Exhibit 10.1

 

 

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PLAINS

ALL AMERICAN

 

February 21, 2013

 

«First» «MI» «Last»

«Address1»

«City» «State» «Zip»

 

Re:                             Grant of Phantom Units

 

Dear «First»:

 

I am pleased to inform you that you have been granted «Units» Phantom Units as
of the above date pursuant to the Company’s Long-Term Incentive Plan (the
“Plan”).  In addition, in tandem with each Phantom Unit you have been granted a
distribution equivalent right (a “DER”). A DER represents the right to receive a
cash payment equivalent to the amount, if any, paid in cash distributions on one
Common Unit of Plains All American Pipeline, L.P. (“PAA” or the “Partnership”)
to the holder of such Common Unit.  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
for each Phantom Unit) as follows: (i) one-third shall vest upon the later to
occur of the August 2016 Distribution Date and the date on which the Partnership
pays an annualized quarterly distribution of at least $2.35 per unit,
(ii) one-third shall vest upon the later to occur of the August 2017
Distribution Date and the date on which the Partnership pays an annualized
quarterly distribution of at least $2.50 per unit, and (iii) one-third shall
vest upon the later to occur of the August 2018 Distribution Date and the date
on which the Partnership pays an annualized quarterly distribution of at least
$2.65 per unit.  Any remaining Phantom Units that are not vested by the
August 2019 Distribution Date, and any tandem DERs (regardless of vesting)
associated with such Phantom Units, shall expire on such date.

 

2.              Subject to the further provisions of this Agreement, your DERs
shall vest (become payable in cash) as follows: (i) one-third shall vest upon
and effective with the date on which the Partnership pays an annualized
quarterly distribution of at least $2.35 per unit, (ii) one-third shall vest
upon and effective with date on which the Partnership pays an annualized
quarterly distribution of at least $2.50 per unit, and (iii) one-third shall
vest upon and effective with the date on which the Partnership pays an
annualized quarterly distribution of at least $2.65 per unit.

 

3.                    Your DERs shall not accrue payments prior to vesting.

 

4.                    The number of Phantom Units subject to this award and any
distribution level required for vesting under paragraphs 1 or 2 above shall be
proportionately reduced

 

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or increased for any split or reverse split, respectively, of the Units, or any
event or transaction having similar effect.

 

5.                    Upon vesting of any Phantom Units, an equivalent number of
DERs will expire.  Any such DERs that are vested prior to, or that would vest as
of, the Distribution Date on which the Phantom Units vest, shall be payable on
such Distribution Date prior to their expiration.

 

6.                    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 7 below),
all of your then outstanding DERs (regardless of vesting) and 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 as a result of a Termination for Cause: (i) any unvested Phantom Units that
have satisfied all vesting criteria as of the date of termination but for the
passage of time shall be deemed nonforfeitable on the date of termination, and
shall vest on the next following Distribution Date; (ii) any DERs associated
with the unvested, nonforfeitable Phantom Units described in clause (i) shall
not be forfeited on the date of termination, but shall be payable and shall
expire in accordance with paragraph 5 above; and (iii) any unvested Phantom
Units that have satisfied none of the vesting criteria as of the date of
termination, and any tandem DERs (regardless of vesting) associated with such
Phantom Units, shall automatically be forfeited as of the date of termination.

 

7.                    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 and
tandem DERs shall not be forfeited on such date, and (i) such DERs shall vest in
accordance with paragraph 2 above and expire in accordance with paragraph 1 or
paragraph 5 above, as applicable, and  (ii) such Phantom Units shall vest or
expire in accordance with paragraph 1 above; provided, however, that such
vesting of Phantom Units shall occur either (x) on the date the Partnership pays
the quarterly distribution specified in clause (i), (ii) or (iii) of paragraph 1
(and in the proportion indicated therein) without regard to any requirement for
further passage of time or (y) if the relevant quarterly distribution has been
paid prior to the date of termination, on the next following Distribution Date. 
As soon as administratively practicable after the vesting of any Phantom Units
pursuant to this paragraph 7, payment will be made in cash in an amount equal to
the Market Value of the number of Phantom Units vesting.

 

8.                    In the event of a Change in Status, all of your then
outstanding Phantom Units and tandem DERs shall be deemed 100% nonforfeitable on
such date, and such Phantom Units shall vest in full upon the next Distribution
Date.

 

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9.                    Upon payment pursuant to a DER, you agree that the Company
may withhold any taxes due from your compensation as required by law.  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, (i) the “Company” refers to Plains All American GP LLC;
(ii) “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); and (iii) “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.

 

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) the Company ceasing
to retain direct or indirect control of the general partner of the Partnership;
(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 the Company, 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 the Company and (b) the
Partnership, the Company or both; (iv) the Persons who own membership interests
in the Company on the date hereof cease to beneficially own, directly or
indirectly, more than 50% of the membership interest in the Company; or (v) 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 if (x) the Company retains direct or indirect
control over the general partner and (y) the Persons

 

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who own membership interests in the Company on the date hereof continue to
beneficially own, directly or indirectly, more than 50% of the membership
interest in the Company.

 

The phrase “Termination for Cause” shall mean severance of your employment with
the Company or its Affiliates based on your (i) failure to perform the duties
and responsibilities of your position at an acceptable level as reasonably
determined in good faith by the CEO of the Company, 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.

 

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 Fourth Amended and Restated
Agreement of Limited Partnership of Plains All American Pipeline, L.P., as
amended (the “Partnership Agreement”).

 

This award is intended to either (i) qualify as a “short-term deferral” under
Section 409A of the Internal Revenue Code of 1986, as amended, or (ii) comply
with the provisions of Section 409A.  If it is determined that any payments or
benefits to be made or provided under this Agreement do not comply with
Section 409A, the parties agree to amend this Agreement or take such other
actions as reasonably necessary or appropriate to comply with Section 409A while
preserving the economic agreement of the parties.

 

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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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

 

 

PLAINS ALL AMERICAN PIPELINE, L.P.

 

 

 

By: PAA GP LLC

 

By: PLAINS AAP, L.P.

 

By: PLAINS ALL AMERICAN GP LLC

 

 

 

 

 

 

By:

 

 

Name:

Richard McGee

 

Title:

Executive Vice President & General Counsel

 

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

 

 

«First» «MI» «Last»

 

 

 

 

 

 

Units:

«Units»

 

 

 

 

 

 

Dated:

 

 

 

 

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