DEF 14A of XPLR Infrastructure, LP, Mar 5, 2024

DEF 14A of XPLR Infrastructure, LP

Filed Mar 5, 20240001104659-24-030999

Open on EDGAR

  1. What is the 5% of outstanding units voting limitation in the election of directors?

    What is the 5% of outstanding units voting limitation in the election of directors? The 5% of outstanding units voting limitation will only apply to the election of directors. A unitholder or any related group, including NextEra Energy, Inc. (“NextEra Energy”) and its affiliates (the “NextEra Energy Group”), that owns more than 5% of the outstanding units as of the record date cannot vote more than 5% of the total outstanding units in the election of directors at the annual meeting (the “5% of Outstanding Units Director Voting Limitation”). The following example of the 5% of Outstanding Units Director Voting Limitation, which assumes 1,000 total units are outstanding as of the record date, is included for illustrative purposes only and does not represent actual ownership of units or votes at the annual meeting:

  2. How does the 10% of votes cast cutback apply to the election of directors?

    How does the 10% of votes cast cutback apply to the election of directors? In the election of directors, no unitholder may cast votes greater than 9.99% of votes actually cast. A unitholder or any related group, including the NextEra Energy Group, casting votes equal to or greater than 10% of actual votes cast will be subject to a 10% of votes cast cutback so that such unitholder(s) cannot cast votes equal to more than 9.99% of the units actually cast in the election of directors at the annual meeting (the “10% of Votes Cast Director Election Cutback”). The units cast in excess of 9.99% will be allocated and voted proportionally with all other votes cast, which will result in the total number of votes counted as being cast by the cutback unitholder to be 9.99% or less of votes cast. The following example of the 10% of Votes Cast Director Election Cutback, which assumes 1,000 total units are outstanding as of the record date, is included for illustrative purposes only and does not represent actual ownership of units or votes at the annual meeting:

  3. Proposal 1: Election of the nominees specified in this proxy statement as directors

    Proposal 1: Election of the nominees specified in this proxy statement as directors The Board is currently composed of seven members. In accordance with our Fifth Amended and Restated Agreement of Limited Partnership (“Partnership Agreement”), four of the seven directors will be elected by unitholders at the annual meeting. The other three directors are appointed by our general partner, NextEra Energy Partners GP, Inc. (the “general partner”), in its sole discretion. The current directors are John W. Ketchum (Chairman), Susan D. Austin, Robert J. Byrne, Terrell Kirk Crews, II, Mark E. Hickson, Peter H. Kind and Rebecca J. Kujawa. Upon the recommendation of the chief executive officer, the Board has nominated the four directors listed below for election as directors at the 2024 annual meeting (“Elected Directors”). Unless you specify otherwise in your voting instructions, your proxy will be voted FOR the Elected Directors. If any Elected Director becomes unavailable for election, which is not currently anticipated, proxies instructing a vote for that Elected Director may be voted for a substitute nominee selected by the Board. The Board believes that the Board membership at its current size is appropriate because such a Board size facilitates substantive discussions among Board members, provides for sufficient staffing of Board committees and allows for contributions by directors having a broad range of skills, expertise, industry knowledge and diversity of opinion. Elected Directors serve until the next annual meeting of unitholders or until their respective successors are qualified and elected. Director Qualifications. The Company’s Corporate Governance Principles & Guidelines, a copy of which is available on the Company’s website at http://www.investor.nexteraenergypartners.com, identifies Board membership qualifications, including experience, skills and attributes that are considered by the Board in recommending nominees for Board membership. The Board views itself as a cohesive whole consisting of members who together serve the interests of the Company and its unitholders. Qualifications, attributes and other factors considered by the Board in recommending director nominees include, but are not limited to, the following: • integrity, competence, insight, creativity and dedication, together with the ability to work with colleagues while challenging one another to achieve superior performance; • attained a prominent position in their field of endeavor; • broad business experience; • the ability to exercise sound business judgment; • the ability to draw on experience relative to significant issues facing the Board and the Company; • experience in the Company’s industry or in another industry or endeavor with practical application to the needs of the Company and the Board; • sufficient time for preparation and participation in Board and committee meetings (including by limiting service on public company boards to no more than three additional boards); • possess attributes deemed appropriate given the then-current needs of the Board; • the individual’s contribution to the achievement of a mix of directors who represent a diversity of background and experience, including age, gender, race, ethnicity and specialized experience; • the individual’s independence as described in applicable listing standards, legislation and regulations and the Company’s Corporate Governance Principles & Guidelines; and • whether the individual would be considered an “audit committee financial expert” or “financially literate” as described in applicable listing standards or regulations. Information about each director appointed by our general partner and each director nominee is presented below and includes specific experience, qualifications, attributes and skills that led the general partner and Board to the conclusion that he or she should serve as a director. Overall, the directors appointed by our general partner and the Elected Directors represent a diverse mix of qualifications deemed beneficial to the formation of a cohesive and effective Board.

  4. Directors Appointed by Our General Partner

    Directors Appointed by Our General Partner The following directors were appointed by our general partner and serve a current term expiring on the date that their successors are qualified and appointed.

  5. Terrell Kirk Crews, II

    Terrell Kirk Crews, II

  6. Biography

    Biography Mr. Crews, 45, has served as chief financial officer of NextEra Energy Partners and our general partner since March 2022. He has served as executive vice president, finance and chief financial officer of NextEra Energy since March 2022. Previously, he served as vice president, business management of NextEra Energy Resources, LLC (“NextEra Energy Resources”) from March 2019 until March 2022. Prior to that, he served as controller and chief accounting officer of NextEra Energy Partners from September 2016 until March 2019 and vice president, controller and chief accounting officer of NextEra Energy from September 2016 until March 2019. He served as a partner in the national office of Deloitte & Touche LLP from July 2015 to April 2016 and was a professional accounting fellow in the Office of the Chief Accountant of the SEC from June 2013 until June 2015. Prior to that, Mr. Crews was audit service senior manager at Deloitte from June 2010 to June 2013. He was appointed to the NextEra Energy Partners’ Board in April 2022 and has served on the board of our general partner since March 2022.

  7. Qualifications

    Qualifications Mr. Crews’ qualifications to serve as a director include his experience in finance, financial reporting and management gained through his current position as executive vice president, finance and chief financial officer of NextEra Energy and his prior roles as vice president, controller and chief accounting officer of NextEra Energy and as vice president, business management of NextEra Energy Resources. Mr. Crews also has experience in the renewables business as NextEra Energy Resources’ vice president, business management. He has a Bachelor of Science in Business Administration degree in accounting from the University of Richmond—Robins School of Business.

  8. Mark E. Hickson

    Mark E. Hickson

  9. Biography

    Biography Mr. Hickson, 57, has served as executive vice president, strategy and corporate development of NextEra Energy Partners since August 2017 and our general partner since February 2017. He has served as executive vice president, corporate development and strategy of NextEra Energy since May 2022 and previously served as executive vice president, corporate development, strategy, quality and integration of NextEra Energy from May 2017 to May 2022. Prior to that, he served as senior vice president, corporate development, strategy, quality and integration of NextEra Energy from May 2016 to May 2017. Mr. Hickson previously served as vice president, strategy and corporate development of our general partner from March 2014 to February 2017 and senior vice president, corporate development and strategic initiatives of NextEra Energy from February 2015 to May 2016. From May 2012 to February 2015, he was vice president, strategy and corporate development of NextEra Energy. From 1997 to April 2012, Mr. Hickson served as managing director in Global Mergers and Acquisitions at Merrill Lynch & Co. He was appointed to the NextEra Energy Partners’ Board upon its establishment in August 2017 and previously served on the board of our general partner from February 2015 until August 2017. Mr. Hickson has served as a director of Fisker Inc. (NYSE: FSR), an electric vehicle automaker, since July 2020.

  10. Qualifications

    Qualifications Mr. Hickson’s qualifications to serve as a director include his expertise in mergers, acquisitions and capital markets transactions gained through his current and prior positions. Mr. Hickson has a bachelor’s degree in aerospace engineering from Texas A&M University and an MBA from Columbia University, where he graduated with honors.

  11. Rebecca J. Kujawa

    Rebecca J. Kujawa Mrs. Kujawa, 48, has served as president of NextEra Energy Partners and our general partner since March 2022 and has been a director of the Company since March 2019. She served as a director of our general partner from March 2019 until March 2022. She previously served as chief financial officer of NextEra Energy Partners and our general partner from March 2019 until March 2022. Mrs. Kujawa has served as president and chief executive officer of NextEra Energy Resources since March 2022. She served as executive vice president, finance and chief financial officer of NextEra Energy from March 2019 until March 2022. Previously, she was vice president, business management of NextEra Energy Resources from 2012 until March 2019. Mrs. Kujawa joined NextEra Energy in 2007 and has held various business and finance roles, including as the director of investor relations for NextEra Energy. Mrs. Kujawa also currently serves as a director of Nuclear Electric Insurance Limited (NEIL), an industry mutual insurance company. Mrs. Kujawa’s qualifications to serve as a director include her experience in finance, risk management, business management, and energy marketing gained from her current and prior roles for subsidiaries of NextEra Energy as well as her experience as an equities and equity derivatives analyst prior to joining NextEra Energy. She also holds a Chartered Financial Analyst (CFA) designation. Mrs. Kujawa has a Bachelor of Arts degree in public policy studies from Duke University.

  12. Director Nominees

    Director Nominees The following Elected Directors currently serve as directors of the Board and have been nominated by the Board for election at the 2024 annual meeting. If elected, each Elected Director will serve until the next annual meeting of unitholders or until a successor Elected Director has been qualified and elected.

  13. Outstanding Equity Awards

    Outstanding Equity Awards The following table presents information as of February 20, 2024 regarding the Company’s outstanding equity awards held by officers and other employees of the Company or its subsidiaries or other affiliates and shares available for future awards under the Current Equity Plan:

  14. Outstanding Equity Awards

    | Total shares underlying all outstanding and unvested restricted unit awards | 222,673 | | Shares available for future awards under Current Equity Plan | 840,220 |

  15. Outstanding Equity Awards

    The Current Equity Plan automatically expires on June 30, 2024, and no further awards may be issued after that date under the Current Equity Plan.

  16. Consideration of Director Nominees

    Consideration of Director Nominees

  17. Proxy Access Unitholder Nominees

    Proxy Access Unitholder Nominees Pursuant to the Partnership Agreement, a holder (or a group of up to 20 unitholders) owning units representing at least 10% of the voting power, including common units and special voting units, of the Company continuously for the relevant holding period may nominate and include in the Company’s proxy statement up to two directors (“Proxy Access Directors”). No more than four Proxy Access Directors are permitted to be included each year in the Company’s proxy materials. Unless a shorter holding period is specified by the Board, the holding period for the 2025 annual meeting is three years. Notice of Proxy Access Director nominees for the 2025 annual meeting of unitholders should be addressed to the Corporate Secretary, NextEra Energy Partners, LP, P.O. Box 14000, 700 Universe Boulevard, Juno Beach, Florida 33408-0420 and must be received no earlier than November 5, 2024 and no later than the close of business on December 5, 2024. In the event that the 2025 annual meeting is more than 30 days earlier or more than 60 days later than the anniversary date of the 2024 annual meeting, the notice of Proxy Access Director nominees must be received on the later of the close of business on the 120th day prior to the date of the 2025 annual meeting or the 10th day following the Company’s first public announcement of the date of the 2025 annual meeting. The proxy access mechanism is the exclusive means through which a common unitholder may nominate a candidate for election to the Board. The complete proxy access requirements are set forth in the Partnership Agreement, a copy of which is available at www.nexteraenergypartners.com. In addition to satisfying the foregoing requirements under the Partnership Agreement, to comply with the universal proxy rules under Rule 14a-19 of the Exchange Act, unitholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19(b) under the Exchange Act.

  18. Director Qualifications

    Director Qualifications In addition to the qualifications for directors set forth under Proposal 1, no person will be considered for Board membership who is an employee or director of a business in significant competition with the Company or of a major or potentially-major customer, supplier, contractor, counselor or consultant of the Company, or an executive officer of a business where a Company employee-director serves on such other business’s board. Generally, no person who shall have attained the age of 72 years by the date of election shall be eligible for election as a director. However, the Board may, by unanimous action (excluding the affected director), extend a director’s eligibility for one or two additional years, in which event such a director will not be eligible for election as a director if he or she has attained the age of 73 or 74 by the date of election.

  19. Identifying and Evaluating Nominees for Directors

    Identifying and Evaluating Nominees for Directors Candidates may come to the attention of the Board through current Board members, professional search firms, unitholders or other persons. Candidates are evaluated at regular or special meetings of the Board and may be considered at any time during the year. The Board considers all nominee recommendations, including those from unitholders, in the same manner when determining candidates for the Board. If any materials are provided by a unitholder in connection with the recommendation of a director candidate, such materials are provided to the Board. In evaluating nominations, the Board seeks to achieve a diverse balance of knowledge, experience and capability. For additional information about the process for nominating and electing directors, see “Proxy Access Unitholder Nominees” and “Director Qualifications” above and as set forth under Proposal 1.

  20. Compensation Discussion & Analysis

    Compensation Discussion & Analysis The Company does not pay for any compensation for its executive officers. All of the executive officers of the Company also are employees of NextEra Energy with extensive experience in clean energy leadership. NextEra Energy compensates these officers for the performance of their duties as employees of NextEra Energy, which include managing the Company. NextEra Energy does not allocate this compensation between services for the Company and services for NextEra Energy and its affiliates. Affiliates of NextEra Energy provide the Company with various general and administrative services, such as technical, commercial, regulatory, financial, accounting, treasury, tax and legal staffing, and related support services, pursuant to a Management Services Agreement, for which the Company pays a management services fee. No portion of the management services fee is allocated to executive officer compensation. As the Company incurs no expense for the compensation or benefits for these executive officers, the Company avoids a cost that would otherwise be incurred for industry leading experience. The NEOs for the year ended December 31, 2023 are John W. Ketchum (chief executive officer) and Terrell Kirk Crews, II (chief financial officer). Mr. Ketchum assumed his responsibilities as chief executive officer as of March 1, 2022. Mr. Crews assumed his responsibilities as chief financial officer as of March 1, 2022. The 2024 NextEra Energy proxy statement, expected to be filed in late March or early April 2024, will include disclosure of the compensation of these officers received from NextEra Energy for the performance of their duties as employees of NextEra Energy, including managing the Company. In February 2023, as part of NextEra Energy’s Compensation Committee’s setting of 2023 long-term performance-based incentive compensation for NextEra Energy’s executive officers, the Compensation Committee expressed its preference that a portion of the long-term performance-based incentive compensation to be awarded to executive officers who also are officers of the Company be granted in the form of performance-based restricted common units of the Company (“NEP Awards”). The NextEra Energy Compensation Committee concluded that the proposed NEP Awards would further align the incentive compensation of these executive officers to activities that promote the growth of long-term value for shareholders of NextEra Energy. After considering this and other factors, in February 2023, the Board approved grants of NEP Awards to those executive officers of NextEra Energy who also are officers of the Company, as well as to other officers and employees of NextEra Energy or its affiliates who are responsible for significant Company activities. The NEP Awards received by executive officers did not increase the executive officers’ overall NextEra Energy incentive compensation opportunity, but instead replaced on a dollar-for-dollar basis approximately 7% of the aggregate grant date value of the portion of their long-term performance-based awards in 2023 that otherwise would have been issued in the form of performance-based restricted stock of NextEra Energy. The performance objective for the NEP Awards is adjusted EBITDA of $400 million. Therefore, the NEP Awards granted in 2023, which would otherwise vest ratably in 2024, 2025 and 2026, will not vest unless and until the Board certifies in each of 2024, 2025 and 2026 that the Company’s adjusted EBITDA equals or exceeds $400 million. The Board increased the performance target for the performance-based restricted common units granted in 2024 from adjusted EBITDA of $400 million to the Company’s adjusted EBITDA of $900 million in each of 2025, 2026 and 2027. The NEP Awards were made pursuant to the NextEra Energy Partners, LP 2014 Long Term Incentive Plan (“2014 Long Term Incentive Plan”). The Company will be reimbursed by NextEra Energy for the grant date fair value of all NEP Awards granted to employees and officers of NextEra Energy or its affiliates. The NEP Awards are considered compensation by NextEra Energy, not the Company. The Company does not incur any expense as a result of these awards.

  21. 2023 Non-Employee Director Compensation

    2023 Non-Employee Director Compensation

  22. 2023 Non-Employee Director Compensation

    | Name (a) | Fees Earned or Paid in Cash ($) (b) | Unit Awards(1) ($) (c) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation ($) (g) | Total ($) (h) | | Susan D. Austin | $90,000 | $150,485 | - | - | - | - | $240,485 | | Robert J. Byrne | 105,000 | 150,485 | - | - | - | - | 255,485 | | Peter H. Kind | 105,000 | 150,485 | - | - | - | - | 255,485 |

  23. 2023 Non-Employee Director Compensation

    (1) Non-employee directors received NextEra Energy Partners common units in an amount determined by dividing $150,000 by the closing price of the common units on the date of grant, rounded up to the nearest ten units. On February 22, 2023, each non-employee director then in office received a grant of 2,180 common units valued at $69.03 per unit. Distributions are paid on the units in cash.

  24. Additional Information About Director Compensation

    Additional Information About Director Compensation The table above includes compensation information for the non-employee directors of NextEra Energy Partners for 2023. Directors of NextEra Energy Partners who are salaried employees of NextEra Energy, the Company or any of its affiliates or subsidiaries do not receive any additional compensation for serving as a director or committee member. Effective January 1, 2024, non-employee directors received an annual cash retainer of $90,000 plus a retainer paid in an amount of NextEra Energy Partners common units determined by dividing $150,000 by the closing price of NextEra Energy Partners common units on the grant date, rounded up to the nearest ten units. Non-employee director grants were made under the 2014 Long Term Incentive Plan. The annual common unit retainers for 2024 were paid on February 20, 2024, at which time the non-employee directors of NextEra Energy Partners were each granted 5,290 units of NextEra Energy Partners common units. These units are generally not transferable until the director ceases to be a member of the Board. Non-employee Board committee chairpersons receive an additional annual cash retainer of $15,000. Travel expenses to attend Board or committee meetings or while on Board business are reimbursed.

  25. 2024 LONG TERM INCENTIVE PLAN

    2024 LONG TERM INCENTIVE PLAN NextEra Energy Partners, LP, a limited partnership (the “Partnership”), sets forth herein the terms of its 2024 Long Term Incentive Plan (the “Plan”), as follows:

  26. 2. DEFINITIONS

    2. DEFINITIONS For purposes of interpreting the Plan documents (including the Plan and Award Agreements), the following definitions shall apply: 2.1 “Affiliate” of the Partnership means any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with the Person in question. As used herein, the term “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. 2.2 “Applicable Laws” means the legal requirements relating to the Plan and the Awards under (a) applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders of any jurisdiction applicable to Awards granted to residents therein and (b) the rules of any Stock Exchange on which the Units are listed. 2.3 “Award” means a grant under the Plan of an Option, a Unit Appreciation Right, Restricted Units, Deferred Units, Unrestricted Units, a Performance Unit or other Performance-Based Award, or an Other Equity-Based Award. 2.4 “Award Agreement” means the agreement between the Partnership and a Grantee that evidences and sets out the terms and conditions of an Award. 2.5 “Board” means the Board of Directors of the Partnership. 2.6 “Cause” means, with respect to any Grantee, as determined by the Committee and unless otherwise provided in an applicable agreement between such Grantee and the Partnership or an Affiliate, (a) repeated violations by such Grantee of such Grantee’s obligations to the Partnership or such Affiliate (other than as a result of incapacity due to physical or mental illness) which are demonstrably willful and deliberate on such Grantee’s part, which are committed in bad faith or without reasonable belief that such violations are in the best interests of the Partnership or such Affiliate and which are not remedied within a reasonable period of time after such Grantee’s receipt of written notice from the Partnership specifying such violations, (b) the conviction of such Grantee of a felony involving an act of dishonesty intended to result in substantial personal enrichment of such Grantee at the expense of the Partnership or an Affiliate, or (c) prior to a Change in Control, such other events as shall be determined by the Committee in its sole discretion. Any determination by the Committee whether an event constituting Cause shall have occurred shall be final, binding and conclusive. 2.7 “Change in Control” means the occurrence of any Person, other than a Person approved by the Partnership, becoming the general partner of the Partnership. 2.8 “Code” means the Internal Revenue Code of 1986, as amended, as now in effect or as hereafter amended, and any successor thereto. 2.9 “Committee” means a committee of, and designated from time to time by resolution of, the Board. 2.10 “Deferred Unit” means a bookkeeping entry representing the equivalent of one (1) Unit awarded to a Grantee pursuant to Section 10 that (a) is not subject to vesting, or (b) is subject to time-based vesting, but not to performance-based vesting. 2.11 “Determination Date” means the Grant Date or such other date as of which the Fair Market Value of a Unit is required to be established for purposes of the Plan. 2.12 “Disability” means any condition as a result of which a Grantee is determined to be totally disabled for purposes of (a) the Partnership’s executive long-term disability plan, for Grantees who participate in such plan, or (b) the Partnership’s long-term disability plan, for Grantees who do not participate in the Partnership’s executive long-term disability plan. 2.13 “Employee” means, as of any date of determination, an employee (including an officer) of the Partnership or an Affiliate. 2.14 “Effective Date” shall have the meaning set forth in Section 5.1. 2.15 “Exchange Act” means the Securities Exchange Act of 1934, as amended, as now in effect or as hereafter amended. 2.16 “Fair Market Value” means the fair market value of a Unit for purposes of the Plan, which shall be determined as of any Determination Date as follows: (a) If on such Determination Date the Units are listed on a Stock Exchange, or are publicly traded on another established securities market (a “Securities Market”), the Fair Market Value of a Units shall be the closing price of the Unit on the trading day immediately preceding such Determination Date as reported on such Stock Exchange or such Securities Market (provided that, if there is more than one such Stock Exchange or Securities Market, the Committee shall designate the appropriate Stock Exchange or Securities Market for purposes of the Fair Market Value determination). If there is no such reported closing price on the trading day immediately preceding such Determination Date, the Fair Market Value of a Unit shall be the closing price of the Unit on the next preceding day on which any sale of Units shall have been reported on such Stock Exchange or such Securities Market. (b) If on such Determination Date the Units are not listed on a Stock Exchange or publicly traded on a Securities Market, the Fair Market Value of a Unit shall be the value of the Unit on such Determination Date as determined by the Committee by the reasonable application of a reasonable valuation method, in a manner consistent with Code Section 409A. 2.17 “General Partner” means NextEra Energy Partners GP, Inc. 2.18 “Grant Date” means, as determined by the Committee, (a) the date as of which the Committee completes the corporate action constituting the Award or (b) such date subsequent to the date specified in clause (a) above as may be specified by the Committee. 2.19 “Grantee” means a person who receives or holds an Award under the Plan. 2.20 “Option” means an option to purchase one or more Units pursuant to the Plan, which will be non-qualified options (i.e. options that do not meet the requirements of section 422 of the Code). 2.21 “Option Price” means the exercise price for each Unit subject to an Option. 2.22 “Outside Director” means a member of the Board who is not an Employee. 2.23 “Other Equity-Based Award” means an Award representing a right or other interest that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Units, other than an Option, a Unit Appreciation Right, Restricted Units, a Deferred Unit or Unrestricted Units. 2.24 “Partnership” means NextEra Energy Partners, LP. 2.25 “Performance-Based Award” means an Award of Options, Unit Appreciation Rights, Restricted Units, Deferred Units, Performance Units or Other Equity-Based Awards made subject to the achievement of performance goals (as provided in Section 14) over a performance period specified by the Committee. 2.26 “Plan” means this NextEra Energy Partners, LP. 2024 Long Term Incentive Plan. 2.27 “Person” means “person”, as such term is used for purposes of Section 13(d) or 14(d) of the Exchange Act (or any successor section thereto). 2.28 “Prior Plan” means the NextEra Energy Partners, LP. 2014 Long Term Incentive Plan. 2.29 “Restricted Period” shall have the meaning set forth in Section 10.2. 2.30 “Restricted Units” means Units awarded to a Grantee pursuant to Section 10. 2.31 “Securities Act” means the Securities Act of 1933, as amended, as now in effect or as hereafter amended.

  27. 3. ADMINISTRATION OF THE PLAN

    3. ADMINISTRATION OF THE PLAN 3.1 Committee. 3.1.1 Powers and Authorities. The Committee shall administer the Plan and shall have such powers and authorities related to the administration of the Plan. Without limiting the generality of the foregoing, the Committee shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the Plan which the Committee deems to be necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All such actions and determinations shall be made by (a) the affirmative vote of a majority of the members of the Committee present at a meeting at which a quorum is present (a majority of the Committee shall constitute a quorum), or (b) the unanimous consent of the members of the Committee executed in writing in accordance with the Partnership’s partnership agreement and bylaws and Applicable Laws. Unless otherwise expressly determined by the Board, the Committee shall have the authority to interpret and construe all provisions of the Plan, any Award and any Award Agreement, and any such interpretation or construction, and any other determination contemplated to be made under the Plan or any Award Agreement, by the Committee shall be final, binding and conclusive whether or not expressly provided for in any provision of the Plan, such Award or such Award Agreement. In the event that the Plan, any Award or any Award Agreement provides for any action to be taken by the Board or any determination to be made by the Board, such action may be taken or such determination may be made by the Committee constituted in accordance with this Section 3.1 if the Board has delegated the power and authority to do so to such Committee 3.1.2 Composition of Committee. The Committee shall be a committee composed of not fewer than two directors of the Partnership designated by the Board to administer the Plan and such committee members shall satisfy any independence standards required by Applicable Law or Stock Exchange. The Committee may delegate the authority to grant Awards under the Plan to any employee or group of employees of the Partnership or any Affiliate provided that such delegation and grants are consistent with Applicable Law. 3.2 Board. The Board from time to time may exercise any or all of the powers and authorities related to the administration and implementation of the Plan, as set forth in Section 3.1 and other applicable provisions of the Plan, as the Board shall determine, consistent with the Partnership’s partnership agreement and bylaws and Applicable Laws. 3.3 Terms of Awards. 3.3.1 Committee Authority. Subject to the other terms and conditions of the Plan, the Committee shall have full and final authority to: (a) designate Grantees; (b) determine the type or types of Awards to be made to a Grantee; (c) determine the number of Units to be subject to an Award; (d) establish the terms and conditions of each Award (including the Option Price of any Option), the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or Units subject thereto, and the treatment of an Award in the event of a Change in Control (subject to applicable agreements); (e) prescribe the form of each Award Agreement evidencing an Award; and (f) subject to the limitation on repricing in Section 3.4, amend, modify or supplement the terms of any outstanding Award, which authority shall include the authority, in order to effectuate the purposes of the Plan but without amending the Plan, to make Awards or to modify outstanding Awards made to eligible natural persons who are foreign nationals or are natural persons who are employed outside the United States to reflect differences in local law, tax policy, or custom, provided that, notwithstanding the foregoing, no amendment, modification or supplement of the terms of any outstanding Award shall, without the consent of the Grantee thereof, impair the Grantee’s rights under such Award. 3.3.2 Forfeiture; Recoupment. The Committee may reserve the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee with respect to an Award thereunder on account of actions taken by, or failed to be taken by, such Grantee in violation or breach of or in conflict with any (a) employment agreement, (b) non-competition agreement, (c) agreement prohibiting solicitation of Employees or clients of the Partnership or any Affiliate, (d) confidentiality obligation with respect to the Partnership or any Affiliate, (e) Partnership policy or procedure, (f) other agreement or (g) any other obligation of such Grantee to the Partnership or any Affiliate, as and to the extent specified in such Award Agreement. The Committee may annul an outstanding Award if the Grantee thereof is an Employee and is terminated for Cause as defined in the Plan or the applicable Award Agreement or for “cause” as defined in any other agreement between the Partnership or such Affiliate and such Grantee, as applicable. Any Award granted pursuant to the Plan shall be subject to mandatory repayment by the Grantee to the Partnership to the extent the Grantee is, or in the future becomes, subject to (a) any Partnership “clawback” or recoupment policy that is adopted to comply with the requirements of any applicable law, rule or regulation, or otherwise, or (b) any law, rule or regulation which imposes mandatory recoupment under circumstances set forth in such law, rule or regulation. 3.4 No Repricing. Except in connection with a transaction involving the Partnership (including, without limitation, any distribution (whether in the form of cash, Units, other securities or other property), unit split, extraordinary cash distribution, recapitalization, change in control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Units or other securities or similar transaction), the Partnership may not, without obtaining unitholder approval: (a) amend the terms of outstanding Options or UARs to reduce the exercise price of such outstanding Options or UARs; (b) cancel outstanding Options or UARs in exchange for Options or UARs with an exercise price that is less than the exercise price of the original Options or UARs; or (c) cancel outstanding Options or UARs with an exercise price above the current unit price in exchange for cash or other securities. 3.5 Deferral Arrangement. The Committee may permit or require the deferral of any payment pursuant to any Award into a deferred compensation arrangement, subject to such rules and procedures as it may establish. Any such deferrals shall be made in a manner that complies with Code Section 409A. 3.6 No Liability. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award or Award Agreement. 3.7 Registration; Units Certificates. Notwithstanding any provision of the Plan to the contrary, the ownership of the Units issued under the Plan may be evidenced in such a manner as the Committee, in its sole discretion, deems appropriate.

  28. 10. TERMS AND CONDITIONS OF RESTRICTED UNITS AND DEFERRED UNITS

    10. TERMS AND CONDITIONS OF RESTRICTED UNITS AND DEFERRED UNITS 10.1 Grant of Restricted Units or Deferred Units. Awards of Restricted Units and Deferred Units may be made for consideration or for no consideration, other than the par value of the Unit, which shall be deemed paid by past Service or, if so provided in the related Award Agreement or a separate agreement, the promise by the Grantee to perform future Service to the Partnership or an Affiliate. 10.2 Restrictions. At the time a grant of Restricted Units or Deferred Units is made, the Committee may, in its sole discretion, (a) establish a period of time (a “Restricted Period”) applicable to such Restricted Units or Deferred Units and (b) prescribe restrictions in addition to or other than the expiration of the Restricted Period, including the satisfaction of corporate or individual performance goals, which may be applicable to all or any portion of such Restricted Units or Deferred Units as provided in Section 14. 10.3 Registration; Restricted Units Certificates. Pursuant to Section 3.7, to the extent that ownership of Restricted Units is evidenced by a book-entry registration or direct registration (including transaction advices), such registration shall be notated to evidence the restrictions imposed on such Award of Restricted Units under the Plan and the applicable Award Agreement. Subject to Section 3.7 and the immediately following sentence, the Partnership may issue, in the name of each Grantee to whom Restricted Units has been granted, unit certificates representing the total number of Restricted Units granted to the Grantee, as soon as reasonably practicable after the Grant Date of such Restricted Units. The Committee may provide in an Award Agreement that either (a) the Secretary of the Partnership shall hold such certificates for such Grantee’s benefit until such time as such Units of Restricted Units are forfeited to the Partnership or the restrictions applicable thereto lapse and such Grantee shall deliver a power to the Partnership with respect to each certificate, or (b) such certificates shall be delivered to such Grantee, provided that such certificates shall bear legends that comply with applicable securities laws and regulations and make appropriate reference to the restrictions imposed on such Award of Restricted Units under the Plan and such Award Agreement. 10.4 Rights of Holders of Restricted Units. Unless the Committee otherwise provides in an Award Agreement or in the partnership agreement, holders of Restricted Units shall have the right to vote such Units and the right to receive any distributions paid with respect to such Units. The Committee may provide that such distributions may or may not be subject to the same vesting conditions and restrictions as the vesting conditions and restrictions applicable to the Restricted Units. Distributions paid on Restricted Units which vest or are earned based upon the achievement of performance goals shall not vest unless such performance goals for such Restricted Units are achieved, and if such performance goals are not achieved, the Grantee of such Restricted Units shall promptly forfeit and repay to the Partnership such distribution payments. All unit distributions, if any, received by a Grantee with respect to Restricted Units as a result of any unit split, distribution, combination of units, or other similar transaction shall be subject to the vesting conditions and restrictions applicable to such Restricted Units. 10.5 Rights of Holders of Deferred Units. 10.5.1 Voting and Distribution Rights. Holders of Deferred Units shall have no rights as unitholders of the Partnership (for example, the right to receive cash distributions attributable to the Units subject to such Deferred Units, to direct the voting of the Units subject to such Deferred Units, or to receive notice of any meeting of the Partnership’s unitholders). The Committee may provide in an Award Agreement evidencing a grant of Deferred Units that the holder of such Deferred Units shall be entitled to receive the Partnership’s payment of a cash distribution on its outstanding Units. Such cash payments paid in connection with Deferred Units which vest or are earned based upon the achievement of performance goals shall not vest unless such performance goals for such Deferred Units are achieved, and if such performance goals are not achieved, the Grantee of such Deferred Units shall promptly forfeit and repay to the Partnership such cash payments. 10.5.2 Creditor’s Rights. A holder of Deferred Units shall have no rights other than those of a general unsecured creditor of the Partnership. Deferred Units represent an unfunded and unsecured obligation of the Partnership, subject to the terms and conditions of the applicable Award Agreement. 10.6 Termination of Service. Unless the Committee otherwise provides in an Award Agreement, in another agreement with the Grantee or otherwise in writing after such Award Agreement is entered into, but prior to termination of Grantee’s Service, upon the termination of such Grantee’s Service, any Restricted Units or Deferred Units held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of such Restricted Units or Deferred Units, the Grantee thereof shall have no further rights with respect thereto, including any right to vote such Restricted Units or any right to receive distributions with respect to such Restricted Units or Deferred Units. 10.7 Delivery of Units. Upon the expiration or termination of any Restricted Period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to Restricted Units or Deferred Units settled in Units shall lapse, and, unless otherwise provided in the applicable Award Agreement, a book-entry or direct registration (including transaction advices) or a unit certificate evidencing ownership of such Units shall be issued, free of all such restrictions, to the Grantee thereof or such Grantee’s beneficiary or estate, as the case may be. Neither the Grantee, nor the Grantee’s beneficiary or estate, shall have any further rights with regard to a Deferred Units once the Units represented by such Deferred Units have been delivered.

  29. 16. CHANGE IN Control

    16. CHANGE IN Control 16.1 Change in Control in which Awards are not Assumed. Except as otherwise provided in the applicable Award Agreement or in another agreement with the Grantee, or as otherwise set forth in writing, upon the occurrence of a Change in Control in which outstanding Options, UARs, Restricted Units, Deferred Units, or Other Equity-Based Awards are not being assumed or continued, the following provisions shall apply to such Award, to the extent not assumed or continued: (a) in each case with the exception of Performance-Based Awards, (i) all outstanding Restricted Units shall be deemed to have vested, all Deferred Units shall be deemed to have vested and the Units subject thereto shall be delivered, immediately prior to the occurrence of such Change in Control, and fifteen (15) days prior to the scheduled consummation of such Change in Control, all Options and UARs outstanding hereunder shall become immediately exercisable and shall remain exercisable for a period of fifteen (15) days; or (ii) the Committee may elect, in its sole discretion, to cancel any outstanding Awards of Options, Restricted Units, Deferred Units, and/or UARs and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or securities having a value (as determined by the Committee acting in good faith), in the case of Restricted Units and Deferred Units equal to the formula or fixed price per Units paid to holders of Units pursuant to such Change in Control and, in the case of Options or UARs, equal to the product of the number of Units subject to such Options or UARs (the “Award Units”) multiplied by the amount, if any, by which (x) the formula or fixed price per Units paid to holders of Units pursuant to such transaction exceeds (y) the Option Price or UAR Price applicable to such Award Units. (b) For Performance-Based Awards denominated in Units, if less than half of the Performance Period has lapsed, such Performance-Based Awards shall be converted into Restricted Units or Performance Units assuming target performance has been achieved (or into Unrestricted Units if no further restrictions apply). If at least half the Performance Period has lapsed, such Performance-Based Awards shall be converted into Restricted Units or Performance Units based on actual performance to date (or into Unrestricted Units if no further restrictions apply). If actual performance is not determinable, such Performance-Based Awards shall be converted into Restricted Units or Performance Units assuming target performance has been achieved, based on the discretion of the Committee (or into Unrestricted Units if no further restrictions apply). (c) Other Equity-Based Awards shall be governed by the terms of the applicable Award Agreement. With respect to the Partnership’s establishment of an exercise window, (A) any exercise of an Option or UAR during the fifteen (15)-day period referred to above shall be conditioned upon the consummation of the applicable Change in Control and shall be effective only immediately before the consummation thereof, and (B) upon consummation of any Change in Control, the Plan and all outstanding but unexercised Options and UARs shall terminate. The Committee shall send notice of an event that shall result in such a termination to all natural persons and entities who hold Options and UARs not later than the time at which the Partnership gives notice thereof to its unitholders. 16.2 Change in Control in which Awards are Assumed. Except as otherwise provided in the applicable Award Agreement or in another agreement with the Grantee, or as otherwise set forth in writing, upon the occurrence of a Change in Control in which outstanding Options, UARs, Restricted Units, Deferred Units, or Other Equity-Based Awards are being assumed or continued, the following provisions shall apply to such Award, to the extent assumed or continued: The Plan and the Options, UARs, Restricted Units, Deferred Units, and Other Equity-Based Awards granted under the Plan shall continue in the manner and under the terms so provided in the event of any Change in Control to the extent that provision is made in writing in connection with such Change in Control for the assumption or continuation of such Options, UARs, Restricted Units, Deferred Units, and Other Equity-Based Awards, or for the substitution for such Options, UARs, Restricted Units, Deferred Units, and Other Equity-Based Awards of new common units, options, unit appreciation rights, restricted units, and other equity-based awards relating to the units of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of units (disregarding any consideration that is not common units) and option and unit appreciation rights exercise prices. 16.3 Adjustments. Adjustments under Section 4.2 and this Section 16 related to Units or other securities of the Partnership shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. No fractional Units or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole unit. The Committee may provide in the applicable Award Agreement at the time of grant, in another agreement with the Grantee, or otherwise in writing at any time thereafter with the consent of the Grantee, for different provisions to apply to an Award in place of those provided in Section 4.2 and Sections 16.1 and 16.2. This Section 16 shall not limit the Committee’s ability to provide for alternative treatment of Awards outstanding under the Plan in the event of a change in control event that is not a Change in Control. 16.4 No Limitations on Partnership. The making of Awards pursuant to the Plan shall not affect or limit in any way the right or power of the Partnership to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets (including all or any part of the business or assets of any Affiliate) or engage in any other transaction or activity.

  30. 17. GENERAL PROVISIONS

    17. GENERAL PROVISIONS 17.1 Disclaimer of Rights. No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon any individual the right to remain in the employ or Service of the Partnership or an Affiliate, or to interfere in any way with any contractual or other right or authority of the Partnership or an Affiliate either to increase or decrease the compensation or other payments to any natural person or entity at any time, or to terminate any employment or other relationship between any natural person or entity and the Partnership or an Affiliate. In addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated in the applicable Award Agreement, in another agreement with the Grantee, or otherwise in writing, no Award granted under the Plan shall be affected by any change of duties or position of the Grantee thereof, so long as such Grantee continues to provide Service. The obligation of the Partnership to pay any benefits pursuant to the Plan shall be interpreted as a contractual obligation to pay only those amounts provided herein, in the manner and under the conditions prescribed herein. The Plan and Awards shall in no way be interpreted to require the Partnership to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms of the Plan. 17.2 Nonexclusivity of the Plan. Neither the adoption of the Plan nor the submission of the Plan to the unitholders of the Partnership for approval shall be construed as creating any limitations upon the right and authority of the Board to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or particular individuals) as the Board in its discretion determines desirable. 17.3 Withholding Taxes. The Partnership or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an Award or upon the issuance of any Units upon the exercise of an Option or pursuant to any other Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay in cash to the Partnership or an Affiliate, as the case may be, any amount that the Partnership or such Affiliate may reasonably determine to be necessary to satisfy such withholding obligation, provided that if there is a same-day sale of Units subject to an Award, the Grantee shall pay such withholding obligation on the day on which such same-day sale is completed. Subject to the prior approval of the Partnership or an Affiliate, which may be withheld by the Partnership or such Affiliate, as the case may be, in its sole discretion, the Grantee may elect to satisfy such withholding obligation, in whole or in part, (a) by causing the Partnership or such Affiliate to withhold Units otherwise issuable to the Grantee or (b) by delivering to the Partnership or such Affiliate Units already owned by the Grantee. The Units withheld or delivered shall have an aggregate Fair Market Value equal to such withholding obligation. The Fair Market Value of the Units used to satisfy such withholding obligation shall be determined by the Partnership or such Affiliate as of the date on which the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to this Section 17.3 may satisfy such Grantee’s withholding obligation only with Units that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The maximum number of Units that may be withheld from any Award to satisfy any federal, state or local tax withholding requirements upon the exercise, vesting, or lapse of restrictions applicable to any Award or payment of Units pursuant to such Award, as applicable, may not exceed such number of Units having a Fair Market Value equal to the minimum statutory amount required by the Partnership or the applicable Affiliate to be withheld and paid to any such federal, state or local taxing authority with respect to such exercise, vesting, lapse of restrictions or payment of Units. Notwithstanding Section 2.16 or this Section 17.3, for purposes of determining taxable income and the amount of the related tax withholding obligation pursuant to this Section 17.3, for any Unit subject to an Award that are sold by or on behalf of a Grantee on the same date on which such Units may first be sold pursuant to the terms of the related Award Agreement, the Fair Market Value of such Units shall be the sale price of such Units on such date (or if sales of such Units are effectuated at more than one sale price, the weighted average sale price of such Units on such date), so long as such Grantee has provided the Partnership, or its designee or agent, with advance written notice of such sale. 17.4 Captions. The use of captions in the Plan or any Award Agreement is for convenience of reference only and shall not affect the meaning of any provision of the Plan or such Award Agreement. 17.5 Other Provisions. Each Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion. 17.6 Number and Gender. With respect to words used in the Plan, the singular form shall include the plural form and the masculine gender shall include the feminine gender, as the context requires. 17.7 Severability. If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction. 17.8 Governing Law. The validity and construction of the Plan and the instruments evidencing the Awards hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan and the instruments evidencing the Awards granted hereunder to the substantive laws of any other jurisdiction. 17.9 Section 409A of the Code. The parties intend for the Awards granted under the Plan to be exempt from Section 409A of the Code or, if not so exempt, to be paid or provided in a manner which complies with the requirements of such section, and intend that this Plan shall be construed and administered in accordance with such intention. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, (i) no amounts shall be paid to a Grantee under this Plan until the Grantee would be considered to have incurred a “separation from service” from the Partnership and its Affiliates within the meaning of Section 409A of the Code, (ii) amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Plan during the six-month period immediately following the Grantee’s separation from service shall instead be paid on the first business day after the date that is six (6) months following the Grantee’s separation from service (or death, if earlier), (iii) each amount to be paid or benefit to be provided under this Plan shall be construed as a separately identified payment for purposes of Section 409A of the Code, and (iv) any payments that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires.