Document:

exv10w1

 

Exhibit 10.1

Second Amendment

to the

Copano Energy, L.L.C.

Long-Term Incentive Plan

          WHEREAS, Copano Energy, L.L.C (the “Company”) maintains the Copano Energy, L.L.C. Long-Term
Incentive Plan (the “Plan”) for the purpose of granting Awards thereunder to eligible Employees,
Directors and independent contractor consultants who perform services for the Company and its
Affiliates; and

          WHEREAS, the Company desires to amend the Plan to provide for the Company’s right to cash out
Awards of (i) Restricted Units under the Plan in connection with the vesting of such units and (ii)
Options in connection with their exercise;

          NOW,
THEREFORE, effective as of May 25, 2006, the Plan is amended as follows:

	I.	 	A new Section 6(a)(v) shall be added to the Plan as follows:

     “(v) Option Cash-Out Right. To the extent determined by the
Company in its sole discretion, and to the extent provided for in an Award
Agreement, in lieu of issuing Units to the Participant in connection with
the exercise of an Option, the Company may elect to pay the Participant an
amount of cash equal to the excess of the aggregate Fair Market Value of
the Units as to which the Options are being exercised as of the date of
exercise over the aggregate exercise price for such Units, less any
amounts required to be withheld by the Company or an Affiliate to meet
withholding obligations under applicable law (the right to make such
election, the “Option Cash-Out Right”). Upon payment by the Company of
such amount, the number of Units that may be purchased by the Participant
pursuant to the Options shall be reduced to the same extent as if the
Company had not exercised the Option Cash-Out Right and the Participant
had exercised the Options pursuant to his election.”

	II.	 	A new Section 6(d)(iv) shall be added to the Plan as follows:

     “(iv) Restricted Unit Cash-Out Right. To the extent
determined by the Company in its sole discretion, and to the extent
provided for in an Award Agreement, the Company may elect to pay a
Participant an amount of cash equal to the aggregate Fair Market Value of
the Restricted Units on the vesting date of such units, less any amounts
required by the Company or an Affiliate to meet withholding obligations
under applicable law, in lieu of issuing such units to the Participant
(the right to make such election, the “Restricted Unit Cash-Out Right”).
Upon payment by
the Company of such amount, any certificate representing the
Restricted Units as to which such Restricted Unit Cash-Out Right has been
exercised shall be cancelled.”

 

 

     All terms used herein that are defined in the Plan shall have the same meanings given to such
terms in the Plan, except as otherwise expressly provided herein.

     Except as amended and modified hereby, the Plan shall continue in full force and effect and
the Plan and this instrument shall be read, taken and construed as one and the same instrument.

     Effective
this day of May
25, 2006.exv10w2

 

Exhibit 10.2

Form
of Employee Grant

Copano Energy, L.L.C.

Long-Term Incentive Plan

Grant of Options

	 	 	 	 	 
	Grantee:
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	Grant Date:

	 	                                        , 200___	 	 

	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, as amended (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 in accordance with the following schedule:

	 	 	 
	Anniversary of

	 	Cumulative
	Grant Date

	 	Vested Percentage
	 

	 	 

	 	 	To the extent then vested, except as provided in Paragraph 3(f) below, the Options may be
exercised only during the months of February, May, August, and November (each, a
“Designated Exercise Month” and collectively, the “Designated Exercise Months”). For sake
of clarity, except as provided in Paragraph 3(f), the Options shall not be exercisable even
if and to the extent vested except during the Designated Exercise Months. Any such
exercise must be made 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).

 

 

	 	 	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 during any
Designated Exercise Month or portion of a Designated Exercise Month that falls within
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 during any
Designated Exercise Month or portion of a Designated Exercise Month that falls within
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, during the Extended
Exercise Period (as defined below) 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 prior to the
expiration of the Extended Exercise 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, during the Extended Exercise Period 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
prior to the expiration of such Extended Exercise Period), but only as to the

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	 	 	 	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 and, notwithstanding any provision herein to the contrary, will be
immediately exercisable.

	 	 	For purposes of this Agreement, “employment with the Company” or being an “employee of the
Company” shall include being an employee, consultant or director of the Company or an
Affiliate. For purposes of this Agreement, (i) if termination of your employment or other
affiliation with the Company terminates during a Designated Exercise Month, “Extended
Exercise Period” shall mean that Designated Exercise Month and the next succeeding
Designated Exercise Month or (ii) if termination of your employment or other affiliation
with the Company occurs other than in a Designated Exercise Month, “Extended Exercise
Period” shall mean the next two succeeding Designated Exercise Months.
	 
	 	 	There is no minimum or maximum number of Units that must be purchased upon exercise of the
Options. Instead, the Option may be exercised, from time to time (but only during
Designated Exercise Months), to purchase any number of Units that are then vested 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.	 	Company Cash-Out Right. Notwithstanding anything to the contrary herein or in the Plan,
in lieu of issuing Units to you upon your exercise of the Options, the Company may elect to
pay you an amount in cash (the “Company Cash-Out Right”) equal to the excess of the aggregate
Fair Market Value of the Units as to which the Options are exercised as of the exercise date
over the aggregate exercise price of such Options (the “Cash-Out Price”). In the event the
Company elects to exercise its Cash-Out Right with respect to any of the Options, it shall
notify you of its intent within two business days following the applicable exercise date and
shall pay the Cash-Out Price (less any amounts required by the Company
or an Affiliate to meet withholding obligations under applicable law) to you within
five business days following such exercise date. In the event that the Company determines
that the Cash-Out Right will be applied to your exercise, upon payment by the Company
pursuant to this Paragraph, the number of Units that may be purchased pursuant to the
Options granted under this Agreement will be reduced to the same extent as if the Cash-Out
Right had not been applied and your Options had been exercised pursuant to your
election.
	 
	5.	 	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

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	 	 	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 any of the rights or privileges of a unitholder of the Company
with respect to Units acquirable upon an exercise of the Options.
	 
	6.	 	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 minimum
amount of taxes required 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.
	 
	7.	 	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.
	 
	8.	 	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

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	 	 	attachment or similar
process upon such rights, such rights shall immediately become null and void.
	 
	9.	 	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.
	 
	10.	 	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.
	 
	11.	 	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
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.
	 
	12.	 	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, (a) 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, and (b) the
Committee, in its sole discretion, may unilaterally modify this Agreement in any manner that
does not materially reduce your benefit.
	 
	13.	 	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 all effective as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	Copano Energy, L.L.C.	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

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