Exhibit 10.2

ATLAS PIPELINE PARTNERS, L.P.

2010 LONG-TERM INCENTIVE PLAN

PHANTOM UNIT GRANT AGREEMENT

THIS PHANTOM UNIT GRANT (this “Grant”) is made as of             , 2010 (the
“Date of Grant”) by and between Atlas Pipeline Partners L.P. (“APL”) and
                     (the “Participant”).

WHEREAS, the Participant has elected to surrender                      bonus
units (“Bonus Units”) granted under the
                                                          in exchange for
Phantom Units under the Atlas Pipeline Partners, L.P., 2010 Long-Term Incentive
Plan (the “Plan”);

WHEREAS, the Phantom Units under this Grant have been granted to the Participant
in exchange for the surrendered Bonus Units, and the surrendered Bonus Units
have been cancelled; and

WHEREAS, all defined terms not defined in this Grant shall have the meanings
given to such terms in the Plan.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

1. Award of Phantom Units; Cancellation of Bonus Units.

(a) The Participant is hereby awarded                      (            )
Phantom Units (“Phantom Units”) pursuant to the Plan. Each Phantom Unit
represents the right of the Participant to receive a common unit of Atlas
Pipeline Partners, L.P. (a “Unit”), subject to the vesting and other terms of
this Grant.

(b) The Participant hereby confirms and agrees that the Participant’s Bonus
Units are cancelled, and no payments shall be made under the Bonus Units.

2. Vesting.

(a) Subject to such further limitations as are provided herein, the Phantom
Units shall vest and become payable on the following dates, in cumulative
fashion:

 

Date

   Number or % of
Phantom  Units That Vest  

            , 2010

   33 % 

            , 2011

   33 % 

            , 2012

   34 % 

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(b) From and after the Date of Grant through the date on which the Phantom Units
become fully vested pursuant to subparagraph (a) above, any unvested Phantom
Units remain subject to forfeiture in accordance with the terms of Section 4.
Such period shall be known herein as the “Restriction Period.”

(c) The Phantom Units otherwise vesting on the dates listed above shall vest
instead on the date of the occurrence of a Change in Control (as defined below)
if such date occurs before the otherwise stated vesting date.

(d) If the Participant’s Employment is terminated by the Company or an Affiliate
without Cause, or is terminated because of the Participant’s death, all of the
Participant’s Phantom Units shall automatically vest on the termination date.

(e) If the foregoing vesting schedule would produce fractional Units, the number
of Phantom Units shall be rounded down to the nearest whole Unit. Any unvested
Units shall vest on the final vesting date if the Participant is still employed
by the Company or an Affiliate.

(f) For purposes of this Grant, “Company” shall mean Atlas Pipeline Partners GP,
LLC.

(g) For purposes of this Grant, “Employment” shall mean employment of the
Participant as an officer or employee of the Company or an Affiliate.

(h) For purposes of this Grant, “Affiliate” shall mean (i) any entity that,
directly or indirectly, controls or is controlled by the Company or Atlas
Pipeline Mid-Continent, LLC, (ii) any entity in which the Company or Atlas
Pipeline Mid-Continent, LLC has a significant equity interest, in either case as
determined by the Committee, and (iii) to the extent not included in clause
(i) or (ii) above, Atlas Pipeline Mid-Continent, LLC, Atlas America
Mid-Continent, Inc. and APL.

(i) For purposes of this Grant, “Cause” shall mean, as determined by the
Committee in its sole discretion, that the Participant has (i) committed an act
of malfeasance or wrongdoing affecting the Company or any Affiliate,
(ii) breached any covenant not to compete or employment contract with the
Company or an Affiliate or (iii) otherwise engaged in conduct that would warrant
the Participant’s discharge from employment or service with the Company or an
Affiliate because of the Participant’s negative effect on the Company or an
Affiliate.

(j) For purposes of this Grant, “Change in Control” shall mean a change in the
ownership of the Atlas Pipeline Mid-Continent, LLC or APL, or a change in the
ownership of a substantial portion of the assets of either company. No event
shall be a Change in Control event unless it is a “change in control event” as
defined in Section 1.409A-3(i)(5) of the Treasury regulations under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”). A change in
ownership shall occur only if ownership interests in either company are acquired
by any one person or more than one person acting as a group and, after the
acquisition, the acquiring person or persons own more than 50% of the total
value or total voting power of such ownership interests. A change in the
ownership of a substantial portion of the assets of either company

 

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shall occur only if one person or more than one person acting as a group
acquire, during the 12-month period ending on the date of the last such
acquisition, assets that have a total gross fair market value equal to more than
50% of the total gross fair market value of all the assets of such company.

3. Payment of Phantom Units

(a) Within thirty (30) days after the applicable vesting date, APL shall
distribute to the Participant Units equal to the number of Phantom Units vesting
on the vesting date. Such payment shall constitute taxable compensation to the
Participant.

(b) Notwithstanding the above general rule with regard to payment, if the
Participant’s Employment is terminated as a result of the Participant’s death,
vesting shall occur immediately, but payment shall be made in accordance with
the vesting schedule in Section 2 as if the Participant were still employed on
the dates listed in that schedule. In the event of a subsequent Change in
Control, however, any remaining payments shall be made within thirty (30) days
of the Change in Control.

(c) Notwithstanding the above general rule with regard to payment, the Committee
may delay any payment to the extent that the payment cannot be deducted for tax
purposes under the pay cap rules of Section 162(m) of the Code, if and to the
extent permitted by Section 409A of the Code. Any payment so delayed shall be
made as soon as reasonably practicable following the first date on which the
Committee anticipates or reasonably should anticipate that, if the payment were
made on such date, the Company’s deduction with respect to such payment would no
longer be restricted due to the application of the pay cap rules of
Section 162(m). No such delay shall be allowed if the delay would cause the
payment to be subject to additional taxes or penalties pursuant to Section 409A
of the Code.

(d) Notwithstanding the above general rules with regard to payment, all payments
shall be subject to compliance with the requirements of Section 409A of the Code
as described below.

4. Forfeiture.

(a) If the Participant’s Employment is terminated during the Restriction Period,
other than for those reasons listed in Section 2 above, the Phantom Units, to
the extent not previously vested, shall immediately terminate and become null
and void.

(b) Notwithstanding any other provisions set forth herein or in the Plan, if the
Participant shall (i) commit any act of malfeasance or wrongdoing affecting the
Company or any Affiliate, (ii) breach any covenant not to compete, or employment
contract, with the Company or an Affiliate or (iii) engage in conduct that would
warrant the Participant’s discharge from Employment for cause, any unvested
Phantom Units shall immediately terminate and become null and void.

5. Distribution Equivalents with respect to Phantom Units. Until such time as
the Phantom Units are paid or forfeited, if a distribution is paid by APL on its
Units, APL shall pay to the Participant, in cash, the amount of the
corresponding Distribution Equivalent attributable to the Participant’s then
outstanding Phantom Units. The Distribution Equivalent shall be paid to the
Participant on the date on which the distribution is paid on Units.

 

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6. Transferability.

(a) Except as provided in (b) below, no Phantom Units and no rights under any
such Phantom Units may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by the Participant, and any such purported
assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall
be void and unenforceable against the Company or any Affiliate.

(b) A Participant may, in the manner established by the Committee, designate a
beneficiary or beneficiaries to receive any cash distributable with respect to
Phantom Units upon the death of the Participant.

7. Acknowledgment by the Participant. By executing this Grant, the Participant
hereby acknowledges that, with respect to any right to payment from the Plan,
the Participant is and shall be an unsecured general creditor of APL without any
preference as against other unsecured general creditors of APL, and the
Participant hereby covenants for himself, and anyone at any time claiming
through or under the Participant, not to claim any such preference, and hereby
disclaims and waives any such preference which may at any time be at issue, to
the fullest extent permitted by applicable law.

8. Withholding. The Company or an Affiliate employing the Participant is
authorized to withhold from any payment (including distribution of Units) due
under this Grant or from any compensation or other amount owing to the
Participant, the amount of any applicable taxes payable in respect of this
Grant, and to take such other action as may be necessary in the opinion of the
Company or the Affiliate to satisfy its withholding obligations for the payment
of such taxes. Payments to the Participant pursuant to this Grant shall be
treated as taxable employee compensation from the Company or Affiliate to the
Participant. With respect to payments in the form of Units, the Participant may
elect to satisfy the applicable tax withholding obligations with respect to the
Phantom Units either (i) by having the Company withhold Units otherwise
distributable to the Participant, up to the legally required minimum applicable
tax withholding amount, with such Units valued at their Fair Market Value, or
(ii) by delivering to the Company a check in the amount of the required tax
withholding.

9. Terms and Conditions. This Grant is made pursuant to the Plan, the terms of
which are incorporated herein by reference, and this Grant shall in all respects
be interpreted and administered in accordance with the Plan. By accepting this
Grant, the Participant hereby agrees to be bound by the interpretations and
determinations of the Committee with respect to this Grant and the Plan.

10. No Rights as Unit Holder. The Participant shall not have the right to vote
with respect to any Phantom Units or otherwise have any rights as a Partnership
unit holder with respect thereto.

 

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11. Employment Not Affected. This Grant shall not be construed as giving the
Participant the right to continued Employment. Further, the Company or an
Affiliate may at any time dismiss the Participant from Employment, free from any
liability or any claim under the Plan, unless otherwise expressly provided in
the Plan or this Grant.

12. Amendments. The Company may waive any conditions or rights under and amend
any terms of this Grant, provided no change shall materially reduce the benefit
to the Participant without the consent of the Participant.

13. Governing Law. The validity, construction, and effect of this Grant shall be
determined in accordance with the laws of the State of Delaware and applicable
federal law.

14. Section 409A of the Internal Revenue Code. This Grant is intended to comply
with Section 409A of the Code, or an exemption, and payments may only be made
under this Grant upon an event and in a manner permitted by Section 409A of the
Code, to the extent applicable. In no event may the Participant, directly or
indirectly, designate the calendar year of a payment. Each payment under this
Grant shall be treated as a separate payment for purposes of Section 409A.
Payments upon a termination of Employment may only be made upon a “separation
from service” as defined under Section 409A. Notwithstanding anything in this
Grant to the contrary, if required by Section 409A, if the Participant is
considered a “specified employee” for purposes of Section 409A and if payment of
any amounts under this Grant is required to be delayed for a period of six
months after separation from service pursuant to Section 409A, payment of such
amounts shall be delayed as required by Section 409A, and the accumulated
amounts shall be paid in a lump sum payment within ten days after the end of the
six-month postponement period. If the Participant dies during the six-month
postponement period prior to the payment of benefits, the amounts withheld on
account of Section 409A shall be paid to the personal representative of the
Participant’s estate within 60 days after the date of the Participant’s death.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, this Grant has been duly executed as of the Date of Grant.

 

Witness:     ATLAS PIPELINE PARTNERS, L.P.                   By: Atlas Pipeline
Partners GP, LLC, General Partner       Name:       Title:  

I hereby accept this Grant, and I agree to be bound by the terms of the Plan and
this Grant. I further agree that all of the decisions and interpretations of the
Committee with respect thereto shall be final and binding.

 

Participant:      

 

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