Exhibit 10.1
Employment Agreement
     This Employment Agreement (the “Agreement”) is entered into between CPNO
Services, L.P., a Texas limited partnership (“Employer”) and James E. Wade
(“Employee”) on this 5th day of April, 2010 (the “Commencement Date”).
     WHEREAS, Employer recognizes the value of the employment of Employee to the
continued success and profitable operation of Employer’s parent, Copano Energy,
L.L.C. (the “Company”) and its Affiliates (as defined in Section 18); and
     WHEREAS, Employer desires to employ Employee to serve as Senior Vice
President of the Company and President and Chief Operating Officer of the
Company’s Texas segment operating subsidiaries and in such other positions with
Affiliates of Employer as may be designated from time to time.
     NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, Employer and
Employee hereby agree as follows:
1. Employment. Employer hereby agrees to employ Employee and Employee hereby
accepts employment upon the terms and conditions specified in this Agreement.
2. Duties and Responsibilities.
     2.1 Duties. Employee shall be employed by Employer to serve as Senior Vice
President of the Company and President and Chief Operating Officer of the
Company’s Texas segment operating subsidiaries and in such other positions with
Affiliates of Employer as may be designated from time to time. Employee agrees
to perform diligently and to the best of his abilities the duties and services
required to effectively discharge the functions assigned to such position by
Employer, as well as such additional or different duties and services that
Employee from time to time may be reasonably directed to perform by Employer.
Employee shall at all times comply with and be subject to all policies of
Employer.
     2.2 Time and Effort. Employee shall, during the term of this Agreement,
devote his full business time, energy, and best reasonable efforts to the
business and affairs of Employer, the Company and its Affiliates. Employee may
not engage, directly or indirectly, in any other business, investment, or
business activity that interferes with Employee’s performance of his duties
under this Agreement, is contrary to the interests of Employer, the Company or
its Affiliates, or requires any significant portion of Employee’s business time.
3. Term of Agreement.
     (a) This Agreement shall be for a three-year period commencing on the
Commencement Date (the “Primary Term”) and shall continue in effect year-to-year
thereafter (each year known as a “Renewal Term”) until terminated by Employer or
Employee providing sixty (60) days’ written notice to the other prior to the end
of the Primary Term or any subsequent Renewal Term.
     (b) Notwithstanding anything to the contrary contained in this Section 3,
it is agreed that if a Change of Control of the Company (as defined below)
occurs during the Primary Term or any Renewal

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Term, then this Agreement shall not be subject to termination under Section 3(a)
and shall remain in force for a period of one year after such Change of Control,
and if Employee’s employment is terminated within said one year, this Agreement
shall remain in effect in accordance with its terms. If, during the Primary Term
or any Renewal Term and within such one year after a Change of Control,
Employee’s employment with Employer is not terminated, this Agreement will again
be subject to termination pursuant to Section 3(a).
4. Compensation and Benefits
     4.1 Salary. Employee shall be paid beginning on the Commencement Date an
annual base salary of $270,000 (the “Base Salary”), subject to Employer’s
standard payroll practice and minus applicable taxes and withholdings.
Employee’s Base Salary shall be subject to annual review and adjustment.
     4.2 Bonus. Effective on the Commencement Date, Employee shall be eligible
to participate in the Company’s Management Incentive Compensation Plan (“MICP”)
or any substitute incentive compensation plan as may be in effect from time to
time for the benefit of management employees of the Company and its Affiliates
who are similarly situated to Employee. Employee shall be eligible to earn an
annual incentive award with an initial target award of 50% of the Base Salary.
Employee’s bonus amount will be determined by the Compensation Committee of the
Board of Directors of the Company based on a combination of factors, including
Employee’s achievement of applicable personal objectives and the Company’s
achievement of applicable financial and operational objectives. Any bonus earned
by Employee pursuant to this Section 4.2 will be paid no later than March 15th
following the end of the calendar year to which it relates.
     4.3 Long-Term Incentive Plan. Employee will be eligible to participate in
the Company’s Long-Term Incentive Plan (“LTIP”). On the Commencement Date,
Employee will receive a grant of 8,500 unit appreciation rights and 4,000
phantom units. The unit appreciation rights will have an exercise price equal to
the closing price of Company’s Common Units on the grant date, vest in five
equal annual increments commencing on the first anniversary of the Commencement
Date, and have a ten (10) year exercise term. The phantom units will vest in
five equal annual increments commencing on the first anniversary of the
Commencement Date.
     Additionally, on the Commencement Date, Employee will receive a grant of
35,000 long-term retention phantom units, which will cliff vest on August 1,
2013, or earlier upon the death or disability of Employee or termination of
Employee’s employment by the Company for reasons other than cause (as defined
herein).
     4.4 Insurance, Vacation, and Other Benefits. Employee shall be eligible to
participate in Employer’s medical and other insurance plans and all other
programs, savings plans, and other employment-related benefits of Employer in
accordance with the terms of those programs.
5. Termination of Agreement.
     5.1 Termination of Agreement by Employer For Cause or Upon Employee Death
or Disability.

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     (a) Employer shall have the right to terminate Employee’s employment under
this Agreement prior to the expiration of the Primary Term or any Renewal Term
for any of the following reasons:

          (i)   for “cause,” which termination shall be without notice or
payment in lieu of notice. “Cause” shall mean (a) gross negligence, gross
incompetence, or willful misconduct in the performance of the duties and
services required of Employee pursuant to this Agreement; (b) willful refusal
without proper reason to perform the duties and services required of Employee
pursuant to this Agreement; (c) the commission of any fraudulent act or
dishonesty in the course of Employee’s employment by Employer; (d) indictment,
arrest or conviction of a felony under a criminal code of the United States of
America or any state thereof, whether or not committed in the course of
employment by Employer; (e) investigation of Employee by any state or federal
agency for any alleged breach of a criminal or civil statute or regulation; or
(f) breach of any material provision of this Agreement or of any material policy
or procedure applicable to Employer;

          (ii)   upon Employee’s death;

          (iii)   upon Employee’s becoming incapacitated by accident, sickness,
or other circumstances that in the reasonable opinion of a qualified doctor
approved by Employer renders Employee mentally or physically incapable of
performing the duties and services required of Employee (with or without
reasonable accommodation within the meaning of the Americans with Disabilities
Act).

     (b) In the event of termination of this Agreement pursuant to
Section 5.1(a), Employee shall be entitled to receive (i) any Base Salary earned
through the date of termination of the Agreement but not yet paid, (ii) an
amount equal to any earned but unused vacation time and (iii) amounts (if any)
to which Employee may be entitled pursuant to the Company’s bonus or equity
incentive compensation plans.
     5.2 Other Terminations of Agreement by Employer. Subject to Section 9, in
the event Employer terminates this Agreement for any reason other than those set
forth in Section 5.1(a) prior to the expiration of the Primary Term, Employee
shall be entitled to a lump sum severance payment equal to two times the sum of
(a) Employee’s then Base Salary in effect at the time of termination and
(b) Employee’s target incentive award under the MICP or any applicable incentive
compensation plan as may be in effect. If Employee is terminated at any time
after the expiration of the Primary Term, Employee shall be entitled to a lump
sum severance payment equal to one year of Employee’s then Base Salary in effect
at the time of termination of the Agreement and shall be eligible to receive a
pro-rata bonus pursuant to the terms of the MICP or any applicable incentive
compensation plan as may be in effect. In addition, in each of these
circumstances, Employee shall also be entitled to continuation of all medical
and dental coverages in which he and his eligible dependents participated on the
date of termination of the Agreement, at Employer’s cost, for the greater of
(a) one year after the date of termination of the Agreement or (b) the remainder
of the Primary Term, if applicable, not to exceed the maximum periods provided
for under the Consolidated Omnibus Budget Reconciliation Act. Notwithstanding
the foregoing provisions of this Section 5.2, Employee shall be entitled to
payment of the greater of (1) any severance amount provided for in any Company
sponsored severance plan, if applicable, or (2) amounts payable hereunder.
For sake of clarity, Employee shall not be entitled to any severance payment or
benefits under this Agreement in connection with a termination of this Agreement
pursuant to Section 3. Any payment pursuant to this Section 5.2 shall be paid
within sixty days following the effective date of termination.

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     5.3 Change of Control. Subject to Section 9, in the event on or within one
year following a Change of Control of the Company, as defined in the Company’s
Change in Control Severance Plan (the “CIC Plan”) as in effect on the
Commencement Date, (i) Employee is terminated by the Company without “Cause” (as
defined in the CIC Plan) or (ii) Employee terminates his employment for Good
Reason, (as defined in the CIC Plan), then in lieu of any payment pursuant to
Section 5.2, Employee shall be entitled to (i) a severance payment that is the
greater of (1) the amount determined as a Level I participant in accordance with
the terms of the Company’s CIC Plan in effect on the Commencement Date or (2) an
amount to which Employee may be entitled to any successor change in control
severance plan, which payment shall be made promptly following the effective
date of the termination of Employee’s employment but in no event later than two
and one-half months following the end of the calendar year in which such date
occurred, and (ii) continuation of all medical and dental coverages in which he
and his eligible dependents participated on the date of termination of the
Agreement, at Employer’s cost, for the greater of the period provided in
Section 5.2 or the period available under the Company’s CIC Plan. In addition,
pursuant to the terms of the LTIP and the applicable awards, upon a Change of
Control of the Company, all outstanding awards (including, without limitation,
those specified in Section 4.3 above) shall automatically vest or become
exercisable, as the case may be; provided, however, that with respect to any
such award that constitutes deferred compensation within the meaning of Section
409A of the Code, the timing of payment of such award shall not be accelerated
unless the Change of Control constitutes a 409A Change of Control.
     “409A Change of Control” shall mean the occurrence of a change of control
event (as defined in Treasury regulation section 1.409A-3(i)(5)) with respect to
the Company.
     5.4 Termination by Employee. Employee shall have the right to terminate
this Agreement at any time upon thirty (30) days prior written notice to
Employer. In the event of termination of this Agreement pursuant to this
Section, Employee shall be entitled to receive (a) any Base Salary earned
through the date of termination of the Agreement but not yet paid, (b) an amount
equal to any earned but unused vacation time and (c) amounts (if any) to which
Employee may be entitled pursuant to the Company’s bonus or equity incentive
compensation plans.
6. Warranty. Employee represents and warrants that he is not under any
obligation to any entity or person that would prevent, impair or limit the
performance of his obligations under this Agreement. Employee further represents
and warrants that he has been afforded a reasonable opportunity to consider this
Agreement before signing it, that he has been afforded a reasonable opportunity
to retain an attorney of his choosing in connection with this Agreement, and
that he has carefully read the Agreement and understands it.
7. Non-Disclosure Agreement, Non-Solicitation Agreements, and Covenant Not to
Compete.
     7.1 Acknowledgments. Employee acknowledges that Employer wishes to protect
the competitive position of Employer and its Affiliates and to ensure the
continued protection of the confidential information of Employer and its
Affiliates. Employee further acknowledges that by virtue of his employment with
Employer, including those services provided by Employee to the Company and its
Affiliates, he is the beneficiary of the goodwill of Employer.
     7.2 Access to and Use of Confidential Information. Employer agrees to
provide Employee Confidential Information (as defined below). Employee
acknowledges that during the course of his employment, he will have access to
highly confidential information about Employer and its Affiliates’ business,
including but not limited to (i) information and records about customers,
partners, business methods or practices, (ii) finances, (iii) accounting,
(iv) pricing or pricing strategies, (v) contracts, (vi)

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vendors, (vii) computer hardware, software, and operating systems and
(viii) training programs (collectively “Confidential Information”). Employee
acknowledges that the Confidential Information is constantly revised and
updated. Employee further acknowledges that he needs the Confidential
Information to perform his job duties for Employer. Notwithstanding any
provision of this Agreement to the contrary, Confidential Information does not
include any information which: (i) at the time of disclosure to Employee or
thereafter is in the public domain (other than as a result of a disclosure
directly or indirectly by Employee), (ii) was available to Employee on a
non-confidential basis from a source other than Employer or its Affiliates,
provided that such source was not bound by a duty of confidentiality to Employer
or its Affiliates or (iii) is independently acquired or developed by Employee
without violating any of Employee’s obligations hereunder.
     7.3 Non-Disclosure of Confidential Information. Employee acknowledges that
the Confidential Information that Employer promises to provide him constitutes a
valuable, special, and unique asset of Employer. Employee acknowledges that all
Confidential Information is and shall at all times remain the property of
Employer. Employee further acknowledges that except as required by his duties to
Employer, he will not after termination of his employment, directly, indirectly,
or otherwise, use, disseminate, or disclose the Confidential Information without
having first obtained written permission from Employer. Employee agrees that any
Confidential Information in his possession or control, as well as any other
materials or items owned by Employer, whether or not they constitute
Confidential Information, shall be returned to Employer immediately upon the
termination of this Agreement.
     7.4 Non-Solicitation of Employees. In consideration of Employer’s promise
to provide Confidential Information to Employee, in consideration of his
employment with Employer, and in consideration of Employer’s promise to pay
Employee certain severance benefits as set forth in Section 5.2 and 5.3,
Employee agrees that for a one-year period following the termination of this
Agreement, Employee shall not, directly or indirectly, jointly or individually,
through other entities or persons or either on his own behalf or in the service
of others, (i) encourage or induce any then current employee of Employer or its
Affiliates to leave the employment of Employer or its Affiliates or (ii) offer
employment, retain, hire or assist in the hiring of any current employee of
Employer or its Affiliates or any former employee of Employer or its Affiliates
employed by Employer or its Affiliates at any time during the twelve (12) month
period prior to the termination of this Agreement, by any person, association,
or entity not affiliated with Employer or its Affiliates.
     7.5 Non-Solicitation of Customers. In consideration of Employer’s promise
to provide Confidential Information, in consideration of his employment with
Employer, and in consideration of Employer’s promise to pay Employee certain
severance benefits as set forth in Section 5.2 and 5.3, Employee agrees that for
a one-year period following the termination of this Agreement, Employee shall
not, directly or indirectly, jointly or individually, solicit or otherwise
attempt to obtain the business of customers of Employer or its Affiliates in the
counties in Texas in which Employer or its Affiliates conducted business at the
time of the termination of his employment or within 12 months prior thereto or
assist in the solicitation of such business by any person, association, or
entity not affiliated with Employer.
     7.6 Covenant Not to Compete. In consideration of Employer’s promise to
provide Confidential Information to Employee, in consideration of his employment
with Employer, and in consideration of Employer’s promise to pay Employee
certain severance benefits as set forth in Section 5.2 and 5.3, Employee agrees
that for a one-year period following the termination of this Agreement, Employee
shall not, directly or indirectly, jointly or individually, through other
entities or persons or either on his own behalf or in the service of others,
compete or attempt to compete with the Company or

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its Affiliates or work with or for any person or entity that engages in the
midstream natural gas business, or otherwise provides the same services or
engages in the same business as the Company or its Affiliates, in the counties
in Texas where the Company or its Affiliates or its subsidiaries do or have done
business during the term of this Agreement. Employee hereby agrees that the
provisions of this Section are reasonable in time, area, and scope, and that in
the event of Employee’s breach of this covenant not to compete or to disclose,
Employer shall be entitled to injunctive and/or monetary relief.
     7.7 Remedies. Employee and Employer acknowledge that in the event that
Employee breaches any of the restrictive covenants contained in this Agreement,
it will be difficult to measure Employer’s damages for such injuries and that,
in the event of such a breach, Employer, in addition to pursuing its other legal
and equitable remedies, will be entitled to a temporary restraining order and
injunction to enforce this Agreement, without any requirement for the securing
or posting of any bond in connection with such a remedy.
     7.8 Reformation. It is expressly understood and agreed that Employer and
Employee consider the restrictions contained in this Section 7 to be reasonable
and necessary to protect the proprietary information of Employer and its
affiliates. Nevertheless, if any of the aforesaid restrictions are found by a
court having jurisdiction to be unreasonable, or overly broad as to geographic
area or time, or otherwise unenforceable, the parties intend for the
restrictions therein set forth to be modified by such court so as to be
reasonable and enforceable and, as so modified by the court, to be fully
enforced.
     7.9 Survival. It is expressly understood that the restrictions set forth in
this Section 7 shall survive the termination of this Agreement in accordance
with their terms notwithstanding any termination of this Agreement.
8. Resolution of Disputes.
     8.1. Alternative Dispute Resolution. Except with respect to the equitable
relief described in Section 7, Employer and Employee hereby knowingly,
voluntarily, and irrevocably agree that any disputes or conflicts in any way
arising out of or relating to: (a) this Agreement; (b) the performance or breach
of any of the matters described herein; or (c) Employee’s employment with
Employer shall be resolved pursuant to binding arbitration under the auspices of
the American Arbitration Association (“AAA”).
     (a) The arbitrator shall be licensed to practice law in Texas and shall be
selected by mutual agreement of the parties. If the parties fail to reach
agreement upon appointment of an arbitrator within thirty (30) days following
receipt by one party of the other party’s notice of desire to arbitrate, then
the arbitrator shall be selected from a list or lists of persons submitted by
the AAA. The selection process shall be that which is set forth in the AAA
National Rules for the Resolution of Employment Disputes then prevailing, except
that, if the parties fail to select an arbitrator from one or more lists, AAA
shall not have the power to make an appointment but shall continue to submit
additional lists until an arbitrator has been selected.
     (b) Notice of arbitration must be given within the limitations period for
the claim on which the notice is based. If the claiming party fails to give
notice of arbitration within that time, the claim shall be deemed to be waived
and shall be barred from either arbitration or litigation.

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     (c) The arbitrator shall render a final decision on the claim(s) within
180 days of the selection of the arbitrator and such decision shall be set forth
in a written, reasoned opinion. In reaching his decision, the arbitrator shall
be bound to apply the substantive rules of applicable law and shall be
prohibited from awarding any exemplary or punitive damages.
     (d) Employer and Employee jointly recognize the mutual benefits of
arbitration, and mutually desire and intend that the expenses of the arbitration
proceeding, including the arbitrator’s fees, be shared equally between them,
subject to the arbitrator’s discretion, in appropriate cases, to issue a final
award granting such expenses to one party or the other. Employer and Employee
expressly acknowledge that the sharing of such expenses is both fair and
equitable, and that neither will challenge such arrangement. Nevertheless, if a
court addressing the enforceability of this Section 8 should deem Section 8 to
be unenforceable because of the equal sharing of expenses, then Employer shall
pay such percentage of the expenses as are necessary to render Section 8
enforceable in the eyes of the Court, but may seek to recover one-half of such
expenses from any monetary award, if any, that is made to Employee by the
arbitrator.
     8.2 Survival. The provisions of Section 8 shall survive the termination of
this Agreement for any reason whatsoever.
9. Release. As a condition to receiving any severance payments or benefits under
this Agreement, Employee shall execute and not revoke a general release in a
form acceptable to Employer, releasing all claims relating to Employee’s
employment with Employer, the termination thereof, and the terms and conditions
thereof. Such general release must be irrevocable not later than 60 days
following his termination of employment, otherwise any severance benefits
provided hereunder shall be forfeited.
10. Waiver. Any waiver or consent from either party with respect to any term or
provision of this Agreement shall be effective only in the specific instance and
for the specific purpose for which it was given and shall not be deemed,
regardless of frequency given, to be a further or continuing waiver or consent.
The failure or delay of either party at any time to require performance of, or
to exercise any of its rights or remedies with respect to any term or provision
of this Agreement shall not affect such party’s right at a later time to enforce
any such term or provision.
11. Amendment. No amendment or modification of this Agreement shall be valid or
effective, unless it is in writing and signed by both Employer and Employee.
12. Assignment. Employer may assign this Agreement to any successor entity of
Employer or any Affiliate of Employer. Employee may not assign this Agreement.
13. Severability. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
14. Entire Agreement. This Agreement constitutes the entire agreement between
Employer and Employee with respect to the subject matter of this Agreement.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Texas without regard to conflicts of
law principles thereof.

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16. Notices. Any notice required or permitted under this Agreement shall be in
writing and shall be delivered by certified or registered United States Mail,
postage prepaid, addressed as follows:

         
 
  Employer:   CPNO Services, L.P.
2727 Allen Parkway, Suite 1200
Houston, Texas 77019
Attention: R. Bruce Northcutt
President and Chief Executive Officer

 
       
 
  Employee:   James E. Wade

 

 
       

     Any notice given in accordance herewith shall be deemed to have been given
when received by the addressee. The address for notice may be changed by notice
given in accordance with this provision.
17. Application of Section 409A of the Internal Revenue Code.
     (a) Delayed Payment Restriction. Notwithstanding any provision in this
Agreement to the contrary, if any payment or benefit provided for herein or
pursuant to any other agreement or plan of the Company to which Employee is
entitled to any payment or benefit would be subject to additional taxes and
interest under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) if the Employee’s receipt of such payment or benefit is not delayed
until the Section 409A Payment Date, then such payment or benefit shall not be
provided to Employee (or Employee’s estate, if applicable) until the
Section 409A Payment Date. For purposes of this Agreement, “Section 409A Payment
Date” shall mean the earlier of (1) the date of the Employee’s death or (2) the
date which is six months after the date of termination of the Employee’s
employment with the Company. Employee hereby agrees to be bound by the Company’s
determination of its “specified employees” (as such term is defined in
Section 409A of the Code) in accordance with any of the methods permitted under
the regulations issued under Section 409A of the Code.
     (b) Separation from Service. For purposes of this Agreement, to the extent
required by Section 409A of the Code, references Employee’s termination of
employment will be interpreted consistently with the term “separation from
service” within the meaning of Section 409A of the Code.
     (c) Section 409A Compliance. References in this Agreement to Section 409A
of the Code include both that section of the Code itself and any regulations and
authoritative guidance promulgated thereunder. Each payment under this
Agreement, including each payment in a series of installment payments, is
intended to be a separate payment for purposes of Treas. Reg. § 1.409A-2(b), and
is intended to be: (i) exempt from Section 409A, including, but not limited to,
by compliance with the short-term deferral exemption as specified in Treas. Reg.
§ 1.409A-1(b)(4), or (ii) in compliance with Section 409A, including, but not
limited to, being paid pursuant to a fixed schedule or specified date pursuant
to Treas. Reg. § 1.409A-3(a) and the provisions of this Agreement will be
administered, interpreted and construed accordingly.

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18. Affiliates. For purposes of this Agreement, “Affiliate” shall mean with
respect to the Company, any other person that directly or indirectly through one
or more intermediaries controls, is controlled by or is under common control
with, the Company. 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.
19 . Execution. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original but all of which shall be deemed one
instrument.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.

            CPNO SERVICES, L.P.
      By: CPNO Services, GP, L.L.C., its general
partner         By:   /s/ R. Bruce Northcutt         R. Bruce Northcutt       
President and
Chief Executive Officer       JAMES E. WADE
      /s/ James E. Wade                

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