Document:

exv10w1

 

    Exhibit 10.1
    

 

    LOGMEIN,
    INC.

    

 

   AMENDED
    AND RESTATED
    2009
    STOCK INCENTIVE PLAN

 

    1. Purpose

 

    The purpose of this
    Amended
    and Restated 2009 Stock Incentive Plan (the
    “Plan”) of LogMeIn, Inc., a Delaware corporation (the
    “Company”), is to advance the interests of the
    Company’s stockholders by enhancing the Company’s
    ability to attract, retain and motivate persons who are expected
    to make important contributions to the Company and by providing
    such persons with equity ownership opportunities and
    performance-based incentives that are intended to better align
    the interests of such persons with those of the Company’s
    stockholders. Except where the context otherwise requires, the
    term “Company” shall include any of the Company’s
    present or future parent or subsidiary corporations as defined
    in Sections 424(e) or (f) of the Internal Revenue Code
    of 1986, as amended, and any regulations promulgated thereunder
    (the “Code”) and any other business venture
    (including, without limitation, joint venture or limited
    liability company) in which the Company has a controlling
    interest, as determined by the Board of Directors of the Company
    (the “Board”).

 

    2. Eligibility

 

    All of the Company’s employees, officers, directors,
    consultants and advisors are eligible to be granted options,
    stock appreciation rights (“SARs”), restricted stock,
    restricted stock units and other stock-based awards (each, an
    “Award”) under the Plan. Each person who receives an
    Award under the Plan is deemed a “Participant”.

 

    3. Administration and Delegation

 

    (a) Administration by Board of
    Directors.  The Plan will be administered by
    the Board. The Board shall have authority to grant Awards and to
    adopt, amend and repeal such administrative rules, guidelines
    and practices relating to the Plan as it shall deem advisable.
    The Board may construe and interpret the terms of the Plan and
    any Award agreements entered into under the Plan. The Board may
    correct any defect, supply any omission or reconcile any
    inconsistency in the Plan or any Award in the manner and to the
    extent it shall deem expedient to carry the Plan into effect and
    it shall be the sole and final judge of such expediency. All
    decisions by the Board shall be made in the Board’s sole
    discretion and shall be final and binding on all persons having
    or claiming any interest in the Plan or in any Award. No
    director or person acting pursuant to the authority delegated by
    the Board shall be liable for any action or determination
    relating to or under the Plan made in good faith.

 

    (b) Appointment of Committees.  To
    the extent permitted by applicable law, the Board may delegate
    any or all of its powers under the Plan to one or more
    committees or subcommittees of the Board (a
    “Committee”). All references in the Plan to the
    “Board” shall mean the Board or a Committee of the
    Board or the officers referred to in Section 3(c) to the
    extent that the Board’s powers or authority under the Plan
    have been delegated to such Committee or officers.

 

    (c) Delegation to Officers.  To the
    extent permitted by applicable law, the Board may delegate to
    one or more officers of the Company the power to grant Awards
    (subject to any limitations under the Plan) to employees or
    officers of the Company or any of its present or future
    subsidiary corporations and to exercise such other powers under
    the Plan as the Board may determine, provided that the Board
    shall fix the terms of the Awards to be granted by such officers
    (including the exercise price of such Awards, which may include
    a formula by which the exercise price will be determined) and
    the maximum number of shares subject to Awards that the officers
    may grant; provided further, however, that no officer shall be
    authorized to grant Awards to any “executive officer”
    of the Company (as defined by
    Rule 3b-7
    under the Securities Exchange Act of 1934, as amended (the
    “Exchange Act”)) or to any
    ” “officer” “of
    the Company (as defined by
    Rule 16a-1
    under the Exchange Act).

    

    A-1

 

    4. Stock Available for Awards

 

    (a) Number of Shares.  Subject to
    adjustment under Section 10, Awards may be made under the
    Plan for up to the number of shares of common stock,
    $0.01 par value per share, of the Company (the “Common
    Stock”) that is equal to the sum of:

 

    (1) 3,323,996
    shares of Common Stock; plus

 

    (2) such additional number of shares of Common Stock as is
    equal to the  number of shares of Common Stock subject
    to awards granted under the
    Company’s
    2007
    Stock Incentive Plan or the Company’s 2004
    Equity Incentive Plan which awards expire, terminate or are
    otherwise surrendered, canceled, forfeited or repurchased by the
    Company at their original issuance price pursuant to a
    contractual repurchase right.

 

    If any Award expires or is terminated, surrendered or canceled
    without having been fully exercised, is forfeited in whole or in
    part (including as the result of shares of Common Stock subject
    to such Award being repurchased by the Company at the original
    issuance price pursuant to a contractual repurchase right), is
    settled in cash or otherwise results in any Common Stock not
    being issued, the unused Common Stock covered by such Award
    shall again be available for the grant of Awards under the Plan.
    Further, shares of Common Stock delivered (either by actual
    delivery or attestation) to the Company by a Participant to
    exercise an Award or to satisfy any applicable tax withholding
    obligation (including shares retained from the Award creating
    the tax obligation) shall be added to the number of shares of
    Common Stock available for the grant of Awards under the
    Plan. Shares issued under
    the Plan may consist in whole or in part of authorized but
    unissued shares or treasury shares.

 

    (b)
    Section 162(m)
    Per-Participant
    Limit.  Subject
    to adjustment under Section 10, the maximum number of
    shares of Common Stock with respect to which Awards may be
    granted to any Participant under the Plan shall be 1,000,000 per
    calendar year. For purposes of the foregoing limit, the
    combination of an Option in tandem with an SAR shall be treated
    as a single Award. The per Participant limit described in this
    Section 4(b) shall be construed and applied consistently
    with Section 162(m) of the Code or any successor provision
    thereto, and the regulations thereunder
    (“Section 162(m)”).

 

    (c)
     Substitute
    Awards.  In connection with a merger or
    consolidation of an entity with the Company or the acquisition
    by the Company of property or stock of an entity, the Board may
    grant Awards in substitution for any options or other stock or
    stock-based awards granted by such entity or an affiliate
    thereof. Substitute Awards may be granted on such terms as the
    Board deems appropriate in the circumstances, notwithstanding
    any limitations on Awards contained in the Plan. Substitute
    Awards shall not count against the overall share limit set forth
    in Section 4(a).

 

    5. Stock Options

 

    (a) General.  The Board may grant
    options to purchase Common Stock (each, an “Option”)
    and determine the number of shares of Common Stock to be covered
    by each Option, the exercise price of each

    

    A-2

 

    Option and the conditions and limitations applicable to the
    exercise of each Option, including conditions relating to
    applicable federal or state securities laws, as it considers
    necessary or advisable. Options
    may only be granted as non-statutory stock options and
    may not be granted as “incentive stock options”, as defined in
    Section 422 of the Code.

 

    (b) Exercise Price.  The Board
    shall establish the exercise price of each Option and specify
    the exercise price in the applicable option agreement. The
    exercise price shall be not less than 100% of the Fair Market
    Value (as defined below) on the date the Option is granted;
    provided that if the Board approves the grant of an Option with
    an exercise price to be determined on a future date, the
    exercise price shall be not less than 100% of the Fair Market
    Value on such future date.

 

    (c) Duration of
    Options.  Each Option shall be exercisable at
    such times and subject to such terms and conditions as the Board
    may specify in the applicable option agreement.

 

    (d) Exercise of
    Option.  Options may be exercised by delivery
    to the Company of a written notice of exercise signed by the
    proper person or by any other form of notice (including
    electronic notice) approved by the Board together with payment
    in full as specified in
    Section 5(f e)
    for the number of shares for which the Option is exercised.
    Shares of Common Stock subject to the Option will be delivered
    by the Company as soon as practicable following exercise.

 

    (e) Payment Upon
    Exercise.  Common Stock purchased upon the
    exercise of an Option granted under the Plan shall be paid for
    as follows:

 

    (1) in cash or by check, payable to the order of the
    Company;

 

    (2) except as may otherwise be provided in the applicable
    option agreement, by (i) delivery of an irrevocable and
    unconditional undertaking by a creditworthy broker to deliver
    promptly to the Company sufficient funds to pay the exercise
    price and any required tax
    withholding, or
    (ii) delivery by the Participant to the Company of a copy
    of irrevocable and unconditional instructions to a creditworthy
    broker to deliver promptly to the Company cash or a check
    sufficient to pay the exercise price and any required tax
    withholding;

 

    (3) to the extent provided for in the applicable option
    agreement or approved by the Board, in its sole discretion, by
    delivery (either by actual delivery or attestation) of shares of
    Common Stock owned by the Participant valued at their fair
    market value as determined by (or in a manner approved by) the
    Board (“Fair Market Value”), provided (i) such
    method of payment is then permitted under applicable law,
    (ii) such Common Stock, if acquired directly from the
    Company, was owned by the Participant for such minimum period of
    time, if any, as may be established by the Board in its
    discretion and (iii) such Common Stock is not subject to
    any repurchase, forfeiture, unfulfilled vesting or other similar
    requirements;

 

    (4) to the extent permitted by applicable law and provided
    for in the applicable option agreement or approved by the Board,
    in its sole discretion, by (i) delivery of a promissory
    note of the Participant to the Company on terms determined by
    the Board, or (ii) payment of such other lawful
    consideration as the Board may determine; or

    

    A-3

 

    (5) by any combination of the above permitted forms of
    payment.

 

    6. Director Options.

 

    (a) Initial Grant.  Upon the
    commencement of service on the Board by any individual who is
    not then an employee of the Company or any subsidiary of the
    Company, the Company shall grant to such person an Option to purchase 150,000 shares of Common Stock (subject
    to adjustment under Section 10).

 

    (b) Biennial Grant.  On the date of
    each annual meeting of stockholders of the Company, the Company
    shall grant to each member of the Board of Directors of the
    Company (i) who is both serving as a director of the
    Company immediately prior to and immediately following such
    annual meeting, (ii) who is not then an employee of the
    Company or any of its subsidiaries and (iii) who did not
    receive an Option under this Section 6(b) in connection
    with the prior years’ annual meeting, an Option to purchase 75,000 shares of Common Stock (subject
    to adjustment under Section 10); provided, however, that a
    director shall not be eligible to receive an option grant under
    this Section 6(b) until such director has served
    continuously on the Board for at least eighteen (18) months.

 

    (c) Terms of Director
    Options.  Options granted under this
    Section 6 shall (i) have an exercise price equal to
    the closing sale price (for the primary trading session) of the
    Common Stock on the national securities exchange on which the
    Common Stock is then traded on the day of grant (or if the date
    of grant is not a trading day on such exchange, the trading day
    immediately prior to the date of grant) or if the Common Stock
    is not then traded on a national securities exchange, the fair
    market value of the Common Stock on such date as determined by
    the Board, (ii) vest in equal quarterly increments over two
    years from the date of grant provided that the individual
    continues serving on the Board, provided that no additional
    vesting shall take place after the Participant ceases to serve
    as a director and further provided that the Board may provide
    for accelerated vesting in the case of death, disability, change
    in control, attainment of mandatory retirement age or retirement
    following at least 10 years of service, (iii) expire
    on the earlier of 10 years from the date of grant or three
    months following cessation of service on the Board and
    (iv) contain such other terms and conditions as the Board
    shall determine.

 

    (d) Board Discretion.  The Board
    retains the specific authority to from time to time increase or
    decrease the number of shares subject to Options granted under
    this Section 6 and to issue SARs, Restricted Stock Awards,
    or Other Stock-Based Awards in lieu of some or all of the
    Options otherwise issuable under this Section 6.

 

    7. Stock Appreciation Rights.

 

    (a) General.  The Board may grant
    Awards consisting of SARs entitling the holder, upon exercise,
    to receive an amount of Common Stock or cash or a combination
    thereof (such form to be determined by the Board) determined in
    whole or in part by reference to appreciation, from and after
    the date of grant, in the fair market value of a share of Common
    Stock over the exercise price established pursuant to
    Section 7(c). The date as of which such appreciation is
    determined shall be the exercise date.

 

    (b) Grants.  SARs may be granted in
    tandem with, or independently of, Options granted under the Plan.

 

    (1) Tandem Awards.  When SARs are
    expressly granted in tandem with Options, (i) the SAR will
    be exercisable only at such time or times, and to the extent,
    that the related Option is exercisable (except to the extent
    designated by the Board in connection with a Reorganization
    Event) and will be exercisable in accordance with the procedure
    required for exercise of the related Option; (ii) the SAR
    will terminate and no longer be exercisable upon the termination
    or exercise of the related Option, except to the extent
    designated by the Board in connection with a Reorganization
    Event and except that a SAR granted with respect to less than
    the full number of shares covered by an Option will not be
    reduced until the number of shares as to which the related
    Option has been exercised or has terminated exceeds the number
    of shares not covered by the SAR; (iii) the Option will
    terminate and no longer be exercisable upon the exercise of the
    related SAR; and (iv) the SAR will be transferable only
    with the related Option.

    

    A-4

 

    (2) Independent SARs.  A SAR not
    expressly granted in tandem with an Option will become
    exercisable at such time or times, and on such conditions, as
    the Board may specify in the SAR Award.

 

    (c) Exercise Price.  The Board
    shall establish the exercise price of each SAR and specify it in
    the applicable SAR agreement. The exercise price shall not be
    less than 100% of the Fair Market Value on the date the SAR is
    granted; provided that if the Board approves the grant of a SAR
    with an exercise price to be determined on a future date, the
    exercise price shall be not less than 100% of the Fair Market
    Value on such future date.

 

    (d) Duration of SARs.  Each SAR
    shall be exercisable at such times and subject to such terms and
    conditions as the Board may specify in the applicable SAR
    agreement.

 

    (e) Exercise of SARs.  SARs may be
    exercised by delivery to the Company of a written notice of
    exercise signed by the proper person or by any other form of
    notice (including electronic notice) approved by the Board,
    together with any other documents required by the Board.

 

    8. Restricted Stock; Restricted Stock Units.

 

    (a) General.  The Board may grant
    Awards entitling recipients to acquire shares of Common Stock
    (“Restricted Stock”), subject to the right of the
    Company to repurchase all or part of such shares at their issue
    price or other stated or formula price (or to require forfeiture
    of such shares if issued at no cost) from the recipient in the
    event that conditions specified by the Board in the applicable
    Award are not satisfied prior to the end of the applicable
    restriction period or periods established by the Board for such
    Award. Instead of granting Awards for Restricted Stock, the
    Board may grant Awards entitling the recipient to receive shares
    of Common Stock or cash to be delivered at the time such Award
    vests (“Restricted Stock Units”) (Restricted Stock and
    Restricted Stock Units are each referred to herein as a
    “Restricted Stock Award”).

 

    (b) Terms and Conditions for All Restricted Stock
    Awards.  The Board shall determine the terms
    and conditions of a Restricted Stock Award, including the
    conditions for vesting and repurchase (or forfeiture) and the
    issue price, if any.

 

    (c) Additional Provisions Relating to Restricted
    Stock.

 

    (1) Dividends.  Unless otherwise
    provided
    in the
    applicable
    Award agreement, any dividends (whether paid
    in
    cash,
    stock
    or property)
    declared and paid by the Company with respect to shares of
    Restricted Stock (“Accrued Dividends”) shall be paid
    to the Participant only if and when such shares become free from
    the restrictions on transferability and
    forfeitability that
    apply to such shares. Each payment
    of
    Accrued Dividends will be made no later than the end
    of the calendar year in which the dividends are paid to
    tockholders
    of that class of stock or, if later, the 15th day of the
    third month following the lapsing
    of the restrictions on transferability and the forfeitability
    provisions applicable to the underlying shares of Restricted
    Stock.

 

    (2) Stock Certificates.  The
    Company may require that any stock certificates issued in
    respect of shares of Restricted Stock shall be deposited in
    escrow by the Participant, together with a stock power endorsed
    in blank, with the Company (or its designee). At the expiration
    of the applicable restriction periods, the Company (or such
    designee) shall deliver the certificates no longer subject to
    such restrictions to the Participant or if the Participant has
    died, to the beneficiary designated, in a manner determined by
    the Board, by a Participant to receive amounts due or exercise
    rights of the Participant in the event of the Participant’s
    death (the “Designated Beneficiary”). In the absence
    of an effective designation by a Participant, “Designated
    Beneficiary” shall mean the Participant’s estate.

    

    A-5

 

    (d) Additional Provisions Relating to Restricted
    Stock Units.

 

    (1) Settlement.  Upon the vesting
    of and/or
    lapsing of any other restrictions (i.e., settlement) with
    respect to each Restricted Stock Unit, the Participant shall be
    entitled to receive from the Company one share of Common Stock
    or an amount of cash equal to the Fair Market Value of one share
    of Common Stock, as provided in the applicable Award agreement.
    The Board may, in its discretion, provide that settlement of
    Restricted Stock Units shall be deferred, on a mandatory basis
    or at the election of the Participant.

 

    (2) Voting Rights.  A Participant
    shall have no voting rights with respect to any Restricted Stock
    Units.

 

    (3) Dividend Equivalents.  To the
    extent provided by the Board, in its sole discretion, a grant of
    Restricted Stock Units may provide Participants with the right
    to receive an amount equal to any dividends or other
    distributions declared and paid on an equal number of
    outstanding shares of Common Stock (“Dividend
    Equivalents”). Dividend Equivalents may be paid currently
    or credited to an account for the Participants, may be settled
    in cash
    and/or
    shares of Common Stock and may be subject to the same
    restrictions on transfer and forfeitability as the Restricted
    Stock Units with respect to which paid, as determined by the
    Board in its sole discretion, subject in each case to such terms
    and conditions as the Board shall establish, in each case to be
    set forth in the applicable Award agreement.

 

    9. Other Stock-Based Awards

 

    Other Awards of shares of Common Stock, and other Awards that
    are valued in whole or in part by reference to, or are otherwise
    based on, shares of Common Stock or other property, may be
    granted hereunder to Participants (“Other Stock-Based
    Awards”), including without limitation Awards entitling
    recipients to receive shares of Common Stock to be delivered in
    the future. Such Other Stock-Based Awards shall also be
    available as a form of payment in the settlement of other Awards
    granted under the Plan or as payment in lieu of compensation to
    which a Participant is otherwise entitled. Other Stock-Based
    Awards may be paid in shares of Common Stock or cash, as the
    Board shall determine. Subject to the provisions of the Plan,
    the Board shall determine the terms and conditions of each Other
    Stock-Based Award, including any purchase price applicable
    thereto.

 

    10. Adjustments for Changes in Common Stock and
    Certain Other Events.

 

    (a) Changes in Capitalization.  In
    the event of any stock split, reverse stock split, stock
    dividend, recapitalization, combination of shares,
    reclassification of shares, spin-off or other similar change in
    capitalization or event, or any dividend or distribution to
    holders of Common Stock other than an ordinary cash dividend,
    (i) the number and class of securities available under this
    Plan, (ii) the number and class of securities and exercise
    price per share of each outstanding Option and each Option
    issuable under Section 6, (iv) the share- and
    per-share provisions and the exercise price of each SAR,
    (v) the number of shares subject to and the repurchase
    price per share subject to each outstanding Restricted Stock
    Award, and (vi) the share- and per-share-related provisions
    and the purchase price, if any, of each outstanding Other
    Stock-Based Award, shall be equitably adjusted by the Company
    (or substituted Awards may be made, if applicable) in the manner
    determined by the Board. Without limiting the generality of the
    foregoing, in the event the Company effects a split of the
    Common Stock by means of a stock dividend and the exercise price
    of and the number of shares subject to an outstanding Option are
    adjusted as of the date of the distribution of the dividend
    (rather than as of the record date for such dividend), then an
    optionee who exercises an Option between the record date and the
    distribution date for such stock dividend shall be entitled to
    receive, on the distribution date, the stock dividend with
    respect to the shares of Common Stock acquired upon such Option
    exercise, notwithstanding the fact that such shares were not
    outstanding as of the close of business on the record date for
    such stock dividend.

 

    (b) Reorganization Events.

 

    (1) Definition.  A
    “Reorganization Event” shall mean: (a) any merger
    or consolidation of the Company with or into another entity as a
    result of which all of the Common Stock of the Company is
    converted into or exchanged for the right to receive cash,
    securities or other property or is cancelled, (b) any
    exchange of all of

    

    A-6

 

    the Common Stock of the Company for cash, securities or other
    property pursuant to a share exchange transaction or
    (c) any liquidation or dissolution of the Company.

 

    (2) Consequences of a Reorganization Event on Awards
    Other than Restricted Stock Awards.  In
    connection with a Reorganization Event, the Board may take any
    one or more of the following actions as to all or any (or any
    portion of) outstanding Awards other than Restricted Stock
    Awards on such terms as the Board determines: (i) provide
    that Awards shall be assumed, or substantially equivalent Awards
    shall be substituted, by the acquiring or succeeding corporation
    (or an affiliate thereof), (ii) upon written notice to a
    Participant, provide that the Participant’s unexercised
    Awards will terminate immediately prior to the consummation of
    such Reorganization Event unless exercised by the Participant
    within a specified period following the date of such notice,
    (iii) provide that outstanding Awards shall become
    exercisable, realizable, or deliverable, or restrictions
    applicable to an Award shall lapse, in whole or in part prior to
    or upon such Reorganization Event, (iv) in the event of a
    Reorganization Event under the terms of which holders of Common
    Stock will receive upon consummation thereof a cash payment for
    each share surrendered in the Reorganization Event (the
    “Acquisition Price”), make or provide for a cash
    payment to a Participant equal to the excess, if any, of
    (A) the Acquisition Price times the number of shares of
    Common Stock subject to the Participant’s Awards (to the
    extent the exercise price does not exceed the Acquisition Price)
    over (B) the aggregate exercise price of all such
    outstanding Awards and any applicable tax withholdings, in
    exchange for the termination of such Awards, (v) provide
    that, in connection with a liquidation or dissolution of the
    Company, Awards shall convert into the right to receive
    liquidation proceeds (if applicable, net of the exercise price
    thereof and any applicable tax withholdings) and (vi) any
    combination of the foregoing. In taking any of the actions
    permitted under this Section 10(b), the Board shall not be
    obligated by the Plan to treat all Awards, all Awards held by a
    Participant, or all Awards of the same type, identically.

 

    For purposes of clause (i) above, an Option shall be
    considered assumed if, following consummation of the
    Reorganization Event, the Option confers the right to purchase,
    for each share of Common Stock subject to the Option immediately
    prior to the consummation of the Reorganization Event, the
    consideration (whether cash, securities or other property)
    received as a result of the Reorganization Event by holders of
    Common Stock for each share of Common Stock held immediately
    prior to the consummation of the Reorganization Event (and if
    holders were offered a choice of consideration, the type of
    consideration chosen by the holders of a majority of the
    outstanding shares of Common Stock); provided, however, that if
    the consideration received as a result of the Reorganization
    Event is not solely common stock of the acquiring or succeeding
    corporation (or an affiliate thereof), the Company may, with the
    consent of the acquiring or succeeding corporation, provide for
    the consideration to be received upon the exercise of Options to
    consist solely of common stock of the acquiring or succeeding
    corporation (or an affiliate thereof) equivalent in value (as
    determined by the Board) to the per share consideration received
    by holders of outstanding shares of Common Stock as a result of
    the Reorganization Event.

 

    (3) Consequences of a Reorganization Event on
    Restricted Stock Awards.  Upon the occurrence
    of a Reorganization Event other than a liquidation or
    dissolution of the Company, the repurchase and other rights of
    the Company under each outstanding Restricted Stock Award shall
    inure to the benefit of the Company’s successor and shall,
    unless the Board determines otherwise, apply to the cash,
    securities or other property which the Common Stock was
    converted into or exchanged for pursuant to such Reorganization
    Event in the same manner and to the same extent as they applied
    to the Common Stock subject to such Restricted Stock Award. Upon
    the occurrence of a Reorganization Event involving the
    liquidation or dissolution of the Company, except to the extent
    specifically provided to the contrary in the instrument
    evidencing any Restricted Stock Award or any other agreement
    between a Participant and the Company, all restrictions and
    conditions on all Restricted Stock Awards then outstanding shall
    automatically be deemed terminated or satisfied.

 

    11. General Provisions Applicable to Awards

 

    (a) Transferability of
    Awards.  Except as the Board may otherwise
    determine or provide in an Award, Awards shall not be sold,
    assigned, transferred, pledged or otherwise encumbered by the
    person to whom they are granted, either voluntarily or by
    operation of law, except by will or the laws of descent and
    distribution or pursuant to a qualified domestic relations
    order, and,

    

    A-7

 

    during the life of the Participant, shall be exercisable only by
    the Participant. References to a Participant, to the extent
    relevant in the context, shall include references to authorized
    transferees.

 

    (b) Documentation.  Each Award
    shall be evidenced in such form (written, electronic or
    otherwise) as the Board shall determine. Each Award may contain
    terms and conditions in addition to those set forth in the Plan.

 

    (c) Board Discretion.  Except as
    otherwise provided by the Plan, each Award may be made alone or
    in addition or in relation to any other Award. The terms of each
    Award need not be identical, and the Board need not treat
    Participants uniformly.

 

    (d) Termination of Status.  The
    Board shall determine the effect on an Award of the disability,
    death, termination or other cessation of employment, authorized
    leave of absence or other change in the employment or other
    status of a Participant and the extent to which, and the period
    during which, the Participant, or the Participant’s legal
    representative, conservator, guardian or Designated Beneficiary,
    may exercise rights under the Award.

 

    (e) Withholding.  The Participant
    must satisfy all applicable federal, state, and local or other
    income and employment tax withholding obligations before the
    Company will deliver stock certificates or otherwise recognize
    ownership of Common Stock under an Award. The Company may decide
    to satisfy the withholding obligations through additional
    withholding on salary or wages. If the Company elects not to or
    cannot withhold from other compensation, the Participant must
    pay the Company the full amount, if any, required for
    withholding or have a broker tender to the Company cash equal to
    the withholding obligations. Payment of withholding obligations
    is due before the Company will issue any shares on exercise or
    release from forfeiture of an Award or, if the Company so
    requires, at the same time as is payment of the exercise price
    unless the Company determines otherwise. If provided for in an
    Award or approved by the Board in its sole discretion, a
    Participant may satisfy such tax obligations in whole or in part
    by delivery (either by actual delivery or attestation) of shares
    of Common Stock, including shares retained from the Award
    creating the tax obligation, valued at their Fair Market Value;
    provided, however, except as otherwise provided by the Board,
    that the total tax withholding where stock is being used to
    satisfy such tax obligations cannot exceed the Company’s
    minimum statutory withholding obligations (based on minimum
    statutory withholding rates for federal and state tax purposes,
    including payroll taxes, that are applicable to such
    supplemental taxable income). Shares used to satisfy tax
    withholding requirements cannot be subject to any repurchase,
    forfeiture, unfulfilled vesting or other similar requirements.

 

    (f) Amendment of Award.

 

    (1) The Board may amend, modify or terminate any
    outstanding Award, including but not limited to, substituting
    therefor another Award of the same or a different type,
    and
    changing the date of exercise or realization. The Participant’s
    consent to such action shall be required unless (i) the
    Board determines that the action, taking into account any
    related action, would not materially and adversely affect the
    Participant’s rights under the Plan or (ii) the change
    is permitted under Section 10 hereof.

 

    (2) The Board may, without stockholder approval, amend any
    outstanding Award granted under the Plan to provide an exercise
    price per share that is lower than the then-current exercise
    price per share of such outstanding Award. The Board may also,
    without stockholder approval, cancel any outstanding award
    (whether or not granted under the Plan) and grant in
    substitution therefor new Awards under the Plan covering the
    same or a different number of shares of Common Stock and having
    an exercise price per share lower than the then-current exercise
    price per share of the cancelled award.

 

    (g) Conditions on Delivery of
    Stock.  The Company will not be obligated to
    deliver any shares of Common Stock pursuant to the Plan or to
    remove restrictions from shares previously delivered under the
    Plan until (i) all conditions of the Award have been met or
    removed to the satisfaction of the Company, (ii) in the
    opinion of the Company’s counsel, all other legal matters
    in connection with the issuance and delivery of such shares have
    been satisfied, including any applicable securities laws and any
    applicable stock exchange or stock market rules and regulations,
    and (iii) the Participant has executed and delivered to the
    Company such representations or agreements as the Company may
    consider appropriate to satisfy the requirements of any
    applicable laws, rules or regulations.

    

    A-8

 

    (h) Acceleration.  The Board may at
    any time provide that any Award shall become immediately
    exercisable in full or in part, free of some or all restrictions
    or conditions, or otherwise realizable in full or in part, as
    the case may be.

 

    (i)
    Performance
    Awards.

 

    (1)
    Grants.  Restricted
    Stock Awards and Other Stock-Based Awards under the Plan may be
    made subject to the achievement of performance goals pursuant to
    this Section 11(i) (“Performance Awards”).

 

    (2)
    Committee.
    Grants of Performance Awards to any Covered Employee (as defined
    below) intended to qualify as “performance-based
    compensation” under Section 162(m)
    (“Performance-Based Compensation”) shall be made only
    by a Committee (or a subcommittee of a Committee) comprised
    solely of two or more directors eligible to serve on a committee
    making Awards qualifying as “performance-based
    compensation” under Section 162(m). In the case of
    such Awards granted to Covered Employees, references to the
    Board or to a Committee shall be treated as referring to such
    Committee (or subcommittee). “Covered Employee” shall
    mean any person who is, or whom the Committee, in its
    discretion, determines may be, a “covered employee”
    under Section 162(m)(3) of the Code.

 

    (3)
    Performance
    Measures.  For
    any Award that is intended to qualify as Performance-Based
    Compensation, the Committee shall specify that the degree of
    granting, vesting
    and/or
    payout shall be subject to the achievement of one or more
    objective performance measures established by the Committee,
    which shall be based on the relative or absolute attainment of
    specified levels of one or any combination of the following,
    which may be determined pursuant to generally accepted
    accounting principles (“GAAP”) or on a non-GAAP basis,
    as determined by the Committee: net income, earnings before or
    after discontinued operations, interest, taxes, depreciation
    and/or
    amortization, operating profit before or after discontinued
    operations
    and/or
    taxes, sales, sales growth, earnings growth, cash flow or cash
    position, gross margins, stock price, market share, return on
    sales, assets, equity or investment, improvement of financial
    ratings, achievement of balance sheet or income statement
    objectives or total stockholder return. Such goals may reflect
    absolute entity or business unit performance or a relative
    comparison to the performance of a peer group of entities or
    other external measure of the selected performance criteria and
    may be absolute in their terms or measured against or in
    relationship to other companies comparably, similarly or
    otherwise situated. The Committee may specify that such
    performance measures shall be adjusted to exclude any one or
    more of (i) extraordinary items, (ii) gains or losses
    on the dispositions of discontinued operations, (iii) the
    cumulative effects of changes in accounting principles,
    (iv) the writedown of any asset, (vi) fluctuation in
    foreign currency exchange rates, and (vi) charges for
    restructuring and rationalization programs. Such performance
    measures: (i) may vary by Participant and may be different
    for different Awards; (ii) may be particular to a
    Participant or the department, branch, line of business,
    subsidiary or other unit in which the Participant works and may
    cover such period as may be specified by the Committee; and
    (iii) shall be set by the Committee within the time period
    prescribed by, and shall otherwise comply with the requirements
    of, Section 162(m). Awards that are not intended to qualify
    as Performance-Based Compensation may be based on these or such
    other performance measures as the Board may determine.

 

    (4)
    Adjustments.  Notwithstanding
    any provision of the Plan, with respect to any Performance Award
    that is intended to qualify as Performance-Based Compensation,
    the Committee may adjust downwards, but not upwards, the cash or
    number of shares payable pursuant to such Award, and the
    Committee may not waive the achievement of the applicable
    performance measures except in the case of the death or
    disability of the Participant or a change in control of the
    Company.

 

    (5)
    Other.  The
    Committee shall have the power to impose such other restrictions
    on Performance Awards as it may deem necessary or appropriate to
    ensure that such Awards satisfy all requirements for
    Performance-Based Compensation.

 

    12. Miscellaneous

 

    (a) No Right To Employment or Other
    Status.  No person shall have any claim or
    right to be granted an Award, and the grant of an Award shall
    not be construed as giving a Participant the right to continued
    employment or any other relationship with the Company. The
    Company expressly reserves the right at any

    

    A-9

 

    time to dismiss or otherwise terminate its relationship with a
    Participant free from any liability or claim under the Plan,
    except as expressly provided in the applicable Award.

 

    (b) No Rights As
    Stockholder.  Subject to the provisions of the
    applicable Award, no Participant or Designated Beneficiary shall
    have any rights as a stockholder with respect to any shares of
    Common Stock to be distributed with respect to an Award until
    becoming the record holder of such shares.

 

    (c) Effective Date and Term of
    Plan.  The Plan shall become effective on the
    date on which it is adopted by the Board. No Awards shall be
    granted under the Plan after the expiration of 10 years
    from the earlier of (i) the date on which the Plan was
    adopted by the Board or (ii) the date the Plan was approved
    by the Company’s stockholders, but Awards previously
    granted may extend beyond that date.

 

    (d) Amendment of Plan.  The Board
    may amend, suspend or terminate the Plan or any portion thereof
    at any time provided that (i) to the extent required by
    Section 162(m), no Award granted to a Participant that is
    intended to comply with Section 162(m) after the date of
    such amendment shall become exercisable, realizable or vested,
    as applicable to such Award, unless and until such amendment
    shall have been approved by the Company’s stockholders if
    required by Section 162(m) (including the vote required
    under Section 162(m)); and (ii) no amendment that
    would require stockholder approval under the rules of the NASDAQ
    Stock Market may be made effective unless and until such
    amendment shall have been approved by the Company’s
    stockholders.  Unless otherwise specified in the
    amendment, any amendment to the Plan adopted in accordance with
    this Section 12(d) shall apply to, and be binding on the
    holders of, all Awards outstanding under the Plan at the time
    the amendment is adopted, provided the Board determines that
    such amendment does not materially and adversely affect the
    rights of Participants under the Plan.

 

    (e) Provisions for Foreign
    Participants.  The Board may modify Awards
    granted to Participants who are foreign nationals or employed
    outside the United States or establish subplans or procedures
    under the Plan to recognize differences in laws, rules,
    regulations or customs of such foreign jurisdictions with
    respect to tax, securities, currency, employee benefit or other
    matters.

 

    (f) Compliance with Code
    Section 409A.  Except
    as provided in individual Award agreements initially or by
    amendment, if and to the extent (i) any portion of any
    payment, compensation or other benefit provided to a Participant
    pursuant to the Plan in connection with his or her employment
    termination constitutes “nonqualified deferred
    compensation” within the meaning of Section 409A of
    the Code and (ii) the Participant is a specified employee
    as defined in Section 409A(a)(2)(B)(i) of the Code, in each
    case as determined by the Company in accordance with its
    procedures, by which determinations the Participant (through
    accepting the Award) agrees that he or she is bound, such
    portion of the payment, compensation or other benefit shall not
    be paid before the day that is six months plus one day after the
    date of “separation from service” (as determined under
    Section 409A of the Code) (the “New Payment
    Date”), except as Section 409A of the Code may then
    permit. The aggregate of any payments that otherwise would have
    been paid to the Participant during the period between the date
    of separation from service and the New Payment Date shall be
    paid to the Participant in a lump sum on such New Payment Date,
    and any remaining payments will be paid on their original
    schedule. The Company makes no representations or warranty and
    shall have no liability to the Participant or any other person
    if any provisions of or payments, compensation or other benefits
    under the Plan are determined to constitute nonqualified
    deferred compensation subject to Section 409A of the Code
    but do not to satisfy the conditions of that section.

 

    (g) Governing Law.  The provisions
    of the Plan and all Awards made hereunder shall be governed by
    and interpreted in accordance with the laws of the State of
    Delaware, excluding choice-of-law principles of the law of such
    state that would require the application of the laws of a
    jurisdiction other than such state.

    

    A-10exv4w1

Exhibit 4.1

Execution Version

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

ENERGY TRANSFER EQUITY, L.P.

AND

REGENCY GP ACQUIRER, L.P.

 

 

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of May 26,
2010, by and among ENERGY TRANSFER EQUITY, L.P., a Delaware limited partnership (“ETE”) and REGENCY
GP ACQUIRER, L.P. (“GE”).

     This Agreement is made in connection with this issuance of the ETE Common Units to GE pursuant
to that certain General Partner Purchase Agreement dated as of May 10, 2010 (the “GP Purchase
Agreement”) by and among GE, ETE and ETE GP Acquirer, LLC, a Delaware limited liability company.
ETE and GE have agreed to enter into this Agreement pursuant to Section 2.3 of the GP Purchase
Agreement. In consideration of the mutual covenants and agreements set forth herein and for good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each
party hereto, the parties hereby agree as follows:

ARTICLE I.

DEFINITIONS

     Section 1.01 Definitions. Capitalized terms used herein without definition shall have
the meanings given to them in the Purchase Agreement. The terms set forth below are used herein as
so defined:

     “Commission” means the U.S. Securities and Exchange Commission.

     “Common Units” means the common units issuable upon conversion of the Series A
Preferred Units representing limited partner interests in ETE.

     “Contribution Agreement” has the meaning specified therefor in the preamble of this
Agreement.

     “Effectiveness Period” has the meaning specified therefor in Section 2.01(a) of this
Agreement.

     “ETE” has the meaning specified therefor in the preamble of this Agreement.

     “ETP” means Energy Transfer Partners, L.P., a Delaware limited partnership.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

     “GE” has the meaning specified therefor in the preamble of this Agreement.

     “GP Purchase Agreement” has the meaning specified therefor in the preamble of this
Agreement.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

2

 

     “Holder” means the record holder of any Registrable Securities.

     “Losses” has the meaning specified therefor in Section 2.07(a) of this Agreement.

     “Managing Underwriter” means, with respect to any Underwritten Offering, the book
running lead manager of such Underwritten Offering.

     “Registrable Securities” means the Common Units until such time as such securities
cease to be Registrable Securities pursuant to Section 1.02 hereof.

     “Registration Expenses” has the meaning specified therefor in Section 2.06(a) of this
Agreement.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

     “Selling Expenses” has the meaning specified therefor in Section 2.06(a) of this
Agreement.

     “Selling Holder” means a Holder who is selling Registrable Securities pursuant to a
Shelf Registration Statement.

     “Series A Preferred Units” means the Series A Preferred Units representing limited
partner interest in ETE issued to GE pursuant to the GP Purchase Agreement.

     “Shelf Registration” has the meaning specified therefor in Section 2.01(a) of this
Agreement.

     “Shelf Registration Statement” has the meaning specified therefor in Section 2.01(a)
of this Agreement.

     “Underwritten Offering” means an offering (including an offering pursuant to a Shelf
Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis
for reoffering to the public or an offering that is a “bought deal” with one or more investment
banks.

     Section 1.02 Registrable Securities. Any Registrable Security will cease to be a
Registrable Security when (a) a registration statement covering such Registrable Security has been
declared effective by the Commission and such Registrable Security has been sold or disposed of
pursuant to such effective registration statement; (b) such Registrable Security has been disposed
of pursuant to any section of Rule 144 (or any successor rule or regulation to Rule 144); (c) such
Registrable Security is held by ETE or one of its subsidiaries; or (d) such Registrable Security is
eligible for resale (without restriction, including but not limited to, volume limitations) under
Rule 144 (or any similar provisions then in force under the Securities Act) under the Securities
Act.

3

 

ARTICLE II.

REGISTRATION RIGHTS

     Section 2.01 Shelf Registration.

          (a) Shelf Registration. (a) At the option and upon the request of the holders of a
majority of the Common Units issued upon conversion of the Series A Preferred Units, ETE shall
prepare and file a registration statement under the Securities Act to permit the public resale of
the Registrable Securities from time to time as permitted by Rule 415 (or any similar provision
then in force) of the Securities Act (the “Shelf Registration Statement”). ETE shall use its
reasonable best efforts to file the Shelf Registration Statement within 45 days of any such request
and cause it to be effective as soon as reasonably practicable thereafter (the “Shelf
Registration”); provided, however, that ETE shall not be required to effect more than one
registration pursuant to this Section 2.01(a). The Shelf Registration Statement filed pursuant to
this Section 2.01(a) shall be on such appropriate registration form of the Commission as shall be
selected by ETE; provided, however, that if a prospectus supplement will be used in connection with
the marketing of an Underwritten Offering from the Shelf Registration Statement and the Managing
Underwriter at any time shall notify GE in writing that, in the sole judgment of such Managing
Underwriter, inclusion of detailed information to be used in such prospectus supplement is of
material importance to the success of the Underwritten Offering of such Registrable Securities, ETE
shall use its reasonable best efforts to include such information in such a prospectus supplement.
ETE will cause the Shelf Registration Statement filed pursuant to this Section 2.01(a) to be
continuously effective under the Securities Act until all Registrable Securities covered by the
Shelf Registration Statement have been distributed in the manner set forth and as contemplated in
the Shelf Registration Statement or there are no longer any Registrable Securities outstanding (the
“Effectiveness Period”). The Shelf Registration Statement when declared effective (including the
documents incorporated therein by reference) will comply as to form with all applicable
requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. If ETE determines in good faith that the requested
registration would be materially detrimental to ETE or ETP because such registration would (x)
materially interfere with a significant acquisition, reorganization or other similar transaction
involving ETE or ETP, (y) require premature disclosure of material information that ETE has a bona
fide business purpose for preserving as confidential or (z) render ETE unable to comply with
requirements under applicable securities laws, then ETE shall have the right to postpone such
requested registration for a period of not more than three months after receipt of GE’s request,
such right pursuant to this Section 2.01(b) not to be utilized more than twice in any twelve-month
period.

          (b) Delay Rights. Notwithstanding anything to the contrary contained herein, ETE may,
upon written notice to any Selling Holder whose Registrable Securities are included in the Shelf
Registration Statement, suspend such Selling Holder’s use of any prospectus which is a part of the
Shelf Registration Statement (in which event the Selling Holder shall discontinue sales of the
Registrable Securities pursuant to the Shelf Registration Statement) if ETE or ETP (i) is pursuing
a financing, acquisition, merger, reorganization, disposition or other similar transaction and
determines in good faith that its ability to pursue or consummate such a transaction would be
materially adversely affected by any required disclosure of such transaction

4

 

in the Shelf Registration Statement or (ii) has experienced some other material non-public
event the disclosure of which at such time, in the good faith judgment of ETE or ETP would
materially adversely affect ETE or ETP. Upon disclosure of such information or the termination of
the condition described above, ETE shall provide prompt notice to the Selling Holders whose
Registrable Securities are included in the Shelf Registration Statement, and shall promptly
terminate any suspension of sales it has put into effect and shall take such other actions to
permit registered sales of Registrable Securities as contemplated in this Agreement.

     Section 2.02 Underwritten Offering. In the event that the Selling Holders holding a
majority of the Registrable Securities outstanding at such time elect to dispose of Registrable
Securities under the Shelf Registration Statement pursuant to an Underwritten Offering, ETE shall
enter into an underwriting agreement in customary form with the Managing Underwriter or
Underwriters, which shall include, among other provisions, indemnities to the effect and to the
extent provided in Section 2.07, and shall take all such other reasonable actions as are requested
by the Managing Underwriter in order to expedite or facilitate the registration and disposition of
the Registrable Securities; provided, however, that ETE shall not be required to facilitate,
participate in, or otherwise have any obligations whatsoever with respect to, any Underwritten
Offering pursuant to this Section 2.02 unless such Underwritten Offering covers at least
$100,000,000 of Registerable Securities based on the closing price of the ETE Common Units on the
trading day immediately prior to such requested Underwritten Offering. In connection with any
Underwritten Offering under this Agreement, ETE shall be entitled to select the Managing
Underwriter or Underwriters, subject to the consent of GE not to be unreasonably withheld. No
Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to
sell its Registrable Securities on the basis provided in such underwriting agreement and completes
and executes all questionnaires, powers of attorney, indemnities and other documents reasonably
required under the terms of such underwriting agreement. Each Selling Holder may, at its option,
require that any or all of the representations and warranties by, and the other agreements on the
part of, ETE to and for the benefit of such underwriters also be made to and for such Selling
Holder’s benefit and that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement also be conditions precedent to its obligations. No
Selling Holder shall be required to make any representations or warranties to or agreements with
ETE other than representations, warranties or agreements regarding such Selling Holder and its
ownership of the securities being registered on its behalf and its intended method of distribution
and any other representation required by law. If any Selling Holder disapproves of the terms of an
underwriting, such Selling Holder may elect to withdraw therefrom by notice to ETE and the Managing
Underwriter; provided, however, that such withdrawal must be made up to and including the time of
pricing of such offering to be effective. No such withdrawal or abandonment shall affect ETE’s
obligation to pay Registration Expenses.

     Section 2.03 Registration Procedures. In connection with its obligations contained in
Section 2.01, ETE will, as expeditiously as possible:

          (a) prepare and file with the Commission such amendments and supplements to the Shelf
Registration Statement and the prospectus used in connection therewith as may be necessary to keep
the Shelf Registration Statement effective for the Effectiveness Period and as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition of all securities
covered by the Shelf Registration Statement;

5

 

          (b) furnish to each Selling Holder (i) as far in advance as reasonably practicable before
filing the Shelf Registration Statement or any supplement or amendment thereto, upon request,
copies of reasonably complete drafts of all such documents proposed to be filed (including
furnishing or making available exhibits and each document incorporated by reference therein to the
extent then required by the rules and regulations of the Commission), and provide each such Selling
Holder the opportunity to object to any information pertaining to such Selling Holder and its plan
of distribution that is contained therein and make the corrections reasonably requested by such
Selling Holder with respect to such information prior to filing the Shelf Registration Statement or
supplement or amendment thereto, and (ii) such number of copies of the Shelf Registration Statement
and the prospectus included therein and any supplements and amendments thereto as such Persons may
reasonably request in order to facilitate the public sale or other disposition of the Registrable
Securities covered by such Shelf Registration Statement;

          (c) if applicable, use its reasonable best efforts to register or qualify the Registrable
Securities covered by the Shelf Registration Statement under the securities or blue sky laws of
such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing
Underwriter, shall reasonably request, provided that neither ETE nor its general partner will be
required to qualify generally to transact business in any jurisdiction where it is not then
required to so qualify or to take any action which would subject it to general service of process
in any such jurisdiction where it is not then so subject;

          (d) promptly notify each Selling Holder and each underwriter, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of (i) the filing of the
Shelf Registration Statement or any prospectus or prospectus supplement to be used in connection
therewith, or any amendment or supplement thereto, and, with respect to such Shelf Registration
Statement, when the same has become effective; and (ii) any written comments from the Commission
with respect to any filing referred to in clause (i) and any written request by the Commission for
amendments or supplements to the Shelf Registration Statement or any prospectus or prospectus
supplement thereto;

          (e) immediately notify each Selling Holder and each underwriter, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of (i) the happening of any
event as a result of which the prospectus or prospectus supplement contained in the Shelf
Registration Statement, as then in effect, includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make the statements
therein not misleading, in the light of the circumstances then existing; (ii) the issuance or
threat of issuance by the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement, or the initiation of any proceedings for that purpose; or (iii) the receipt
by ETE of any notification with respect to the suspension of the qualification of any Registrable
Securities for sale under the applicable securities or blue sky laws of any jurisdiction.
Following the provision of such notice, ETE agrees to as promptly as practicable amend or
supplement the prospectus or prospectus supplement or take other appropriate action so that the
prospectus or prospectus supplement does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein
not misleading, in the light of the circumstances then existing, and to take such other

6

 

action as is necessary to remove a stop order, suspension, threat thereof or proceedings
related thereto;

          (f) furnish to each Selling Holder copies of any and all transmittal letters or other
correspondence with the Commission or any other governmental agency or self-regulatory body or
other body having jurisdiction (including any domestic or foreign securities exchange) relating to
such offering of Registrable Securities;

          (g) in the case of an Underwritten Offering, furnish upon request and addressed to the
underwriters and to the Selling Holders, (i) an opinion of counsel for ETE, dated the effective
date of the closing under the underwriting agreement, and (ii) a “comfort letter”, dated the
effective date of the applicable registration statement or the date of any amendment or supplement
thereto and a letter of like kind dated the date of the closing under the underwriting agreement,
in each case, signed by the independent public accountants who have certified ETE’s financial
statements included or incorporated by reference into the applicable registration statement, and
each of the opinion and the “comfort letter” shall be in customary form and covering substantially
the same matters with respect to such registration statement (and the prospectus and any prospectus
supplement included therein) and as are customarily covered in opinions of issuer’s counsel and in
accountants’ letters delivered to the underwriters in Underwritten Offerings of securities, and
such other matters as such underwriters may reasonably request;

          (h) otherwise use its reasonable best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least 12 months, but not more than 18
months, beginning with the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 promulgated thereunder;

          (i) make available to the appropriate representatives of the Managing Underwriter and Selling
Holders access to such information and ETE personnel as is reasonable and customary to enable such
parties to establish a due diligence defense under the Securities Act; provided that ETE need not
disclose any information to any such representative unless and until such representative has
entered into a confidentiality agreement with ETE;

          (j) cause all such Registrable Securities registered pursuant to this Agreement to be listed
on each securities exchange or nationally recognized quotation system on which similar securities
issued by ETE are then listed;

          (k) use its reasonable best efforts to cause the Registrable Securities to be registered with
or approved by such other governmental agencies or authorities as may be necessary by virtue of the
business and operations of ETE to enable the Selling Holders to consummate the disposition of such
Registrable Securities;

          (l) provide a transfer agent and registrar for all Registrable Securities covered by such
registration statement not later than the effective date of such registration statement; and

7

 

          (m) enter into customary agreements and take such other actions as are reasonably requested by
the Selling Holders or the underwriters, if any, including participation in “roadshows,” as are
reasonably required in order to expedite or facilitate the disposition of such Registrable
Securities.

     Each Selling Holder, upon receipt of notice from ETE of the happening of any event of the kind
described in subsection (e) of this Section 2.03, shall forthwith discontinue disposition of the
Registrable Securities until such Selling Holder’s receipt of the copies of the supplemented or
amended prospectus contemplated by subsection (e) of this Section 2.03 or until it is advised in
writing by ETE that the use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings incorporated by reference in the prospectus, and, if so directed
by ETE, such Selling Holder will, or will request the managing underwriter or underwriters, if any,
to deliver to ETE (at ETE’s expense) all copies in their possession or control, other than
permanent file copies then in such Selling Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

     Section 2.04 Cooperation by Holders. ETE shall have no obligation to include in the
Shelf Registration Statement units of a Holder who has failed to timely furnish such information
which, in the opinion of counsel to ETE, is reasonably required in order for the Shelf Registration
Statement or any prospectus or prospectus supplement thereto, as applicable, to comply with the
Securities Act.

     Section 2.05 Restrictions on Public Sale by Holders of Registrable Securities. Each
Holder of Registrable Securities who is included in the Shelf Registration Statement agrees not to
effect any public sale or distribution of the Registrable Securities during the lock-up period
contained in a prospectus supplement filed with the Commission with respect to the pricing of an
Underwritten Offering, provided that (i) ETE gives written notice to such Holder of the date of the
commencement and termination of such period with respect to any such Underwritten Offering and (ii)
the duration of the foregoing restrictions shall be no longer than the duration of the shortest
restriction generally imposed by the underwriters on ETE or on the officers or directors or any
other unitholder of ETE on whom a restriction is imposed.

     Section 2.06 Expenses.

          (a) Certain Definitions. “Registration Expenses” means all expenses incident
to ETE’s performance under or compliance with this Agreement to effect the registration of
Registrable Securities in a Shelf Registration, and the disposition of such securities, including,
without limitation, all registration, filing, securities exchange listing fees, all registration,
filing, qualification and other fees and expenses of complying with securities or blue sky laws,
fees of the Financial Industry Regulatory Authority, transfer taxes and fees of transfer agents and
registrars, all word processing, duplicating and printing expenses, the fees and disbursements of
counsel and independent public accountants for ETE, including the expenses of any special audits or
“comfort letters” required by or incident to such performance and compliance. Except as otherwise
provided in Section 2.07 hereof, ETE shall not be responsible for legal fees incurred by Holders in
connection with the exercise of such Holders’ rights hereunder. In addition, ETE shall not be
responsible for any “Selling Expenses,” which means all underwriting fees, discounts and selling
commissions allocable to the sale of the Registrable Securities.

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          (b) Expenses. ETE will pay all Registration Expenses in connection with any Shelf
Registration Statement filed pursuant to Section 2.01(a) of this Agreement, whether or not the
Shelf Registration Statement becomes effective or any sale is made pursuant to the Shelf
Registration Statement. Each Selling Holder shall pay all Selling Expenses in connection with any
sale of its Registrable Securities hereunder.

     Section 2.07 Indemnification.

          (a) By ETE. In the event of a registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, ETE will indemnify and hold harmless each Selling Holder
thereunder, its directors and officers and each underwriter pursuant to the applicable underwriting
agreement with such underwriter and each Person, if any, who controls such Selling Holder or
underwriter within the meaning of the Securities Act and the Exchange Act, against any losses,
claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses)
(collectively, “Losses”), joint or several, to which such Selling Holder or underwriter or
controlling Person may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Shelf Registration Statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, and will reimburse each such Selling
Holder, its directors and officers, each such underwriter and each such controlling Person for any
legal or other expenses reasonably incurred by them in connection with investigating or defending
any such Loss or actions or proceedings; provided, however, that ETE will not be liable in any such
case if and to the extent that any such Loss arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity with information
furnished by such Selling Holder, such underwriter or such controlling Person in writing
specifically for use in the Shelf Registration Statement or any prospectus contained therein or any
amendment or supplement thereof. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Selling Holder or any such director, officer or
controlling Person, and shall survive the transfer of such securities by such Selling Holder.

          (b) By Each Selling Holder. Each Selling Holder agrees severally and jointly to
indemnify and hold harmless ETE, its directors and officers, and each Person, if any, who controls
ETE within the meaning of the Securities Act or of the Exchange Act to the same extent as the
foregoing indemnity from ETE to the Selling Holders, but only with respect to information regarding
such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for
inclusion in the Shelf Registration Statement or any prospectus contained therein or any amendment
or supplement thereof relating to the Registrable Securities; provided, however, that the liability
of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net
of any Selling Expenses) received by such Selling Holder from the sale of the Registrable
Securities giving rise to such indemnification.

9

 

          (c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party other than under this Section 2.07. The indemnifying party
shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to assume and undertake
the defense thereof, the indemnifying party shall not be liable to such indemnified party under
this Section 2.07 for any legal expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation and of liaison
with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to
assume the defense and employ counsel or (ii) if the defendants in any such action include both the
indemnified party and the indemnifying party and counsel to the indemnified party shall have
concluded that there may be reasonable defenses available to the indemnified party that are
different from or additional to those available to the indemnifying party, or if the interests of
the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying
party, then the indemnified party shall have the right to select a separate counsel and to assume
such legal defense and otherwise to participate in the defense of such action, with the reasonable
expenses and fees of one such separate counsel (firm) and other reasonable expenses related to such
participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other
provision of this Agreement, no indemnified party shall settle any action brought against it with
respect to which it is entitled to indemnification hereunder without the consent of the
indemnifying party, unless the settlement thereof imposes no liability or obligation on, and
includes a complete and unconditional release from all liability of, the indemnifying party.

          (d) Contribution. If the indemnification provided for in this Section 2.07 is held by
a court or government agency of competent jurisdiction to be unavailable to ETE or any Selling
Holder or is insufficient to hold it harmless in respect of any Losses, then each such indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Losses as between ETE on the one hand and
such Selling Holder on the other hand, in such proportion as is appropriate to reflect the relative
fault of ETE on the one hand and of such Selling Holder on the other in connection with the
statements or omissions which resulted in such Losses, as well as any other relevant equitable
considerations; provided, however, that in no event shall such Selling Holder be required to
contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses)
received by such Selling Holder from the sale of Registrable Securities giving rise to such
indemnification. The relative fault of ETE on the one hand and each Selling Holder on the other
hand shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact has been
made by, or relates to, information supplied by such party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contributions pursuant to this
paragraph were to be determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first sentence of this
paragraph. The amount paid by an indemnified party as a result of the Losses

10

 

referred to in the first sentence of this paragraph shall be deemed to include any legal and
other expenses reasonably incurred by such indemnified party in connection with investigating or
defending any Loss which is the subject of this paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who is not guilty of such fraudulent misrepresentation.

          (e) Other Indemnification. The provisions of this Section 2.07 shall be in addition
to any other rights to indemnification or contribution which an indemnified party may have pursuant
to law, equity, contract or otherwise.

     Section 2.08 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the Registrable
Securities to the public without registration, ETE agrees to use its reasonable best efforts to:

          (a) Make and keep public information regarding ETE available, as those terms are understood
and defined in Rule 144 of the Securities Act, at all times from and after the date hereof;

          (b) File with the Commission in a timely manner all reports and other documents required of
ETE under the Securities Act and the Exchange Act at all times from and after the date hereof; and

          (c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon
request a copy of the most recent annual or quarterly report of ETE, and such other reports and
documents so filed as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing such Holder to sell any such securities without registration.

     Section 2.09 Transfer or Assignment of Registration Rights. The rights to cause ETE
to include Registrable Securities in a Shelf Registration Statement may be transferred or assigned
by GE to one or more transferee(s) or assignee(s) of such Registrable Securities, provided that (a)
such transferee or assignee receives at least 20% of the Common Units (or 20% of the Series A
Preferred Units prior to conversion) covered by this Agreement, (b) ETE is given written notice
prior to any said transfer or assignment, stating the name and address of each such transferee and
identifying the securities with respect to which such registration rights are being transferred or
assigned, and (c) each such transferee or assignee assumes in writing responsibility for its
portion of the obligations of GE under this Agreement.

     Section 2.10 Information by Holder. Any Holder or Holders of Registrable Securities
included in any registration statement shall promptly furnish to ETE such information regarding
such Holder or Holders and the distribution proposed by such Holder or Holders as ETE may
reasonably request and as shall be required in connection with any registration, qualification or
compliance referred to herein.

11

 

ARTICLE III.

MISCELLANEOUS

     Section 3.01 Communications. All notices and other communications provided for or
permitted hereunder shall be made in writing by facsimile, courier service or personal delivery:

If to GE to:

GE Energy Financial Services

800 Long Ridge Road

Stanford, Connecticut 06927

Telephone: (203) 316-7355

Facsimile: (203) 961-2606

Attention: Portfolio-Regency

With a copy (not itself constituting notice) to:

GE Energy Financial Services

800 Long Ridge Road

Stanford, Connecticut 06927

Telephone: (203) 357-4151

Facsimile: (203) 357-6632

Attention: General Counsel

and

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Telephone: (212) 906-1259

Facsimile: (212) 751-4864

Attention: Charles E. Carpenter

If to the ETE to:

Energy Transfer Equity, L.P.

3738 Oak Lawn

Dallas, Texas 75219

Telephone: (832) 668-1210 or (214) 981-0763

Facsimile: (832) 668-1127

Attention: General Counsel

and

Vinson & Elkins LLP

2500 First City Tower

1001 Fannin, Suite 2500

Houston, Texas 77007

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Telephone: (713) 758-3613

Facsimile: (713) 615-5725

Attention: Douglas E. McWilliams

     All such notices and communications shall be deemed to have been received at the time
delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or
sent via Internet electronic mail; and when actually received, if sent by any other means.

     Section 3.02 Successor and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties, including subsequent Holders of
Registrable Securities to the extent permitted herein.

     Section 3.03 Assignment of Rights. All or any portion of the rights and obligations
of GE under this Agreement may be transferred or assigned by GE only in accordance with Section
2.09 of this Agreement.

     Section 3.04 Recapitalization, Exchanges, etc. Affecting the Common Units. The
provisions of this Agreement shall apply to the full extent set forth herein with respect to any
and all units of ETE or any successor or assign of ETE (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the
Registrable Securities, and shall be appropriately adjusted for combinations, recapitalizations and
the like occurring after the date of this Agreement.

     Section 3.05 Specific Performance. Damages in the event of breach of this Agreement
by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed
that each such Person, in addition to and without limiting any other remedy or right it may have,
will have the right to an injunction or other equitable relief in any court of competent
jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions
hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground
of lack of jurisdiction or competence of the court to grant such an injunction or other equitable
relief. The existence of this right will not preclude any such Person from pursuing any other
rights and remedies at law or in equity which such Person may have.

     Section 3.06 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.

     Section 3.07 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     Section 3.08 Governing Law. The laws of the State of Delaware shall govern this
Agreement without regard to principles of conflict of laws.

     Section 3.09 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions

13

 

hereof or affecting or impairing the validity or enforceability of such provision in any other
jurisdiction.

     Section 3.10 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the rights granted by ETE set forth herein. This
Agreement supersedes all prior agreements and understandings between the parties with respect to
such subject matter.

     Section 3.11 Amendment. This Agreement may be amended only by means of a written
amendment signed by ETE and the Holders of a majority of the then outstanding Registrable
Securities; provided, however, that no such amendment shall materially and adversely affect the
rights of any Holder hereunder without the consent of such Holder.

     Section 3.12 No Presumption. In the event any claim is made by a party relating to
any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or
persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular party or its counsel.

[Signature page follows]

14

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	REGENCY GP ACQUIRER, L.P.

 	 
	 	 	 
	 	By: REGENCY GP HOLDCO I LLC, 
        its
general partner

 	 
	 
	 	By: AIRCRAFT SERVICES
CORPORATION, 
        its managing member

 	 
	 
	 	By:  	                                      /s/ Mark Mellana
 	 
	 	 	Mark Mellana, 	 
	 	 	Authorized Signatory 	 
	 
	 	ENERGY TRANSFER EQUITY, L.P.

By: LE GP, LLC, its general partner

 	 
	 	By:  	/s/ John W. McReynolds
 	 
	 	 	John W. McReynolds, 	 
	 	 	President and Chief Financial Officer 	 
	 

Signature Page to Registration Rights Agreement

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