Exhibit 10.1

Long-Term Incentive Plan

Performance Phantom Unit Grant Agreement

Grantee:                                                           

Grant Date:                                                     

Performance Period:                                     

 

1. Grant of Performance Phantom Units. DCP Midstream GP, LLC (the “Company”)
hereby grants to you             Performance Phantom Units (“PPUs”) under the
DCP Midstream Partners, LP Long-Term Incentive Plan (the “Plan”) on the terms
and conditions set forth herein. The number of PPUs has been determined based on
the closing price of DCP Midstream Partners, LP Common Units on the Grant Date
and includes a tandem distribution equivalent right (“DER”) grant with respect
to each PPU. The Company will establish a DER bookkeeping account for you with
respect to each PPU granted that shall be credited with an amount equal to the
cash distributions made with respect to the Partnership’s Common Units. Unless
otherwise defined herein, terms used, but not defined, in this Grant Agreement
shall have the same meaning as set forth in the Plan.

 

2. Performance Goals and Vesting. The PPUs granted hereunder shall become Vested
only if (i) the Performance goals set forth in the Performance Schedule attached
hereto are achieved at the end of the Performance Period and (ii) you have not
ceased to be an Employee (“Termination of Service”) prior to the end of the
Performance Period, except as provided in Paragraph 3 below. To the extent the
Performance goals are not achieved, the PPUs shall be forfeited automatically at
the end of the Performance Period without payment.

 

3. Contingent Vesting Events. You may become “contingently” Vested prior to the
end of the Performance Period as provided below, but unless the Performance
goals for the Performance Period are achieved, you will not become entitled to a
payment with respect to a PPU.

 

  (a) Death, Disability or Layoff. If you incur a Termination of Service after
the first anniversary of the Grant Date as a result of your: (i) death,
(ii) disability that entitles you to benefits under the Company’s long-term
disability plan, or (iii) involuntary termination by the Company for reasons
other than “Cause,” as determined by the Company in accordance with its
employment policies, a percentage of your PPUs will become contingently Vested
in a pro-rata share (rounded up to the nearest whole PPU) based on the number of
days in the Performance Period that have lapsed through the date of your
Termination of Service over the total number of days in the Performance Period.
The number of your PPUs that do not become contingently Vested as provided above
will be forfeited automatically on the date of your Termination of Service
without payment.

 

  (b) Retirement. If your Termination of Service occurs after the first
anniversary of the Grant Date due to your retirement on or after attaining age
55 and completing five (5) continuous years of service with the Company or its
Affiliates, you will also become contingently Vested in a pro-rata share of your
PPUs.

 

  (c) Other Terminations of Service. If your Termination of Service occurs prior
to the end of the Performance Period for any reason other than as provided in
Paragraphs 3(a) or (b) above, all of your PPUs shall be forfeited without
payment automatically upon the date of your Termination of Service.

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

4. Change of Control. If a Change of Control occurs prior to the end of the
Performance Period the following will occur: (i) if there is no change in job
(same status) within twelve (12) months of the Change of Control, PPUs will be
replaced with equivalent ownership interests of the new enterprise; however
(ii) if you are severed or your job is lower in status within twelve (12) months
of the Change of Control, the Performance Period terminates and all PPUs will
become immediately Vested. For purposes of this Agreement, a Change of Control
means any person other than DCP Midstream, LLC and/or an affiliate thereof
becomes the beneficial owner of more than 50% of the combined voting power of
the Company’s equity interests.

 

5. Payments.

 

  (a)

PPUs. As soon as administratively practicable after the end of the Performance
Period the Committee will determine whether, and the extent to which, the
Performance goals set forth on the Performance Schedule have been achieved and
the number of your PPUs that have become Vested as a result of such achievement.
The Company will then either pay you cash or issue you DCP Midstream Partners,
LP Common Units, or a combination thereof, at the sole discretion of the
Compensation Committee. If payment is made in cash, such payment will be made in
a lump sum equal to the then average closing price of your Vested PPUs based on
the last twenty trading days immediately prior to the end of the Performance
Period (“Valuation Date”), less any taxes the Company is required to withhold
from such payment. If the Compensation Committee decides to settle your PPUs in
DCP Midstream Partners, LP Common Units, the PPUs that have become Vested will
be exchanged for a like number of DCP Midstream Partners, LP Common Units, less
any taxes the Company is required to withhold from such payment, valuing such
PPUs and applicable tax withholding as of the settlement date. Payment will be
made as soon as practicable after the end of the Performance Period, but no
later than 2 1/2 months following the end of the Plan year in which the
Performance Period terminates unless deferred into the Executive Deferred
Compensation Plan in accordance with Code Section 409A, less all applicable
taxes required to be withheld therefrom.

 

  (b)

DERs. As soon as administratively practicable after the end of the Performance
Period (but no later than 2 1/2 months following the end of the Plan year in
which the Performance Period terminates), the Company shall pay you, with
respect to each PPU that became Vested at the end of the Performance Period, an
amount of cash equal to the DERs credited to your DER account during the
Performance Period with respect to such Vested PPUs less all applicable taxes
required to be withheld therefrom.

 

6. Limitations Upon Transfer. All rights under this Agreement shall belong to
you alone and may not be transferred, assigned, pledged, or hypothecated by you
in any way (whether by operation of law or otherwise), other than by will or the
laws of descent and distribution or by a beneficiary designation form filed with
the Company in accordance with the procedures established by the Company for
such designation, and shall not be subject to execution, attachment, or similar
process. Upon any attempt by you to transfer, assign, pledge, hypothecate, or
otherwise dispose of such rights contrary to the provisions in this Agreement or
the Plan, or upon the levy of any attachment or similar process upon such
rights, such rights shall immediately become null and void.

 

7. Binding Effect. This Agreement may be assigned to any successor or successors
of the Company and is binding upon and inures to the benefit of any person
lawfully claiming under you.

 

8. Entire Agreement. This Agreement along with the Plan constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to the PPUs granted hereby. Without limiting the scope
of the preceding sentence, all prior understandings and agreements, if any,
among the parties hereto relating to the subject matter hereof are hereby null
and void and of no further force and effect.

 

-2-

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

9. Modifications. Any modification of this Agreement shall be effective only if
it is in writing and signed by both you and an authorized officer of the
Company.

 

10. Governing Law. This grant shall be governed by, and construed in accordance
with, the laws of the State of Colorado, without regard to conflicts of laws
principles thereof.

 

11. Plan Controls. By accepting this Grant, you acknowledge and agree that the
PPUs are granted under and governed by the terms and conditions of this
Agreement and the Plan, a copy of which has been furnished to you. In the event
of any conflict between the Plan and this Agreement, the terms of the Plan shall
control. All decisions or interpretations of the Committee upon any questions
relating to the Plan or this Agreement are binding, conclusive and final on all
persons.

 

DCP MIDSTREAM GP, LLC By:  

 

Name:  

 

Title:  

 

 

Grantee Acknowledgement and Acceptance By:  

 

Name:  

 

 

-3-

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

Performance Schedule

The Performance Period is                      through                     .
Vesting for Performance Phantom Units will range from 0% - 200% with no payout
if threshold performance is not achieved as determined by the Compensation
Committee of the Board of Directors in its sole and absolute discretion.

The measure determining the number of performance units that vest over the
Performance Period will be total shareholder return (TSR). The peer group for
measuring TSR is set forth in Attachment A. If the TSR ranking over the
Performance Period is equal or less than the 25th percentile, 0% to 50% of the
performance units will vest, as determined by the Compensation Committee. If the
TSR ranking over the Performance Period is greater than the 25th percentile but
less than or equal to the 50th percentile, 50% to 100% of the performance units
will vest, as determined by the Compensation Committee. If the TSR ranking over
the Performance Period is greater than the 50th percentile but less than or
equal to the 75th percentile, 100% to 150% of the performance units will vest,
as determined by the Compensation Committee. If the TSR ranking over the
Performance Period is greater than the 75th percentile, 150% to 200% of the
performance units will vest, as determined by the Compensation Committee. TSR is
computed by using data obtained from Bloomberg for the attached peer group and
will incorporate the average closing prices of the twenty trading days ending on
December 31,          and December 31,         . In addition:

 

  •  

If any company originally named to the TSR peer group becomes insolvent during
the Performance Period, it will remain a member of the peer group for purposes
of ranking peer group TSR, but it will drop to the bottom of the TSR ranking.

 

  •  

If any member of the peer group is acquired by a company outside of the peer
group, it will fall out of the peer group.

 

  •  

If there is a combination of any of the peer group companies during the
Performance Period, the performance of the surviving entities will be used

 

  •  

No new companies will be added to the peer group during the Performance Period
(including a non-peer group company that acquires a member of the peer group).

 

-4-

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

      Attachment A    Ticker    1    CPNO    Copano 2    CMLP    Crestwood
Midstream Partners 3    DPM    DCP Midstream Partners 4    DEP    Duncan Energy
Partners 5    EEP    Enbridge Energy Partners 6    EPD    Enterprise Products
Partners 7    NYGY    Inergy 8    MWE    MarkWest 9    OKS    ONEOK Partners 10
   PVR    Penn Virginia Resources 11    RGNC    Regency 12    NGLS    Targa
Resources 13    WES    Western Gas Partners 14    WPZ    Williams Partners

 

-5-