EXHIBIT
10.1


 


PERFORMANCE
OPTION GRANT AGREEMENT


 


March      ,
2005


 


To:                              [Name]


[Address]


 


Re:                               Grant of Performance Options


 


Dear [first name]:


 


I
am pleased to inform you that Plains All American GP LLC and Plains AAP, L.P.
(together, the “Company”) hereby jointly grant to you [number] options (the “Options”)
with respect to common units of Plains All American Pipeline, L.P. (the “MLP
Units”) on the following terms:


 


1.                                       Each Option represents the right
to purchase a single MLP Unit at a purchase price of $22.00 per MLP Unit;
provided, however, that the purchase price with respect to an MLP Unit shall be
reduced by an amount equal to 80% of the value of any distributions made with
respect to an MLP Unit during the period beginning on June 7, 2001 and
ending on the date record title to such MLP Unit is transferred in connection
with the exercise of the Option.  For
purposes of the foregoing, a distribution will be deemed made on the record
date for such distribution.


 


2.                                       Subject to the further
provisions below, the Options shall become vested (exercisable) on the later to
occur of (i) January 1, 2008 and (ii) the date on which the
quarterly distribution declared on the common units of Plains All American
Pipeline, L.P. equals or exceeds $0.675. Notwithstanding the foregoing, all of
the Options shall vest immediately upon occurrence of a Change in Control of
the Company.  A “Change in Control of the
Company” shall conclusively be deemed to have occurred on the date when (i) any
person (other than Plains Resources Inc. or its wholly owned subsidiaries),
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, becomes the beneficial owner, directly
or indirectly, of 50% or more of the membership or partnership interest in the
Company, (ii) the persons who own membership or partnership interests in
the Company as of June 8, 2001 cease to beneficially own, directly or
indirectly, more than 50% of the membership or partnership interest in the
Company or (iii) (A) Plains Resources Inc. or its subsidiaries
becomes the beneficial owner, directly or indirectly, of more than 50% of the
membership or partnership


 





















 


interest in the Company and (B) within
one year thereafter, the Company terminates your employment.


 


3.                                       All Options must be exercised by
December 31 of the year in which they vest.  Any Options not so exercised will be
forfeited.


 


4.                                       In the event of your termination
of employment with the Company and its Affiliates for any reason other than (i) your
death, (ii) your “Disability” (a physical or mental infirmity that impairs
your ability to perform substantially your duties for a period of 180
consecutive days or that the Company otherwise determines constitutes a
Disability) or (iii) in connection with a Change in Control of the
Company, all of your Options not then vested shall automatically be forfeited
unexercised as of your date of termination.


 


5.                                       In the event of your termination
of employment with the Company and its Affiliates due to your death or
Disability or in connection with a Change in Control, all of your Options shall
immediately vest.


 


6.                                       Vested Options may be exercised
by written notice to the Company at its principal executive office addressed to
the attention of its Secretary.  The
purchase price with respect to a vested Option shall be paid in full at the
time of exercise in cash or other property acceptable to the Company, which may
include, in your discretion, withholding a number of MLP Units otherwise
payable to you.


 


7.                                       Upon exercise of an Option, you
shall pay all required withholding taxes.


 


8.                                       For purposes hereof, you shall
be considered to be in the employment of the Company as long as you remain an
employee of the Company and its Affiliates. 
Any question as to whether and when there has been a termination of your
employment, and the cause of such termination, shall be determined by the
Company and its determination shall be final.


 


9.                                       This Agreement shall be binding
upon and inure to the benefit of any successors to the Company and all persons
lawfully claiming under you.


 


10.                                 These Options shall not be
transferable otherwise than (a) by will or the laws of descent and
distribution, (b) pursuant to a qualified domestic relations order as
defined in Title I of the Employee Retirement Income Security Act of 1974,
as amended, and the rules thereunder, or (c) with the consent of the
Company.


 


11.                                 This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware, without regard to conflicts of laws principles thereof.


 


By signing
below, you agree that the Options are governed by the terms of the Plains All
American 2001 Performance Option Plan, as amended (the “Plan”).  Terms used herein that are defined in the
Plan shall have the meanings set forth in the Plan. Terms used herein that are
not defined either herein or in the Plan shall have the meaning 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 Plan and the Partnership
Agreement are available upon request. 
Please execute and return this Agreement to me.  The attached copy of this Agreement is for
your records.


 


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IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of March      , 2005.


 


	
   

  	
  PLAINS ALL AMERICAN GP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Tim Moore, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLAINS AAP, L.P.

  
	
   

  	
  By Plains All American GP LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Tim Moore, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [name]

  



 


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