Exhibit 10.2
AMENDED AND RESTATED
COPANO ENERGY, L.L.C.
LONG-TERM INCENTIVE PLAN
     SECTION 1. Purpose of the Plan.
     The Copano Energy, L.L.C. Long-Term Incentive Plan (the “Plan”) is intended
to promote the interests of Copano Energy, L.L.C., a Delaware limited liability
company (the “Company”), by providing to Employees and Directors of the Company
and its Affiliates incentive compensation awards for superior performance that
are based on Units. The Plan is also contemplated to enhance the ability of the
Company and its Affiliates to attract and retain the services of individuals who
are essential for the growth and profitability of the Company and to encourage
those individuals to devote their best efforts to advancing the business of the
Company.
     SECTION 2. Definitions.
     As used in the Plan, the following terms shall have the meanings set forth
below:
     “Affiliate” means, (i) 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 and
(ii) with respect to the Company Copano Operations for so long as Copano
Operations provides any general and administrative functions or field operating
personnel to the Company or its subsidiaries. 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, UAR, Restricted Unit, Phantom Unit or Unit Award
granted under the Plan, and shall include any tandem DERs granted with respect
to an Award.
     “Award Agreement” means the written or electronic agreement by which an
Award shall be evidenced.
     “Board” means the Board of Directors of the Company.
     “Change of Control” means the happening of any of the following events:
     (i) the acquisition by any “person,” as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than the Company or an Affiliate of the Company (other than Copano
Operations), of “beneficial ownership” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the combined voting power of the Company’s then outstanding
securities entitled to vote generally in the election of directors; or
     (ii) the consummation of a reorganization, merger, consolidation or other
form of business transaction or series of business transactions, in each case,
with respect to which persons who were the members of the Company immediately
prior to such reorganization,

 

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merger or consolidation or other transaction do not, immediately thereafter, own
more than 50% of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated company’s then
outstanding voting securities; or
     (iii) the sale, lease or disposition (in one or a series of related
transactions) by the Company of all or substantially all the Company’s assets to
any Person or its Affiliates, other than the Company or its Affiliates (other
than Copano Operations); or
     (iv) a change in the composition of the Board, as a result of which fewer
than a majority of the directors are Incumbent Directors. “Incumbent Directors”
shall mean directors who either (A) are directors of the Company as of the
effective date of the initial public offering of the Company’s equity interests,
or (B) are elected, or nominated for election, thereafter to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination or (C) are among the five initial independent
directors of the Company, but “Incumbent Director” shall not include an
individual whose election or nomination is in connection with (i) an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or an actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board or (ii) a plan or agreement to replace a majority of the then Incumbent
Directors; or
     (v) the approval by the Board or the members of the Company of a complete
or substantially complete liquidation or dissolution of the Company.
     “Code” means the Internal Revenue Code of 1986, as amended. Reference to
any section of the Code shall include reference to such section and the
regulations and other authoritative guidance promulgated thereunder.
     “Committee” means the Compensation Committee of the Board or such other
committee of the Board as may be appointed by the Board to administer the Plan.
     “DER” or “Distribution Equivalent Right” means a contingent right, granted
in tandem with a specific Option, UAR or Phantom Unit, to receive an amount in
cash equal to the cash distributions made by the Company with respect to a Unit
during the period such tandem Award is outstanding.
     “Director” means a member of the Board who is not an Employee.
     “Employee” means (i) any employee of the Company or (ii) an employee of an
Affiliate or an independent contractor consultant who performs services for the
benefit of the Company or a subsidiary of the Company. As used herein,
termination of consulting services shall be deemed to be a termination of
employment.
     “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 Committee.
     “Option” means an option to purchase Units granted under the Plan.

 

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     “Participant” means any Employee or Director granted an Award under the
Plan.
     “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.
     “Phantom Unit” means a phantom (notional) Unit granted under the Plan which
upon vesting entitles the Participant to receive a Unit or an amount of cash
equal to the Fair Market Value of a Unit, as determined by the Committee in its
discretion.
     “Restricted Period” means the period established by the Committee with
respect to an Award during which the Award remains subject to forfeiture and is
either not exercisable by or payable to the Participant, as the case may be.
     “Restricted Unit” means a Unit granted under the Plan that is subject to a
Restricted Period.
     “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under 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 common unit of the Company.
     “Unit Award” means a Unit granted under the Plan that is not subject to a
Restricted Period.
     “UDR” or “Unit Distribution Right” means a distribution made by the Company
with respect to a Restricted Unit.
     “Unit Appreciation Right” or “UAR” means an Award that, upon exercise,
entitles the holder to receive the excess of the Fair Market Value of a Unit on
the exercise date over the exercise price established for such Unit Appreciation
Right. Such excess may be paid in cash and/or in Units as determined by the
Committee in its discretion.
     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 and applicable law, 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, if any. 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
Rule 16b-3 or a member of the Board. 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 type or types of
Awards to be granted to a Participant; (iii) determine the number of Units to be
covered by Awards; (iv) determine the terms and conditions of any Award;
(v) determine

 

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whether, to what extent, and under what circumstances Awards may be settled,
exercised, canceled, or forfeited; (vi) interpret and administer the Plan and
any instrument or agreement relating to an Award made under the Plan;
(vii) 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 (viii) 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, any Affiliate, any Participant, and any
beneficiary of any Award.

    SECTION 4. Units.

     (a) Limits on Units Deliverable. Subject to adjustment as provided in
Section 4(c), the number of Units that may be delivered with respect to Awards
under the Plan shall not exceed 6,200,000 Units, determined at the time of any
Award; provided, however, that no more than 3,700,000 (as adjusted pursuant to
Section 4(c)) may be delivered in payment of Unit Awards, Restricted Units and
Phantom Units. If any Award (including Restricted Units) is terminated,
forfeited or expires for any reason without the delivery of Units covered by
such Award, or Units are withheld from an Award to satisfy the exercise price or
tax withholding obligation with respect to such Award, such Units shall again be
available for delivery pursuant to other Awards granted under the Plan.
Notwithstanding the foregoing, there shall not be any limitation on the number
of Awards that may be granted under the Plan and paid in cash.
     (b) Sources of Units Deliverable Under Awards. Any Units delivered pursuant
to an Award shall consist, in whole or in part, of Units acquired in the open
market, from any Affiliate or any other Person, newly issued Units, or any
combination of the foregoing, as determined by the Committee in its sole
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,
Change of Control, consolidation, split-up, spin-off, combination, repurchase,
or exchange of Units or other securities of the Company, issuance of warrants or
other rights to purchase Units or other securities of the Company, 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 the 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, (iii) the grant or exercise price with respect to any Award,
or (iv) 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 or Director shall be eligible to be designated a Participant
and receive an Award under the Plan.
     SECTION 6. Awards.

 

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     (a) Options. The Committee shall have the authority to determine the
Employees and Directors to whom Options shall be granted, the number of Units to
be covered by each Option, whether DERs are granted with respect to such Option,
the purchase price for such Units 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 at the time the Option is granted, provided
such purchase price may not be less than its Fair Market Value as of the date of
grant.
     (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 in part, which may include, without limitation, accelerated vesting
upon the achievement of specified performance goals, and, in its discretion, the
method or methods by which payment of the exercise price with respect thereto
may be made or deemed to have been made, which may include, without limitation,
cash, check acceptable to the Company, a “cashless-broker” exercise through
procedures approved by the Company, with the consent of the Company, the
withholding of Units that would otherwise be delivered to the Participant upon
the exercise of the Option, other securities or other property, or any
combination thereof, having a Fair Market Value on the exercise date equal to
the relevant exercise price.
     (iii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment with the Company and
its Affiliates or membership on the Board, whichever is applicable, for any
reason during the applicable Restricted Period, all 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.
     (iv) DERs. To the extent provided by the Committee, in its discretion, a
grant of Options may include a tandem DER grant, which may provide that such
DERs shall be paid directly to the Participant, be credited to a bookkeeping
account (with or without interest in the discretion of the Committee) subject to
the same vesting restrictions as the tandem Award, or be subject to such other
provisions or restrictions as determined by the Committee in its discretion.
Further, to the extent required by Section 409A of the Code, DERs granted in
tandem with Options shall not be directly or indirectly contingent on the
exercise of the Options with respect to which they were granted.
     (v) Option Cash-Out Right. To the extent determined by the Company in its
sole discretion, and to the extent provided for in an Award Agreement, in lieu
of issuing Units to the Participant in connection with the exercise of an
Option, the Company may elect to pay the Participant an amount of cash equal to
the excess of the aggregate Fair Market Value of the Units as to which the
Options are being exercised as of the date of exercise over the aggregate
exercise price for such Units, less any amounts required to be withheld by the
Company or an Affiliate to meet withholding obligations under applicable law
(the right to make such election, the “Option Cash-Out Right”). Upon payment by
the Company of such amount, the number of Units that may be purchased by the
Participant pursuant to the Options shall be reduced to the same extent as if
the Company had not exercised the Option Cash-Out Right and the Participant had
exercised the Options pursuant to his election.

 

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     (b) UARs. The Committee shall have the authority to determine the Employees
and Directors to whom Unit Appreciation Rights shall be granted, the number of
Units to be covered by each grant, whether DERs are granted with respect to such
Unit Appreciation Right, the exercise price therefor and the conditions and
limitations applicable to the exercise of the Unit Appreciation Right, 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 exercise price per Unit Appreciation Right shall be
determined by the Committee at the time the Unit Appreciation Right is granted
but may not be less than the Fair Market Value of a Unit as of the date of
grant.
     (ii) Time of Exercise. The Committee shall determine the Restricted Period,
i.e., the time or times at which a Unit Appreciation Right may be exercised in
whole or in part, which may include, without limitation, accelerated vesting
upon the achievement of specified performance goals.
     (iii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment with the Company and
its Affiliates or membership on the Board, whichever is applicable, for any
reason during the applicable Restricted Period, all outstanding Unit
Appreciation Rights awarded the Participant shall be automatically forfeited on
such termination. The Committee may, in its discretion, waive in whole or in
part such forfeiture with respect to a Participant’s Unit Appreciation Rights.
     (iv) Unit Appreciation Right DERs. To the extent provided by the Committee,
in its discretion, a grant of Unit Appreciation Rights may include a tandem DER
grant, which may provide that such DERs shall be paid directly to the
Participant, be credited to a bookkeeping account (with or without interest in
the discretion of the Committee) subject to the same vesting restrictions as the
tandem Unit Appreciation Rights Award, or be subject to such other provisions or
restrictions as determined by the Committee in its discretion. Further, to the
extent required by Section 409A of the Code, DERs granted in tandem with UARs
shall not be directly or indirectly contingent on the exercise of the UARs with
respect to which they were granted.
     (c) Phantom Units. The Committee shall have the authority to determine the
Employees and Directors to whom Phantom Units shall be granted, the number of
Phantom Units to be granted to each such Participant, the Restricted Period, the
time or conditions under which the Phantom Units may become vested or forfeited,
which may include, without limitation, the accelerated vesting upon the
achievement of specified performance goals, and such other terms and conditions
as the Committee may establish with respect to such Awards, including whether
DERs are granted with respect to such Phantom Units.
     (i) DERs. To the extent provided by the Committee, in its discretion, a
grant of Phantom Units may include a tandem DER grant, which may provide that
such DERs shall be paid directly to the Participant, be credited to a
bookkeeping account (with or without interest in the discretion of the
Committee) subject to the same vesting restrictions as the tandem Award, or be
subject to such other provisions or restrictions as determined by the Committee
in its discretion.
     (ii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment with the Company and
its Affiliates or membership on the Board, whichever is applicable, for any
reason during the applicable

 

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Restricted Period, all outstanding Phantom Units awarded the Participant shall
be automatically forfeited on such termination. The Committee may, in its
discretion, waive in whole or in part such forfeiture with respect to a
Participant’s Phantom Units.
     (iii) Lapse of Restrictions. Upon or as soon as reasonably practical
following the vesting of each Phantom Unit, subject to the provisions of
Section 8(b), the Participant shall be entitled to receive from the Company one
Unit or cash equal to the Fair Market Value of a Unit, as determined by the
Committee in its discretion.
     (d) Restricted Units. The Committee shall have the authority to determine
the Employees and Directors to whom Restricted Units shall be granted, the
number of Restricted Units to be granted to each such Participant, the
Restricted Period, the conditions under which the Restricted Units may become
vested or forfeited, which may include, without limitation, the accelerated
vesting upon the achievement of specified performance goals, and such other
terms and conditions as the Committee may establish with respect to such Awards.
     (i) UDRs. To the extent provided by the Committee, in its discretion, a
grant of Restricted Units may provide that distributions made by the Company
with respect to the Restricted Units shall be subject to the same forfeiture and
other restrictions as the Restricted Unit and, if restricted, such distributions
shall be held, without interest, until the Restricted Unit vests or is forfeited
with the UDR being paid or forfeited at the same time, as the case may be.
Absent such a restriction on the UDRs in the Award Agreement, UDRs shall be paid
to the holder of the Restricted Unit without restriction.
     (ii) Forfeitures. Except as otherwise provided in the terms of the Award
Agreement, upon termination of a Participant’s employment with the Company and
its Affiliates or membership on the Board, whichever is applicable, for any
reason during the applicable Restricted Period, all outstanding Restricted Units
awarded the Participant shall be automatically forfeited on such termination.
The Committee may, in its discretion, waive in whole or in part such forfeiture
with respect to a Participant’s Restricted Units.
     (iii) Lapse of Restrictions. Upon or as soon as reasonably practical
following the vesting of each Restricted Unit, subject to the provisions of
Section 8(b), the Participant shall be entitled to have the restrictions removed
from his or her Unit certificate so that the Participant then holds an
unrestricted Unit.
     (iv) Restricted Unit Cash-Out Right. To the extent determined by the
Company in its sole discretion, and to the extent provided for in an Award
Agreement, the Company may elect to pay a Participant an amount of cash equal to
the aggregate Fair Market Value of the Restricted Units on the vesting date of
such units, less any amounts required by the Company or an Affiliate to meet
withholding obligations under applicable law, in lieu of issuing such units to
the Participant (the right to make such election, the “Restricted Unit Cash-Out
Right”). Upon payment by the Company of such amount, any certificate
representing the Restricted Units as to which such Restricted Unit Cash-Out
Right has been exercised shall be cancelled.
     (e) Unit Awards. The Committee may grant Unit Awards to such Employees and
Directors, and in such amounts, as it may determine. Such grants may be based on
the Participant’s performance or such other considerations as the Committee
deems appropriate.
     (f) General.

 

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     (i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan or
any award granted under any other plan of the Company or any Affiliate. Awards
granted in addition to or in tandem with other Awards or awards granted under
any other plan of the Company or any Affiliate may be granted either at the same
time as or at a different time from the grant of such other Awards or awards.
     (ii) Limits on Transfer of Awards.
     (A) Except as provided in paragraph (C) below, each Award shall be
exercisable or payable only by or to 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 paragraphs (A) and (C), no Award and no right
under any such Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant 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 or approved by the Committee with
respect to an Award, an Award may be transferred by a Participant without
consideration to immediate family members or related family trusts, limited
partnerships or similar entities on such terms and conditions as the Committee
may from time to time establish.
     (iii) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee, but shall not exceed 10 years.
     (iv) Unit Certificates. All certificates for Units or other securities of
the Company 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.
     (v) Consideration for Grants. Awards may be granted for such consideration,
including services, as the Committee determines.
     (vi) Delivery of Units or other Securities and Payment by Participant of
Consideration. Notwithstanding anything in the Plan or any Award Agreement to
the contrary, delivery of Units pursuant to the exercise or vesting 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 required to
be paid pursuant to the Plan or the applicable Award Agreement (including,
without limitation, any exercise price or tax withholding) is received by the
Company.

 

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     (vii) Change of Control. Unless specifically provided otherwise in the
Award Agreement, upon a Change of Control or such time prior thereto as
established by the Committee, all outstanding Awards shall automatically vest or
become exercisable in full, as the case may be. In this regard, all Restricted
Periods shall terminate and all performance criteria, if any, shall be deemed to
have been achieved at the maximum level. To the extent an Option or UAR is not
exercised, or a Phantom Unit or Restricted Unit does not vest, upon the Change
of Control, the Committee may, in its discretion, cancel such Award or provide
for an assumption of such Award or a replacement grant on substantially the same
terms; provided, however, upon any cancellation of an Option or UAR that has a
positive “spread” or a Phantom Unit or Restricted Unit, the holder shall be paid
an amount in cash and/or other property, as determined by the Committee, equal
to such “spread” if an Option or UAR or equal to the Fair Market Value of a
Unit, if a Phantom Unit or Restricted Unit.
     SECTION 7. Amendment and Termination. Except to the extent prohibited by
applicable law:
     (a) Amendments to the Plan. Except as required by the rules of the
principal securities exchange on which the Units are traded and subject to
Section 7(b) below, the Board or the Committee may amend, alter, suspend,
discontinue, or terminate the Plan in any manner, without the consent of any
member, Participant, other holder or beneficiary of an Award, or other Person.
     (b) Amendments to Awards. Subject to Section 7(a), 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(c) or,
as determined by the Committee, in its sole discretion, as being necessary or
appropriate to comply with applicable law, including, without limitation,
Section 409A of the Code, in any Award shall materially reduce the benefit of a
Participant without the consent of such Participant.
     (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may 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 Company or the financial statements of
the Company, 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 or any Award.
     SECTION 8. General Provisions.
     (a) No Rights to Award. No Person shall have any claim to be granted any
Award under the Plan, 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) Tax 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 or property, or Units that would otherwise be issued or
delivered pursuant to such Award) 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 its
withholding obligations for the payment of such taxes.

 

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     (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 Texas law without regard to its conflict of laws
principles.
     (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 of 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 Company 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 any 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 participating 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 participating Affiliate pursuant to
an Award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating 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.
     (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.
     (j) Facility Payment. Any amounts payable hereunder to any person under
legal disability or who, in the judgment of the Committee, is unable to properly
manage his financial affairs, may be paid to the legal representative of such
person, or may be applied for the benefit of such person in any manner which the
Committee may select, and the Company shall be relieved of any further liability
for payment of such amounts.
     (k) Gender and Number. Words in the masculine gender shall include the
feminine gender, the plural shall include the singular and the singular shall
include the plural.

 

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     (l) Compliance with Section 409A of the Code. Nothing in the Plan or any
Award Agreement shall operate or be construed to cause the Plan or an Award, to
the extent subject to Section 409A, to fail to comply with the requirements of
Section 409A of the Code. With respect to any Award that is subject to
Section 409A of the Code, the applicable provisions of Section 409A the Code are
hereby incorporated by reference and shall control over any provision of the
Plan or any Award Agreement that is in conflict therewith. For purposes of such
compliance, in the event that an Award that is subject to Section 409A of the
Code is payable in connection with a Participant’s termination of service as an
Employee or Director, such payments shall be made only in connection with a
‘separation from service’ within the meaning of Section 409A of the Code and the
regulations thereunder (a “Separation from Service”) and the adjustment
provisions of the Plan (including, without limitation, Sections 4(c), 6(f)(vii),
and 7(c)) shall be applied in a manner consistent with the requirements of
Section 409A. In addition, in the event that an Award that is intended to be
exempt from Section 409A as a short term deferral provides for vesting in
connection with termination of service as an Employee or Director, such vesting
shall occur only at the time of the Employee’s or Director’s Separation from
Service. Further, notwithstanding anything to the contrary in the Plan or any
Award Agreement, with respect to any Award that is subject to Section 409A and
that provides for vesting in connection with a Change in Control or a change in
control of any Affiliate of the Company, the timing of payment of such award
shall not be accelerated unless the event(s) constituting the Change of Control
or the change of control of such Affiliate constitute a change of control event
(as defined in Treasury regulation section 1.409A-3(i)(5)). Finally,
notwithstanding anything to the contrary in this Plan, in the event an Award
issued under the Plan is subject to Section 409A of the Code, if upon a
Participant’s Separation from Service, the Participant is a ‘specified employee’
within the meaning of Section 409A of the Code, and the deferral of any amounts
or benefits otherwise payable or to be provided under any Award made pursuant to
this Plan as a result of the Participant’s Separation from Service is necessary
in order to prevent any accelerated or additional tax to the Participant under
Section 409A of the Code, then the Company will delay the payment of any such
amounts or the provision of any such benefits hereunder until the earlier of
(x) the date that is six (6) months following the date of the Participant’s
Separation from Service and (y) the date of the Participant’s death following
such Separation from Service. Upon the expiration of the applicable deferral
period, any delayed amounts will be paid to the Participant in a single lump sum
and any delayed benefits will be provided on such date.
     SECTION 9. Term of the Plan.
     The Plan shall become effective on the date of the initial public offering
of Units and shall continue until the earlier of the date terminated by the
Board or the Committee or the 15th anniversary of the date the Plan was first
approved by the Unitholders or members of the Company. 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.
Effective as of May 18, 2011