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): February 20, 2008
ENTERPRISE PRODUCTS PARTNERS L.P.
(Exact name of registrant as specified in its charter)
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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1-14323
(Commission File Number)
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76-0568219
(I.R.S. Employer
Identification No.) |
1100 Louisiana, 10th Floor
Houston, Texas 77002
(Address of Principal Executive Offices, including Zip Code)
(713) 381-6500
(Registrant’s 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 (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Unless the context requires otherwise, references to “we,” “us,” “our,” “Partnership,” or
“Enterprise Products Partners” within the context of this Current Report on Form 8-K refer to
Enterprise Products Partners L.P.
(e) On February 20, 2008, EPCO Inc. (“EPCO”) formed Enterprise Unit L.P. (“Enterprise LP”) to
serve as an incentive arrangement for certain employees of EPCO through a “profits interest” in
Enterprise LP. On that date, EPCO Holdings, Inc. (“EPCO Holdings”) agreed to make contributions of
$18,000,000 in the aggregate (the “Initial Contribution”) to Enterprise LP and was admitted as the
Class A limited partner. Certain EPCO employees, including some of our named executive officers,
were issued Class B limited partner interests and admitted as Class B limited partners of
Enterprise LP without any capital contribution. As with the awards granted in connection with
Enterprise GP Holdings L.P.’s initial public offering in 2005 in EPE Unit, L.P., these awards are
designed to provide additional long-term incentive compensation for our certain of our officers.
The profits interest awards (or Class B limited partner interests) in Enterprise LP entitle the
holder to participate in the appreciation in value of common units representing limited partner
interests in Enterprise GP Holdings (the “EPE Units”) and in the value of common units representing
limited partner interests in Enterprise Products Partners L.P. (the “EPD Units” and, together with
the EPE Units, the “Units”) and are subject to forfeiture. The Class B limited partner interests
in Enterprise LP held by our named executive officers are as follows:
Michael A. Creel, 17.48%, W. Randall Fowler, 7.77%,
Ralph S. Cunningham, 9.7%, James H. Lytal, 3.88% and A.J. Teague, 9.7%. A copy of the Enterprise
LP limited partnership agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K.
Unless otherwise agreed to by EPCO, EPCO Holdings and a majority in interest of the Class B
limited partners of Enterprise LP, Enterprise LP will terminate at the earlier of February 20, 2014
(six years from the date of the agreement) or a change in control of Enterprise Products Partners
L.P. or Enterprise GP Holdings. Enterprise LP has the following material terms regarding its
quarterly cash distribution to partners:.
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Distributions of cash flow – Each quarter, 100% of the
cash distributions received by Enterprise LP from us
and from Enterprise Products Partners L.P. will be
distributed to the Class A limited partner until EPCO
Holdings has received an amount equal to the Class A
preferred return (as defined below), and any remaining
distributions received by Enterprise LP will be
distributed to the Class B limited partners. The
Class A preferred return equals the Class A capital
base (as defined below) multiplied by 5.0% per annum.
The Class A limited partner’s capital base equals the
amount of any contributions of cash or cash
equivalents made by the Class A limited partner to
Enterprise LP, plus any unpaid Class A preferred
return from prior periods, less any distributions made
by Enterprise LP of proceeds from the sale of our
units owned by Enterprise LP (as described below). |
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Liquidating Distributions – Upon liquidation of
Enterprise LP, units having a fair market value equal
to the Class A limited partner capital base will be
distributed to EPCO Holdings, plus any accrued Class A
preferred return for the quarter in which liquidation
occurs. Any remaining units will be distributed to
the Class B limited partners. |
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Sale Proceeds – If Enterprise LP sells any Units that
it beneficially owns, the sale proceeds will be
distributed to the Class A limited partner and the
Class B limited partners in the same manner as
liquidating distributions described above. |
The Class B limited partner interests in Enterprise LP that are owned by EPCO employees are
subject to forfeiture if the participating employee’s employment with EPCO and its affiliates is
terminated prior to February 20, 2014, with customary exceptions for death, disability and certain
retirements. The risk of forfeiture associated with the Class B limited partner interests in
Enterprise LP will also lapse upon certain change of control events.
A portion of the fair value of these equity awards will be allocated to us under the EPCO
administrative services agreement as a non-cash expense. We will not reimburse EPCO, Enterprise LP
or any of their affiliates or partners, through the administrative services agreement or otherwise,
for any expenses related to Enterprise LP, including the Initial Contribution by EPCO Holdings.
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