Exhibit 10.9
Constellation Energy Partners
LLC
2009 Omnibus Incentive
Compensation Plan
Grant Agreement Relating
to
Notional Units with DERs -
Executives
Grantee:
Grant Date
: May 1, 2009
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1.
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Grant of
Notional Units .
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(a) Grant . Constellation
Energy Partners LLC, a Delaware limited liability company (the
“ Company ”), hereby grants to you [
—
] Notional Units (each, a “
Notional Unit ”) under the Constellation Energy
Partners LLC 2009 Omnibus Incentive Compensation Plan (the “
Plan ”) on the terms and conditions set forth herein
and in the Plan, which is attached hereto as Appendix A and
incorporated herein by reference as a part of this agreement (the
“ Grant Agreement ”).
(b) General . Except where
explicitly noted herein, in the event of any conflict between the
terms of this Grant Agreement and the Plan, the Plan shall control.
Capitalized terms used in this Grant Agreement but not defined
herein shall have the meanings ascribed to such terms in the Plan,
unless the context requires otherwise.
(c) Failure to Approve Plan .
In the event the Plan is not approved by the common unitholders of
the Company (an “ Approval Failure ”) prior to
the occurrence of a particular Vesting Date or other vesting of
Notional Units pursuant to this Grant Agreement, Grantee
(i) shall have no right pursuant to this Grant Agreement or
otherwise to receive Units in respect of the Notional Units so
vested and (ii) shall be entitled to settlement of the
Notional Units so vested only pursuant to Section 5 .
No Approval Failure shall affect the validity of this Grant
Agreement and shall have no effect on this Grant Agreement other
than as explicitly provided for in this Section 1(c)
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2.
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Conversion
to Restricted Common Units .
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(a) Conversion Upon Plan
Approval . Upon approval of the Plan by the common unitholders
of the Company, each Notional Unit and related DER shall be
automatically converted into a right to receive one Restricted Unit
and a tandem DER. All Notional Units and related DERs granted
hereby shall become null, void and without further effect upon such
conversion; provided , however , that any
Distribution Credits that have accumulated pursuant to
Section 4(b) in respect of such Notional Units shall
remain outstanding. The Company shall promptly cause the issuance
of such restricted common units (the “ Restricted
Units ”) upon such approval of the Plan. The Restricted
Units shall be evidenced in book-entry form in the name of
Grantee.
(b) Vesting of Restricted
Units . Except as otherwise provided in
Section 2(c) , each tranche of Restricted Units
identified below (an “ RU Tranche ”) shall fully
vest in Grantee and the restrictions set forth in this
Section 2(b) , Section 2(c) ,
Section 2(d) and Section 2(e) shall lapse
according to the following schedule of vesting dates:
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Percent Vesting
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Vesting Date
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First
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20
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%
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January 1, 2010
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Second
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20
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%
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January 1, 2011
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Third
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20
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%
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January 1, 2012
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Fourth
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20
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%
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January 1, 2013
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Fifth
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20
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%
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January 1, 2014
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(c) Forfeiture .
(i) General . Subject to
Section 2(c)(ii) , all Restricted Units that are then
unvested, as well as the related DERs and any Distribution Credits
that are then unearned pursuant to Section 4(c) , shall
become forfeited, null and void on the date on which
Grantee’s employment by the Company or its Affiliates is
terminated.
(ii) Employment Agreement .
Notwithstanding Section 2(c)(i) and anything to the
contrary herein or in the Plan, if Grantee’s Employment
Agreement (defined below) provides for a treatment of the
Restricted Units, related DERs and Distribution Credits that
differs from Section 2(c)(i) , the terms of
Grantee’s Employment Agreement shall control upon the
termination of Grantee’s employment by the Company or its
Affiliates. “ Employment Agreement ” means that
certain Employment Agreement, dated as of May 1, 2009, entered
into by and between the Company and Grantee, as such agreement may
be amended from time to time.
(iii) Committee Discretion .
The Committee may, in its discretion, waive in whole or in part any
forfeiture pursuant to this Section 2(c) .
(d) Transfer Restrictions .
None of the Restricted Units, related DERs or Distribution Credits
may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by Grantee and any such purported
assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or
any of its Affiliates; provided , however , that the
Restricted Units, related DERs and Distribution Credits may be
transferred by Grantee without consideration to immediate family
members or related family trusts, family limited partnerships or
similar entities.
(e) Ownership Rights .
Subject to the vesting restrictions provided in
Section 2(b) and the risk of forfeiture pursuant to
Section 2(c) , Grantee shall have full ownership rights
in respect of the Restricted Units, including the right to vote
along with the other common unitholders; provided ,
however , that other than in respect of
Section 4 , the Restricted Units shall not have the
right, prior to vesting pursuant to Section 2(b) , to
receive distributions when paid by the Company on the
Units.
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3.
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Vesting of
Notional Units Prior to Conversion .
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(a) Regular Vesting . Except
as otherwise provided in Section 3(b) , each tranche of
Notional Units identified below (a “ NU Tranche
”) shall vest in the following manner and according to the
following schedule of vesting dates (each, a “ Vesting
Date ”):
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Percent Vesting
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Vesting Date
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First
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20
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%
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January 1, 2010
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Second
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20
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%
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January 1, 2011
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Third
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20
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%
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January 1, 2012
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Fourth
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20
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%
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January 1, 2013
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Fifth
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20
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%
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January 1, 2014
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Each NU Tranche and RU Tranche may
be referred to in this Grant Agreement as a “ Tranche
”.
(b) Forfeiture .
(i) General . Subject to
Section 3(b)(ii) , all Notional Units that are then
unvested and all related DERs and any accumulated Distribution
Credits that are then unearned pursuant to Section 4(c)
shall become forfeited, null and void on the date on which
Grantee’s employment by the Company or its Affiliates is
terminated.
(ii) Employment Agreement .
Notwithstanding Section 3(b)(i) and anything to the
contrary herein or in the Plan, if Grantee’s Employment
Agreement provides for a treatment of the Notional Units, related
DERs and Distribution Credits that differs from
Section 3(b)(i) , the terms of Grantee’s
Employment Agreement shall control upon the termination of
Grantee’s employment by the Company or its
Affiliates.
(iii) Committee Discretion .
The Committee may, in its discretion, waive in whole or in part any
forfeiture pursuant to this Section 3(b) .
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4.
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Distribution
Equivalent Rights .
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(a) Grant . Each Notional
Unit and Restricted Unit is accompanied by a tandem Distribution
Equivalent Right (each, a “ DER ”), which
provides that when the Company makes a cash distribution with
respect to a Unit, the Company will record book-entry distribution
credits in the manner provided in Section 4(b) (the
“ Distribution Credits ”).
(b) Accumulation of Distribution
Credits . Until a Tranche has vested pursuant to
Section 2 or 3 , as applicable, the
Comp