exv10w2







Exhibit 10.2




Targa Resources Partners

Long Term Incentive Plan




Performance Unit Grant Agreement



	 	 	 

	Grantee:

	 	                    
	 
	 	 
	Date of Grant:

	 	                     , 200  
	 
	 	 
	Number of Performance Units Granted:

	 	                    






     1. Performance Unit Grant. I am pleased to inform you that you have been granted the
above number of Performance Units with respect to Common Units (“Common Units” or “Units”) of Targa
Resources Partners LP (the “MLP”) under the Targa Resources Partners Long-Term Incentive Plan (the
“Plan”). A Performance Unit is a notional Common Unit of the MLP. Each Performance Unit also
includes a tandem Distribution Equivalent Right (“DER”). A DER is a right to receive an amount
equal to the cash distributions made with respect to a Common Unit during the Performance Period
(set forth on Attachment A) as described in Section 4. The terms of the grant are subject to the
terms of the Plan and this Performance Unit Grant Agreement (this “Agreement”), which includes
Attachment A hereto.



     2. Performance Goal and Payment. Subject to the further provisions of this Agreement,
if, and to the extent, the Performance Goal (set forth on Attachment A) is achieved for the
Performance Period, then as soon as reasonably practical following the end of the Performance
Period (but in no event later than the 15th day of March following the end of the year
during which the Performance Period ends), you will receive a number of Units calculated as the
product of: (i) the number of vested Performance Units granted hereunder, times (ii) the
Performance Percentage (set forth in Item II on Attachment A) for the Performance Period. Any
earned fractional Units shall be rounded up to the nearest whole Unit. In addition, you will
receive cash relating to the amount of the DER that you are entitled to as described in Section 4.
If, however, the minimum Performance Goal is not achieved for the Performance Period, all of your
Performance Units and DERs will be cancelled automatically without payment at the end of the
Performance Period.



     3. Vesting.




     (a) If you cease to be employed by Targa Resources Corp. and its Affiliates
(collectively, the “Company”) during the Performance Period for any reason other than as
provided below, all Performance Units and tandem DERs awarded to you shall be automatically
forfeited without payment upon your termination. For purposes of this Agreement,
“employment with the Company” shall include being an employee or a Director of, or a
Consultant to, the Company.




     (b) If you cease to be employed by the Company during the Performance Period as a
result of your death or a disability that entitles you to disability benefits under the
Company’s long-term disability plan, or your employment is terminated by the Company other
than for Cause, you will be vested in any Performance Units that you are



 









 







otherwise qualified to receive payment for based on achievement of the Performance Goal
at the end of the Performance Period. If you are a party to an agreement with the Company
in which the term “cause” is defined, that definition of cause shall apply for purposes of
the Plan and this Agreement. Otherwise, “Cause” means (i) failure to perform assigned
duties and responsibilities (ii) engaging in conduct which is injurious (monetarily or
otherwise) to the Company or any of its Affiliates, (iii) breach of any corporate policy or
code of conduct established by the Company or breach of any agreement between the Company
and you, or (iv) conviction of a misdemeanor involving moral turpitude or a felony.



     4. DERs. Beginning on the later of the Date of Grant and the first day of the
Performance Period and ending on the last day of the Performance Period, on each date during such
period that the MLP makes a cash distribution with respect to its Units, you will be credited with
an amount of cash equal to the product of (i) the cash distributions paid with respect to a Common
Unit times (ii) your number of Performance Units. Your DERs shall be credited to a bookkeeping
account by the Company. As soon as practical following the end of the Performance Period (but in
no event later than the 15th day of March following the end of the year during which the
Performance Period ends), your DER account will be paid (without interest) to you in cash or
forfeited, as the case may be. The amount of your DER account to be paid to you will be equal to
the product of the Performance Percentage times the amount credited to your DER account. DERs
shall not be payable with respect to any Performance Unit that is forfeited or as to which you are
not otherwise qualified to receive payment for based on the Performance Goal at the end of the
Performance Period.



     5. Change of Control. Upon the occurrence of a Change of Control during the
Performance Period, the Performance Percentage shall be deemed to be 100% and your Performance
Units and all DER amounts, if any, then credited to you shall be cancelled on such date and you
will be paid (i) one Unit for each Performance Unit granted to you under this Agreement, plus (ii)
an amount of cash equal to the amount of DERs then credited to you, if any. Notwithstanding
anything else contained in this Section 5 to the contrary, the Committee may elect, at its sole
discretion by resolution adopted prior to the occurrence of the Change of Control, to have the
Company satisfy your rights in respect of the Performance Units (as determined pursuant to the
foregoing provisions of this Section 5), in whole or in part, by having the Company make a cash
payment to you within five business days of the occurrence of the Change of Control in respect of
all such Performance Units or such portion of such Performance Units as the Committee shall
determine. Any cash payment made pursuant to the foregoing sentence for any Performance Units
shall be equal to the Fair Market Value of a Common Unit on the date of the Change of Control,
times the number of Performance Units granted to you under this Agreement.



     6. Nontransferability of Award. The Performance Units and DERs may not be
transferred, assigned, encumbered or pledged by you in any manner otherwise than by will or by the
laws of descent or distribution. The terms of the Plan and this Agreement shall be binding upon
your executors, administrators, heirs, successors and assigns.



     7. Entire Agreement; Governing Law. The Plan is incorporated herein by reference.
The Plan and this Agreement constitute the entire agreement of the parties with respect to the



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subject matter hereof and, except as expressly provided in this Agreement, supersede in their
entirety all prior undertakings and agreements between you and Targa Resources GP LLC and its
Affiliates with respect to the same. This Agreement is governed by the internal substantive laws,
but not the choice of law rules, of the State of Texas.



     8. Withholding of Taxes. To the extent that the vesting or payment of Performance
Units or DERs results in the receipt of compensation by you with respect to which the Company or an
Affiliate has a tax withholding obligation pursuant to applicable law, the Company or Affiliate
shall withhold from the cash and from the Units otherwise to be delivered to you, that amount of
cash and that number of Units having a Fair Market Value equal to the Company’s or Affiliate’s tax
withholding obligations with respect to such cash and Unit payments, respectively, unless you
deliver to the Company or Affiliate (as applicable) at the time such cash or Units are delivered to
you such amount of money as the Company or Affiliate may require to meet such tax withholding
obligations. No payment of a vested Performance Unit or a cash distribution with respect to DERs
shall be made pursuant to this Agreement until the applicable tax withholding requirements with
respect to such event have been satisfied in full.



     9. Amendments. This Agreement may be modified only by a written agreement signed by
you and an authorized person on behalf of Targa Resources GP LLC who is expressly authorized to
execute such document; provided, however, notwithstanding the foregoing, Targa Resources Corp. may
make any change to this Agreement without your consent if such change is not materially adverse to
your rights under this Agreement.



     10. Plan Controls. By accepting this grant, you agree that the Performance Units and
DERs are granted under and governed by the terms and conditions of the Plan and this Agreement. In
the event of any conflict between the Plan and this Agreement, the terms of the Plan shall control.
Unless otherwise defined herein, the terms defined in the Plan shall have the same defined
meanings in this Agreement.



	 	 	 	 	 
	 	TARGA RESOURCES GP LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Rene R. Joyce 	 
	 	 	Title:  	Chief Executive Officer 	 



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ATTACHMENT A





			
	I.	 	The Performance Period shall begin on
                        ,
200   and end on
               , 20     .






			
	II.	 	Performance Goal






			
		 	The payment of a Performance Unit will be determined based on the comparison of (i) the
Total Return (as defined below) of a Common Unit for the Performance Period to (ii) the
Total Return of a share of the common stock/unit of each member of the Peer Group for the
Performance Period. Total Return shall be measured by (i) subtracting the average closing
price per share/unit for the first ten trading days of the Performance Period (the
“Beginning Price”) from the sum of (a) the average closing price per share/unit for the last
ten trading days ending on the date that is 15 days prior to the end of the Performance
Period plus (b) the aggregate amount of dividends/distributions paid with respect to a
share/unit during such period (the result being referred to as the “Value Increase”) and
(ii) dividing the Value Increase by the Beginning Price.






	 	 	 	 	 

	Total Return compared to 

Peer Group Total Return
	 	Performance

Percentage1
	75th Percentile
	 	 	150	% 
	50th Percentile
	 	 	100	% 
	25th Percentile
	 	 	25	% 
	Below 25th Percentile2
	 	 	0	% 








 




			
	1	 	The Performance Percentage between the 25th Percentile
and the 50th Percentile is a percentage based on a straight-line interpolation
between 25% and 100% based on a comparison of the Total Returns described above, and the
Performance Percentage between the 50th Percentile and the 75th
Percentile is a percentage based on a straight-line interpolation between 100% and 150%
based on a comparison of the Total Returns described above.
	 
	2	 	The 25th Percentile is the minimum Performance Goal for which
there is a Performance Percentage.






			
	III.	 	Adjustments to Performance Goals for Certain Events






			
		 	If, during the Performance Period, there is a change in accounting standards required by the
Financial Accounting Standards Board, the above performance goals shall be adjusted by the
Committee as appropriate, in its discretion, to disregard the effect of such change.





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	IV.	 	The Peer Group shall consist of the following companies:





	 	 	 
	Company	 	Ticker
	Energy Transfer Partners

	 	ETP
	Oneok Partners

	 	OKS
	Copano Energy

	 	CPNO
	DCP Midstream

	 	DPM
	Regency Energy Partners

	 	RGNC
	Plains All American Pipeline

	 	PAA
	MarkWest Energy Partners

	 	MWE
	Williams Energy Partners

	 	WPZ
	Magellan Midstream

	 	MMP
	Martin Midstream

	 	MMLP
	Enbridge Energy Partners

	 	EEP
	Crosstex Energy

	 	XTEX
	Targa Resources Partners LP

	 	NGLS







			
		 	The Committee may add or delete companies from the Peer Group and provide a related
adjustment in the rankings at any time during the Performance Period, wherever, in its
discretion, such deletion or adjustment is appropriate to reflect that such peer company is
no longer publicly traded or is determined by the Committee to no longer be a peer of the
MLP (for example due to a member no longer being publicly traded) or to reflect any other
significant event.






			
	V.	 	Committee Certification






			
		 	As soon as reasonably practical following the end of the Performance Period, the Committee
shall review the results for the Performance Period and certify those results in writing to
the Board. No Performance Units or DERs shall be paid prior to the Committee’s
certification. However, Committee certification shall not apply in the event of a Change of
Control.






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