPU Acceleration
Percentage
Shall Equal:
|
|
|
December
31, 2008
|
40%
|
|
|
December
31, 2009
|
60%
|
|
|
December
31, 2010
|
80%
|
|
|
If
a qualifying termination occurs on
or
after:
|
Then
the CPU Acceleration
Percentage
Shall Equal:
|
|
|
January
1, 2011
|
100%
|
14
EXHIBIT
D
CONSENT
OF SPOUSE
I,
____________________, spouse of ____________________, have read and approve
the
foregoing Convertible Phantom Unit Agreement (the “Agreement”).
In
consideration of the issuance to my spouse of the Convertible Phantom Units
(“CPUs”)
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 CPUs 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.
|
Signature
of Spouse
|
15
