Exhibit
10.3


 


	
  

  	
   

  	
   

  PLAINS 

  ALL AMERICAN

  



 


TRANSACTION GRANT AGREEMENT


 


September 9,
2010


 


[name
and address]


 


Re:  Grant of MLP Phantom Units


 


Dear
[name]:


 


I
am pleased to inform you that Plains All American Pipeline, L.P. (“PAA” or the “Partnership”)
hereby grants to you a total of [amount] MLP Phantom Units, as described below,
certain of which include tandem Distribution Equivalent Rights (“DERs”).  The MLP Phantom Units represent the right to
receive, upon vesting as provided below, equity securities of PAA Natural Gas
Storage, L.P. (the “MLP”).  Your MLP
Phantom Units are denominated by reference to the currently outstanding series
and classes of MLP equity, as follows:


 


A.           [one-third amount] MLP
Phantom Units shall be denominated in Common Units of the MLP (the “Phantom
Common Units”);


 


B.             [one-third amount] MLP
Phantom Units shall be denominated in Series A Subordinated Units of the
MLP (the “Phantom Series A Units”); and


 


C.             [one-third amount] MLP
Phantom Units shall be denominated in Series B Subordinated Units of the
MLP (the “Phantom Series B Units”).


 


A
DER is a right to receive a quarterly cash payment from PAA equal to the
distributions made by the MLP with respect to a Common Unit or Series A
Subordinated Unit until such time that the tandem Phantom Common Unit or
Phantom Series A Unit is paid to you or forfeited.  No DERs are granted with respect to the
Phantom Series B Units.  The terms
of this grant are set forth below.


 


1.                                       Subject to the
further vesting provisions below, the MLP Phantom Units will vest (become
payable) and be subject to payment as follows:


 


(a)                                  50% of the
Phantom Common Units will vest on May 5, 2011 and the remaining 50% on May 5,
2012, respectively, and be payable on or within 20 Business Days of the
applicable vesting date, in Common Units equal in amount to the number of
Phantom Common Units vesting.  Upon
vesting and payment, the DERs associated with your Phantom Common Units will
expire.  Notwithstanding the foregoing,
you shall be entitled to receive a proportionate 


 


1

















 


share
of the May 2011 and May 2012 distribution received by PAA with
respect to the delivered units.


 


(b)                                 100% of the
Phantom Series A Units will vest upon satisfaction of the requirements
necessary to achieve conversion of the Series A Subordinated Units into
Common Units as set forth in the MLP Partnership Agreement.  Because the Series A Subordinated Units
will convert into Common Units on the first Business Day following the
satisfaction of such requirements, upon vesting of the Phantom Series A
Units, PAA will deliver Common Units in lieu of the Series A Subordinated
Units underlying the Phantom Series A Units.  Any Phantom Series A Units that have not
vested as of December 31, 2018 will be automatically cancelled on such
date. DERs associated with the Phantom Series A Units will expire on the
first Business Day following vesting or cancellation of such units.


 


(c)                                  The Phantom Series B
Units will vest as follows: (i) 20% of your Phantom Series B Units
will vest upon satisfaction of the requirements necessary to achieve conversion
of the First Tranche Series B Subordinated Units into Series A
Subordinated Units or Common Units, as set forth in the MLP Partnership
Agreement; (ii) 21% of your Phantom Series B Units will vest upon
satisfaction of the requirements necessary to achieve conversion of the Second
Tranche Series B Subordinated Units into Series A Subordinated Units
or Common Units, as set forth in the MLP Partnership Agreement; (iii) 15%
of your Phantom Series B Units will vest upon satisfaction of the
requirements necessary to achieve conversion of the Third Tranche Series B
Subordinated Units into Series A Subordinated Units or Common Units, as
set forth in the MLP Partnership Agreement; (iv) 22% of your Phantom Series B
Units will vest upon satisfaction of the requirements necessary to achieve
conversion of the Fourth Tranche Series B Subordinated Units into Series A
Subordinated Units or Common Units, as set forth in the MLP Partnership
Agreement; and (v) 22% of your Phantom Series B Units will vest upon
satisfaction of the requirements necessary to achieve conversion of the Fifth
Tranche Series B Subordinated Units into Series A Subordinated Units
or Common Units, as set forth in the MLP Partnership Agreement.  Upon vesting, the Phantom Series B Units
will be payable by PAA in Series A Subordinated Units or in Common Units
it receives upon conversion of the Series B Subordinated Units.  You shall be entitled to receive a
proportionate share of any distribution payment received by PAA upon conversion
of the Series B Subordinated Units pursuant to the terms of Section 5.12
of the MLP Partnership Agreement. Any Phantom Series B Units that have not
vested as of December 31, 2018 will be automatically cancelled on such
date.


 


(d)                                 Notwithstanding
any other provision of this Agreement, all of your Phantom Series A Units
and Phantom Series B Units will vest upon conversion of the Series A
Subordinated Units and Series B Subordinated Units pursuant to the terms
of Section 11.4 of the MLP Partnership Agreement.


 


2.                                       Subject to the
exceptions below, in the event of the termination of your employment with the
Company and its Affiliates, all of your then outstanding MLP Phantom Units 


 


2

















 


and
associated DERs shall automatically be forfeited as of the date of
termination.  The exceptions are:


 


(a)                                  If the Company
or its Affiliates terminate your employment other than a Termination for Cause:
(i) any unvested Phantom Common Units shall be deemed nonforfeitable on
the date of termination, and shall be payable on the next following
Distribution Date; and (ii) any DERs associated with the unvested,
nonforfeitable Phantom Common 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 1(a);


 


(b)                                 If your
employment with the Company or its Affiliates is terminated 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 MLP Phantom Units and tandem DERs shall not be forfeited on such
date and: (i) such MLP Phantom Units shall vest or be cancelled in
accordance with paragraph 1 above; and (ii) such DERs shall be payable and
shall expire in accordance with paragraphs 1(a) and 1(b) above; and


 


(c)                                  In the event of
a Change in Status, all of your then outstanding MLP Phantom Units and tandem
DERs shall be deemed 100% non-forfeitable on such date, and such MLP Phantom
Units shall be payable on the next following Distribution Date.


 


3.                                       Notwithstanding
anything herein to the contrary:


 


(a)                                  If any vesting
hereunder is generally coincident with the conversion of any tranche of the
underlying denominated series or class of securities into a different series or
class, PAA will satisfy its obligations hereunder by delivery of units of the
class or series into which the underlying denominated series or class is
converted.  PAA will deliver units in
satisfaction of its obligations as soon as reasonably practicable, but not more
than 20 Business Days following each vesting date;


 


(b)                                 In the event
that any vesting hereunder or any actions associated with such vesting would
create potential “short-swing” liability under Section 16 of the
Securities Exchange Act, the Company in its sole discretion may postpone such
vesting until such time as determined by the Company, but no later than March 13
of the year following the year in which the Phantom Units would otherwise have
vested; and


 


(c)                                  To the extent
any of the rights accruing to you hereunder may constitute “deferred
compensation” within the meaning of Section 409A of the I.R.C., it is the
intention of the Company that the provisions of this agreement comply in all
respects with Section 409A.  If the
Company determines after the date hereof that an amendment hereto is necessary
to ensure the foregoing, it may make such amendment effective as of the grant
date or any later date, without 


 


3

















 


your
consent (provided that any such amendment shall be narrowly tailored to achieve
such compliance with as little deviation from the intent of this agreement as
of the date hereof as is practicable).


 


4.                                       Upon payment
pursuant to a DER, you agree that PAA may withhold any taxes due from your
compensation as required by law.  Upon
vesting of an MLP Phantom Unit, you agree that PAA may withhold any taxes due
from your compensation as required by law, which, in the sole discretion of
PAA, may include withholding a number of Common Units or Series A
Subordinated 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).


 


The
phrase “Change in Status” means (A) the termination of your employment by
the Company and its Affiliates 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 or
its Affiliates; provided, however, a termination by you under Clause (B) 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, (2) the Company fails to remedy the condition (or cause it to
be remedied) within the 30-day period following such notice and (3) you
terminate your employment within 10 days of the end of the 30-day period. As
used herein, a termination of your employment means a “separation from service”
for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”).


 


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 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.


 


4

















 


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
Plains All American GP LLC.


 


Terms
used but not defined herein shall have the meanings set forth in the Second
Amended and Restated Agreement of Limited Partnership of PAA Natural Gas
Storage, L.P. (as amended, the “MLP Partnership Agreement”); provided, however, that terms used but not defined in the
definitions of “Change in Status,” “Change of Control” and “Termination for
Cause” shall have the meanings set forth in the Third Amended and Restated
Agreement of Limited Partnership of Plains All American Pipeline, L.P. (as amended,
the “Partnership Agreement”).  Copies of
the MLP Partnership Agreement and Partnership Agreement are available upon
request.


 


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.  Please execute and return
a copy of this grant letter to me no later than 10 Business Days after your
receipt, and retain a copy for your files.


 


	
   

  	
  Plains All American
  Pipeline, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PAA GP LLC, its general
  partner

  
	
   

  	
  By:

  	
  Plains AAP, L.P., its sole
  member

  
	
   

  	
  By:

  	
  Plains All American GP
  LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


 


5