exv10w9






Exhibit 10.9









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





 









 
















	 	 	 	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”).








 









 








 - 3 -




			
	 	 	 
	[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: