Exhibit 10.38


 


Copano Energy

Long-Term Incentive Plan


 


ScissorTail
Energy, L.L.C.


 


Grant of
Restricted Units


 


Grantee:


 


Grant Date:


 


1.                                       Grant
of Restricted Units.  Copano Energy,
L.L.C. (the “Company”) hereby grants to you Restricted Units under the Copano
Energy Long-Term Incentive Plan (the “Plan”) on the terms and conditions set
forth herein and in the Plan, which is incorporated herein by reference as a
part of this Agreement. In the event of any conflict between the terms of this
Agreement and the Plan, the Plan shall control. Capitalized terms used in this
Agreement but not defined herein shall have the meanings ascribed to such terms
under the Plan, unless the context requires otherwise.


 


2.                                       Regular
Vesting.  Except as otherwise provided in
Paragraph 3 below, the Restricted Units granted hereunder and any distributions
made by the Company with respect to the Restricted Units shall vest on the
anniversary of the above Grant Date as follows:


 




	
  Anniversary of

  Grant Date

  	
   

  	
  Cumulative

  Vested Percentage

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  






 


Distributions on a Restricted Unit shall be
held by the Company without interest until the Restricted Unit with respect to
which the distribution was made becomes vested or is forfeited and then paid or
forfeited, as the case may be.


 


3.                                       Events
Occurring Prior to Regular Vesting.


 


(a)                      Death
or Disability. 
If, prior to becoming fully vested in the Restricted Units hereby
granted, you cease to be an employee of the Company or an Affiliate as a result
of your death or a disability that entitles you to benefits under the Company’s
or an Affiliate’s long-term disability plan, the Restricted Units then held by
you automatically will become fully vested upon such termination.


 





















 


(b)                     Termination
by the Company other than for Cause.  If your employment is terminated by the
Company or an Affiliate for any reason other than “Cause,” as determined by the
Company in accordance with its employment policies, the Restricted Units then
held by you automatically will become fully vested upon such termination.


 


(c)                      Other Terminations.  Except as provided in Paragraph 2 hereof, if
your employment with the Company or an Affiliate terminates for any reason
other than as provided in paragraphs 3(a) and (b) above, all unvested
Restricted Units then held by you automatically shall be forfeited without
payment upon such termination.


 


(d)                     Copano Operations Ceases to be
an Affiliate.  If (i) Copano Operations ceases to be an
Affiliate, (ii) you are an employee of Copano Operations on that date, and
(iii) your employment is not transferred to the Company or an Affiliate,
the Restricted Units then held by you automatically will become fully vested on
the date Copano Operations ceases to be an Affiliate.


 


(e)                      Change of Control.  All outstanding Restricted Units held by you
automatically shall become fully vested upon a Change of Control.


 


(f)                        Change of Control or Liquidation of
ScissorTail Energy L.L.C. (“ScissorTail”). 
All outstanding Restricted Units held by shall become fully vested upon
a Change of Control of ScissorTail (as defined below).


 


“Change of Control of ScissorTail” shall mean (i) 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 Company or an Affiliate, who was the owner of all of the outstanding
membership interests of ScissorTail immediately prior to such reorganization,
merger or consolidation or other transaction does not, immediately thereafter,
own more than 50% of the outstanding membership interests of ScissorTail; or (ii) the
sale, lease or disposition (in one or a series of related transactions) by
Company or an Affiliate of all or substantially all of ScissorTail’s assets to
any person or entity other than Company or an Affiliate; or (iii) the approval
by the Board of Directors of Company or ScissorTail of a complete or
substantially complete liquidation or dissolution of ScissorTail.


 


For purposes of this Agreement, “employment
with the Company” shall include being an employee or a director of the Company
or an Affiliate.


 


4.                                       Unit
Certificates. 
A
certificate evidencing the Restricted Units shall be issued in your name,
pursuant to which you shall have all voting rights.  The certificate shall bear the following
legend:


 


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The Units evidenced by this certificate have
been issued pursuant to a grant of restricted units, a copy of which is
attached hereto and incorporated herein, made by the Company to the registered
holder of the Units, and are subject to forfeiture to the Company under certain
circumstances described in such grant. 
The sale, assignment, pledge or other transfer of the Units evidenced by
this certificate is prohibited under the terms and conditions of such
agreement, and such Units may not be sold, assigned, pledged or otherwise
transferred except as provided in such grant.


 


The Company may
cause the certificate to be delivered upon issuance to the Secretary of the
Company as a depository for safekeeping until the forfeiture occurs or the
restrictions lapse pursuant to the terms of this Agreement.  Upon request of the Company, you shall
deliver to the Company a unit power, endorsed in blank, relating to the
Restricted Units then subject to the restrictions.  Upon the lapse of the restrictions without
forfeiture, the Company shall cause a certificate or certificates to be issued
without legend in your name in exchange for the certificate evidencing the
Restricted Units.


 


5.                                       Limitations
Upon Transfer. 
All rights under this Agreement shall belong to you alone and may not be
transferred, assigned, pledged, or hypothecated by you in any way (whether by
operation of law or otherwise), other than by will or the laws of descent and
distribution and shall not be subject to execution, attachment, or similar
process.  Upon any attempt by you to
transfer, assign, pledge, hypothecate, or otherwise dispose of such rights
contrary to the provisions in this Agreement or the Plan, or upon the levy of
any attachment or similar process upon such rights, such rights shall
immediately become null and void.


 


6.                                       Restrictions. By accepting this grant, you
agree that any Units which you may acquire upon vesting of this award will not
be sold or otherwise disposed of in any manner which would constitute a violation
of any applicable federal or state securities laws.  You also agree that (i) the certificates
representing the Units acquired under this award may bear such legend or
legends as the Committee deems appropriate in order to assure compliance with
applicable securities laws, (ii) the Company may refuse to register the
transfer of the Units acquired under this award on the transfer records of the
Company if such proposed transfer would in the opinion of counsel satisfactory
to the Company constitute a violation of any applicable securities law, and (iii) the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the Units to be acquired under this award.


 


7.                                       Withholding
of Tax.  To  the 
extent that the grant or vesting of a Restricted Unit results in the
receipt of compensation by you with respect to which the Company or an
Affiliate has a tax withholding obligation pursuant to applicable law, unless
other arrangements have been made by you that are acceptable to the Company or
such Affiliate, you shall deliver to the Company or the Affiliate such amount
of money as the Company or the Affiliate may require to meet its withholding
obligations under such applicable law. 
No issuance of an unrestricted Common Unit shall be made pursuant to
this Agreement until


 


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you
have paid or made arrangements approved by the Company or the Affiliate to
satisfy in full the applicable tax withholding requirements of the Company or
Affiliate.


 


8.                                       Insider
Trading Policy.   
The terms of the Company’s Insider Trading Policy are incorporated
herein by reference.


 


9.                                       Binding
Effect.  This Agreement
shall be binding upon and inure to the benefit of any successor or successors
of the Company and upon any person lawfully claiming under you.


 


10.                                 Entire Agreement. 
This Agreement constitutes the entire agreement of the parties with
regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to
the Restricted Units granted hereby. 
Without limiting the scope of the preceding sentence, all prior
understandings and agreements, if any, among the parties hereto relating to the
subject matter hereof are hereby null and void and of no further force and
effect.  Any modification of this
Agreement shall be effective only if it is in writing and signed by both you
and an authorized officer of the Company.


 


11.                                 Modifications.  Except as provided below, any modification of
this Agreement shall be effective only if it is in writing and signed by both
you and an authorized officer of the Company. 
Notwithstanding anything in the Plan or this Agreement to the contrary,
if the Committee determines that the terms of this grant do not, in whole or in
part, satisfy the requirements of new Section 409A of the Internal Revenue
Code, the Committee, in its sole discretion, may unilaterally modify this
Agreement in such manner as it deems appropriate to comply with such section and
any regulations or guidance issued thereunder.


 


12.                                 Governing
Law.  This grant shall be
governed by, and construed in accordance with, the laws of the State of Texas,
without regard to conflicts of laws principles thereof.


 


 


	
   

  	
    Copano
  Energy, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


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