EXHIBIT 99.2
PLAINS ALL AMERICAN
2001 PERFORMANCE OPTION PLAN
SECTION 1. Purpose of the Plan.
The Plains All American 2001 Performance Option Plan (the "Plan") is
intended to promote the interests of Plains All American Pipeline, L.P., a
Delaware limited partnership (the "Partnership"), by providing to employees of
Plains All American GP, LLC and Plains AAP, L.P. (together, the "Company") and
their Affiliates who perform services for the Partnership incentive compensation
awards for superior performance that are based on Units.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set
forth below:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Award" means an Option granted under the Plan.
"Board" means the Board of Directors of Plains All American GP, LLC.
"Committee" means the Board or such committee of the Board appointed to
administer the Plan.
"Employee" means any employee of the Company or an Affiliate, as
determined by the Committee.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the closing sales price of a Unit on the
applicable date (or if there is no trading in the Units on such date, on the
next preceding date on which there was trading) as reported in The Wall Street
Journal (or other reporting service approved by the Committee). In the event
Units are not publicly traded at the time a determination of fair market value
is required to be made hereunder, the determination of fair market value shall
be made in good faith by the Company.
"Option" means an option to purchase Units granted under the Plan.
"Participant" means any Employee granted an Award under the Plan.
"Partnership Agreement" means the Third Amended and Restated Agreement
of Limited Partnership of Plains All American Pipeline, L.P., as it may be
amended from time to time.
"Person" means an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity.
"Restricted Period" means the period established by the Committee with
respect to an Award during which the Award either remains subject to forfeiture
or is not exercisable by the Participant.
"Section 16(b)" means Section 16(b) of the Exchange Act, or any
successor rule or regulation thereto as in effect from time to time.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"Unit" means a Subordinated Unit of the Partnership (or, to the extent
converted pursuant to the terms of the Partnership Agreement, a Common Unit of
the Partnership).
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the following, the Committee, in its
sole discretion, may delegate any or all of its powers and duties under the
Plan, including the power to grant Awards under the Plan, to the Chief Executive
Officer of the Company, subject to such limitations on such delegated powers and
duties as the Committee may impose. Upon any such delegation all references in
the Plan to the "Committee", other than in Section 7, shall be deemed to include
the Chief Executive Officer; provided, however, that such delegation shall not
limit the Chief Executive Officer's right to receive Awards under the Plan.
Notwithstanding the foregoing, the Chief Executive Officer may not grant Awards
to, or take any action with respect to any Award previously granted to, a person
who is an officer subject to Section 16(b) or a member of the Board. Subject to
the foregoing limitation, the Chief Executive Officer is deemed to have been
delegated the power hereunder to grant Options with respect to Employees who are
not subject to Section 16(b). Subject to the terms of the Plan and applicable
law, and in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the number of Units to be covered by
Awards; (iii) determine the terms and conditions of any Award; (iv) determine
whether, to what extent, and under what circumstances Awards may be settled,
exercised, canceled, or forfeited; (v) interpret and administer the Plan and any
instrument or agreement relating to an Award made under the Plan; (vi)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (vii) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, the Partnership, any Affiliate, any Participant,
and any beneficiary of any Award.
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SECTION 4. Units Available for Awards.
(a) Units Available. Subject to adjustment as provided in Section 4(c),
the number of Units with respect to which Awards may be granted under the Plan
is 450,000. If any Award is forfeited or otherwise terminates or is canceled
without the delivery of Units, or if Units are withheld for payment of exercise
price or taxes, then the Units covered by such Award, to the extent of such
forfeiture, termination, cancellation or withholding, shall again be Units with
respect to which Awards may be granted.
(b) Sources of Units Deliverable Under Awards. Any Units delivered
pursuant to an Award shall consist, in whole or in part, of Units owned by
Plains AAP, L.P. or Units acquired in the open market, from any Affiliate, the
Partnership (provided applicable exchange requirements or other laws permit such
primary issuance) or any other Person, or any combination of the foregoing, as
determined by the Committee in its discretion.
(c) Adjustments. In the event that the Committee determines that any
distribution (whether in the form of cash, Units, other securities, or other
property), recapitalization, split, reverse split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of Units
or other securities of the Partnership, issuance of warrants or other rights to
purchase Units or other securities of the Partnership, or other similar
transaction or event affects the Units such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Units (or other securities or property) with
respect to which Awards may be granted, (ii) the number and type of Units (or
other securities or property) subject to outstanding Awards, and (iii) the grant
or exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award; provided,
that the number of Units subject to any Award shall always be a whole number.
SECTION 5. Eligibility.
Any Employee shall be eligible to be designated a Participant.
SECTION 6. Options.
The Committee shall have the authority to determine the Employees to
whom Options shall be granted, the number of Units to be covered by each Option,
the purchase price therefor and the conditions and limitations applicable to the
exercise of the Option, including the following terms and conditions and such
additional terms and conditions, as the Committee shall determine, that are not
inconsistent with the provisions of the Plan:
(i) Exercise Price. The purchase price per Unit purchasable
under an Option shall be determined by the Committee, which, in its
discretion, may provide for adjustment after the date of grant for
distributions made with respect to Units.
(ii) Time and Method of Exercise. The Committee shall
determine the Restricted Period, i.e., the time or times at which an
Option may be exercised in whole or
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in part, and the method or methods by which payment of the exercise
price with respect thereto may be made or deemed to have been made in
accordance with clause (vii) below.
(iii) Term. Subject to earlier termination as provided in the
grant agreement or the Plan, each Option shall expire on the 10th
anniversary of its date of grant.
(iv) Forfeiture. Except as otherwise provided in the terms of
any grant agreement, upon termination of a Participant's employment
with the Company and its Affiliates for any reason during the
applicable Restricted Period, all unvested Options shall be forfeited
by the Participant. The Committee may, in its discretion, waive in
whole or in part such forfeiture with respect to a Participant's
Options.
(v) Limits on Transfer of Awards.
(A) Except as provided in (C) below or otherwise
provided in the terms of any grant agreement, each Option
shall be exercisable only by the Participant during the
Participant's lifetime, or by the person to whom the
Participant's rights shall pass by will or the laws of descent
and distribution.
(B) Except as provided in (C) below or otherwise
provided in the terms of any grant agreement, no Award and no
right under any such Award may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered
by a Participant otherwise than by will or by the laws of
descent and distribution and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance
shall be void and unenforceable against the Company or any
Affiliate.
(C) To the extent specifically provided by the
Committee with respect to a grant, an Option may be
transferred by a Participant without consideration to
immediate family members or related family trusts, limited
partnerships or similar entities or on such terms and
conditions as the Committee may from time to time establish.
(vi) Unit Certificates. All certificates for Units or other
securities of the Partnership delivered under the Plan pursuant to any
Award or the exercise thereof shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations, and other requirements of the SEC,
any stock exchange upon which such Units or other securities are then
listed, and any applicable federal or state laws, and the Committee may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(vii) Delivery of Units or other Securities and Payment by
Participant of Consideration. Notwithstanding anything in the Plan or
any grant agreement to the contrary, delivery of Units pursuant to the
exercise of an Award may be deferred for any period during which, in
the good faith determination of the Committee, the Company is not
reasonably able to obtain Units to deliver pursuant to such Award
without violating the rules or regulations of any applicable law or
securities exchange. No Units or other securities shall be delivered
pursuant to any Award until payment in full of any amount
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required to be paid pursuant to the Plan or the applicable Award grant
agreement (including, without limitation, any exercise price or tax
withholding) is received by the Company. Such payment may be made by
such method or methods and in such form or forms as set forth in any
grant agreement or as the Committee shall determine, including, without
limitation, cash, other Awards, Units (including withholding of Units
that would otherwise be issued pursuant to such Award), cashless-broker
exercises with simultaneous sale, or any combination thereof; provided
that the combined value, as determined by the Company, of all cash and
cash equivalents and the Fair Market Value of any such Units or other
property so tendered to the Company, as of the date of such tender, is
at least equal to the full amount required to be paid to the Company
pursuant to the Plan or the applicable Award agreement.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award agreement or in the Plan:
(i) Amendments to the Plan. Except as required by applicable
law or the rules of the principal securities exchange on which the
Units are traded and subject to Section 7(ii) below, the Board or the
Committee may amend, alter, suspend, discontinue, or terminate the Plan
in any manner, including increasing the number of Units available for
Awards under the Plan, without the consent of any partner, Participant,
other holder or beneficiary of an Award, or other Person.
(ii) Amendments to Awards. The Committee may waive any
conditions or rights under, amend any terms of, or alter any Award
theretofore granted, provided no change, other than pursuant to Section
7(iii), in any Award shall materially reduce the benefit to a
Participant without the consent of such Participant.
(iii) Adjustment of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. The Committee is hereby authorized to
make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4(c) of
the Plan) affecting the Partnership or the financial statements of the
Partnership, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available
under the Plan.
SECTION 8. General Provisions.
(a) No Rights to Awards. No Person shall have any claim to be granted
any Award, and there is no obligation for uniformity of treatment of
Participants. The terms and conditions of Awards need not be the same with
respect to each recipient.
(b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due or transfer made under any Award or from
any compensation or other amount owing to a Participant the amount (in cash,
Units, other securities, Units that would
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otherwise be issued pursuant to such Award or other property) of any applicable
taxes payable in respect of the grant of an Award, its exercise, the lapse of
restrictions thereon, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes.
(c) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate or to remain on the Board, as applicable. Further, the
Company or an Affiliate may at any time dismiss a Participant from employment,
free from any liability or any claim under the Plan, unless otherwise expressly
provided in the Plan or in any Award agreement.
(d) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable federal law.
(e) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Units
or other consideration under an Award if, in its sole discretion, it determines
that the issuance or transfer or such Units or such other consideration might
violate any applicable law or regulation, the rules of the principal securities
exchange on which the Units are then traded, or entitle the Partnership or an
Affiliate to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Affiliate.
(h) No Fractional Units. No fractional Units shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Units or whether such fractional Units or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
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(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 9. Term of the Plan.
The Plan shall be effective as of June 7, 2001 and shall continue until
the date terminated by the Board or Units are no longer available for grants of
Awards under the Plan, whichever occurs first. However, unless otherwise
expressly provided in the Plan or in an applicable Award Agreement, any Award
granted prior to such termination, and the authority of the Board or the
Committee to amend, alter, adjust, suspend, discontinue, or terminate any such
Award or to waive any conditions or rights under such Award, shall extend beyond
such termination date.
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