DEF 14A of Westlake Chemical Partners LP, Mar 18, 2024

DEF 14A of Westlake Chemical Partners LP

Filed Mar 18, 2024 · FY20230001140361-24-013767

Open on EDGAR

  1. The Deliberative Process

    The Deliberative Process In establishing targeted levels of executive compensation, the Westlake Compensation Committee has selected a set of peer group companies (the “Peer Group”) from among companies of relative comparable size to Westlake, with executive positions of similar scope and responsibility, and from among companies with which Westlake may compete for executive talent. With the assistance of Willis Towers Watson, the Westlake Compensation Committee reviews the Peer Group on a regular basis. To validate current peers and identify potential new peer companies, Willis Towers Watson conducts a comprehensive review using both objective and qualitative criteria that the Westlake Compensation Committee deems to be appropriate, including recent developments with current peer companies (e.g., merger and acquisition activity and changes in financial performance), revenue, industry classification, market capitalization and other financial data, peers of peers analysis, business and product portfolios, peers as identified by proxy advisory firms such as ISS and Glass Lewis, and business and labor market competitors, with an overall objective of achieving approximately a median ranking for Westlake within the Peer Group. The following companies from both the chemicals and building products industries made up the Peer Group as adopted by the Westlake Compensation Committee for purposes of determining compensation for the Westlake NEOs for 2023:

  2. The Deliberative Process

    As proposed by Willis Towers Watson, the Westlake Compensation Committee recommended, and the Westlake board of directors approved, adjustments to the Peer Group in November 2023 for purposes of determining compensation for 2024. In consideration of the criteria previously mentioned and to achieve an approximately median ranking for Westlake relative to its Peer Group, Dow Inc., Ecolab Inc., LyondellBasell Industries N.V. and The Sherwin-Williams Company were added and Corteva, Inc. and Fortune Brands Innovations, Inc. were removed. The Westlake Compensation Committee will continue to make changes in the Peer Group as warranted to reflect changes in the size, business profile and publicly-listed status of the companies to help ensure that companies comparable in size and business profile to Westlake are included and continue to be appropriate for the compensation decision-making process. In addition to referring to the Peer Group, Willis Towers Watson utilizes survey data from its proprietary compensation databases, including, but not limited to, the Willis Towers Watson CDB Executive Survey and other relevant market information. These surveys compare the compensation of executives at numerous companies to similar positions as the Westlake NEOs (the “Market Survey”). The Market Survey is used in conjunction with the Peer Group data (collectively, the “Reference Points”) to help validate the market findings and more specifically establish market compensation rates for positions with limited Peer Group data and/or for positions that are not industry-specific and for which Westlake would need to recruit on a broader basis (for instance, Chief Financial Officer). Finally, in establishing the target executive compensation, the Westlake Compensation Committee takes a total compensation view to include base pay, cash bonuses and long-term incentives, so that as long as the composite total compensation of a Westlake NEO is competitive with the Reference Points, individual components may fall below or above the median of the Reference Points. In conducting its surveys for the Reference Points, Willis Towers Watson reports directly to the Westlake Compensation Committee on each component and on a composite total compensation basis. The Westlake Compensation Committee meets annually in February to address the compensation of the Westlake NEOs and other Westlake Executives, including each of our NEOs. During this meeting, the Westlake Compensation Committee reviews the achievement of Westlake’s goals and objectives, including Westlake’s Economic Value Added (defined as the net operating profit after taxes in relation to capital employed) and performance relative to its competitors within the chemical and building products industries, including those direct competitors within the Peer Group, the Reference Points and other relevant factors established by the Westlake Compensation Committee. During this deliberation, the Westlake PEO is excused from the meeting to allow the members of the Westlake Compensation Committee to deliberate independently regarding the Westlake PEO’s compensation. During this annual review meeting, the Westlake PEO also presents his recommendations to the Westlake Compensation Committee regarding the compensation to be provided to the other Westlake NEOs and other Westlake Executives. The Westlake PEO and the Westlake Compensation Committee, after considering data from the Reference Points and other relevant factors, set the compensation for these Westlake Executives.

  3. Compensation Philosophy and Program Objectives of Westlake

    | • | maintaining market competitiveness with Westlake's peer group compensation programs and practices; |

  4. Compensation Philosophy and Program Objectives of Westlake

    | • | balancing short-term objectives with long-term strategic initiatives. |

  5. Employment Agreements; Termination or Change-in-Control Arrangements

    Employment Agreements; Termination or Change-in-Control Arrangements Employment Agreements—Westlake does not have employment agreements with any of the Westlake NEOs; however, each Westlake Executive, including each of the Westlake NEOs, is typically provided an offer letter of employment containing the principal elements of the employment arrangement, including compensation. Termination or Change-in-Control Arrangements—Although none of the offer letters contain a provision for payments by us upon termination or a change in control, in 2023, Westlake incorporated change in control provisions into its annual cash incentive plan and long-term equity incentive plan that provide for certain benefits on a qualifying termination of employment within a twenty-four month period following a change in control of Westlake for awards that are assumed or replaced with equivalent awards or protections in connection with a change in control of Westlake if such awards were not assumed or replaced with equivalent awards. Furthermore, award agreements under Westlake’s long-term equity incentive plan contain provisions that provide for certain accelerated vesting benefits in the event of termination by reason of death or normal retirement and Westlake’s annual cash incentive plan provides for the payment of a prorated bonus and certain banked amounts in the event of termination by reason of death, permanent disability, normal retirement or an approved reduction-in-force. For additional information on termination and change in control provisions, see the section titled “2023 Potential Payments Upon Termination or Change in Control” of the proxy statement that is expected to be filed by Westlake in connection with its 2024 annual meeting of stockholders. We are not required to reimburse Westlake for any portion of such benefits that may become payable to our NEOs either in connection with or following a termination of employment or a change in control of Westlake. Recovery of Erroneously Awarded Compensation— In November 2023, the Board of Directors approved a policy for the recovery of erroneously awarded compensation, or “clawback” policy, applicable to executive officers. The policy implements the incentive-based compensation recovery provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 as required under the listing standards of the New York Stock Exchange, and requires recovery of incentive-based compensation received by current or former executive officers during the three fiscal years preceding the date it is determined that the Partnership is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The amount required to be recovered is the excess of the amount of incentive-based compensation received over the amount that otherwise would have been received had it been determined based on the restated financial measure. As of the date hereof, none of our current or former executive officers have received incentive-based compensation from us for their services.

  6. Summary Compensation Table

    Summary Compensation Table The compensation of our NEOs included in the tables below is established by Westlake as described above. We have included in the following tables the full base salary paid by Westlake to each of the NEOs, together with an estimate of the approximate time spent by each NEO on our behalf. The following table provides information regarding the NEO compensation actually allocated to us during 2023, 2022 and 2021.

  7. Summary Compensation Table

    | Name and Principal Position | Year | Base Salary ($)(1) | Percentage Allocated(2) | Total ($)(3) | | Albert Y. Chao President and Chief Executive Officer | 2023 | 1,256,000 | 10.0 % | 125,600 | | | 2022 | 1,201,000 | 10.0% | 120,100 | | | 2021 | 1,163,167 | 10.0% | 116,317 | | M. Steven Bender Executive Vice President and Chief Financial Officer | 2023 | 721,000 | 10.0 % | 72,100 | | | 2022 | 660,000 | 10.0% | 66,000 | | | 2021 | 638,833 | 10.0% | 63,883 |

  8. Summary Compensation Table

    | (1) See “Compensation Discussion and Analysis—Establishing Compensation Levels—Base Pay” for more information on base salary. |

  9. Summary Compensation Table

    | (2) See “Compensation Discussion and Analysis—Overview” for more information on the portion of base salary allocated to us by Westlake. |

  10. Summary Compensation Table

    | (3) Reflects the portion of base salary allocated to us by Westlake for the periods from January 1, 2023 through December 31, 2023, from January 1, 2022 through December 31, 2022 and from January 1, 2021 through December 31, 2021. |

  11. 2023 Pay-Versus-Performance Compensation Table

    | Year | Summary Compensation Table Total for CEO ($)(1) | Compensation Actually Paid to CEO ($)(1) | Summary Compensation Table Total for Non-CEO NEO ($)(2) | Compensation Actually Paid to Non-CEO NEO ($)(2) | Value of Initial Fixed $100 Investment Based On: | | Net Income (in millions) ($) | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(3) | | | 2023 | 125,600 | 125,600 | 72,100 | 72,100 | 114 | 114 | 54.283 | | 2022 | 120,100 | 120,100 | 66,000 | 66,000 | 114 | 108 | 64.173 | | 2021 | 116,317 | 116,317 | 63,883 | 63,883 | 121 | 124 | 82.547 |

  12. 2023 Pay-Versus-Performance Compensation Table

    | (1) The summary compensation table totals for the CEO, Mr. Albert Chao, did not require equity award or pension plan benefit-related adjustments to arrive at the “compensation actually paid to the CEO” in each year. During the measurement period, Mr. Chao has not been granted any equity awards or received any pension benefits under a plan of the Partnership or in connection with his services to the Partnership. Mr. Chao’s summary compensation table totals for each year of the measurement period reflect only the portion of his base salary allocated to the Partnership by Westlake. |

  13. 2023 Pay-Versus-Performance Compensation Table

    | (2) Mr. Bender was the sole non-CEO NEO for each year of the measurement period. The summary compensation table totals for Mr. Bender did not require equity award or pension plan benefit-related adjustments to arrive at the “compensation actually paid to Non-CEO NEOs” in each year. During the measurement period, Mr. Bender has not been granted any equity awards or received any pension benefits under a plan of the Partnership or in connection with his services to the Partnership. Mr. Bender’s summary compensation table totals reflect only the portion of his base salary allocated to the Partnership by Westlake. |

  14. 2023 Pay-Versus-Performance Compensation Table

    | (3) Peer Group is the Chicago Board Options Exchange S&P Chemicals Index, also known as the Standard & Poor’s Chemicals Index, or CEX. |

  15. 2023 Pay-Versus-Performance Relationship Disclosure

    2023 Pay-Versus-Performance Relationship Disclosure Relationship Between Compensation Actually Paid and Cumulative TSR. As required by Item 402(v) of Regulation S-K, we are presenting the graph below, which compares the compensation actually paid to the CEO and the average amount of compensation actually paid to the Non-CEO NEO to cumulative TSR of the Partnership over the three-year period presented in the table. The TSR amounts reflected in the graph below assume reinvestment of distributions, where applicable, and that $100 was invested at the market close on December 31, 2020. We are allocated a set percentage of our NEO’s base pay allocated by Westlake, and, therefore, compensation actually paid is not sensitive to the Partnership’s TSR. Relationship Between Compensation Actually Paid and Net Income. As required by Item 402(v) of Regulation S-K, we are presenting the graph below, which compares the compensation actually paid to the CEO and the average amount of compensation actually paid to the Non-CEO NEO to net income of the Partnership over the three-year period presented in the table. We are allocated a set percentage of our NEO’s base pay allocated by Westlake, and, therefore, compensation actually paid is not sensitive to the Partnership’s net income. Relationship Between Cumulative TSR of the Partnership and Cumulative TSR of the Peer Group. As required by Item 402(v) of Regulation S-K, we are presenting the graph below, which compares cumulative TSR of the Partnership and cumulative TSR of the peer group (which, in accordance with applicable SEC guidance, is the peer group used by Westlake for this purpose, the Chicago Board Options Exchange S&P Chemicals Index (“CEX”)), over the three-year period presented in the table. As demonstrated by the following graph, the Partnership’s cumulative TSR over the three-year period presented in the table was 14%, while the cumulative TSR of the peer group presented for this purpose was 14% over the three-year period presented in the table.

  16. 2023 Key Performance Measures

    2023 Key Performance Measures A list of the most important financial performance measures used by the Partnership to link “executive compensation actually paid” to the Partnership’s fiscal year 2023 performance has not been provided because the Partnership does not use any financial performance measures to link “executive compensation actually paid” to the Partnership’s performance.

  17. CEO Pay Ratio Analysis

    CEO Pay Ratio Analysis The table below sets forth comparative information regarding: (1) the annual total compensation of our Chief Executive Officer, Mr. Albert Chao, for the year ended December 31, 2023, determined on the basis set forth in the Summary Compensation Table; (2) the median of the annual total compensation of all seconded employees of Westlake that provide services to OpCo under the Services and Secondment Agreement, which excludes our Chief Executive Officer, for the year ended December 31, 2023, determined on the basis described below; and (3) a ratio comparison of those two amounts. These amounts were determined in accordance with rules prescribed by the SEC. Neither we nor OpCo have any employees. However, for purposes of this disclosure, we have included the employees of Westlake and its other affiliates who are seconded to OpCo under the Services and Secondment Agreement for the production of ethylene (the “Seconded Employees”). SEC rules allow us to identify our median employee once every three years unless there has been a change in our Seconded Employee population or employee compensation arrangements that we reasonably believe would result in a significant change in our pay ratio disclosure. Accordingly, our 2023 CEO pay ratio is calculated utilizing the same median Seconded Employee identified in 2022. In determining that it was still appropriate to utilize our 2022 median Seconded Employee for this disclosure, we considered the change to our Seconded Employee population and compensation programs during 2023, as well as the absence of material changes in that Seconded Employee’s job description or compensation during 2023. For purposes of determining the median of the annual total compensation of such Seconded Employees for the year ended December 31, 2022, the applicable SEC rules required us to identify the median employee, by using either annual total compensation for all such employees or another consistently applied compensation measure. For these purposes, we used total taxable earnings, plus certain non-taxable items, including retirement plan contributions and perquisites, as determined from the payroll records of Westlake and its affiliates providing the services of the Seconded Employees to OpCo for the period from January 1, 2022 through December 31, 2022 (the “Measurement Date”), as our consistently applied compensation measure. We included all Seconded Employees of Westlake who provided services to OpCo as of the Measurement Date whether employed on a full-time, part-time or seasonal basis. We did not use statistical sampling or include any cost-of-living adjustments for purposes of this determination. We calculated 2023 total compensation for the median Seconded Employee identified in 2022 and our Chief Executive Officer using the same methodology we used for determining total compensation for 2023 for our NEOs as set forth in the Summary Compensation Table.

  18. CEO Pay Ratio Analysis

    | Chief Executive Officer annual total compensation (A) | $125,600 | | Median annual total compensation of all employees (excluding Chief Executive Officer) (B) | $154,978 | | Ratio of (A) to (B) | 0.81 |

  19. Director Compensation

    Director Compensation Officers or employees of Westlake or its affiliates who also serve as directors do not receive additional compensation for such service. The directors who are not also officers or employees of Westlake or its affiliates (i.e., Ms. Friel and Messrs. Finley and Woelfel) receive compensation from our general partner for their service. In 2023, Messrs. Finley and Woelfel and Ms. Friel each received an annual retainer valued at approximately $205,000, of which $100,000 was paid in the form of a cash retainer and the remaining $105,000 was paid in the form of a grant of phantom unit awards under the Incentive Plan. In addition, in connection with her appointment to the Board of Directors, Ms. Friel received a grant of phantom unit awards valued at $105,000, effective May 10, 2023. All phantom unit awards vest on the first anniversary of their grant date. Mr. Finley, as the audit committee chairman, received an additional cash retainer of $20,000. In addition, each non-employee member of the Board of Directors is reimbursed for out-of-pocket expenses in connection with attending board and committee meetings. Each director is fully indemnified by us for actions associated with being a director to the fullest extent permitted under Delaware law pursuant to the Partnership Agreement. The following table sets forth a summary of the compensation paid to non-employee directors in 2023:

  20. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Phantom Unit Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | G. Stephen Finley | 120,000 | 105,000 | 8,237 | 233,237 | | Lisa A. Friel | 67,857 | 210,000 | 11,206 | 289,063 | | Randy G. Woelfel | 100,000 | 105,000 | 8,237 | 213,237 | | Angela A. Minas(3) | 25,000 | — | 1,969 | 26,969 |

  21. Director Compensation

    | (1) The amounts reflected in this column represent the grant date fair value of phantom unit awards granted to the non-employee members of the Board of Directors, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, as the product of (i) the number of phantom units granted and (ii) the average of the high and low prices of our common units reported on the New York Stock Exchange on the grant date. For a discussion of the related valuation assumptions, please see Note 12 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. As of December 31, 2023, Ms. Friel held 9,444 phantom units, 4,884 of which will become fully vested on May 10, 2024 and 4,560 of which will become fully vested on August 9, 2024, and Mr. Finley and Mr. Woelfel each held 4,560 phantom units, which will become fully vested on August 9, 2024. |

  22. Director Compensation

    | (2) The amounts reflected in this column represent the amount of cash paid with respect to distribution equivalent rights granted in tandem with the phantom unit awards. |

  23. Director Compensation

    | (3) Ms. Minas retired from the Board of Directors effective April 27, 2023. |

  24. EQUITY COMPENSATION PLAN INFORMATION

    EQUITY COMPENSATION PLAN INFORMATION Units authorized for issuance under the Incentive Plan are summarized in the following table.

  25. EQUITY COMPENSATION PLAN INFORMATION

    | Plan Category | Number of units to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted- average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | Equity compensation plans approved by security holders(1) | 18,564 | $0 | 1,198,853 | | Equity compensation plans not approved by security holders | 0 | N/A | 0 | | Total | 18,564 | $— | 1,198,853 |

  26. EQUITY COMPENSATION PLAN INFORMATION

    | (1) In connection with the consummation of our IPO, the Board of Directors adopted the Incentive Plan. Only phantom unit awards have been granted to non-employee members of the Board of Directors under the Incentive Plan. There is no weighted-average exercise price associated with these awards. |

  27. LONG-TERM INCENTIVE PLAN

    LONG-TERM INCENTIVE PLAN

  28. (As Amended and Restated Effective May 8, 2024)

    (ii) Other Adjustments. Subject to, and without limiting the scope of, the provisions of Section 4(c)(i), in the event that the Committee determines that any distribution (whether in the form of cash, Units, other securities, or other property), recapitalization, split, reverse split, reorganization, merger, change of control, consolidation, split-up, spin-off, combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of warrants or other rights to purchase Units or other securities of the Partnership, or other similar transaction or event affects the Units such that an adjustment is determined by the Committee, in its sole discretion, to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (A) the number and type of Units (or other securities or property) with respect to which Awards may be granted, (B) the number and type of Units (or other securities or property) subject to outstanding Awards, and (C) the grant or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, that the number of Units subject to any Award shall always be a whole number. Further, upon the occurrence of any event described in the preceding sentence, the Committee, acting in its sole discretion without the consent or approval of any holder, may effect one or more of the following alternatives, which may vary among individual holders and which may vary among Awards: (I) remove any applicable forfeiture restrictions on any Award; (II) accelerate the time of exercisability or the time at which the Restricted Period shall lapse to a specific date specified by the Committee; (III) require the mandatory surrender to the General Partner or the Partnership by selected holders of some or all of the outstanding Awards held by such holders (irrespective of whether such Awards are then subject to a Restricted Period or other restrictions pursuant to the Plan) as of a date specified by the Committee, in which event the Committee shall thereupon cancel such Awards and cause the General Partner, the Partnership or an Affiliate thereof to pay to each holder an amount of cash per Unit equal to the per Unit value as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Awards less the exercise price, if any, applicable to such Awards; provided, however, that to the extent the exercise price of an Option or UAR exceeds such per Unit value as determined by the Committee, no consideration will be paid with respect to that Award; (IV) cancel Awards that remain subject to a Restricted Period as of a date specified by the Committee without payment of any consideration to the Participant for such Awards; or (V) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such event (including, without limitation, the substitution of new awards for Awards); provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding. Section 5. Eligibility. Any Employee, Consultant or Director shall be eligible to be designated a Participant and receive an Award under the Plan. Section 6. Awards. (a) Options and UARs. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Options and/or UARs shall be granted, the number of Units to be covered by each Option or UAR, the exercise price therefor, the Restricted Period and other conditions and limitations applicable to the exercise of the Option or UAR, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan. (i) Exercise Price. The exercise price per Unit purchasable under an Option or subject to a UAR shall be determined by the Committee at the time the Option or UAR is granted but, except with respect to substitute Awards pursuant to Section 6(f)(viii), may not be less than the Fair Market Value of a Unit as of the date of grant of such Option or UAR. (ii) Time and Method of Exercise. The Committee shall determine the exercise terms and the Restricted Period, if any, with respect to an Option or UAR, which may include, without limitation, a provision for accelerated vesting upon the achievement of specified performance goals and/or other events, and the method or methods by which payment of the exercise price with respect to an Option or UAR may be made or deemed to have been made, which may include, without limitation, cash, check acceptable to the General Partner, withholding Units having a Fair Market Value on the exercise date equal to the relevant exercise price from the Award, a “cashless-broker” exercise through procedures approved by the General Partner, other securities or other property, a note (in a form acceptable to the General Partner), or any combination of the foregoing methods. (iii) Forfeitures. Except as otherwise provided in the terms of the Award Agreement, upon termination of a Participant’s employment with (or service to) the General Partner and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding Options and UARs awarded to the Participant shall be automatically forfeited on such termination. (b) Restricted Units and Phantom Units. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Restricted Units or Phantom Units shall be granted, the number of Restricted Units or Phantom Units to be granted to each such Participant, the applicable Restricted Period, the conditions under which the Restricted Units or Phantom Units may become vested or forfeited and such other terms and conditions as the Committee may establish with respect to such Awards, including whether DERs are granted with respect to the Phantom Units. (i) UDRs. To the extent determined by the Committee, in its discretion, the Award Agreement for a grant of Restricted Units may provide that distributions made by the Partnership with respect to the Restricted Units shall be subject to the same forfeiture and other restrictions as the Restricted Unit and, if restricted, such distributions shall be held, without interest, until the Restricted Unit vests or is forfeited with the UDR being paid or forfeited at the same time, as the case may be. Absent such a restriction on the UDRs in the Award Agreement, UDRs shall be paid to the holder of the Restricted Unit without restriction at the same time as cash distributions are paid by the Partnership to its unitholders. (ii) Forfeitures. Except as otherwise provided in the terms of the applicable Award Agreement, upon termination of a Participant’s employment with (or service to) the General Partner and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding, unvested Restricted Units and Phantom Units awarded to the Participant shall be automatically forfeited on such termination. (iii) Lapse of Restrictions. (A) Phantom Units. Unless otherwise provided in the applicable Award Agreement, upon or as soon as reasonably practical following the vesting of each Phantom Unit, subject to Section 8(b), the Participant shall be entitled to settlement of such Phantom Unit and shall receive

  29. (As Amended and Restated Effective May 8, 2024)

    one Unit (or such greater or lesser number of Units as may be provided pursuant to the applicable Award Agreement) or an amount in cash equal to the Fair Market Value (for purposes of this Section 6(b)(iii), as calculated on the last day of the Restricted Period) of a Unit (or such greater or lesser number of Units as may be provided pursuant to the applicable Award Agreement) or a combination thereof, as determined by the Committee in its discretion and as provided in the applicable Award Agreement. (B) Restricted Units. Upon or as soon as reasonably practicable following the vesting of each Restricted Unit, subject to Section 8(b), the Participant shall be entitled to have the restrictions removed from his or her Unit certificate (or book entry account, as applicable). (c) DERs. The Committee shall have the authority to determine the Employees, Consultants and/or Directors to whom DERs are granted, whether such DERs are tandem or separate Awards, whether such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest), any vesting restrictions and payment provisions applicable to the DERs, and such other provisions or restrictions as determined by the Committee in its discretion, all of which shall be specified in the applicable Award Agreements. Distributions in respect of DERs shall be credited as of the distribution dates during the period between the date an Award is granted to a Participant and the date such Award vests, is exercised, is distributed or expires, as determined by the Committee. Such DERs shall be converted to cash, Units, Restricted Units and/or Phantom Units by such formula and at such time(s) and subject to such limitations as may be determined by the Committee. Tandem DERs may be subject to the same or different vesting restrictions as the underlying Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion. Notwithstanding the foregoing, DERs shall only be paid in a manner that is either exempt from or in compliance with Section 409A. (d) Unit Awards. Unit Awards may be granted under the Plan (i) to such Employees, Consultants and/or Directors and in such amounts as the Committee, in its discretion, may select and (ii) subject to such other terms and conditions, including, without limitation, restrictions on transferability, as the Committee may establish with respect to such Awards. (e) Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Plan to such Employees, Consultants and/or Directors as the Committee, in its discretion, may select. An Other Unit-Based Award shall be an award denominated or payable in, valued in or otherwise based on or related to Units, in whole or in part. The Committee shall determine the terms and conditions of any Other Unit-Based Award. An Other Unit-Based Award may be paid in cash, Units (including Restricted Units) or any combination thereof as provided in the applicable Award Agreement. (f) Certain Provisions Applicable to Awards. (i) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the General Partner or any Affiliate of the General Partner. Awards granted in addition to or in tandem with other Awards or awards granted under any other plan of the General Partner, the Partnership or any of their respective Affiliates may be granted either at the same time as or at a different time from the grant of such other Awards or awards. (ii) Limits on Transfer of Awards. (A) Except as provided in Section 6(f)(ii)(C), each Option and UAR shall be exercisable only by the Participant during the Participant’s lifetime, or by the Person to whom the Participant’s rights shall pass by will or the laws of descent and distribution. (B) Except as provided in Section 6(f)(ii)(C), no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the General Partner, the Partnership or any of their respective Affiliates. (C) The Committee may provide in an Award Agreement or in its discretion that an Award may, on such terms and conditions as the Committee may from time to time establish, be transferred by a Participant without consideration to any “family member” of the Participant, as defined in the instructions to use of the Form S-8 Registration Statement under the Securities Act of 1933, as amended, or any related family trust, limited partnership or other transferee specifically approved by the Committee. (iii) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee. (iv) Issuance of Units. The Units or other securities of the Partnership delivered pursuant to an Award may be evidenced in any manner deemed appropriate by the Committee in its sole discretion, including, without limitation, in the form of a certificate issued in the name of the Participant or by book entry, electronic or otherwise and shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any securities exchange upon which such Units or other securities are then listed, and any applicable laws, and the Committee may cause a legend or legends to be inscribed on any certificates, if applicable, to make appropriate reference to such restrictions. (v) Consideration for Grants. To the extent permitted by applicable law, Awards may be granted for such consideration, including services, as the Committee shall determine.