Document:

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.

A-1

 

			
	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.

A-2exv10w2

Exhibit 10.2

RESTRICTED STOCK AGREEMENT

     THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) evidences an award made as of the _____ day
of _________________, ______ (the “Date of Grant”) by TARGA RESOURCES CORP., a Delaware corporation
(the “Company”), to ____________________ (the “Employee”).

     1. Award. Pursuant to the TARGA RESOURCES CORP. 2010 STOCK INCENTIVE PLAN (the
“Plan”), as of the Date of Grant, ____________ shares (the “Restricted Shares”) of the Company’s
common stock, par value $0.001 per share, shall be issued as hereinafter provided in the Employee’s
name, subject to certain restrictions thereon. This award of Restricted Shares shall be subject to
all of the terms and provisions of the Plan, including future amendments thereto, if any, pursuant
to the terms thereof.

     2. Definitions. Capitalized terms used in this Agreement that are not defined below
or in the body of this Agreement shall have the meanings given to them in the Plan. In addition to
the terms defined in the body of this Agreement, the following capitalized words and terms shall
have the meanings indicated below:

     (a) “Disability” shall mean a disability that entitles the Employee to disability benefits
under the Company’s long-term disability plan.

     (b) “Earned Shares” means the Restricted Shares after the lapse of the Forfeiture Restrictions
without forfeiture.

     (c) “Forfeiture Restrictions” shall have the meaning specified in Section 3(a) hereof.

     (d) “Unvested Dividends” shall have the meaning specified in Section 3(d) hereof.

     (e) “Vested Dividends” shall have the meaning specified in Section 3(d) hereof.

     3. Restricted Shares. The Restricted Shares shall be subject to the following
provisions:

     (a) Forfeiture Restrictions. The Restricted Shares may not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, and in the
event of termination of the Employee’s employment with the Company for any reason other than death
or Disability, the Employee shall, for no consideration, forfeit to the Company all Restricted
Shares. The prohibition against transfer and the obligation to forfeit and surrender Restricted
Shares to the Company upon termination of employment as provided in the preceding sentence are
herein referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding
upon and enforceable against any transferee of Restricted Shares.

     (b) Lapse of Forfeiture Restrictions. Provided that the Employee has been
continuously employed by the Company from the Date of Grant through the lapse date set forth

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in the following schedule, the Forfeiture Restrictions shall lapse with respect to a
percentage of the Restricted Shares determined in accordance with the following schedule:

	 	 	 	 	 
	 	 	Percentage of Total Number
	 	 	of Restricted Shares as to Which
	Lapse Date	 	Forfeiture Restrictions Lapse
	 
	1st Anniversary of Date of Grant
	 	 	0	%
	2nd Anniversary of Date of Grant
	 	 	0	%
	3rd Anniversary of Date of Grant
	 	 	100	%

Notwithstanding the schedule set forth above, (i) if the Employee’s employment with the Company is
terminated by reason of death or Disability, then the Forfeiture Restrictions shall lapse with
respect to 100% of the Restricted Shares effective as of the date of such termination, and (ii) if
a Change in Control occurs and the Employee has remained continuously employed by the Company from
the Date of Grant to the date upon which such Change in Control occurs, then the Forfeiture
Restrictions shall lapse with respect to 100% of the Restricted Shares on the date upon which such
Change in Control occurs. Any shares with respect to which the Forfeiture Restrictions do not
lapse in accordance with the preceding provisions of this Section 3(b) (and any associated Unvested
Dividends) shall be forfeited to the Company for no consideration as of the date of the termination
of the Employee’s employment with the Company.

     (c) Escrow of Restricted Shares. The Company shall issue in the Employee’s name the
Restricted Shares, and such Restricted Shares shall be held for the Employee in electronic, book
entry form by the Company’s transfer agent with a notation that the shares are subject to
restrictions. The Restricted Shares shall be held subject to restrictions as provided in the
Agreement until such time as the Restricted Shares become Earned Shares. The Employee may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of any of the Restricted Shares
that are subject to the Forfeiture Restrictions. A breach of the terms of this Agreement shall
cause a forfeiture of the Restricted Shares. If part or all of the Restricted Shares are forfeited
pursuant to this Agreement, the Company shall have the right to direct the Company’s transfer agent
to cancel such forfeited Restricted Shares or, at the Company’s election, transfer such Restricted
Shares to the Company or to any designee of the Company. Effective as of the Date of Grant, the
Employee shall have all of the rights of a stockholder of the Company with respect to the
Restricted Shares, including, without limitation, voting rights and the right, subject to Section
3(d), to receive all dividends and other distributions paid with respect to such Restricted Shares;
provided, however, that such Restricted Shares shall be subject to the restrictions described
herein, including, without limitation, those described in Section 3 hereof. Upon the lapse of the
Forfeiture Restrictions without forfeiture, the Company shall issue appropriate instructions to the
transfer agent.

     (d) Dividends. Notwithstanding the foregoing, the Employee shall not have the right
to receive any dividends or other distributions, including any special or extraordinary dividends
or distributions (with all references to “dividends” in this Agreement being deemed to also include
reference to any such special distributions), with respect to the Restricted Shares granted hereby
unless and until the Restricted Shares become Earned Shares. Any such dividends

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declared and paid with respect to already Earned Shares shall be paid no later than the end of
the calendar year in which the dividend for such class of stock is paid to stockholders of such
class or, if later, the 15th day of the third month following the date the dividend is
paid to stockholders of such class of stock. In the event the Company declares and pays a dividend
in respect of its Common Stock and, on the record date for such dividend, the Employee holds
Restricted Shares granted pursuant to this Agreement that have not yet become Earned Shares, the
dividends with respect to such Restricted Shares shall be credited to an account maintained by the
Company or the transfer agent for the Employee’s benefit (such dividends, “Unvested Dividends”).
Such account is intended to constitute an “unfunded” account, and neither this Section 3(d) nor any
action taken pursuant to or in accordance with this Section 3(d) shall be construed to create a
trust of any kind. Amounts credited to such account with respect to Restricted Shares that become
Earned Shares will become “Vested Dividends” on the date that such Restricted Shares vest in
accordance with Section 3(b) and will be paid to the Employee as soon as administratively
practicable following that date; provided that, in all cases, any Vested Dividends that become
payable pursuant to this Section 3(d) shall be paid no later than March 15 of the calendar year
following the calendar year during which such dividends become Vested Dividends pursuant to
paragraphs (b) and (d) of this Section 3. The Employee shall not be entitled to receive any
interest with respect to the timing of payment of dividends. In the event all or any portion of
the Restricted Shares granted hereby fail to become Earned Shares, Unvested Dividends accumulated
in the Employee’s account with respect to such Restricted Shares shall be forfeited to the Company.

     (e) Corporate Acts. The existence of the Restricted Shares shall not affect in any
way the right or power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company’s capital structure or
its business, any merger or consolidation of the Company, any issue of debt or equity securities,
the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of
all or any part of its assets or business or any other corporate act or proceeding. The
prohibitions of Section 3(a) hereof shall not apply to the transfer of Restricted Shares pursuant
to a plan of reorganization of the Company, but the stock, securities, or other property received
in exchange therefor shall also become subject to the Forfeiture Restrictions and provisions
governing the lapsing of such Forfeiture Restrictions applicable to the original Restricted Shares
for all purposes of this Agreement, and the book entry representing such stock, securities, or
other property shall be legended or notated to show such restrictions.

     4. Withholding of Tax. To the extent that the receipt of the Restricted Shares (or
any dividends thereon) or the lapse of any Forfeiture Restrictions results in compensation income
or wages to the Employee for federal, state or local tax purposes, the Employee shall deliver to
the Company at the time of such receipt or lapse, as the case may be, such amount of money as the
Company may require to meet its minimum obligation under applicable tax laws or regulations, and if
the Employee fails to do so (or if the Employee instructs the Company to withhold cash or stock to
meet such obligation), the Company is authorized to withhold from any cash or stock remuneration
(including withholding any Restricted Shares or Earned Shares distributable to the Employee under
this Agreement) then or thereafter payable to the Employee any tax required to be withheld by
reason of such resulting compensation income or wages. The Company is making no representation or
warranty as to the tax consequences to the Employee as a result of the receipt of the Restricted
Shares, the treatment of dividends, the lapse of any

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Forfeiture Restrictions, or the forfeiture of any Restricted Shares pursuant to the Forfeiture
Restrictions.

     5. Status of Stock. The Restricted Shares and Earned Shares issued under this
Agreement may not be sold or otherwise disposed of in any manner which would constitute a violation
of any applicable federal or state securities laws. In addition, (a) the book entry representing
the Restricted Shares and Earned Shares may bear such legend or notation as the Company deems
appropriate in order to reflect the Forfeiture Restrictions and to assure compliance with the terms
and provisions of this Agreement and applicable securities laws, (b) the Company may refuse to
register the transfer of the Restricted Shares or Earned Shares on the stock transfer records of
the Company if such proposed transfer would constitute a violation of the Forfeiture Restrictions
or, in the opinion of counsel satisfactory to the Company, of any applicable securities law, and
(c) the Company may give related instructions to its transfer agent, if any, to stop registration
of the transfer of the Restricted Shares.

     6. Clawback. Notwithstanding any provisions in the Agreement to the contrary, any
compensation, payments, or benefits provided hereunder (or profits realized from the sale of Earned
Shares awarded hereunder), whether in the form of cash or otherwise, shall be subject to a clawback
to the extent necessary to comply with the requirements of any applicable law, including but not
limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 304 of
the Sarbanes-Oxley Act of 2002, or any regulations promulgated thereunder.

     7. Employment Relationship. For purposes of this Agreement, the Employee shall be
considered to be in the employment of the Company as long as the Employee remains an employee of
either the Company or an Affiliate. Without limiting the scope of the preceding sentence, it is
specifically provided that the Employee shall be considered to have terminated employment with the
Company at the time of the termination of the “Affiliate” status of the entity or other
organization that employs the Employee. Nothing in the adoption of the Plan, nor the award of the
Restricted Shares thereunder pursuant to this Agreement, shall confer upon the Employee the right
to continued employment by the Company or affect in any way the right of the Company to terminate
such employment at any time. Unless otherwise provided in a written employment agreement or by
applicable law, the Employee’s employment by the Company shall be on an at-will basis, and the
employment relationship may be terminated at any time by either the Employee or the Company for any
reason whatsoever, with or without cause or notice. Any question as to whether and when there has
been a termination of such employment, and the cause of such termination, shall be determined by
the Committee or its delegate, and its determination shall be final.

     8. Notices. Any notices or other communications provided for in this Agreement shall
be sufficient if in writing. In the case of the Employee, such notices or communications shall be
effectively delivered if hand delivered to the Employee at the Employee’s principal place of
employment or if sent by registered or certified mail to the Employee at the last address the
Employee has filed with the Company. In the case of the Company, such notices or communications
shall be effectively delivered if sent by registered or certified mail to the Company at its
principal executive offices.

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     9. Entire Agreement; Amendment. This Agreement replaces and merges all previous
agreements and discussions relating to the same or similar subject matters between the Employee and
the Company and constitutes the entire agreement between the Employee and the Company with respect
to the subject matter of this Agreement. This Agreement may not be modified in any respect by any
verbal statement, representation or agreement made by any employee, officer, or representative of
the Company or by any written agreement unless signed by an officer of the Company who is expressly
authorized by the Company to execute such document.

     10. Binding Effect; Survival. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under the Employee. The
provisions of Section 5 shall survive the lapse of the Forfeiture Restrictions without forfeiture.

     11. Controlling Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflicts of law principles thereof, or,
if applicable, the laws of the United States.

[Signatures begin on next page.]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer
thereunto duly authorized, as of the date first above written.

	 	 	 	 	 
	 	TARGA RESOURCES CORP.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

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