Document:

EXHIBIT
10.3

 

«GrantDate»

 

«FirstName»«MI» «LastName»

«Address1»

«City»,
«State» «PostalCode»

 

Re:                               Grant of Restricted
Units

 

Dear «FirstName»:

 

I am pleased to inform you that you have been granted «Units» Phantom Units as of the above date
pursuant to the Company’s 2005 Long-Term Incentive Plan (the “Plan”).  In addition, in tandem with each Phantom Unit
you have been granted a distribution equivalent right (a “DER”). 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 Plains All American Pipeline, L.P. for each
Phantom Unit) as follows: (i) 40% shall vest upon the later to occur of
the May 2007 Distribution Date and the date on which the Partnership pays
a quarterly dividend of $0.65 per unit, (ii) 30% shall vest upon the later
to occur of the May 2009 Distribution Date and the date on which the
Partnership pays a quarterly distribution of $0.70 per unit, and (iii) 30%
shall vest upon the later to occur of the May 2010 Distribution Date and
the date on which the Partnership pays a quarterly distribution of $0.75 per
unit.  Any remaining Phantom Units that
are not vested by the sixth anniversary of the grant date shall vest on the May 2011
Distribution Date.

 

2.                       Subject to the further
provisions of this Agreement, your DERs shall vest (become payable in cash) as
follows: (i) 40% shall vest upon and effective with the earlier to occur
of the May 2007 Distribution Date and the date on which the Partnership
pays a quarterly dividend of $0.65 per unit, (ii) 15% shall vest upon and
effective with the earlier to occur of the May 2008 Distribution Date and
the date on which the Partnership pays a quarterly distribution of $0.675 per
unit, (iii) 15% shall vest upon and effective with the earlier to occur of
the May 2009 Distribution Date and the date on which the Partnership pays
a quarterly distribution of $0.70 per unit, (iv) 15% shall vest upon and
effective with the earlier to occur of the May 2010 Distribution Date and
the date on which the Partnership pays a quarterly distribution of $.725 per
unit, and (v) 15% shall vest upon and effective with the earlier to occur
of the May 2010 Distribution Date and the date on which the Partnership
pays a quarterly distribution of $0.75 per unit.

 

 

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

 

4.                       Any distribution level required
for vesting under paragraphs 1 or 2 above shall be proportionately reduced 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 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; provided,
further, that any DERs associated with the unvested, nonforfeitable Phantom
Units described in the preceding proviso shall not be forfeited on the date of
termination, but shall be payable and shall expire in accordance with paragraph
5 above.

 

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”), 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 accordance with paragraph 1
(other than the last sentence thereof) and paragraph 2 above.

 

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.

 

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, the phrase “Distribution Date” means the date, in any
given month and year, on which the Partnership pays a quarterly distribution.

 

 

The phrase “Change in Status” means the occurrence, within three months
prior to or one year following a Change of Control, of any of the following
circumstances:  (A) any termination
by the Company of your employment other than a Termination for Cause, (B) without
your consent, any removal of you from, or any failure to re-elect you to, the
positions held by you  (or substantially
equivalent positions) immediately prior to the change that may constitute a
Change in Status, or (C) any reduction in your base salary or (D) any
material reduction in your fringe benefits.

 

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 be the
general partner 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 the beneficial owner,
directly or indirectly, of more than 49.9% of the membership interest in the
Company (a “Majority Holder”); provided, however, that if 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, who is a member of the Company as
of March 1, 2005, or any Affiliate of any such Person, becomes a Majority
Holder, a Change of Control shall not be deemed to have occurred pursuant to
this clause (v) if at or prior to the time such Person becomes a Majority
Holder, such Person executes and delivers to the Company an agreement
substantially in the form of Exhibit A hereto (the “Specified Voting
Agreement”); provided, further, however, that if,
following the execution and delivery to the Company of the Specified Voting
Agreement by such Majority Holder, (x) such Majority Holder shall give written
notice to the Company of termination of such Specified Voting Agreement
pursuant to Section 3 thereof (and such written notice is not withdrawn
prior to the effectiveness of such termination), then a Change of Control shall
be deemed to have occurred upon the effectiveness of such termination if, at
the time of the effectiveness of such termination, such Majority Holder
beneficially owns, directly or indirectly, more than 49.9% of the membership
interests in the Company or (y) such Majority Holder shall breach or
anticipatorily breach the Specified Voting Agreement,  then a Change of Control shall be deemed to
have occurred at the time of such breach (or anticipatory breach) of the
Specified Voting Agreement if, at the time of such breach, such Majority Holder
beneficially owns, directly or indirectly, more than 49.9% of the membership
interests 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 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.  The “Partnership” refers to Plains All
American Pipeline, 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 Third Amended and Restated Agreement
of Limited Partnership of Plains All American Pipeline, 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. 
Please execute and return this Agreement to me.  The attached copy of this Agreement is for
your records.

 

	
   

  	
  PLAINS ALL
  AMERICAN PIPELINE, L.P.

  
	
   

  	
   

  
	
   

  	
  By: PLAINS
  AAP, L.P.

  
	
   

  	
   

  
	
   

  	
  By: PLAINS
  ALL AMERICAN GP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Tim Moore

  
	
   

  	
  Title:

  	
  Vice
  President & General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  «FirstName»

  	
   

  
	
   

  	
   

  
	
  Units:

  	
  «Units»

  	
   

  	
   

  
	
   

  	
   

  
	
  SSN:

  	
  «SSN»

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
   

  
									

 

 

 

 

EXHIBIT A

 

Form of Letter Agreement

 

                                                                                                [DATE]

 

 

Plains All American GP LLC

333 Clay Street, Suite 1600

Houston, Texas 77002

 

 

Gentlemen:

 

                                                Reference is made to the Amended and Restated
Limited Liability Company Agreement of Plains All American GP LLC, dated as of
June 8, 2001, as amended (the “LLC Agreement”). 
The undersigned has become the beneficial owner of more than 49.9% (a
“Majority Holder”) of the Membership Interests (as defined in the LLC
Agreement) of Plains All American GP LLC, a Delaware limited liability company
(the “Company”).  Capitalized terms that
are not otherwise defined herein shall have the meanings set forth in the LLC
Agreement.

 

                The undersigned hereby acknowledges its
understanding that, pursuant to the terms of certain of the Company’s equity
incentive awards, absent the execution and delivery of this letter agreement by
the undersigned, the fact that the undersigned has become a Majority Holder
would constitute a “change of control” for purposes of those equity incentive
awards.

 

1.             Subject to the terms and conditions
of this letter agreement, during the term of this letter agreement, at each
annual meeting of the Members, at each special meeting of the Members called
for the purpose of electing Independent Directors, and in respect of any action
by written consent to elect Independent Directors, the undersigned shall vote
or cause to be voted the Excess Interests held by it and its affiliates in
favor of the election of each nominee for Independent Director in the same
proportion as all Membership Interests (other than those beneficially owned by
the undersigned and its affiliates, including the Excess Interests) are voted
with respect to such election.  For the
avoidance of doubt, for purposes of this letter agreement the term “Independent
Director” shall not include any replacement Director who is to be elected by a
Majority in Interest pursuant to the second sentence of Section 7.1(a)(iv) of
the LLC Agreement.  “Excess Interests”
means, with respect to a particular election or removal of Independent
Directors, an amount of Membership Interests equal to the amount, if any, by
which the total Membership Interests beneficially owned by the undersigned and
its affiliates and entitled to vote with respect to such election or removal of
Independent Directors exceeds 49.9% of the outstanding Membership Interests
that are entitled to vote with respect to such election or removal of
Independent Directors.

 

 

 

2.             Subject to the terms and conditions
of this letter agreement, during the term of this letter agreement, at each
special meeting of the Members called for the purpose of removing any
Independent Director without Good Cause, and in connection with any action by
the Members to remove any Independent Director without Good Cause, including
without limitation pursuant to Section 7.1(a)(iii) of the LLC Agreement, the
undersigned shall vote or cause to be voted the Excess Interests held by it and
its affiliates in favor of or against the removal of such Independent Director
in the same proportion as all Membership Interests (other than those
beneficially owned by the undersigned and its affiliates, including the Excess
Interests) are voted with respect to such removal.  For the purposes of this letter agreement,
the Members shall have “Good Cause” to remove or fail to reelect any
Independent Director only upon such Independent Director’s (i) engaging in
gross misconduct, including without limitation any breach of his fiduciary
duties, (ii) violation of the Company’s Code of Business Conduct (unless waived
in accordance with the terms thereof), (iii) engaging in conduct which is demonstrably
and materially injurious to the Company or to Rodeo, L.P. and its subsidiaries,
taken as a whole, (iv) indictment for, or conviction of, a felony involving
moral turpitude.

3.             The term of this letter agreement
shall commence on the date of this letter agreement and shall continue
thereafter unless terminated by the undersigned pursuant to this Section
3.  The undersigned shall be entitled to
terminate this letter agreement at any time upon giving at least one year’s
prior written notice of such termination to the Company.  Notwithstanding the foregoing, the
undersigned shall be entitled to terminate this letter agreement at any time by
giving written notice to the Company (which notice shall be effective immediately)
upon and after the occurrence of any of the following circumstances:  (a) the undersigned is no longer a Majority
Holder, (b) with respect to the Plains All American 2005 Long-Term Incentive
Plan (the “2005 Plan”), all of the Awards (as defined in the 2005 Plan) granted
to Greg L. Armstrong shall have vested in accordance with their terms, (c) with
respect to the 2005 Plan, all of the Awards granted to Harry N. Pefanis shall
have vested in accordance with their terms, (d) if the undersigned is any of
Plains Holdings Inc., KAFU Holdings, L.P., E-Holdings III, L.P. or Sable
Investments, L.P., or any affiliate of any of the foregoing (collectively, the
“Private Equity Members”), at least two of the other Members shall cease to be
Private Equity Members, (e) any other Member shall be in breach of the LLC
Agreement in any manner adverse to the undersigned, (f) the Persons who own the
equity interests in the undersigned, or if the undersigned is controlled
directly or indirectly by any other entity, the ultimate parent of the
undersigned, as the case may be, on the date hereof cease to beneficially own,
directly or indirectly, more than 50% of the equity interest in the undersigned
or the ultimate parent entity, as the case may be, (g) Greg L. Armstrong shall
cease to be the Chief Executive Officer of the Company, or (h) Harry N. Pefanis
shall cease to be the President and Chief Operating Officer of the Company;
provided, that in the case of either clause (g) or (h) above, to be effective
such written notice must be given within 90 days of such officer ceasing to
hold such position.

4.             Except to the extent specifically
set forth above, nothing contained herein shall be deemed to modify, supersede
or in any manner limit any rights of the undersigned under the LLC Agreement,
including without limitation, any rights of the 

 

 

undersigned to designate a
Director pursuant to Section 7.1(a)(ii) of the LLC Agreement, or to remove any
such designated Director pursuant to Section 7.1(a)(iii) of the LLC
Agreement.  Nothing contained herein
shall be deemed to modify, supersede or in any manner limit any rights of the
undersigned under the Partnership Agreement or the Rodeo, L.P. Partnership
Agreement.

5.             This letter agreement is to be
governed by the laws of the State of Delaware, without giving effect to the principles
of conflicts of laws thereof.  If any
provision hereof is deemed unenforceable, the enforceability of the other
provisions hereof shall not be affected.

6.             The undersigned signs solely in
his, her or its individual capacity with respect to his, her or its beneficial
ownership of Membership Interests and makes no agreement or understanding
herein in any other capacity, including his, her or its capacity as a director
of the Company.

7.             This letter agreement may be
executed in two or more counterparts, each of which shall be considered an
original but all of which together shall constitute the same instrument.

8.             This letter agreement (including
the documents and instruments referred to herein) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, among the undersigned and the Company, or any of them, with
respect to the subject matter hereof.

9.             This letter agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by each of the undersigned and the
Company.

10.           This letter agreement shall not be
assigned by the Company by operation of law or otherwise without the prior
written consent of the undersigned.

11.           This letter agreement shall be
binding upon and inure solely to the benefit of each party to this letter
agreement and their permitted assignees, and nothing in this letter agreement,
express or implied, is intended to or shall confer upon any other Person any
rights, benefits or remedies of any nature whatsoever under or by reason of
this letter agreement.  Without limiting
the foregoing, no direct or indirect holder of any equity interests or
securities of any party to this letter agreement (whether such holder is a
limited or general partner, member, stockholder or otherwise), nor any
Affiliate of any party to this letter agreement, nor any director, officer,
employee, representative, agent or other controlling Person of each of the
parties to this letter agreement and their respective Affiliates shall have any
liability or obligation arising under this letter agreement.

12.           The undersigned acknowledges and
agrees that the Company could not be made whole by monetary damages in the
event of any default by the undersigned of the terms and conditions set forth
in this letter agreement.  It is
accordingly agreed and understood that the Company, in addition to any other
remedy that it may have at law or in equity, shall be entitled to an injunction
or injunctions to prevent breaches of this letter 

 

 

 

agreement and specifically
to enforce the terms and provisions hereof in any action instituted in any
court of the United States or in any state having appropriate jurisdiction.

	
   

  	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [UNDERSIGNED]

  
	
   

  	
   

  	
   

  
	
  Agreed and
  accepted as of

  	
   

  
	
  this ___ day
  of _____, ___:

  	
   

  
	
   

  	
   

  	
   

  
	
  PLAINS ALL
  AMERICAN GP LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:Exhibit 10.2

 

AMENDMENT NO. 1

TO

1998 STOCK OPTION PLAN

 

This Amendment No. 1 to the 1998 Stock Option
Plan (this “Amendment”) is executed by the undersigned, by and on behalf of
Caldera Systems, Inc., a Delaware corporation (the “Company”).

 

Background

 

A.                                   The
Company has adopted the Caldera Systems, Inc. 1998 Stock Option Plan (the “1998
Plan”) pursuant to which the Company granted Options to employees,
directors and certain consultants of the Company and its subsidiaries.  Capitalized terms used in this Amendment but
not defined herein have the meaning set forth in the 1998 Plan.

 

B.                                     The
Company desires to amend the 1998 Plan in order to provide for additional
mechanisms for handling options upon a corporate change in control transaction
and to permit exercise of options within 60 days after termination of
employment for “cause.”

 

Amendment

 

NOW,
THEREFORE, the 1998 Plan is hereby amended as follows:

 

1.                                      Allow
Cash Out, Conversion or Other Disposition of Vested Options Upon a Corporate
Transaction

 

Article 2 II A of the 1998 Plan is amended to
delete the first sentence thereof and to add the following provisions in its
stead:

 

Any vested Options outstanding at the time of a
Corporate Transaction shall be cashed out, converted to options of the
acquiring entity, assumed by the acquiring entity or otherwise disposed of in
the manner provided in any shareholder-approved agreement or plan governing or
providing for such Corporate Transaction (“Transaction Agreement”); provided
that any such cash-out, conversion, assumption or disposition of the Options
shall not deprive the Option holder of the inherent value of his options,
measured solely by the excess of the fair market value of the underlying option
shares immediately prior to the Corporate Transaction over the option exercise
price, without the holder’s consent.  In
the absence of such governing provisions in a Transaction Agreement, the Plan
Administrator in its sole discretion may on a case by case basis require any
vested, exercisable Options that remain outstanding upon a Corporate
Transaction to be cashed out and terminated in exchange for a lump sum cash
payment, shares of the acquiring entity or a combination thereof equal in value
to the fair market value of the Option, measured in the manner described above,
immediately prior to the Corporate Transaction. 
Any non-vested Options shall terminate unless:  (i) otherwise provided in the
Transaction Agreement or in any other written agreement, such as a severance
agreement, between the Corporation and the Optionee; or (ii) the Plan
Administrator in its sole discretion on a case by case basis elects in writing
to waive termination.

 

 

2.                                      Allow
Exercise of Options Up to 120 Days After Termination of Service.

 

Article 2 I C (i) of the 1998 Plan is amended to
read as follows:

 

(i)                                     Should
an Optionee cease to remain in Service with the Corporation for any reason
other than Cause, death or Disability then any Options granted to the Optionee,
to the extent they are exercisable at the time of termination of Service, shall
remain exercisable until the date which is 120 days after the date of such
termination, on which date they shall expire.

 

3.                                      Allow
Exercise of Options Up To 30 Days After Termination For Cause.

 

Article 2 I C (ii) of the 1998 Plan is amended to
read as follows:

 

(ii)                                  Unless
an applicable option agreement issued after July 1, 2000 provides
otherwise, if an Optionee’s Service with the Corporation or a Subsidiary of the
Corporation is terminated for Cause, Options granted to the Optionee, to the
extent they are then exercisable, shall remain exercisable for 30 days
following the date of termination of Service, on which date they shall
expire.  Notwithstanding the foregoing,
no Option shall be exercisable after expiration of its term.

 

4.                                      Increase
in Number of Shares Subject to the Plan and Individual Limitation.

 

Section IV.A of the Plan is hereby deleted in its
entirety, and the following is hereby inserted in its stead:

 

A.                                   The
stock issuable under the Plan shall be shares of authorized but unissued or re-acquired
Common Stock.  The maximum number of
shares of Common Stock which may be issued over the term of the Plan shall not
exceed 5,000,000 shares.

 

5.                                      Ratification.  Except as specifically modified hereby, the
Plan is hereby ratified and reaffirmed by the Company.

 

6.                                      Effectiveness.  This Amendment is effective as of the date
this Amendment is approved by the Board of Directors of the Company and shall
supersede any inconsistent statement contained in an Option agreement issued
prior to the date hereof.

 

The undersigned, who is the duly elected Secretary of
the Company, hereby certifies that the Board of Directors of the Company
approved this Amendment on July 14, 2000, at which time this Amendment
became effective.

 

	
   

  	
  Caldera Systems,
  Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ RICHARD C. RIFE

  	
   

  
	
   

  	
   

  	
  Richard C. Rife, its Corporate Secretary

  

 

2

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