Exhibit 10.2

 

FORM OF

PERFORMANCE UNIT AGREEMENT

 

THIS PERFORMANCE UNIT AGREEMENT (this “Agreement”) is entered into by and
between EnLink Midstream, LLC, a Delaware limited liability company (the
“Company”), and                                    (“Participant”) as of the
Grant Date.

 

WITNESSETH:

 

WHEREAS, the EnLink Midstream, LLC 2014 Long-Term Incentive Plan was adopted by
the Company, effective February 5, 2014 (the “Plan”), for the benefit of certain
employees and consultants of the Company or its Affiliates, and non-employee
directors of EnLink Midstream Manager, LLC, the managing member of the Company;
and

 

WHEREAS, a committee (the “Special Committee”) has been designated to administer
Awards that are intended to constitute qualified performance-based compensation
(“Qualified Awards”) under Section 162(m) of the Internal Revenue Code of 1986,
as amended (the “Code”), which Qualified Awards shall be subject to such terms
and conditions as the Special Committee shall determine pursuant to the Plan;

 

WHEREAS, the Special Committee is responsible for granting Qualified Awards in
accordance with the Plan; and

 

WHEREAS, Participant is eligible to participate in the Plan and the Special
Committee has authorized the grant to Participant of the “Subject Award” (as
defined in Section 2 of this Agreement), which is intended to constitute a
Qualified Award, and which shall be subject to certain restrictions pursuant to
the Plan and upon the terms set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Company and Participant hereby agree as
follows:

 

1.                                      Definitions.  Capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to them
in the Plan.

 

“Good Reason” means any of the following, without Participant’s consent: (i) a
material reduction in Participant’s base annual salary; (ii) a material adverse
change in Participant’s authority, duties or responsibilities; or (iii) the
Company requires Participant to move his or her principal place of employment to
a location that is 30 or more miles from his or her current place of employment
and the new location is farther from his or her primary residence.  From and
after the occurrence of a Change of Control that occurs following the date
hereof, Good Reason shall also include any material breach of this Agreement by
the Company (or any successor thereof, as applicable).  For purposes of this
definition, no act or failure to act on the Company’s part shall be considered a
“Good Reason” unless (x) Participant has given the Company written notice of
such act or failure to act within 30 days thereof, (y) the Company fails to
remedy such act or failure to act within 30 days of its receipt of such notice,
and (z) Participant terminates his or her employment with the Company within 60
days following the Company’s receipt of written notice.

 

“Grant Date” means      .

 

“Performance Goal” means the Performance Goal as set forth in Schedule A to this
Agreement.

 

“Performance Period” means the period defined in Schedule A to this Agreement
for purposes of determining attainment of the Performance Goal.

 

1

--------------------------------------------------------------------------------

 

“Prorated Amount” means a number equal to the total number of outstanding
Restricted Incentive Units granted hereunder multiplied by a fraction (i) the
numerator of which is the number of days that elapse from the commencement of
the Performance Period to the date of the Qualifying Termination and (ii) the
denominator of which is the full number of days of the Performance Period.

 

“Qualifying Termination” means Participant’s employment or service with the
Company or its Affiliates is terminated due to (i) Participant’s retirement with
the approval of the Chief Executive Officer of EnLink Midstream Manager, LLC on
or after reaching age 60, (ii) an involuntary termination of Participant by the
Company for reasons other than Cause, or (iii) a termination by Participant for
Good Reason.

 

“Vesting Date” means the date on which the Performance Period ends as set forth
in Schedule A to this Agreement.

 

2.                                      Performance Unit Award.  On the terms
and conditions and subject to the restrictions, including forfeiture,
hereinafter set forth, the Company hereby grants to Participant, and Participant
hereby accepts, an award of            Restricted Incentive Units (the “Subject
Award”).  The Restricted Incentive Units granted hereunder shall be evidenced by
the Special Committee in a book entry or in such other manner as the Special
Committee may determine.

 

3.                                      Vesting/Forfeiture.

 

(a)                                 The Restricted Incentive Units that comprise
the Subject Award shall be subject to a Performance Period that shall terminate
on the Vesting Date based on the attainment and certification of the Performance
Goal as described Schedule A; provided that Participant is in the continuous
service of the Company or its Affiliates until such Vesting Date.

 

(b)                                 The Restricted Incentive Units shall be
forfeited to the Company at no cost to the Company if Participant’s employment
or service with the Company or its Affiliates terminates prior to the
termination of the Performance Period applicable to such Restricted Incentive
Units; provided, however:

 

(i)                                     if a Qualifying Termination occurs
during the Performance Period and prior to the occurrence of a Change of Control
that occurs following the date hereof, a Prorated Amount of the Restricted
Incentive Units shall remain eligible for vesting on the Vesting Date, based on
the attainment and certification of the Performance Goal as described Schedule
A;

 

(ii)                                  if a Change of Control occurs following
the date hereof, the Restricted Incentive Units shall become fully vested at the
Target amount and the Performance Period shall terminate; or

 

(iii)                               if, during the Performance Period, the
Participant dies or he or she becomes disabled and qualified to receive benefits
under the Company’s long-term disability plan, the Restricted Incentive Units
shall become fully vested at the Target amount and the Performance Period shall
terminate.

 

Notwithstanding the foregoing, to the extent the Subject Award is subject to
Section 409A, in no event shall any Units be delivered when Participant becomes
disabled and qualified to receive benefits under the Company’s long-term
disability plan unless Participant incurs a “disability” within the meaning of
Treas. Reg. Section 1.409A-3(i)(4).

 

Notwithstanding anything herein to the contrary, if, at the time of a
Participant’s

 

2

--------------------------------------------------------------------------------

 

termination of employment or service with the Company or its Affiliates, such
Participant is a “specified employee” (as defined in Section 409A of the Code),
and the deferral of the commencement of any amount of the payments or benefits
otherwise payable pursuant to the Plan is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then, to the
extent permitted by Section 409A of the Code, such payments or benefits
hereunder (without any reduction in the payments or benefits ultimately paid or
provided to the Participant) will be deferred until the earlier to occur of
(i) the Participant’s death or (ii) the first business day that is six
(6) months following the Participant’s termination of employment or service with
the Company or its Affiliates, provided that amounts which qualify for the
separation pay plan exemption under Treasury Regulation
§1.409A-1(b)(9)(v)(D) and do not exceed the limits set forth in
Section 402(g)(1)(B) of the Code in the year of such termination shall be
payable immediately upon termination.  Any payments or benefits deferred due to
the requirements of this paragraph will be paid in a lump sum (without interest)
to the Participant on the earliest to occur of (i) or (ii) in the immediately
preceding sentence.

 

(c)                                  As soon as reasonably practicable following
the close of the Performance Period, the Special Committee shall determine and
certify the extent to which (i) the Performance Goal as described on Schedule A
is attained and (ii) the Restricted Incentive Units granted hereunder shall be
vested, if at all.  Such certification shall be final, conclusive and binding on
Participant, and on all other persons, to the maximum extent permitted by law. 
As soon as reasonably practicable thereafter, Units representing the number of
vested Restricted Incentive Units, if any, shall be delivered, free of all such
restrictions, to Participant or Participant’s beneficiary or estate, as the case
may be, it being understood that the entry on the transfer agent’s books or the
delivery of the certificate(s) with respect to such Units shall constitute
delivery of such Units for purposes of this Agreement.  Notwithstanding anything
contained herein to the contrary, in no event shall such Units be delivered to
Participant later than (i) the end of the calendar year in which vesting occurs,
or, if later, (ii) the 15th day of the third calendar month following the date
on which vesting occurs.

 

(d)                                 Notwithstanding anything contained herein to
the contrary, in no event shall Participant have any right to vote any, or to
exercise any other rights, powers and privileges of a holder of the Units with
respect to such Restricted Incentive Units until such time that (i) the
Performance Period applicable to such Restricted Incentive Units or a portion
thereof shall have expired (and all other conditions to payment with respect
thereto have been fulfilled), (ii) such Restricted Incentive Units are converted
into the right to receive Units, and (iii) such Units are delivered to
Participant.

 

4.                                      Distribution Equivalent Payment Rights. 
Subject to the following, the Subject Award granted hereunder includes a tandem
award of Distribution Equivalent Rights with respect to each applicable
Restricted Incentive Unit that shall entitle Participant to receive cash
payments equal to the cash distributions made by the Company (on a per Unit
basis) in respect of its outstanding Units generally (“General Distributions”);
provided that such cash payments (“Distribution Equivalent Payments”) shall be
credited to a bookkeeping account established on the records of the Company for
Participant and will vest and be paid to or on behalf of Participant at the same
time, and subject to the same conditions, as are applicable to the vesting of
the underlying Restricted Incentive Units.  Accordingly, Distribution Equivalent
Payments shall be forfeited to the extent that the underlying Restricted
Incentive Units do not vest, are forfeited or are otherwise cancelled.  No
interest shall be credited on any Distribution Equivalent Payments.

 

3

--------------------------------------------------------------------------------

 

5.                                      Taxes.

 

(a)                                 REPRESENTATION. PARTICIPANT REPRESENTS THAT
PARTICIPANT IS NOT RELYING ON THE COMPANY OR ITS AFFILIATES FOR ANY TAX ADVICE
IN CONNECTION WITH THE RESTRICTED INCENTIVE UNITS AND THAT PARTICIPANT HAS BEEN,
OR IS OTHERWISE HEREBY, ADVISED TO CONSULT WITH ITS OWN TAX ADVISOR WITH RESPECT
TO THE AWARD OF RESTRICTED INCENTIVE UNITS UNDER THIS AGREEMENT.

 

(b)                                 Withholding Matters.

 

(i)                                     Participant shall pay to the Company or
its Affiliates, or make arrangements satisfactory to the Company or its
Affiliates regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to (x) Distribution Equivalent
Payments described in Section 4 of this Agreement that are received due to the
grant of the Restricted Incentive Units hereunder, and (y) the vesting of the
Restricted Incentive Units (in which case arrangements will be made no later
than the time Units are delivered, if at all, pursuant to Section 3(c) herein).

 

(ii)                                  Participant shall, to the extent permitted
by law, have the right to deliver to the Company or its Affiliates Units to
which Participant shall be entitled upon the vesting of the Restricted Incentive
Units (or other unrestricted Units owned by Participant) or to deliver to the
Company or its Affiliates Units that Participant has previously acquired, in
each case valued at the Fair Market Value of such Units at the time of such
delivery to the Company or its Affiliates, to satisfy the obligation of
Participant under Section 5(b)(i) of this Agreement; provided, however, that, in
no event shall the Fair Market Value of such Units exceed the minimum statutory
withholding requirements.

 

(iii)                               Any provision of this Agreement to the
contrary notwithstanding, if Participant does not otherwise satisfy the
obligation of Participant under Section 5(b)(i) of this Agreement, then the
Company and its Affiliates shall, to the extent permitted by law, have the right
to deduct from any payments of any kind otherwise due from the Company or its
Affiliates to or with respect to Participant, whether or not pursuant to this
Agreement or the Plan and regardless of the form of payment, any federal, state
or local taxes of any kind required by law to be withheld with respect to any
Distribution Equivalent Payments or Restricted Incentive Units hereunder.

 

6.                                      Non-Assignability.  The Subject Award is
not assignable or transferable by Participant, and, unless and until Units with
respect to Restricted Incentive Units are delivered to Participant upon vesting,
such Restricted Incentive Units shall not be assigned, alienated, pledged,
attached sold or otherwise transferred or encumbered by Participant in any
manner.

 

7.                                      Legend.  In the event any Units are
delivered to Participant in connection with the vesting of any of the Restricted
Incentive Units granted hereunder, the Special Committee, in its discretion, may
cause the certificate(s) representing such Units to bear an appropriate legend
referring to any conditions and/or restrictions with respect to such Units.

 

8.                                      Entirety and Modification.  This
Agreement contains the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes any and all prior agreements,
whether written or oral, between such parties relating to such subject matter. 
Subject to Section 15.2 of the Plan, no modification, alteration, amendment or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to be enforced.

 

4

--------------------------------------------------------------------------------

 

9.                                      Severability.  If any provision of this
Agreement is held to be unenforceable, this Agreement shall be considered
divisible, and such provision shall be deemed inoperative to the extent it is
unenforceable, and in all other respects this Agreement shall remain in full
force and effect; provided, however, that if any such provision may be made
enforceable by limitation thereof, then such provision shall be deemed to be so
limited and shall be enforceable to the maximum extent permitted by applicable
law.

 

10.                               Gender.  Words used in this Agreement which
refer to Participant and denote the male gender shall also be deemed to include
the female gender or the neuter gender when appropriate.

 

11.                               Employment or Service.  Nothing in this
Agreement shall confer upon Participant any right to continue in the employ or
service of the Company or its Affiliates, nor shall this Agreement interfere in
any manner with the right of the Company or its Affiliates to terminate the
employment or service of Participant with or without Cause at any time.

 

12                                  Incorporation of Plan Provisions.  This
Agreement is made pursuant to the Plan and is subject to all of the terms and
provisions of the Plan as if the same were fully set forth herein.  In the event
that any provision of this Agreement conflicts with the Plan, the provisions of
the Plan shall control.  Participant acknowledges receipt of a copy of the Plan
and agrees that all decisions under and interpretations of the Plan by the
Special Committee shall be final, binding and conclusive upon Participant.

 

13.                               Headings.  The headings of the various
sections and subsections of this Agreement have been inserted for convenient
reference only and shall not be construed to enlarge, diminish or otherwise
change the express provisions hereof.

 

14.                               Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the state of Delaware
(regardless of the laws that might otherwise govern under applicable Delaware
principles of conflicts of law).

 

15.                               Counterparts.  This Agreement may be signed in
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Grant Date.

 

 

ENLINK MIDSTREAM, LLC

 

By: EnLink Midstream Manager, LLC

 

 

 

 

 

Barry E. Davis

 

President and Chief Executive Officer

 

 

 

 

 

PARTICIPANT:

 

 

 

Name:

 

 

 

 

YOU MUST ACCEPT THIS GRANT AND THE TERMS OF THIS AGREEMENT IN ORDER TO RECEIVE
IT. TO ACCEPT THIS GRANT, COMPLETE THE GRANT ACCEPTANCE PROCESS AT THE WEBSITE
OF UBS: (www.ubs.com/onesource/ENLC)

 

5

--------------------------------------------------------------------------------

 

SCHEDULE A

PERFORMANCE GOAL, PERFORMANCE PERIOD, AND PAYOUT AMOUNTS

 

1.                                      Performance Period.  The maximum number
of Restricted Incentive Units, which can vest pursuant to the Subject Award
shall be calculated based on the Performance Goal over a period (the
“Performance Period”) that begins on [·] and ends on [·] (the “Vesting Date”).

 

2.                                      Performance Goal.  The Performance Goal
is based on total shareholder return (“TSR”), which shall be the rate of return
a holder of a common equity security of a company would receive through common
equity security price changes and the assumed reinvestment of dividends /
distributions over the Performance Period.  Vesting will be based on the ranking
of the average of the TSR of the Company and the TSR of EnLink Midstream
Partners, LP (the “Partnership” and, together with the Company, “EnLink”)
relative to the TSR ranking of the Peer Companies (identified in Sections
3(c) and (d) below).  At the end of the Performance Period, the TSR for the
Company, for the Partnership and for each Peer Company, shall be determined
pursuant to the following formula:

 

TSR    =

(Closing Average Value - Opening Average Value) + Reinvested Dividends / Opening
Average Value*

 

--------------------------------------------------------------------------------

*The result shall be rounded to the nearest hundredth of one percent (.01%).

 

(a)                                 The term “Closing Average Value” means the
average value of the common equity security on the relevant United States stock
market (NYSE or NASDAQ) for the 30 trading days ending on the last day of the
Performance Period, which shall be calculated as follows: (i) determine the
closing price of the common equity security on each trading date during 30-day
period and (ii) average the amounts so determined for the 30-day period.

 

(b)                                 The term “Opening Average Value” means the
average value of the common equity security on the relevant United States stock
market (NYSE or NASDAQ) for the 30 trading days preceding the start of the
Performance Period, which shall be calculated as follows: (i) determine the
closing price of the common equity security on each trading date during the
30-day period and (ii) average the amounts so determined for the 30-day period.

 

(c)                                  “Reinvested Dividends” shall be calculated
by multiplying (i) the aggregate number of common equity securities (including
fractional units thereof) that could have been purchased during the Performance
Period had each cash dividend or distribution paid on a single common equity
security during that period been immediately reinvested in additional common
equity securities (or fractional units thereof) at the closing selling price per
common equity security on the applicable dividend or distribution payment date
by (ii) the average daily closing price per common equity security on the
relevant United States stock market (NYSE or NASDAQ) calculated for the duration
of the Performance Period following the dividend or distribution payment date.

 

(d)                                 Each of the foregoing amounts shall be
equitably adjusted for stock / unit splits, stock dividends or unit
distributions, recapitalizations and other similar events affecting the common
equity securities in question without the issuer’s receipt of consideration.

 

3.                                      Vesting Schedule.  The Restricted
Incentive Units shall vest pursuant to the Agreement based on EnLink’s relative
TSR ranking in respect of the Performance Period as compared to the TSR ranking
of the Peer Companies, in accordance with the following schedule:

 

A-1

--------------------------------------------------------------------------------

 

Performance
Level

 

EnLink’s Achieved TSR Percentile
Position Relative to AMZ Peers*

 

Associated Individual Payout Level
(expressed as a percentage
of the Subject Award)

 

Below Threshold

 

Less than 25%

 

0

%

Threshold

 

Equal to 25%

 

50

%

Target

 

Equal to 50%

 

100

%

Maximum

 

Greater than or Equal to 75%

 

200

%

 

--------------------------------------------------------------------------------

* If EnLink’s achieved TSR percentile position is between the Threshold and
Target performance levels or if EnLink’s achieved TSR percentile position is
between the Target and Maximum performance levels (and EnLink’s TSR is positive
for the Performance Period), then the associated individual payout level will be
interpolated on a linear basis.

 

(a)                                 If EnLink’s TSR is negative for the
Performance Period, the maximum associated payout level (expressed as a
percentage of the Subject Award) for the Performance Period shall not exceed
100% of the Subject Award (i.e., if EnLink’s achieved TSR percentile position
relative to AMZ peers equals or exceeds 50%, then the associated payout level
will not exceed 100%).

 

(b)                                 If EnLink’s final TSR value is equal to the
TSR value of a Peer Company, the Special Committee shall assign EnLink the
higher ranking.

 

(c)                                  The Peer Companies are the companies that
comprise the Alerian MLP Index for Master Limited Partnerships (AMZ) as of the
Grant Date, which are set forth on Schedule B to this Agreement, it being
understood that in no event shall the Peer Companies include the Company or the
Partnership.

 

(d)                                 The Peer Companies will be subject to change
as follows:

 

(i)                                     In the event of a merger, acquisition or
business combination transaction of a Peer Company, in which the Peer Company is
the surviving entity and remains publicly traded, the surviving entity shall
remain a Peer Company.  Any entity involved in the transaction that is not the
surviving company shall no longer be a Peer Company.

 

(ii)                                  If a Peer Company ceases to be a publicly
traded company at any time during the Performance Period, due to bankruptcy,
delisting or any other reason other than those set forth in clause (i) above,
such company shall remain a Peer Company but shall be deemed to have a TSR of
negative 100% (-100%).

 

4.                                      General Vesting Terms.  Any fractional
Restricted Incentive Units resulting from the vesting of the Restricted
Incentive Units in accordance with the Agreement shall be rounded down to the
nearest whole number.  Any portion of the Restricted Incentive Units that does
not vest as of the end of the Performance Period shall be forfeited as of the
end of the Performance Period.

 

A-2

--------------------------------------------------------------------------------

 

SCHEDULE B

PEER COMPANIES

 

[to be completed]

 

B-1

--------------------------------------------------------------------------------