Energy Transfer 2010 Annual Report Download - page 159

8. UNIT-BASED COMPENSATION PLANS:
We have issued equity incentive plans for employees, officers and directors, which provide for various types
of awards, including options to purchase ETP Common Units, restricted units, phantom units, Common
Units, distribution equivalent rights (“DERs”), Common Unit appreciation rights, and other unit-based
awards. As of December 31, 2010, an aggregate total of 3,657,136 ETP Common Units remain available to
be awarded under our equity incentive plans.
Unit Grants
We have granted restricted unit awards to employees that vest over a specified time period, typically a five-
year period at 20% per year, with vesting based on continued employment as of each applicable vesting
date. Upon vesting, ETP Common Units are issued. These unit awards entitle the recipients of the unit
awards to receive, with respect to each Common Unit subject to such award that has not either vested or
been forfeited, a cash payment equal to each cash distribution per Common Unit made by us on our
Common Units promptly following each such distribution by us to our Unitholders. We refer to these rights
as “distribution equivalent rights.”
Under our equity incentive plans, our non-employee directors each receive grants that vest ratably over three
years and do not entitle the holders to receive distributions during the vesting period.
Award Activity
The following table shows the activity of the awards granted to employees and non-employee directors:
Number of
Units
Weighted Average
Grant-Date Fair
Value Per Unit
Unvested awards as of December 31, 2009 1,690,592 $39.88
Awards granted 761,428 49.82
Awards vested (417,328) 39.60
Awards forfeited (98,114) 37.84
Unvested awards as of December 31, 2010 1,936,578 43.95
During the years ended December 31, 2010, 2009 and 2008, the weighted average grant-date fair value per
unit award granted was $49.82, $43.56 and $33.86, respectively. The total fair value of awards vested was
$16.5 million, $14.7 million and $14.6 million, respectively based on the market price of ETP Common
Units as of the vesting date. As of December 31, 2010, a total of 1,936,578 unit awards remain unvested, for
which ETP expects to recognize a total of $61.8 million in compensation expense over a weighted average
period of 1.9 years.
Related Party Awards
McReynolds Energy Partners, L.P., the general partner of which is owned and controlled by the President of
the entity that owns our General Partner, awarded to certain officers of ETP certain rights related to units of
ETE previously issued by ETE to such officers. These rights include the economic benefits of ownership of
these ETE units based on a five year vesting schedule whereby the officer will vest in the ETE units at a rate
of 20% per year. As these ETE units are conveyed to the recipients of these awards upon vesting from a
partnership that is not owned or managed by ETE or ETP, none of the costs related to such awards are paid
by ETP or ETE unless this partnership defaults under its obligations pursuant to these unit awards. As these
units were outstanding prior to these awards, these awards do not represent an increase in the number of
outstanding units of either ETP or ETE and are not dilutive to cash distributions per unit with respect to
either ETP or ETE.
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