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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
January 22, 2008 (January 17, 2008)
TARGA RESOURCES PARTNERS LP
(Exact name of registrant as specified in its charter)
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Delaware
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001-33303
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65-1295427 |
(State or other jurisdiction
of incorporation or organization)
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(Commission
File Number)
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(IRS Employer
Identification No.) |
1000 Louisiana, Suite 4300
Houston, TX 77002
(Address of principal executive office and Zip Code)
(713) 584-1000
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Targa Investments 2008 Annual Incentive Compensation Plan. On January 17, 2008,
the Compensation Committee (the Committee) of the Board of Directors (the
Board) of Targa Resources Investments Inc. (Targa Investments), the
indirect parent of Targa Resources, Inc. (the Company) which is the indirect parent
of the general partner of Targa Resources Partners LP (the Partnership), approved
the Targa Investments 2008 Annual Incentive Compensation Plan (the Bonus Plan).
The Bonus Plan is a discretionary annual cash bonus plan available to all of the Companys
employees, including its executive officers. The purpose of the Bonus Plan is to reward
employees for contributions toward the Companys business priorities approved by the
Committee and to aid the Company in retaining and motivating employees. Under the Bonus
Plan, a discretionary cash bonus pool may be funded based on the Companys achievement of
certain business priorities recommended by the Companys chief executive officer (the
CEO) and approved by the Committee. The Bonus Plan is administered by the
Committee, which considers certain recommendations by the CEO. Following the end of the year, the
CEO recommends to the Committee the total amount of cash to be allocated to the bonus pool
based upon the achievement of the business priorities of the Company, generally ranging from
0 to 2x the total target bonus for the employees in the pool. Upon receipt of the CEOs
recommendation, the Committee, in its sole discretion, determines the total amount of cash to
be allocated to the bonus pool. Additionally, the Committee, in its sole discretion,
determines the amount of the cash bonus award to each of the Companys executive officers,
including the CEO. The executive officers determine the amount of the cash bonus pool to be
allocated to certain of the Companys departments, groups and employees (other than the
executive officers of the Company) based upon the recommendation of their supervisors,
managers and line officers.
The Committee has established the following six key business priorities for 2008:
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Identify opportunities to strengthen organization and develop plans to
address them; |
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Expand on existing processes to enhance the involvement of the
organization in making our businesses better; |
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Aggressively develop attractive return projects and opportunities and
proactively invest in and expand the Companys businesses; |
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Improve insurance recovery situation with resolution or clear path to
resolution; |
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Make a significant third-party acquisition(s) at the Partnership and/or
continue to effectively drop down Company assets to the Partnership; and |
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Execute on all fronts (including the 2008 business plan and above
priorities). |
The Committee has targeted a total cash bonus pool for achievement of the business
priorities based on the sum of individual employee market-based target percentages ranging
from approximately 3% to 50% of each employees eligible earnings. Generally, eligible
earnings are an employees base salary and overtime pay. The Committee has discretion to
adjust the cash bonus pool attributable to the business priorities based on accomplishment of
the applicable objectives as determined by the Committee and the CEO. Funding of the
Companys cash bonus pool and the payment of individual cash bonuses to employees are subject
to the sole discretion of the Committee.
Long-Term Incentive Plan. On January 17, 2008, the Committee made the following
grants under the Targa Resources Investments Inc. Long-Term Incentive Plan (the
Plan): 4,000 performance units to Mr. Rene R. Joyce, 3,500 performance units to Mr.
Joe Bob Perkins, 3,500 performance units to Mr. James W. Whalen, 3,500 performance units to
Mr. Michael A. Heim and 2,700 performance units to Mr. Jeffrey J. McParland. The Plan is
administered by the Committee.
Awards under the Plan may be made to employees, consultants and directors of Targa
Investments and its affiliates who perform services for Targa Investments, including
officers, directors and employees of the Company and the Partnerships general partner. The
Plan provides for the grant of performance units which are cash-settled awards linked to the
relative performance of the Partnerships common units. The awards made to Messrs. Joyce,
Perkins, Whalen, Heim and McParland will vest on June 30, 2011, with the amounts vesting
under such awards dependent on the Partnerships performance compared to a peer-group
consisting of the Partnership and 12 other publicly traded partnerships. The Committee has
the ability to modify the peer-group in the event a peer company is no longer determined to
be one of the Partnerships peers. The cash settlement value of each performance unit award
will be the value of an equivalent Partnership common unit at the time of vesting plus
associated distributions over the three year period, which may be higher or lower than the
Partnership common unit price at the time of the grant. If the Partnerships performance
equals or exceeds the performance for the median of the group, 100% of the award will vest.
If the Partnership ranks tenth in the group, 50% of the
award will vest, between tenth and seventh, 50% to 100% will vest, and for a performance
ranking lower than tenth, no amounts will vest.
This description of the Plan is qualified in its entirety by reference to the Plan, a
copy of which is filed as Exhibit 10.9 to the Partnerships Registration Statement on Form
S-1 (File No. 333-138747), as amended, and is incorporated herein by reference. A copy of
the form of Performance Unit Grant Agreement to be used in connection with the 2008 and
future awards under the Plan is filed as Exhibit 10.2 to this Current Report and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit |
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Number |
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Description |
Exhibit 10.1
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Targa Resources Investments Inc. Long-Term Incentive Plan
(incorporated by reference to Exhibit 10.9 to Targa Resources
Partners LPs Registration Statement on Form S-1/A filed
February 1, 2007 (File No. 333-138747)). |
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Exhibit 10.2
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Form of Performance Unit Grant Agreement |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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TARGA RESOURCES PARTNERS LP
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By: |
Targa Resources GP LLC,
its general partner
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Dated: January 22, 2008 |
By: |
/s/ Jeffrey J. McParland
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Jeffrey J. McParland |
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Executive Vice President and Chief Financial Officer |
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EXHIBIT INDEX
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Exhibit |
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Number |
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Description |
Exhibit 10.1
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Targa Resources Investments Inc. Long-Term Incentive Plan
(incorporated by reference to Exhibit 10.9 to Targa Resources
Partners LPs Registration Statement on Form S-1/A filed
February 1, 2007 (File No. 333-138747)). |
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Exhibit 10.2
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Form of Performance Unit Grant Agreement |
exv10w2
Exhibit 10.2
Targa Resources Investments Inc.
Long Term Incentive Plan
Performance Unit Grant Agreement
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Grantee:
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Date of Grant:
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___, 200_ |
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Number of Performance Units Granted:
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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 Investments Inc. 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 after the Date of Grant
and prior to payment of your Performance Unit, if earned. 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 (set forth on Attachment A), then as soon as reasonably practical following the
end of the Performance Period you will receive, in cancellation of your Performance Units, an
amount of cash equal to the product of (i) your number of Performance Units times (ii) the
Performance Percentage (set forth in Item II on Attachment A) for the Performance Period times
(iii) the Fair Market Value of a Common Unit on the last day of the Performance Period. 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 Investments Inc. 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
Companys 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 Date of Grant 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, 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 an amount of cash equal to the sum of (i) the product of (a) the Fair Market Value of
a Common Unit times (b) the number of Performance Units granted to you plus (ii) the amount of DERs
then credited to you, if any.
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
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 Investments Inc. 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 has a
tax withholding obligation pursuant to applicable law, the Company shall withhold such tax from any
payment due you hereunder.
9. Amendments. This Agreement may be modified only by a written agreement signed by
you and an authorized person on behalf of Targa Resources Investments Inc. who is expressly
authorized to execute such document; provided, however, notwithstanding the foregoing, Targa
Resources Investments Inc. may make any change to this Agreement without your consent if such
change is not materially adverse to your rights under this Agreement.
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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.
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TARGA RESOURCES INVESTMENTS INC.
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By: |
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Name: |
Rene R. Joyce |
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Title: |
Chief Executive Officer |
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ATTACHMENT A
I. |
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The Performance Period shall begin on ___, 2007 and end on , 20_. |
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Performance Goal |
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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 . |
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Peer Group Ranking |
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Performance |
(out of 13 companies) |
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Percentage1 |
No. 1-7 |
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100 |
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No. 8 |
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83.33 |
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No. 9 |
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66.67 |
% |
No. 102 |
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50 |
% |
No. 11-13 |
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0 |
% |
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1 |
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The Performance Percentage between No. 7 and No. 10 is a percentage
between 50% and 100% based on a comparison of the Total Returns described above. |
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No. 10 is the minimum Performance Goal for which there is a Performance
Percentage. |
III. |
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Adjustments to Performance Goals for Certain Events |
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If, during the Performance Period, there is a change in accounting standards required by the
Financial Accounting Standards Board, the above performance goals shall be adjusted by the
Committee as appropriate, in its discretion, to disregard the effect of such change. |
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IV. |
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The Peer Group shall consist of the following companies: |
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Company |
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Ticker |
Energy Transfer Partners
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ETP |
Oneok Partners
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OKS |
Copano Energy
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CPNO |
DCP Midstream
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DPM |
Regency Energy Partners
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RGNC |
Plains All American Pipeline
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PAA |
MarkWest Energy Partners
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MWE |
Williams Energy Partners
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WPZ |
Magellan Midstream
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MMP |
Martin Midstream
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MMLP |
Enbridge Energy Partners
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EEP |
Crosstex Energy
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XTEX |
Targa Resources Partners LP
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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. |
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Committee Certification |
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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 Committees
certification. However, Committee certification shall not apply in the event of a Change of
Control. |
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