REV. 2/3/97
PC DOCS #31047 BUSINESS FORMS Provisions to Create "Phantom" Partnership Interests
ARTICLE ^
PHANTOM UNITS IN THE PARTNERSHIP §1. Creation of Phantom Units . In recognition of the valuable and significant dedication and contributions of the following persons to the Partnership and its interests and in order to reward and provide incentives for such dedication and contributions, each of the persons identified below shall be deemed to hold the number of Phantom Units stated opposite his or her name: Person ^ ^ ^ ^ Phantom Units ^ ^ ^ ^
The holders of such Phantom Units shall by virtue thereof have the limited and special rights specified in this Article. §2. Rights of Holders of Phantom Units. A holder of Phantom Units shall be entitled to receive all financial statements and notices sent by the Partnership to Limited Partners generally, shall be entitled to such access to the Partnership's books and records as is available to Limited Partners generally, and shall be entitled to all distributions from the Partnership made pursuant to this Agreement (and for purposes of the sections of the Partnership's Partnership Agreement relating to distributions) shall be deemed to be included in the term "Partner" notwithstanding that he or she is not a Partner of the Partnership). For purposes of the foregoing a holder of Phantom Units shall be deemed to have a Percentage Partnership Interest equal to that which he or she would have if he held a number of Units equal to the number of Phantom Units held by him or her. It is recited for the avoidance of doubt that a holder of Phantom Units shall not by virtue thereof be a Partner, that Phantom Units shall not constitute Units, Partnership Interests or any equity interest whatever in the Partnership; that Phantom Units shall not entitle the holder thereof to vote in meetings, consents or other deliberations or actions of Partners; and that Phantom Units shall not entitle the holder thereof to any rights, claims or interests other than those expressly stated in this Article ^. §3. Restrictions on Transfer. No holder of Phantom Units shall transfer such Phantom Units without the written consent of the General Partner, which consent may be granted or withheld in the sole and absolute discretion of the General Partner. §4. Distribution of Partnership Interest Units to Replace Phantom Units Under Certain Circumstances. At the time of the making of any distribution to the Partners and the holders of Phantom Units the Partnership may, at its option, distribute to the holders of
Phantom Units either (i) the distribution that would otherwise be made to them (but for this §4) or (ii) a number of Units equal to (and in replacement and cancellation of) the entire number of Phantom Units held by such holders; provided that any such issuance of Units shall be accompanied by, in addition, sufficient cash for payment of the holder's federal and state income taxes payable upon and as a result of such issuance of Units.
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