Exhibit 10.1
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STAR GAS PARTNERS, L.P.
INCENTIVE UNITS AGREEMENT
FOR OUTSIDE DIRECTORS
THIS AGREEMENT, made as of this 30th day of August, 2000 by Star Gas
Partners, L.P., a Delaware limited partnership (the "Partnership"), with
_________________ (the "Grantee"):
W I T N E S S E T H:
WHEREAS, the Partnership has adopted an equity based incentive program
(the "Program") for the non-employee members (the "Outside Directors") of the
Board of Directors of Star Gas LLC, the general partner of the Partnership
("Star");
WHEREAS, pursuant to the Program, each Outside Director is entitled to
receive 8,500 Senior Subordinated Units (the "Units") of limited partnership
interest on the terms and conditions set forth herein;
WHEREAS, the Grantee is an Outside Director of Star.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Incentive Units. The Partnership hereby grants (the
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"Grant") to the Grantee as of the date hereof (subject to the restrictions set
forth herein) 8,500 Units, upon the following terms and conditions:
(i) 1,700 Units [20% of the Grant] (the "Initial Units") shall vest
immediately. Certificates representing these Units will be
delivered
promptly to the Grantee and shall be freely transferable
subject to Section 5.
(ii) The balance of the Grant (the "Contingent Units") shall vest in
four (non-cumulative) installments of 1,700 Units each if the
Partnership earns a minimum (each, a "Target") of the following
amount of distributable cash flow ("DCF") per limited partner
unit ("LP Unit") in the following fiscal years:
Fiscal Year Target DCF Per LP Unit
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2001 $2.19
2002 2.29
2003 2.39
2004 2.49
(iii) Certificates for the Contingent Units will be delivered
promptly upon vesting and will be freely transferable subject
to Section 6. Installments that do not vest shall be forfeited;
(iv) For purposes of this Agreement, the term Distributable Cash
Flow shall mean the numbers publicly announced by the General
Partner as the Partnership's distributable cash flow or if such
distributable cash flow is not publicly announced, then the
distributable cash flow of the Partnership as determined by its
Chief Financial Officer, in either case, adjusted to eliminate
the impact of acquisitions made in the year being calculated.
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2. Contingent Unit Distributions. Distributions on each Contingent
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Unit shall accrue and be payable on the date the Contingent Unit vests as
follows:
(i) The amount of such distributions per Unit (hereinafter referred
to as the "DCF Bonus") shall be equal to the sum of:
(A) (1) The amount by which the DCF of the Partnership exceeds
an amount sufficient to permit the Partnership to pay the
Minimum Quarterly Distribution of $2.30 per share on all
Common Units and the Target DCF per LP Unit on all other
Units outstanding divided by (2) the total number of
Contingent Units outstanding (which for the purposes of
these calculations includes all contingent units that have
heretofore or that may hereafter be issued by the
Partnership, including, without limitation, incentive
contingent units issued to employees). Notwithstanding the
foregoing, such accrual shall not exceed an amount equal to
the Target DCF per LP Unit. plus
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(B) Should the Partnership determine to make distributions in
excess (the "Excess Distributions") of the amount paid on
the outstanding Units plus the amount accrued for the DCF
Bonuses, the Contingent Units shall be treated as Senior
Subordinated Units in determining the amount of Excess
Distributions to be distributed and accrued per Unit. The
amount of Excess Distributions per Contingent Unit so
accrued will be included in the DCF Bonus.
(ii) The DCF Bonus shall be forfeited with respect to any Contingent
Units that do not vest.
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3. Termination. In the event the Grantee ceases to be, for any reason, a
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Director (such event a "Termination") all Contingent Units shall be forfeited by
the Grantee.
4. Status of Contingent Units. The Partnership shall deliver the unit
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certificate(s) to the Grantee for Contingent Units promptly following the
receipt of written certification from an authorized officer of the General
Partner that such Contingent Units are vested. The Grantee shall have no right
to receive distributions with respect to, to vote, or to otherwise exercise any
ownership rights with respect to such Contingent Units until they are vested.
5. Securities Regulation.
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(a) Units shall not be issued unless the issuance and delivery of
such Units shall comply with all relevant provisions of law, including, without
limitation, any applicable state securities laws, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations thereunder and the
requirements of any stock exchange or quotation system upon which the Units may
then be listed or quoted, and such issuance shall be further subject to the
approval of counsel for the Partnership with respect to such compliance,
including the availability of an exemption from registration for the issuance of
such Units. The inability of the Partnership to obtain from any regulatory body
the authority deemed by the Partnership to be necessary for the lawful issuance
of any Units under this Agreement, or the unavailability of an exemption from
registration for the issuance of any Units under this Plan, shall relieve the
Partnership of any liability with respect to the non-issuance of such Units.
(b) The issuance, transfer or delivery of certificates representing
Units may be delayed, at the discretion of the General Partner, until the
General Partner is satisfied that the applicable requirements of the federal and
state securities laws and the withholding
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provisions of the Internal Revenue Code of 1986, as amended (or any successor
thereto) have been met.
6. Rights as Unitholder. Except to the extent set forth above,
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Grantee shall have no rights as a unitholder with respect to any Contingent
Units until the issuance (as evidenced by the appropriate entry on the books of
the Partnership or a duly authorized transfer agent) of a certificate
representing the Units. No adjustment shall be made for distributions or other
rights for which the record date is prior to the date the certificate is issued.
7. Invalid Transfers. In the event of any attempt by the Grantee to
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transfer, assign, pledge, hypothecate or otherwise dispose of any Contingent
Units or of any right hereunder, except as provided for herein, or in the event
of the levy or any attachment, execution or similar process upon the rights or
interest hereby conferred, the Partnership may terminate this Grant by notice to
the Grantee and it shall thereupon become null and void.
8. Notices. Any notice to the Partnership provided for in this
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Agreement shall be addressed to the Partnership in care of its Chief Financial
Officer, 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 and any notice to the
Grantee shall be addressed to him at his address now on file with the
Partnership, or to such other address as either may last have designated to the
other by notice as provided herein. Any notice so addressed shall be deemed to
be given on the second business day after mailing, by registered or certified
mail, at a post office or branch post office within the United States.
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9. Controversies. In the event that any question or controversy
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shall arise with respect to the nature, scope or extent of any one or more
rights conferred by this Grant, the determination by the Board of Directors of
Star of the rights of the Grantee shall be conclusive, final and binding upon
the Grantee and upon any other person who shall assert any right pursuant to
this Grant.
STAR GAS PARTNERS, L.P.
By: Star Gas LLC
(General Partner)
By: ______________________________________
Name: Xxxx X. Xxxxx
Title: Chairman and Chief Executive Officer
ACCEPTED AND AGREED
_____________________________
, Grantee
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