Document:

Exhibit 10.37

 

Copano
Energy, L.L.C.

Long-Term Incentive Plan

 

SCISSORTAIL
ENERGY, L.L.C.

 

Grant
of Options

 

Grantee:

 

Grant Date:

 

1.                                       Grant of Options.  Copano Energy, L.L.C. (the “Company”) hereby
grants to you the right and option (“Options”) to purchase all or any part of
an aggregate of Common
Units (“Units”) of Copano Energy, L.L.C. on the terms and conditions set
forth herein and in the Copano Energy, L.L.C. Long-Term Incentive Plan (the “Plan”),
which is incorporated herein by reference as a part of this Agreement.  This grant of Options does not include a
tandem grant of DERs.  In the event of
any conflict between the terms of this Agreement and the Plan, the Plan shall
control.  Capitalized terms used but not
defined in this Agreement shall have the meaning attributed to such terms under
the Plan, unless the context requires otherwise.

 

2.                                       Purchase Price.  The purchase price per Unit purchased
pursuant to the exercise of the Options shall be $     , subject to adjustment as provided in the
Plan.

 

3.                                       Vesting and
Exercise of Option. 
Subject to the further provisions of this Agreement, the Options shall
become vested and may be exercised in accordance with the following schedule,
by written notice to the Company at its principal executive office addressed to
the attention of its Secretary (or such other officer or employee of the
Company as the Company may designate from time to time):

 

	
  Anniversary of

  Grant Date

  	
   

  	
  Cumulative

  Vested Percentage

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Notwithstanding the above schedule, but subject to the further
provisions hereof, upon the occurrence of the following events the Options
shall vest and become exercisable as provided below:

 

 

(a)                                  Disability.
If your employment with the Company and its Affiliates terminates by reason of
a disability that entitles you to benefits under the Company’s or an Affiliate’s
long-term disability plan, the Options shall become fully vested and, subject
to the further provisions of this Agreement, may be exercised at any time
during the one-year period following such termination by you or by your guardian or legal representative (or, if
you die during such one-year period, by your estate or the person who acquires
the Options by will or the laws of descent and distribution).

 

(b)                                 Death.  If you die while in the employ of the Company
or an Affiliate, the Options shall become fully vested and, subject to the
further provisions of this Agreement, your estate (or the person who acquires
the Options by will or the laws of descent and distribution) may exercise the
Options at any time during the one-year period following the date of your death.

 

(c)                                  Termination For
Cause.  If your employment
with the Company and its Affiliates is terminated by the Company or an
Affiliate for Cause (as determined by the Company or an Affiliate in accordance
with its employment policies), the Options, whether or not then vested, shall
immediately cease to be exercisable upon such termination and shall be
cancelled automatically without payment.

 

(d)                                 Other
Terminations.  If your
employment with the Company and its Affiliates is terminated for any reason other than as provided in paragraphs
3(a), (b) and (c) above, the Options, to the extent vested on the
date of your termination, may be exercised, subject to the further provisions
of this Agreement, at any time during the three month period following such
termination by you or by your guardian or legal representative (or by your
estate or the person who acquires the Options by will or the laws of descent
and distribution or otherwise by reason of your death if you die during such
period), but only as to
the vested number of Units, if any, that you were entitled to purchase
hereunder as of the date your employment so terminates.

 

(e)                                  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 Options, to
the extent vested on the date Copano Operations ceases to be an Affiliate, may
be exercised, subject to the further provisions of this Agreement, at any time
during the three month period following such date by you or by your guardian or
legal representative (or by your estate or the person who acquires the Options
by will or the laws of descent and distribution or otherwise by reason of your
death if you die during such period), but only as to the vested number of Units, if any,
that you were entitled to purchase hereunder as of the date Copano Operations
ceases to be an Affiliate.

 

(f)                                    Change of Control.  The Options shall become fully vested upon a
Change of Control.

 

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(g)                     Change of
Control or Liquidation of ScissorTail Energy
L.L.C. (“ScissorTail”).  The
Options 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.

 

There is no minimum or maximum number of Units that must be purchased
upon exercise of the Options.  Instead,
the Option may be exercised, at any time and from time to time, to purchase any
number of Units that are then vested and exercisable according to the
provisions of this Agreement.

 

Notwithstanding any of the foregoing, the Options shall not be
exercisable in any event after the expiration of 10 years from the Grant Date.

 

All Options that are not vested on your termination of employment as
provided above shall be automatically cancelled without payment upon your
termination.

 

4.                                       Payment of
Exercise Price.  The
purchase price of the Units as to which the Options are exercised shall be paid
in full at the time of exercise (a) in cash (including by check acceptable
to the Company), (b) if the Units are readily tradable on a national
securities market or exchange, through a “cashless broker exercise” procedure (a
“cashless broker exercise” is not available for executive officers of the
Company except to the extent the exercise in such manner is approved in advance
by the Company) in accordance with a program established by the Company, (c) any
other method approved by the Company, including, with the consent of the
Committee, by withholding a number of Units that would otherwise be delivered
on exercise of the Option that have an aggregate Fair Market Value that does
not exceed the aggregate exercise price for the Options being then exercised,
or (d) any combination of the foregoing. 
No fraction of a Unit shall be transferred upon exercise of the
Options.  Unless and until a certificate
or certificates representing such Units shall have been transferred by the Company
to you, you (or the person permitted to exercise the Options in the event of
your death) shall not be or have

 

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any of the rights or privileges of a
unitholder of the Company with respect to Units acquirable upon an exercise of
the Options.

 

5.                                       Withholding of
Tax.  To the extent that the exercise of an Option
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, which, with the consent of the Committee, may
include withholding a number of Units that would otherwise be delivered on
exercise or vesting that have an aggregate Fair Market Value that does not
exceed the amount of taxes to be withheld, 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 delivery of Units shall be made pursuant
to the exercise of an Option under this Agreement until 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.

 

6.                                       Restrictions.
By accepting this grant, you agree that the Units which you may acquire by
exercising the Options 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 purchased under the Options 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 purchased under the Options 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
purchased under the Options.

 

7.                                       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.

 

8.                                       Insider Trading.  The terms of the Company’s Insider Trading
Policy are incorporated herein by reference. 
The timing of the delivery of any Units pursuant to an Option exercise
shall be subject to and comply with such policy.

 

9.                                       Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons 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 Option

 

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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.

 

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 Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas, without regard to conflicts
of laws principles thereof.

 

IN WITNESS WHEREOF, the Company has
caused this Agreement to be executed by its duly authorized officer, effective
as of the day and year first above written.

 

	
   

  	
  Copano
  Energy, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

5Exhibit 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:

 

2

 

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

 

3

 

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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