Document:

Exhibit 10.39

November 17, 2005

 

 

«FirstName» «MI» «LastName»

«Address»

«City», «State» «Zip»

 

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) 33.3% shall vest upon the later to occur of the
May 2008 Distribution Date and the date on which the Partnership pays a
quarterly dividend of $0.725 per unit, (ii) 33.3% 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 $0.75 per unit, and (iii) 33.3% 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 $0.775 per unit.  Any remaining Phantom Units that are not vested
by the May 2012 Distribution Date shall expire.

 

2.                     Subject to the further
provisions of this Agreement, your DERs shall vest (become payable in cash) as
follows: (i) 33.3% shall vest upon and effective with the date on which the
Partnership pays a quarterly dividend of $0.725 per unit, (ii) 33.3% shall vest
upon and effective with date on which the Partnership pays a quarterly
distribution of $0.75 per unit, (iii) 33.3% shall vest upon and effective with
the date on which the Partnership pays a quarterly distribution of $0.775 per
unit.  Any remaining DERs that are not
vested by the May 2012 Distribution Date shall expire.

 

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.

 

 

333
Clay Street, Suite 1600    •    Houston,
Texas 77002    •    713/646-4100
or 800-564-3036

 

 

 

 

 

 

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

 

2

 

(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 after the
date hereof the beneficial owner, directly or indirectly, of more than 49.9% of
the membership interest 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:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  «FirstName» «MI» «LastName»

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Units:

  	
  «Units»

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SSN:

  	
  «SSN»

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

3Exhibit
10.40

Plains
All American GP LLC

 

 

 

December 18, 2001

 

 

Mr. John P. von Berg

14131 Hays

Houston, TX 
77069

 

Dear John:

 

                Pursuant
to our discussions, the following shall set forth the employment agreement
between Plains All American GP LLC (the “Company”) and John P. von Berg (“Employee”):

 

1.             The
position will be Director, Trading. 
Employee’s activities will be part of a Business Unit with one or more
other employees of the Company.

 

2.             Compensation will include:

 

a.                                       a monthly
salary of $16,667.00 which will be payable semi-monthly, with salary review
from time to time consistent with Company’s compensation practices,

 

b.                                      your allocated
share of a fiscal quarterly bonus pool (QBP). 
The QBP will be equal to 4% of your Business Unit’s Gross Margin (as
hereinafter defined).  In the event that
there is a loss in any quarter, such amount shall be recouped before earnings
in a subsequent quarter are eligible for participation in the QBP.  Employee and the Senior Vice President will
determine the allocation of percentages of the QBP among the employees in the
Business Unit.

 

For purposes of this
agreement, Gross Margin shall mean the earnings (directly generated by your
Business Unit only) before FASB 133 adjustments, income taxes, depreciation and
amortization less:

 

	
  (i)

  	
  all overhead attributable
  to the Business Unit,

  
	
  (ii)

  	
  interest costs (net of
  interest income) and other direct costs incurred through borrowings for
  inventory or fees for letters of credits associated with Business Unit
  transactions, and

  
	
  (iii)

  	
  brokerage commissions,
  consultant or professional services fees or other similar charges.

  

 

 

 

c.                                       participation
in the discretionary annual bonus pool. 
The amount, if any, of the annual bonus pool and the amount therefrom
allocable to Employee shall be in the sole discretion of the Senior Vice
President and President.

 

3.                                       Employee shall receive:

 

a.                                       12,500
Restricted Units of Plains All American Pipeline, L.P. under the Company’s 1998
Long-Term Incentive Plan, to vest 90 days after conversion of subordinated
units into common units and subject to further vesting criteria as follows:

 

	
  Vesting Distribution Level #1

  	
   

  	
  25.0

  	
  %

  	
  (Individual Target $2MM
  First year Business Unit Gross Margin)

  	
   

  
	
  Vesting Distribution Level
  #2

  	
   

  	
  25.0

  	
  %

  	
  $

  	
  2.10

  	
   

  
	
  Vesting Distribution Level
  #3

  	
   

  	
  25.0

  	
  %

  	
  $

  	
  2.30

  	
   

  
	
  Vesting Distribution Level
  #4

  	
   

  	
  25.0

  	
  %

  	
  $

  	
  2.50

  	
   

  
	
   

  	
   

  	
  100.0

  	
  % 

  	
   

  	
   

  

 

b.                                      12,500
Performance Options to purchase existing Subordinated Units in accordance with,
and subject to the vesting criteria described in, the Consent of Sole Member of
the Company dated as of June 7, 2001 with vesting criteria as follows:

 

	
  Vesting Distribution Level #1

  	
   

  	
  25.0

  	
  %

  	
  $

  	
  2.10

  	
   

  
	
  Vesting Distribution Level
  #2

  	
   

  	
  25.0

  	
  %

  	
  $

  	
  2.30

  	
   

  
	
  Vesting Distribution Level
  #3

  	
   

  	
  25.0

  	
  %

  	
  $

  	
  2.50

  	
   

  
	
  Vesting Distribution Level
  #4

  	
   

  	
  25.0

  	
  %

  	
  $

  	
  2.70

  	
   

  
	
   

  	
   

  	
  100.0

  	
  %

  	
   

  	
   

  

 

The initial strike price
will be $22.00 per unit.  This strike
price will be reduced by an amount equal to 80% of the actual distributions
made on such units.  The life of the option
will be 10 years and vesting of the options will be tied to unit performance as
measured by the annualized distribution level set forth in the table above.

 

c.                                       The
opportunity, but not the obligation to purchase, within 60 days from Employee’s
first day of employment, but in no event later than March 1, 2002 an interest
in PAA Management LLC (“LLC”) and a limited partner interest in PAA Management,
L.P. (“LP”), for a purchase price of $150,000.00; provided that Employee agrees
to and does execute the documents required to consummate this investment.  If the interests are acquired from existing
owners, the interests will be a 5% membership interest in LLC and a 4.95%
interest in LP.  If new interests are
issued, the interests in the LLC and LP will be proportionately reduced.

 

 

2

 

4.             Monthly expense reimbursements will include reasonable
and legitimate business travel and entertainment expenses including membership
at one country club or athletic club.

 

5.             Other benefits will include:  (i) four weeks paid vacation, (ii) up to 10
days sick leave with pay, (iii) participation in the Company’s 401(K) Plan and
(iv) participation in the Company’s insurance benefit program which is
currently comprised of the benefits set forth on Exhibit A.

 

6.             (a)           If
the Company causes this agreement to terminate for any reason except gross
negligence or willful misconduct of Employee, Employee’s monthly base salary
will be continued for a period that is the greater of (a) if more than twelve
months remain in the unexpired portion of the initial term, the remainder of
the initial term of this agreement as provided in paragraph 8 or (b) if less
than twelve months remain in the unexpired portion of the initial term or any
successive term of this agreement, twelve months.  Employee will be reimbursed for up to six
months of COBRA insurance.  Upon payment
of such amounts, the Company shall not have any further salary obligation to
Employee.

 

(b)           In the event Employee causes this
agreement to terminate for reasons other than as set forth in paragraph 6(c),
the Company shall not have any further obligation to Employee under paragraphs
2 and 3 of this agreement or for severance (and the obligations under paragraph
under paragraph 6(a) will not apply).

 

(c)           Unless otherwise agreed by the
Company and Employee, in the event there is a material change in circumstances
of the employment of Employee whereby either (1) the Company’s home office is
relocated to a new location, or the Employee’s place of employment is
relocated, outside of a 50 mile radius from 333 Clay Street, Houston, Texas, or
(2) the Company institutes a reduction in Employee’s base salary, or (3) there
is a material reduction in Employee’s responsibilities, or (4) the Company
eliminates the oil trading function or merchant activities of the Company; then
in each such case the obligations of the Company under paragraph 6(a) shall
apply.

 

7.             Contemporaneous with the execution of this agreement,
Employee and the Company shall execute a Confidential Information and
Non-Solicitation Agreement (the “Confidentiality Agreement”) substantially in
the form of Exhibit “B” attached hereto. 
The rights and obligations set forth in the Confidentiality Agreement
shall survive the termination of this agreement, even if this agreement is terminated
pursuant to the terms of paragraph 6 above, or paragraph 8, below.

 

8.             Unless terminated earlier pursuant to the provisions of
paragraph 6 above, this agreement shall

 

 

3

 

 

(i)            have an initial term of twenty four
months beginning January 31, 2002 (or as soon as Employee can commence his
employment at the discretion of Employee) and

 

(ii)           Shall thereafter automatically be extended and continue
for up to three successive terms of one year each, provided that during the
twelve month period immediately prior to each such successive term, Employee’s
Business Unit shall have generated Gross Margin of not less than $2,000,000.00
with Employee’s active full time services.

 

The Company may terminate this agreement
prior to the end of the initial term or any successive term in the event of
gross negligence or willful misconduct by the Employee, in which case Paragraph
6(a) shall not apply.

 

9.             Upon
termination of this agreement for any reason, Employee shall promptly return to
Company all copies of any Company data, records, or materials of whatever
nature or kind, including all materials incorporating the proprietary
information of Company.  Employee shall
also furnish to Company all work in progress or portions thereof, including all
incomplete work.

 

10.           Employee represents that (i) execution of this agreement
will not violate the terms of any agreement to which Employee is currently
bound, and (ii) Employee is not subject to an existing confidentiality,
non-compete or similar type agreement that would prevent, limit or otherwise
encumber Employee’s ability to purchase crude oil on behalf of the Company.

 

11.           By accepting this offer, Employee agrees that he shall at
all times:

 

	
  (i)

  	
  adhere to the Company’s
  Trading and Risk Management Policies and Procedures,

  
	
  (ii)

  	
  adhere to the standard of integrity, ethics, conflicts of interest,
  compliance with statutory law and regulations and other applicable standards
  of personal conduct while employed by the Company, and

  
	
  (iii)

  	
  not misrepresent nor
  conceal information regarding transactions from senior management or any
  person responsible for the accurate recording and reporting of each
  transaction.

  

 

 

 

4

 

If the foregoing meets with your
understanding of our agreement, please execute, date and return one original
agreement for our files.

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PLAINS ALL AMERICAN GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ George R. Coiner

  
	
   

  	
   

  	
  George R. Coiner

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
  Agreed to and accepted

  	
   

  	
   

  
	
  this 15th day
  of January 2002.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ John von Berg

  	
   

  	
   

  
	
  John von Berg

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

5

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