Exhibit 10.2
Targa Resources Partners
Long Term Incentive Plan
Performance Unit Grant Agreement

     
Grantee:
                      
 
   
Date of Grant:
                       , 200  
 
   
Number of Performance Units Granted:
                      

     1. Performance Unit Grant. I am pleased to inform you that you have been
granted the above number of Performance Units with respect to Common Units
(“Common Units” or “Units”) of Targa Resources Partners LP (the “MLP”) under the
Targa Resources Partners Long-Term Incentive Plan (the “Plan”). A Performance
Unit is a notional Common Unit of the MLP. Each Performance Unit also includes a
tandem Distribution Equivalent Right (“DER”). A DER is a right to receive an
amount equal to the cash distributions made with respect to a Common Unit during
the Performance Period (set forth on Attachment A) as described in Section 4.
The terms of the grant are subject to the terms of the Plan and this Performance
Unit Grant Agreement (this “Agreement”), which includes Attachment A hereto.
     2. Performance Goal and Payment. Subject to the further provisions of this
Agreement, if, and to the extent, the Performance Goal (set forth on Attachment
A) is achieved for the Performance Period, then as soon as reasonably practical
following the end of the Performance Period (but in no event later than the 15th
day of March following the end of the year during which the Performance Period
ends), you will receive a number of Units calculated as the product of: (i) the
number of vested Performance Units granted hereunder, times (ii) the Performance
Percentage (set forth in Item II on Attachment A) for the Performance Period.
Any earned fractional Units shall be rounded up to the nearest whole Unit. In
addition, you will receive cash relating to the amount of the DER that you are
entitled to as described in Section 4. If, however, the minimum Performance Goal
is not achieved for the Performance Period, all of your Performance Units and
DERs will be cancelled automatically without payment at the end of the
Performance Period.
     3. Vesting.
     (a) If you cease to be employed by Targa Resources Corp. and its Affiliates
(collectively, the “Company”) during the Performance Period for any reason other
than as provided below, all Performance Units and tandem DERs awarded to you
shall be automatically forfeited without payment upon your termination. For
purposes of this Agreement, “employment with the Company” shall include being an
employee or a Director of, or a Consultant to, the Company.
     (b) If you cease to be employed by the Company during the Performance
Period as a result of your death or a disability that entitles you to disability
benefits under the Company’s long-term disability plan, or your employment is
terminated by the Company other than for Cause, you will be vested in any
Performance Units that you are

 

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otherwise qualified to receive payment for based on achievement of the
Performance Goal at the end of the Performance Period. If you are a party to an
agreement with the Company in which the term “cause” is defined, that definition
of cause shall apply for purposes of the Plan and this Agreement. Otherwise,
“Cause” means (i) failure to perform assigned duties and responsibilities
(ii) engaging in conduct which is injurious (monetarily or otherwise) to the
Company or any of its Affiliates, (iii) breach of any corporate policy or code
of conduct established by the Company or breach of any agreement between the
Company and you, or (iv) conviction of a misdemeanor involving moral turpitude
or a felony.
     4. DERs. Beginning on the later of the Date of Grant and the first day of
the Performance Period and ending on the last day of the Performance Period, on
each date during such period that the MLP makes a cash distribution with respect
to its Units, you will be credited with an amount of cash equal to the product
of (i) the cash distributions paid with respect to a Common Unit times (ii) your
number of Performance Units. Your DERs shall be credited to a bookkeeping
account by the Company. As soon as practical following the end of the
Performance Period (but in no event later than the 15th day of March following
the end of the year during which the Performance Period ends), your DER account
will be paid (without interest) to you in cash or forfeited, as the case may be.
The amount of your DER account to be paid to you will be equal to the product of
the Performance Percentage times the amount credited to your DER account. DERs
shall not be payable with respect to any Performance Unit that is forfeited or
as to which you are not otherwise qualified to receive payment for based on the
Performance Goal at the end of the Performance Period.
     5. Change of Control. Upon the occurrence of a Change of Control during the
Performance Period, the Performance Percentage shall be deemed to be 100% and
your Performance Units and all DER amounts, if any, then credited to you shall
be cancelled on such date and you will be paid (i) one Unit for each Performance
Unit granted to you under this Agreement, plus (ii) an amount of cash equal to
the amount of DERs then credited to you, if any. Notwithstanding anything else
contained in this Section 5 to the contrary, the Committee may elect, at its
sole discretion by resolution adopted prior to the occurrence of the Change of
Control, to have the Company satisfy your rights in respect of the Performance
Units (as determined pursuant to the foregoing provisions of this Section 5), in
whole or in part, by having the Company make a cash payment to you within five
business days of the occurrence of the Change of Control in respect of all such
Performance Units or such portion of such Performance Units as the Committee
shall determine. Any cash payment made pursuant to the foregoing sentence for
any Performance Units shall be equal to the Fair Market Value of a Common Unit
on the date of the Change of Control, times the number of Performance Units
granted to you under this Agreement.
     6. Nontransferability of Award. The Performance Units and DERs may not be
transferred, assigned, encumbered or pledged by you in any manner otherwise than
by will or by the laws of descent or distribution. The terms of the Plan and
this Agreement shall be binding upon your executors, administrators, heirs,
successors and assigns.
     7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Agreement constitute the entire agreement of the
parties with respect to the

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subject matter hereof and, except as expressly provided in this Agreement,
supersede in their entirety all prior undertakings and agreements between you
and Targa Resources GP LLC and its Affiliates with respect to the same. This
Agreement is governed by the internal substantive laws, but not the choice of
law rules, of the State of Texas.
     8. Withholding of Taxes. To the extent that the vesting or payment of
Performance Units or DERs results in the receipt of compensation by you with
respect to which the Company or an Affiliate has a tax withholding obligation
pursuant to applicable law, the Company or Affiliate shall withhold from the
cash and from the Units otherwise to be delivered to you, that amount of cash
and that number of Units having a Fair Market Value equal to the Company’s or
Affiliate’s tax withholding obligations with respect to such cash and Unit
payments, respectively, unless you deliver to the Company or Affiliate (as
applicable) at the time such cash or Units are delivered to you such amount of
money as the Company or Affiliate may require to meet such tax withholding
obligations. No payment of a vested Performance Unit or a cash distribution with
respect to DERs shall be made pursuant to this Agreement until the applicable
tax withholding requirements with respect to such event have been satisfied in
full.
     9. Amendments. This Agreement may be modified only by a written agreement
signed by you and an authorized person on behalf of Targa Resources GP LLC who
is expressly authorized to execute such document; provided, however,
notwithstanding the foregoing, Targa Resources Corp. may make any change to this
Agreement without your consent if such change is not materially adverse to your
rights under this Agreement.
     10. Plan Controls. By accepting this grant, you agree that the Performance
Units and DERs are granted under and governed by the terms and conditions of the
Plan and this Agreement. In the event of any conflict between the Plan and this
Agreement, the terms of the Plan shall control. Unless otherwise defined herein,
the terms defined in the Plan shall have the same defined meanings in this
Agreement.

            TARGA RESOURCES GP LLC
      By:           Name:   Rene R. Joyce        Title:   Chief Executive
Officer   

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ATTACHMENT A

I.   The Performance Period shall begin on                         , 200   and
end on                , 20     .

II.   Performance Goal

  The payment of a Performance Unit will be determined based on the comparison
of (i) the Total Return (as defined below) of a Common Unit for the Performance
Period to (ii) the Total Return of a share of the common stock/unit of each
member of the Peer Group for the Performance Period. Total Return shall be
measured by (i) subtracting the average closing price per share/unit for the
first ten trading days of the Performance Period (the “Beginning Price”) from
the sum of (a) the average closing price per share/unit for the last ten trading
days ending on the date that is 15 days prior to the end of the Performance
Period plus (b) the aggregate amount of dividends/distributions paid with
respect to a share/unit during such period (the result being referred to as the
“Value Increase”) and (ii) dividing the Value Increase by the Beginning Price.

          Total Return compared to
Peer Group Total Return   Performance
Percentage1 75th Percentile     150 %  50th Percentile     100 %  25th
Percentile     25 %  Below 25th Percentile2     0 % 

 

1   The Performance Percentage between the 25th Percentile and the 50th
Percentile is a percentage based on a straight-line interpolation between 25%
and 100% based on a comparison of the Total Returns described above, and the
Performance Percentage between the 50th Percentile and the 75th Percentile is a
percentage based on a straight-line interpolation between 100% and 150% based on
a comparison of the Total Returns described above.   2   The 25th Percentile is
the minimum Performance Goal for which there is a Performance Percentage.

III.   Adjustments to Performance Goals for Certain Events

  If, during the Performance Period, there is a change in accounting standards
required by the Financial Accounting Standards Board, the above performance
goals shall be adjusted by the Committee as appropriate, in its discretion, to
disregard the effect of such change.

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IV.   The Peer Group shall consist of the following companies:

      Company   Ticker
Energy Transfer Partners
  ETP
Oneok Partners
  OKS
Copano Energy
  CPNO
DCP Midstream
  DPM
Regency Energy Partners
  RGNC
Plains All American Pipeline
  PAA
MarkWest Energy Partners
  MWE
Williams Energy Partners
  WPZ
Magellan Midstream
  MMP
Martin Midstream
  MMLP
Enbridge Energy Partners
  EEP
Crosstex Energy
  XTEX
Targa Resources Partners LP
  NGLS

  The Committee may add or delete companies from the Peer Group and provide a
related adjustment in the rankings at any time during the Performance Period,
wherever, in its discretion, such deletion or adjustment is appropriate to
reflect that such peer company is no longer publicly traded or is determined by
the Committee to no longer be a peer of the MLP (for example due to a member no
longer being publicly traded) or to reflect any other significant event.

V.   Committee Certification

  As soon as reasonably practical following the end of the Performance Period,
the Committee shall review the results for the Performance Period and certify
those results in writing to the Board. No Performance Units or DERs shall be
paid prior to the Committee’s certification. However, Committee certification
shall not apply in the event of a Change of Control.

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