Equity Plans

12 Months Ended

Dec. 31, 2019

Equity Plans

Long-term incentive awards are granted under the Crestwood Equity Partners LP Long Term Incentive Plan (Crestwood LTIP) in order to align the economic interests of key employees and directors with those of CEQP’s common unitholders and to provide an incentive for continuous employment. Long-term incentive compensation consist of grants of restricted, phantom and performance units which vest based upon continued service.

The following table summarizes information regarding restricted, phantom and performance unit activity during the years ended December 31, 2019, 2018 and 2017.



	Units		Weighted-Average Grant Date Fair Value
Unvested - January 1, 2017	1,292,330		$	24.67
Granted - restricted units	919,411		$	25.69
Granted - phantom units	15,849		$	25.02
Granted - performance units	405,620		$	30.21
Vested - restricted units	(607,115	)	$	28.00
Vested - performance units	(31,106	)	$	30.27
Forfeited - restricted units	(140,137	)	$	23.73
Forfeited - performance units	(24,756	)	$	30.45
Unvested - December 31, 2017	1,830,096		$	25.21
Granted - restricted units	1,144,017		$	25.80
Granted - phantom units	7,750		$	26.10
Granted - performance units	901		$	25.60
Vested - restricted units	(617,807	)	$	23.73
Vested - phantom units	(105,809	)	$	49.45
Vested - performance units	(11,772	)	$	28.87
Forfeited - restricted units	(53,530	)	$	23.36
Forfeited - phantom units	(6	)	$	49.45
Forfeited - performance units	(5,870	)	$	30.45
Unvested - December 31, 2018	2,187,970		$	24.78
Granted - restricted units	988,096		$	31.48
Granted - phantom units	7,164		$	29.03
Granted - performance units	238,263		$	34.21
Vested - restricted units	(985,751	)	$	23.39
Vested - performance units	(32,246	)	$	34.21
Forfeited - restricted units	(47,547	)	$	27.85
Unvested - December 31, 2019	2,355,949		$	28.94

As of December 31, 2019 and 2018, we had total unamortized compensation expense of approximately $34.6 million and $28.0 million related to restricted, phantom, and performance units, which will be amortized during the next three years (or sooner in certain cases, which generally represents the original vesting period of these instruments), except for grants to non-employee directors of our general partner, which vest over one year. We recognized compensation expense of approximately $45.1 million, $24.3 million and $22.4 million under the Crestwood LTIP during the years ended December 31, 2019, 2018 and 2017, which is included in general and administrative expenses on our consolidated statements of operations. During the year ended December 31, 2019, compensation expense includes approximately $4.6 million related to equity awards under the Crestwood LTIP that was included in accrued expenses and other liabilities on our consolidated balance sheet. As of February 10, 2020, we had 2,593,885 units available for issuance under the Crestwood LTIP.

Restricted Units. Under the Crestwood LTIP, participants who have been granted restricted units may elect to have us withhold common units to satisfy minimum statutory tax withholding obligations arising in connection with the vesting of non-vested common units. Any such common units withheld are returned to the Crestwood LTIP on the applicable vesting dates, which correspond to the times at which income is recognized by the employee. When we withhold these common units, we are required to remit to the appropriate taxing authorities the fair value of the units withheld as of the vesting date. The number of units withheld is determined based on the closing price per common unit as reported on the NYSE on such dates. During the years ended December 31, 2019, 2018, and 2017, we withheld 336,548, 221,576 and 206,600 common units to satisfy employee tax withholding obligations.

Phantom Units. The Crestwood LTIP permits grants of phantom units that entitle the holder thereof to receive upon vesting one CEQP common unit granted pursuant to the Crestwood LTIP and a phantom unit award agreement (the Crestwood Equity

Phantom Unit Agreement). The Crestwood Equity Phantom Unit Agreement provides for vesting to occur at the end of three years following the grant date or, if earlier, upon the named executive officer’s termination without cause or due to death or disability or the named executive officer’s resignation for employee cause (each, as defined in the Crestwood Equity Phantom Unit Agreement). In addition, the Crestwood Equity Phantom Unit Agreement provides for distribution equivalent rights with respect to each phantom unit which are paid in additional phantom units and settled in common units upon vesting of the underlying phantom units.

Performance Units. The Crestwood LTIP permits grants of performance units that are designed to provide an incentive for continuous employment to certain key employees. Performance units vest over a three-year performance period and the number of units issued are based on a performance multiplier ranging between 50% and 200%, determined based on the actual performance in the third year of the performance period compared to pre-established performance goals. The performance goals are based on achieving a specified level of distributable cash flow per unit, Adjusted EBITDA, return on capital invested, and three-year relative total shareholder return. The vesting of performance units is subject to the attainment of certain performance and market goals over a three-year period and entitle a participant to receive common units of Crestwood Equity without payment of an exercise price upon vesting.

Employee Unit Purchase Plan

In August 2018, the board of directors of our general partner approved an employee unit purchase plan under which employees of the general partner may purchase our common units through payroll deductions up to a maximum of 10% of the employees’ eligible compensation, not to exceed $25,000 for any calendar year. Under the plan, we anticipate purchasing our common units on the open market for the benefit of participating employees based on their payroll deductions. In addition, we may match up to 10% of participating employees’ payroll deductions to purchase additional Crestwood common units for participating employees. The board of directors of our general partner authorized 1,500,000 common units (subject to adjustment as provided in the employee unit purchase plan) to be available for purchase. During the year ended December 31, 2019, 6,341 common units were purchased under the plan. There were no common units purchased under the employee unit purchase plan in 2018.