Exhibit 10.9
(PAA NATURAL GAS STORAGE LOGO) [h77418h7741800.gif]
November 2, 2010

     
[name and address]
  Note: This letter replaces and supersedes
original grant letter dated May 24, 2010

     Re: Grant of Phantom Units
Dear [name]:
     I am pleased to inform you that you have been granted [amount] Phantom
Units as of the above date pursuant to the Company’s 2010 Long-Term Incentive
Plan (the “Plan”). The terms and conditions of this grant are as set forth
below:

  1.   Subject to the further provisions of this Agreement, your Phantom Units
shall vest (become payable in the form of one Common Unit of PAA Natural Gas
Storage, L.P. for each Phantom Unit) as follows; (i) 20% shall vest as of the
date on which all of the Series A Subordinated Units of the Partnership convert
into Common Units, (ii) 20% shall vest as of the date on which the First Tranche
Series B Subordinated Units convert into either Series A Subordinated Units or
Common Units, (iii) 20% shall vest as of the date on which the Second Tranche
Series B Subordinated Units convert into either Series A Subordinated Units or
Common Units, (iv) 20% shall vest as of the date on which the Third Tranche
Series B Subordinated Units convert into either Series A Subordinated Units or
Common Units, and (v) 20% shall vest as of the date on which the Fourth Tranche
Series B Subordinated Units convert into either Series A Subordinated Units or
Common Units. Common Units delivered in connection with the vesting of Phantom
Units hereunder (after giving effect to any units withheld for taxes) shall
commence receiving distributions in a manner consistent with the commencement of
distribution receipt by Common Units delivered in connection with the conversion
of the First, Second, Third and Fourth Tranche Series B Subordinated Units,
respectively, as provided in Section 5.12 of the Partnership Agreement. Any
Phantom Units that remain outstanding as of January 1, 2018 shall expire without
vesting on such date.     2.   In the event of the termination of your
employment with the Company and its Affiliates (other than in connection with a
Change in Status or by reason of your death or “disability,” as defined in
paragraph 3 below), all of your then outstanding Phantom Units shall
automatically be forfeited as of the date of termination; provided, however,
that if the Company or its Affiliates terminate your employment other than a
Termination for Cause, any unvested Phantom Units that have satisfied all
vesting criteria as of the date of termination but for the passage of time shall
be

 

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(PAA NATURAL GAS STORAGE LOGO) [h77418h7741800.gif]

      deemed nonforfeitable on the date of termination, and shall vest on the
next following Distribution Date.     3.   In the event of termination of your
employment with the Company and its Affiliates by reason of your death or your
“disability” (a physical or mental infirmity that impairs your ability
substantially to perform your duties for a period of eighteen months or that the
Company otherwise determines constitutes a “disability”), your then outstanding
Phantom Units shall not be forfeited on such date, and such Phantom Units shall
vest or expire in accordance with paragraph 1 above. As soon as administratively
practicable after the vesting of any Phantom Units pursuant to this paragraph 3,
payment will be made in cash in an amount equal to the Market Value of the
number of Phantom Units vesting.     4.   In the event of a Change in Status,
all of your then outstanding Phantom Units shall be deemed 100% nonforfeitable
on such date, and such Phantom Units shall vest in full upon the next
Distribution Date.     5.   Upon vesting of a Phantom Unit, you agree that the
Company may withhold any taxes due from your compensation as required by law,
which (in the sole discretion of the Company) may include withholding a number
of Common Units otherwise payable to you.

     As used herein, the phrase “Distribution Date” means the day in February,
May, August or November in any year (as context dictates) that is 45 days after
the end of the most recently completed calendar quarter (or, if not a business
day, the closest previous business day). “Market Value” means the average of the
closing sales prices for a Common Unit on the New York Stock Exchange for the
five trading days preceding the then most recent “ex dividend” date for payment
of a distribution by the Partnership.
     The phrase “Change in Status” means (A) the termination of your employment
by the Company other than a Termination for Cause, within two and a half months
prior to or one year following a Change of Control (the “Protected Period”), or
(B) the termination of your employment by you due to the occurrence during the
Protected Period, without your written consent, of (i) any material diminution
in your authority, duties or responsibilities, (ii) any material reduction in
your base salary or (iii) any other action or inaction that constitutes a
material breach of this agreement by the Company. A termination by you shall not
be a Change in Status unless (1) you provide written notice to the Company of
the condition in (B)(i),(ii) or (iii) that would constitute a Change in Status
within 90 days of the initial existence of the condition and (2) the Company
fails to remedy the condition within the 30-day period following such notice. As
used herein, a termination of the Employee’s employment means a “separation from
service,” for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”).

 

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      [name]   November 2, 2010

     The phrase “Change of Control” means, and shall be deemed to have occurred
upon the occurrence of, one or more of the following events: (i) any transaction
or other occurrence as a result of which Plains All American Pipeline, L.P.
retains neither direct nor indirect control of the Company (or successor general
partner of the Partnership, if applicable), (ii) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Partnership or the Company to any
Person and/or its Affiliates, other than to the Partnership (or any of its
subsidiaries), the Company, or Plains All American Pipeline, L.P., including any
employee benefit plan thereof; (iii) a consolidation, reorganization, merger or
any other similar transaction involving (a) a Person other than the Partnership
(or any of its subsidiaries), the Company, or Plains All American Pipeline, L.P.
(or its Affiliates) and (b) the Partnership, the Company or both, or (iv) any
Person, including any partnership, limited partnership, syndicate or other group
deemed a “person” for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended, becoming after the date hereof the beneficial
owner, directly or indirectly, of more than 49.9% of the membership interest in
the Company. Notwithstanding the foregoing, no Change of Control shall be deemed
to have occurred in connection with a restructuring or reorganization related to
a securitization and sale to the public of direct or indirect equity interests
in the general partner interest of the Partnership if Plains All American
Pipeline, L.P. continues to have the power to elect, directly or indirectly, the
majority of the Board of Directors (or equivalent governing body) of the general
partner of the Partnership.
     The phrase “Termination for Cause” shall mean severance of your employment
with the Company or its Affiliates based on your (i) failure to perform your job
function in accordance with standards described to you in writing, or
(ii) violation of the Company’s Code of Business Conduct (unless waived in
accordance with the terms thereof), in each case, with the specific failure or
violation described to you in writing.
     The “Company” refers to PNGS GP LLC. The “Partnership” refers to PAA
Natural Gas Storage, L.P.
     Terms used herein that are not defined herein shall have the meanings set
forth in the Plan or, if not defined in the Plan, in the Second Amended and
Restated Agreement of Limited Partnership of PAA Natural Gas Storage, L.P., as
amended (the “Partnership Agreement”). By signing below, you agree that the
Phantom Units and DERs granted hereunder are governed by the terms of the Plan.
Copies of the Plan and the Partnership Agreement are available upon request.

 

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      [name]   November 2, 2010

In order for this grant to be effective you must designate a beneficiary that
will be entitled to receive any benefits payable under this grant in the event
of your death. Unless you indicate otherwise by checking the appropriate box the
named beneficiaries on this form will serve as your beneficiaries for all
previous LTIP grants. Please execute and return a copy of this grant letter to
me and retain a copy for your records.

                  PAA NATURAL GAS STORAGE, L.P.    
 
           
 
  By:   PNGS GP LLC    
 
           
 
  By:   PLAINS ALL AMERICAN GP LLC    
 
         (pursuant to Omnibus Agreement)    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

   Beneficiary Designation

         
Primary Beneficiary Name
  Relationship   Percent (Must total 100%)  
 
       
Secondary Beneficiary Name
  Relationship   Percent (Must total 100%)  

o Check this box only if designation does not apply to prior grants

               
[name]
   
 
       
No. of Units:
[amount]    
 
 
 
   
Dated: