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Exhibit 10.5    
    

 
  COPANO ENERGY, L.L.C.
  LONG-TERM INCENTIVE PLAN    
    

        SECTION
1.    Purpose of the Plan.    

        The
Copano Energy, L.L.C. Long-Term Incentive Plan (the "Plan") is intended to promote the interests of Copano Energy, L.L.C., a Delaware limited liability company (the "Company"), by
providing to Employees and Directors of the Company and its Affiliates incentive compensation awards for superior performance that are based on Units. The Plan is also contemplated to enhance the
ability of the Company and its Affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the Company and to encourage those individuals to
devote their best efforts to advancing the business of the Company. 

        SECTION
2.    Definitions.    

        As
used in the Plan, the following terms shall have the meanings set forth below: 

        "Affiliate"
means, (i) with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control
with, the Person in question and (ii) with respect to the Company, Copano Operations for so long as Copano Operations provides any general and administrative functions or field operating personnel to
the Company or its subsidiaries. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise. 

        "Award"
means an Option, UAR, Restricted Unit or Phantom Unit granted under the Plan, and shall include any tandem DERs granted with respect to an Award. 

        "Award
Agreement" means the written or electronic agreement by which an Award shall be evidenced. 

        "Board"
means the Board of Directors of the Company. 

        "Change
of Control" means the happening of any of the following events: 

          (i)  the
acquisition by any "person," as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than
the Company or an Affiliate of the Company (other than Copano Operations), of "beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company's then outstanding securities entitled to vote generally in the election of directors; or 

 

         (ii)  the
consummation of a reorganization, merger, consolidation or other form of business transaction or series of business transactions, in each case, with respect to
which persons who were the members of the Company immediately prior to such reorganization, merger or consolidation or other transaction do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities; or 

        (iii)  the
sale, lease or disposition (in one or a series of related transactions) by the Company of all or substantially all the Company's assets to any Person or its
Affiliates, other than the Company or its Affiliates (other than Copano Operations); or 

        (iv)  a
change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either (A) are
directors of the Company as of the effective date of the initial public offering of the Company's equity interests, or (B) are elected, or nominated for election, thereafter to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination or (C) are among the five original independent directors of the Company, but
"Incumbent Director" shall not include an individual whose election or nomination is in connection with (i) an actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or (ii) a plan or agreement to
replace a majority of the then Incumbent Directors; or 

         (v)  the
approval by the Board or the members of the Company of a complete or substantially complete liquidation or dissolution of the Company. 

        "Committee"
means the Compensation Committee of the Board or such other committee of the Board as may be appointed by the Board to administer the Plan. 

        "Copano
Operations" means Copano Operations, Inc., a Texas corporation. 

        "DER"
or "Distribution Equivalent Right" means a contingent right, granted in tandem with a specific Option, UAR or Phantom Unit, to receive an amount in cash equal to the cash
distributions made by the Company with respect to a Unit during the period such tandem Award is outstanding. 

        "Director"
means a member of the Board who is not an Employee. 

        "Employee"
means any employee of the Company or an employee of an Affiliate who performs services for the benefit of the Company or a subsidiary of the Company. 

        "Exchange
Act" means the Securities Exchange Act of 1934, as amended. 

        "Fair
Market Value" means the closing sales price of a Unit on the applicable date (or if there is no trading in the Units on such date, on the next preceding date on which there was
trading) as reported in The Wall Street Journal (or other reporting service approved by the 

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Committee).
In the event Units are not publicly traded at the time a determination of fair market value is required to be made hereunder, the determination of fair market value shall be made in good
faith by the Committee. 

        "Option"
means an option to purchase Units granted under the Plan. 

        "Participant"
means any Employee or Director granted an Award under the Plan. 

        "Person"
means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity. 

        "Phantom
Unit" means a phantom (notional) Unit granted under the Plan which upon vesting entitles the Participant to receive a Unit or an amount of cash equal to the Fair Market Value of
a Unit, as determined by the Committee in its discretion. 

        "Restricted
Period" means the period established by the Committee with respect to an Award during which the Award remains subject to forfeiture and is either not exercisable by or
payable to the Participant, as the case may be. 

        "Restricted
Unit" means a Unit granted under the Plan that is subject to a Restricted Period. 

        "Rule
16b-3" means Rule 16b-3 promulgated by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time. 

        "SEC"
means the Securities and Exchange Commission, or any successor thereto. 

        "Unit"
means a common unit of the Company. 

        "UDR"
or "Unit Distribution Right" means a distribution made by the Company with respect to a Restricted Unit. 

        "Unit
Appreciation Right" or "UAR" means an Award that, upon exercise, entitles the holder to receive the excess of the Fair Market Value of a Unit on the exercise date over the exercise
price established for such Unit Appreciation Right. Such excess may be paid in cash and/or in Units as determined by the Committee in its discretion. 

        SECTION
3.    Administration.    

        The
Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting
thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. Subject to the terms of the Plan and applicable law,
and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the
type or types of Awards to be granted to a Participant; (iii) determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to
what extent, and under what circumstances Awards may be settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any instrument or agreement relating to an Award made
under the Plan; (vii) establish, amend, 

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suspend,
or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (viii) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons,
including the Company, any Affiliate, any Participant, and any beneficiary of any Award. 

        SECTION
4.    Units.    

        (a)    Limits on Units Deliverable.    Subject to adjustment as provided in Section 4(c), the number of Units that may
be delivered with respect to Awards under the Plan is 800,000, except that no more than 200,000 Units in the aggregate may be issued under the Plan as Restricted Units or Phantom Units; provided,
however, that if any Award is terminated or expires for any reason without the delivery of Units covered by such Award or Units are withheld from an Award to satisfy the exercise price or tax
withholding obligation with respect to such Award, such Units shall again be available for delivery pursuant to other Awards granted under the Plan. Notwithstanding the foregoing, there shall not be
any limitation on the number of Awards that may be granted under the Plan and paid in cash. 

        (b)    Sources of Units Deliverable Under Awards.    Any Units delivered pursuant to an Award shall consist, in whole
or in part, of Units acquired in the open market, from any Affiliate or any other Person, newly issued Units, or any combination of the foregoing, as determined by the Committee in its sole
discretion. 

        (c)    Adjustments.    In the event that the Committee determines that any distribution (whether in the form of cash,
Units, other securities, or other property), recapitalization, split, reverse split, reorganization, merger, Change of Control, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Units or other securities of the Company, issuance of warrants or other rights to purchase Units or other securities of the Company, or other similar transaction or event affects the Units such
that an adjustment is determined by the Committee to be appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Units (or other securities or property) with respect to which Awards may be granted,
(ii) the number and type of Units (or other securities or property) subject to outstanding Awards, (iii) the grant or exercise price with respect to any Award, or (iv) if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award; provided, that the number of Units subject to any Award shall always be a whole number. 

        SECTION
5.    Eligibility.    

        Any
Employee or Director shall be eligible to be designated a Participant and receive an Award under the Plan. 

        SECTION
6.    Awards.    

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        (a)    Options.    The Committee shall have the authority to determine the Employees and Directors to whom Options
shall be granted, the number of Units to be covered by each Option, whether DERs are granted with respect to such Option, the purchase price for such Units and the conditions and limitations
applicable to the exercise of the Option, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the
provisions of the Plan. 

        (i)    Exercise Price.    The purchase price per Unit purchasable under an Option shall be determined by the Committee
at the time the Option is granted, provided such purchase price may not be less than its Fair Market Value as of the date of grant. 

        (ii)    Time and Method of Exercise.    The Committee shall determine the Restricted Period, i.e., the time or times
at which an Option may be exercised in whole or in part, which may include, without limitation, accelerated vesting upon the achievement of specified performance goals, and the method or methods by
which payment of the exercise price with respect thereto may be made or deemed to have been made, which may include, without limitation, cash, check acceptable to the Company, a "cashless-broker"
exercise through procedures approved by the Company, with the consent of the Company, the withholding of Units that would otherwise be delivered to the Participant upon the exercise of the Option,
other securities or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price. 

        (iii)    Forfeitures.    Except as otherwise provided in the terms of the Award Agreement, upon termination of a
Participant's employment with the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all Options shall be forfeited
by the Participant. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant's Options. 

        (iv)    DERs.    To the extent provided by the Committee, in its discretion, a grant of Options may include a tandem
DER grant, which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of the Committee) subject to the
same vesting restrictions as the tandem Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion. 

        (b)    UARs.    The Committee shall have the authority to determine the Employees and Directors to whom Unit
Appreciation Rights shall be granted, the number of Units to be covered by each grant, whether DERs are granted with respect to such Unit Appreciation Right, the exercise price therefor and the
conditions and limitations applicable to the exercise of the Unit Appreciation Right, including the following terms and conditions and such additional terms and conditions, as the Committee shall
determine, that are not inconsistent with the provisions of the Plan. 

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        (i)    Exercise Price.    The exercise price per Unit Appreciation Right shall be determined by the Committee at the
time the Unit Appreciation Right is granted but may not be less than the Fair Market Value of a Unit as of the date of grant. 

        (ii)    Time of Exercise.    The Committee shall determine the Restricted Period, i.e., the time or times at which a
Unit Appreciation Right may be exercised in whole or in part, which may include, without limitation, accelerated vesting upon the achievement of specified performance goals. 

        (iii)    Forfeitures.    Except as otherwise provided in the terms of the Award Agreement, upon termination of a
Participant's employment with the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding Unit
Appreciation Rights awarded the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a
Participant's Unit Appreciation Rights. 

        (iv)    Unit Appreciation Right DERs.    To the extent provided by the Committee, in its discretion, a grant of Unit
Appreciation Rights may include a tandem DER grant, which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the
discretion of the Committee) subject to the same vesting restrictions as the tandem Unit Appreciation Rights Award, or be subject to such other provisions or restrictions as determined by the
Committee in its discretion. 

        (c)    Phantom Units.    The Committee shall have the authority to determine the Employees and Directors to whom
Phantom Units shall be granted, the number of Phantom Units to be granted to each such Participant, the Restricted Period, the time or conditions under which the Phantom Units may become vested or
forfeited, which may include, without limitation, the accelerated vesting upon the achievement of specified performance goals, and such other terms and conditions as the Committee may establish with
respect to such Awards, including whether DERs are granted with respect to such Phantom Units. 

        (i)    DERs.    To the extent provided by the Committee, in its discretion, a grant of Phantom Units may include a
tandem DER grant, which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of the Committee) subject
to the same vesting restrictions as the tandem Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion. 

        (ii)    Forfeitures.    Except as otherwise provided in the terms of the Award Agreement, upon termination of a
Participant's employment with the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding Phantom Units
awarded the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant's Phantom
Units. 

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        (iii)    Lapse of Restrictions.    Upon or as soon as reasonably practical following the vesting of each Phantom Unit,
subject to the provisions of Section 8(b), the Participant shall be entitled to receive from the Company one Unit or cash equal to the Fair Market Value of a Unit, as determined by the Committee in
its discretion. 

        (d)    Restricted Units.    The Committee shall have the authority to determine the Employees and Directors to whom
Restricted Units shall be granted, the number of Restricted Units to be granted to each such Participant, the Restricted Period, the conditions under which the Restricted Units may become vested or
forfeited, which may include, without limitation, the accelerated vesting upon the achievement of specified performance goals, and such other terms and conditions as the Committee may establish with
respect to such Awards. 

        (i)    UDRs.    To the extent provided by the Committee, in its discretion, a grant of Restricted Units may provide
that distributions made by the Company with respect to the Restricted Units shall be subject to the same forfeiture and other restrictions as the Restricted Unit and, if restricted, such distributions
shall be held, without interest, until the Restricted Unit vests or is forfeited with the UDR being paid or forfeited at the same time, as the case may be. Absent such a restriction on the UDRs in the
Award Agreement, UDRs shall be paid to the holder of the Restricted Unit without restriction. 

        (ii)    Forfeitures.    Except as otherwise provided in the terms of the Award Agreement, upon termination of a
Participant's employment with the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding Restricted
Units awarded the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant's
Restricted Units. 

        (iii)    Lapse of Restrictions.    Upon or as soon as reasonably practical following the vesting of each Restricted
Unit, subject to the provisions of Section 8(b), the Participant shall be entitled to have the restrictions removed from his or her Unit certificate so that the Participant then holds an unrestricted
Unit. 

        (e)    General.    

        (i)    Awards May Be Granted Separately or Together.    Awards may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Company or any Affiliate. Awards granted
in addition to or in tandem with other Awards or awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of
such other Awards or awards. 

        (ii)    Limits on Transfer of Awards.    

        (A)  Except
as provided in paragraph (C) below, each Award shall be exercisable or payable only by or to the Participant during the Participant's 

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lifetime,
or by the person to whom the Participant's rights shall pass by will or the laws of descent and distribution. 

        (B)  Except
as provided in paragraphs (A) and (C), no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate. 

        (C)  To
the extent specifically provided or approved by the Committee with respect to an Award, an Award may be transferred by a Participant without consideration to
immediate family members or related family trusts, limited partnerships or similar entities on such terms and conditions as the Committee may from time to time establish. 

        (iii)    Term of Awards.    The term of each Award shall be for such period as may be determined by the Committee, but
shall not exceed 10 years. 

        (iv)    Unit Certificates.    All certificates for Units or other securities of the Company delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the SEC, any stock exchange upon which such Units or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such restrictions. 

        (v)    Consideration for Grants.    Awards may be granted for such consideration, including services, as the Committee
determines. 

        (vi)    Delivery of Units or other Securities and Payment by Participant of Consideration.    Notwithstanding anything
in the Plan or any Award Agreement to the contrary, delivery of Units pursuant to the exercise or vesting of an Award may be deferred for any period during which, in the good faith determination of
the Committee, the Company is not reasonably able to obtain Units to deliver pursuant to such Award without violating the rules or regulations of any applicable law or securities exchange. No Units or
other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including, without limitation,
any exercise price or tax withholding) is received by the Company. 

        (vii)    Change of Control.    Unless specifically provided otherwise in the Award Agreement, upon a Change of Control
or such time prior thereto as established by the Committee, all outstanding Awards shall automatically vest or become exercisable in full, as the case may be. In this regard, all Restricted Periods
shall terminate and all performance criteria, if any, shall be deemed to have been achieved at the maximum level. To the extent an Option or UAR is not exercised, or a Phantom Unit or Restricted Unit
does not vest, upon the Change of Control, the Committee may, in its discretion, 

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cancel
such Award or provide for an assumption of such Award or a replacement grant on substantially the same terms; provided, however, upon any cancellation of an Option or UAR that has a positive
"spread" or a Phantom Unit or Restricted Unit, the holder shall be paid an amount in cash and/or other property, as determined by the Committee, equal to such "spread" if an Option or UAR or equal to
the Fair Market Value of a Unit, if a Phantom Unit or Restricted Unit. 

        SECTION
7.    Amendment and Termination.    Except to the extent prohibited by applicable law: 

        (a)    Amendments to the Plan.    Except as required by the rules of the principal securities exchange on which the
Units are traded and subject to Section 7(b) below, the Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan in any manner, without the consent of any member,
Participant, other holder or beneficiary of an Award, or other Person. 

        (b)    Amendments to Awards.    Subject to Section 7(a), the Committee may waive any conditions or rights under, amend
any terms of, or alter any Award theretofore granted, provided no change, other than pursuant to Section 7(c), in any Award shall materially reduce the benefit of a Participant without the consent of
such Participant. 

        (c)    Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.    The Committee may make
adjustments in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4(c) of the Plan) affecting the Company or the financial statements of the Company, or of
changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits
or potential benefits intended to be made available under the Plan or any Award. 

        SECTION
8.    General Provisions.    

        (a)    No Rights to Award.    No Person shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient. 

        (b)    Tax Withholding.    The Company or any Affiliate is authorized to withhold from any Award, from any payment due
or transfer made under any Award or from any compensation or other amount owing to a Participant the amount (in cash, Units, other securities or property, or Units that would otherwise be issued or
delivered pursuant to such Award) of any applicable taxes payable in respect of the grant of an Award, its exercise, the lapse of restrictions thereon, or any payment or transfer under an Award or
under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy its withholding obligations for the payment of such taxes. 

        (c)    No Right to Employment.    The grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Company or any Affiliate or to remain on the Board, as applicable. Further, the Company or an Affiliate may at any time dismiss a 

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Participant
from employment, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. 

        (d)    Governing Law.    The validity, construction, and effect of the Plan and any rules and regulations relating to
the Plan shall be determined in accordance with the laws of the State of Texas law without regard to its conflict of laws principles. 

        (e)    Severability.    If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal,
or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Compensation Committee, such provision shall
be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Compensation Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. 

        (f)    Other Laws.    The Committee may refuse to issue or transfer any Units or other consideration under an Award
if, in its sole discretion, it determines that the issuance or transfer of such Units or such other consideration might violate any applicable law or regulation, the rules of the principal securities
exchange on which the Units are then traded, or entitle the Company or an Affiliate to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a
Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary. 

        (g)    No Trust or Fund Created.    Neither the Plan nor any Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any participating Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to
receive payments from the Company or any participating Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or any
participating Affiliate. 

        (h)    No Fractional Units.    No fractional Units shall be issued or delivered pursuant to the Plan or any Award, and
the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Units or whether such fractional Units or any rights thereto
shall be canceled, terminated, or otherwise eliminated. 

        (i)    Headings.    Headings are given to the Sections and subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. 

        (j)    Facility Payment.    Any amounts payable hereunder to any person under legal disability or who, in the judgment
of the Committee, is unable to properly manage his financial affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner which the
Committee may select, and the Company shall be relieved of any further liability for payment of such amounts. 

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        (k)    Gender and Number.    Words in the masculine gender shall include the feminine gender, the plural shall include
the singular and the singular shall include the plural. 

        SECTION
9.    Term of the Plan.    

        The
Plan shall be effective on the date of its approval by the Board and shall continue until the earlier of the date terminated by the Board or the 10th anniversary of the effective
date of the Plan. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted prior to such termination, and the authority of the Board or the
Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such termination date. 

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Exhibit 10.5

COPANO ENERGY, L.L.C. LONG-TERM INCENTIVE PLANQuickLinks
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Exhibit 10.10    
    

 
 

EMPLOYMENT AGREEMENT    
    

        This Employment Agreement ("Agreement") is entered into effective the 1st day of October, 2004, by and between
COPANO/OPERATIONS, INC., a Texas corporation (the "Company"), and JAMES J. GIBSON, III
("Employee"). 

        1.     Employment. 

        This
Agreement terminates and replaces the Employment Agreement dated October 1, 2001, between the Company and Employee. The Company hereby agrees to employ the Employee and the
Employee hereby accepts employment upon the terms and conditions specified in this Agreement. 

        2.     Duties and Responsibilities. 

        2.1   The
Employee shall devote his full business time, efforts, and abilities to the Company for the profit, benefit, and advantage of the Company, and shall promptly obey
and comply with all lawful rules, regulations, and orders that may be issued from time to time by the Company and/or other entity affiliated with the Company. The Employee also agrees to perform,
without additional compensation, such other management and supervisory services for any parent, subsidiary, partnership, joint venture, or other entity affiliated with the Company as may be reasonably
requested. 

        2.2   The
Employee shall be employed to serve as Vice President, Processing, for Copano Energy, L.L.C., Copano Processing (Texas) L.L.C. and Copano Field Services/Central Gulf
Coast (Texas) L.L.C. and Vice President for Copano NGL Services (Texas) L.L.C. reporting to the Chief Operating Officer of the Company. During the term hereof, the Employee shall oversee the
Operations Manager of Copano Processing, Copano Field Services/Central Gulf Coast and Copano NGL Services, manage all commercial aspects of Copano Processing and Copano NGL Services and perform such
services and functions as may be designated from time to time by the Company, Copano Processing, and/or Copano NGL Services, which duties shall have similar responsibilities and shall not require a
relocation of Employee's residence. 

        2.3   The
Employee represents and warrants that Employee has no prior obligations, written or oral, including confidentiality agreements or other agreements, which restrict
Employee's ability to enter into this Agreement or to perform any duties for the Company other than Employee's customary obligation to give notice to his current employer. Employee agrees to indemnify
and hold harmless the Company from any breach of the above representations and warranties, including any and all attorney's fees, costs, and damages the Company may have incurred in connection
therewith. 

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        3.     Compensation. 

        3.1   In
consideration for his services hereunder during the term of the Employee's employment under this Agreement and the covenants contained in this Agreement, Employee
shall be paid beginning on October 1, 2004, the amount of            Thousand Dollars ($            ) per month
("Salary"), payable in
accordance with the usual payroll practices of the Company and subject to all customary payroll deductions. The Salary shall be adjusted at the end of each year of employment to reflect any change in
the cost of living by multiplying the Salary for the prior year by a fraction, the numerator of which is the Consumer Price Index-All Urban Consumers ("CPI") for the month most recently
released by the Bureau of Labor Statistics of the United States Department of Labor and the denominator of which is the CPI for the identical month in the preceding year or such greater amount as
determined in the sole discretion of the Company at such time as general salary reviews are conducted by the Company for all employees. 

        3.2   In
addition to the Salary set forth in Paragraph 3.1, Employee shall be paid, on a quarterly basis, an amount within the Board of Directors of the Company's sole
discretion taking into consideration Employee's performance and other relevant circumstances. 

        3.3   During
the term of the Employee's employment under this Agreement, the Employee also shall be entitled to receive the following: 

        (a)   participation
in the Company's medical, dental, life and long-term disability insurance plans for Employee and Employee's dependents. In the event Employee
has no dependents participating in the Company's medical and dental plans, Employee shall be entitled to a payment equal to the difference between the average cost of such premiums for all employees
of the Company and the actual cost of such premiums for the Employee; 

        (b)   an
allowance of $700.00 per month for the use of Employee's automobile for business purposes of Company. Additionally, the Company will reimburse Employee for routine
maintenance expenses and gasoline expenses incurred for Company purposes; 

        (c)   reimbursement
of reasonable expenses related to the performance of his duties hereunder; provided, however, that in order to be reimbursed the Employee must submit
vouchers or other satisfactory evidence of such expenses as required by Company policies; 

        (d)   Eighteen
(18) days of paid vacation per work year earned ratably per year and all holidays for which the Company is not open for business. Employee shall also be
entitled to reasonable compensation time to reflect time spent outside normal business hours for Company purposes; and, 

        (e)   participation
in the Company's 401k or similar plan and any matching contributions made by the Company. 

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        4.     Term and Termination. 

        4.1   Subject
to other provisions of this Agreement, Employee's employment with the Company is for a one (1) year term and shall continue thereafter from month to month
until terminated by either party with thirty (30) days written notice. 4.2 Employee's employment and this Agreement shall terminate upon the earliest to occur of any of the following events
(the actual date of such termination being referred to herein as the "Termination Date"): 

        (a)   The
termination of the Agreement pursuant to Paragraph 4.1. 

        (b)   Employee's
employment pursuant hereto shall terminate in the event of the death or Disability of Employee. For purposes of this Agreement, "Disability" shall mean the
failure of Employee to be able to perform Employee's duties hereunder for a period of not less than ninety days by reason of disability. For purposes of this Agreement, Employee shall be deemed to
have become disabled when a qualified physician determines, pursuant to the Company's long term disability plan, that Employee has become physically or mentally incapable (excluding infrequent and
temporary absences due to ordinary illness) of performing Employee's duties under this Agreement. Before making any termination decision pursuant to this Paragraph 4.2, the Board of Directors
of Company shall determine whether there is any reasonable accommodation (within the meaning of the Americans with Disabilities Act) which would enable Employee to perform the essential functions of
Employee's position under this Agreement despite the existence of any such disability. If such a reasonable accommodation is possible, Employer shall make that accommodation and shall not terminate
Employee's employment hereunder based on such disability. 

        (c)   Employer
may terminate Employee's employment under this Agreement for cause without any prior notice (except as specifically set forth below), upon the occurrence of any
of the following events: 

        (1)   any
embezzlement or wrongful diversion of funds of Employer or any affiliate of Employer by Employee; 

        (2)   gross
malfeasance by Employee in the conduct of Employee's duties; 

        (3)   material
breach of this Agreement and failure of Employee to cure such breach after notice and reasonable opportunity to cure such breach; or 

        (4)   gross
neglect by Employee in carrying out Employee's duties. 

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        4.3   Subject
to Paragraph 4.4, in the event the Company elects to terminate this Agreement pursuant to Paragraph 4.2(a) prior to October 1, 2006,, the
Employee shall be entitled to receive (a) severance compensation equivalent to twenty percent (20%) of the aggregate of the Employee's Salary from the Termination Date through
September 30, 2006, (b) reimbursement of expenses up to the effective date of termination, (c) an amount equal to any earned but unused vacation time based upon the then Salary
computed on a daily basis all subject to all customary payroll deductions and (d) any bonus granted but not paid. In the event of termination of employment pursuant to Paragraph 4.2(a)
after September 30, 2006, the Employee shall be entitled to receive severance compensation equivalent to twenty percent (20%) of the aggregate of the Employee's Salary from the Termination Date
through September 30, 2011, and (b) through (d) above.. 

        4.4   In
the event of Company elects to terminate this Agreement pursuant to    Paragraph 4.2(a) Employee shall be entitled to payment of the greater of
(1) any severance amount provided for in any Company sponsored severance plan, if applicable, or amounts payable pursuant to Paragraph 4.3. 

        6.     Confidential Information and Discoveries of the Company. 

        6.1   The
Employee will have access to confidential and/or proprietary information of the Company and any affiliates, including, but not limited to, corporate books and
records, financial information, business plans, personnel information, lists of customers and suppliers, processes or dealings, patents, inventions, discoveries, information, data, programs, know how,
knowledge, and other trade secrets (collectively, "Confidential Information"). "Confidential Information" shall also include but is not limited to
confidential evaluations of, and the confidential use or non-use by the Company or any affiliates thereof of, technical or business information not in the public domain. 

        To
ensure the continued secrecy of the Confidential Information, the Employee agrees that he will not at any time during the term of the Employee's employment with the Company or for
five (5) years thereafter, divulge such Confidential Information to any person or entity other than for the benefit of the Company or use such Confidential Information for himself or any other
party whatsoever other than for the benefit of the Company. 

        Upon
the termination of his employment, the Employee shall not take from the Company, or otherwise retain, and shall surrender to the Company, any such Confidential Information and any
records, files, notes, memoranda, or other documents, or copies thereof, relating to the business or affairs of the Company. 

        The
obligations of this Paragraph 6.1 shall not apply to Confidential Information that: (a) at the time of the Employee's
employment by the Company was in the public domain; (b) is or becomes generally available in the public domain other than pursuant to a breach by the Employee of his obligations under this
Paragraph 6.1; or (c) the Employee proves that such Confidential Information was acquired after the date of this Agreement, from a third party and 

4

 

such
third party did not obtain such Confidential Information from the Company subject to or in violation of obligations similar to those set forth in this Paragraph 6.1. 

        6.2   Any
and all inventions, discoveries, ideas, concepts, improvements, processes, methods, designs, programs and/or know-how, whether or not patentable, or
copyrightable that the Employee may conceive, discover, develop or make, either jointly or alone, during the Employee's term of employment with the Company, which relates in any way, to the business
of natural gas gathering, processing and fractionization and the transportation of natural gas, liquids and condensates and: (a) for which the Company provided equipment, supplies, facilities,
or Confidential Information; or (b) that was developed on or partially on the Company's time; or (c) that relates to the Company's then current business or business that the Company is
planning to develop or to the Company's then actual or planned research or development or that results from any work performed by the Employee for the Company, shall be the sole and exclusive property
of the Company (collectively, referred to as a "Company Invention"). All works of authorship related to any Company Invention created by the Employee
during the term of this Agreement, solely or jointly with others, shall be considered works made for hire under the Copyright Act of 1976, as amended, and shall be owned entirely by the Company.
Without limiting the generality of the foregoing, any Company Invention of the Employee relating to any subject matter on which the Employee worked or was informed of during his employment by the
Company shall be presumed to have been conceived and made prior to the termination of his employment (unless the Employee proves that such Company Invention was conceived and made following the
termination of his employment), and shall accordingly belong and be assigned to the Company and shall be subject to this Agreement. The Employee shall promptly disclose to the Company all Company
Inventions that he may conceive or make, alone or with others, during the term of his employment with the Company, and that directly or indirectly are based on his knowledge of the information or the
actual or anticipated business or interests of the Company or any of its affiliates. 

        The
Employee shall give all testimony and execute all patent applications, rights or priority, assignments and other documents and in general do all lawful things requested of the
Employee by the Company to enable the Company to obtain, maintain, and enforce protection of such ideas, inventions and discoveries, and any improvements or modifications therein, for and in the name
of the Company, or its nominee, in all countries of the world. However, should the Employee render any of these services following termination of his employment, the Employee shall be compensated at a
rate per hour based upon the base wages the Employee received from the Company at the time of termination (assuming a 40 hour work week) and shall be reimbursed for reasonable
out-of-pocket expenses incurred in rendering the services. 

        7.     Agreement Not to Solicit. 

        To
induce the Company to enter into this Agreement, the Employee agrees, during the term of his employment, and for a period of twelve (12) months after the termination of his
employment with the Company for any reason, the Employee will not, directly or indirectly, for his own account or for the account of others, employ any of the Company's employees or induce or attempt
to induce any of the Company's employees to leave their 

5

 

employment,
nor will the Employee in any other way interfere with the employee relations of the Company. 

        8.     Non-Competition. 

        8.1   The
Employee acknowledges that he will obtain special knowledge in the course of his dealing with the Confidential Information identified in Paragraph 6. The
Employee acknowledges that this Confidential Information is valuable to the Company and creates a high risk and opportunity for Employee to misappropriate this Confidential Information. Employee
acknowledges and agrees that it is fair and reasonable for the Company to take steps to protect itself from the risk of such misappropriation. 

        8.2   The
Employee, except in furtherance of the Company's business, shall not during his employment and for a period ending twelve (12) months thereafter, either
directly or indirectly, (a) make known to any person, firm, or corporation the names and addresses of any of the customers or suppliers of the Company or contacts of the Company or any other
information pertaining to such persons or (b) call on, solicit, or take away, or attempt to call on, solicit, or take away any of the customers or suppliers of the Company on whom the Employee
called or with whom the Employee became acquainted during the Employee's association with the Company, whether for the Employee or for any other person, firm, or corporation, or (c) disparage
the Company or any of its stockholders, directors, officers, employees, or agents. 

        8.3   Employee
acknowledges and agrees that the Agreements set forth above are ancillary to an otherwise enforceable agreement and supported by independent, valuable
consideration as required by Tex. Bus. & Com. Code Ann. §15.50. Employee further acknowledges and agrees that the limitations as to time, geographical area, and scope of activity
to be restrained are reasonable and acceptable to Employee and do not impose any greater restraint than is reasonably necessary to protect the goodwill and other business interests of the Company.
Employee further agrees that if, at some later date, a court of competent jurisdiction determines that this Agreement does not meet the criteria set forth in Tex. Bus. & Com. Code Ann.
§15.50, this Agreement shall be reformed by the court, pursuant to Tex. Bus. & Com. Code Ann. §15.51(c), and enforced to the maximum extent permitted under Texas law. 

        9.     Remedies. 

        The
Employee acknowledges that the provisions of Paragraphs 6, 7, and 8 shall survive the termination of Employee's employment with the Company for any reason whatsoever and are
reasonable and necessary for the protection of the Company and that the Company will be irrevocably damaged if such provisions are not specifically enforced. Accordingly, in the event of breach or
threatened breach of the provisions of Paragraphs 6, 7, or 8, it is understood and agreed that the Company shall be entitled to injunctive relief (without bond or other security being required) as
well as any and all other applicable remedies at law and in equity. Should a court of competent jurisdiction declare any of these provisions unenforceable due to an unreasonable restriction, or for
any other reason, such court shall have the express authority of the parties to this Agreement to reform such provisions and/or to grant the Company any and all other relief, at law or in equity,
reasonably necessary to protect the interests of the Company. 

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The
Employee expressly acknowledges that (a) he has been encouraged to obtain separate legal counsel in connection with the negotiation of this Agreement who can explain the legal effects of
these provisions and (b) he considers these provisions to be reasonable. 

        10.   Alternative Dispute Resolution.

        Except for actions involving requests by the Company for injunctive relief under Paragraph 9 hereof, the parties hereto hereby knowingly, voluntarily, and
irrevocably agree that any disputes or conflicts in any way arising out of or relating to: (a) this Agreement or any amendment or modification or (b) the performance or breach of any of
the matters described herein, may be mediated or arbitrated, at the written election of either party hereto. If a party makes a proper election to mediate under this paragraph, but such mediation
efforts fail to resolve the subject dispute(s) between the parties, the parties shall be bound to resolve the subject dispute(s) by binding arbitration; provided that nothing in this sentence shall be
read to require a party to first elect to mediate any dispute hereunder prior to electing to arbitrate. If the subject dispute(s) are ultimately resolved by arbitration, the parties hereto irrevocably
agree to be bound by all findings of fact and conclusions of law of the arbitrator selected. The election of a party under this paragraph shall be by delivery of written notice to the opposing party;
provided that if a legal proceeding relating to the subject dispute (other than a proceeding for injunctive relief under Paragraph 9 hereof) has previously been filed in any court of competent
jurisdiction, then such notice of election under this paragraph shall be delivered within forty five (45) days of the date the electing party receives service of process in such legal
proceeding. Any such mediation or arbitration shall be conducted in Houston, Texas, and shall proceed in accordance with the Employment Dispute rules of JAMS/ENDISPUTE COMPANY (the "JAMS Rules")
except as provided otherwise herein, including selection of a single independent mediator and/or
arbitrator. JAMS/ENDISPUTE or any successor entity shall be the appointing and administrative agency. If as of the date of a proper election made by a party under this paragraph, the JAMS Rules are
not then in effect, the mediation and/or arbitration shall proceed in accordance with the commercial rules of the American Arbitration Association. All federal and state substantive and procedural
laws applicable to this Agreement relating to arbitration or mediation of conflicts shall be fully complied with by the parties.

        Unless the parties otherwise agree, each party may conduct discovery prior to any mediation or arbitration hearing in accordance with the Texas rules of civil
procedure and evidence. Additionally, there shall be no evidence by affidavit allowed, and each party shall disclose a list of all documentary evidence to be used, a list of all witnesses, and experts
to be called by the party at least twenty (20) days prior to the mediation or arbitration hearing.

        To the maximum extent permitted by law, each party knowingly, voluntarily, and intentionally waives any right to consequential, exemplary, or punitive damages
regardless of the forum for the proceedings. The provisions of this Paragraph 10 shall survive the termination of this Agreement for any reason whatsoever.

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        11.   Miscellaneous. 

        11.1 Notices. Any notice required or permitted under this Agreement shall be in writing and shall be deemed to be delivered
three (3) business days after deposit in the United States mail, postage prepaid, addressed as follows: 

	 	 	Company:	 	Copano/Operations, Inc.

2727 Allen Parkway, Suite 1200

Houston, Texas 77019

Attn: President
	

 	
 	

Employee:	
 	

James J. Gibson, III

5342 Appleblossom

Friendswood, Texas 77546

        Notice given in any other manner shall be effective when delivered to the addressee. The address for notice may be changed by notice given in accordance with this
provision. 

        11.2 Drug Testing. Employee acknowledges and agrees that he may be required to submit to random drug and/or alcohol screening
tests while employed by the Company. Employee agrees that the results of any blood and/or urine sample test results may be revealed to the Company for its use and evaluation. Furthermore, Employee
acknowledges and agrees that his refusal to submit to such testing can be grounds for immediate termination. 

        11.3 Amendments. This Agreement and the documents referred to herein constitute the entire agreement between the parties with
respect to the employment of the Employee and supersedes any prior agreements and may not be amended, supplemented, waived, modified, or amended except by written instrument executed by the parties
hereto. There are no oral agreements between the parties. 

        11.4 Preservation of Business: Fiduciary Responsibility. The Employee shall use his best efforts to preserve the business and
organization of the Company, to keep available to the Company the services of its employees, to preserve the business relations of the Company, and the Employee shall not commit any act that might
reasonably be expected to injure the Company. The Employee shall observe and fulfill proper standards of fiduciary responsibility attendant upon his service and office. 

        11.5 Assignments. The Company may not assign this Agreement without the consent of the Employee, except to Copano Energy,
L.L.C. and any subsidiary thereof or in connection with a sale of substantially all of the assets of the Company and its affiliates or the merger or consolidation of the Company with a successor
entity provided in such events such transferee entity assumes all of the obligations of the Company pursuant to this Agreement. The rights and obligations of the Employee hereunder are personal to
him, and no such rights, benefits, duties or obligations shall be subject to voluntary or involuntary alienation, assignment, or transfer. 

8

 

        11.6 Effect of Agreement. This Agreement shall be binding upon the Employee and his heirs, executors, administrators, and
legal representatives and upon the Company and its successors and assigns. 

        11.7 Waiver of Breach. The waiver by either party hereto of a breach of any provision of this Agreement by the other party
hereto shall not operate or be construed as a waiver by such party of any subsequent breach of such other party. 

        11.8 Governing Law. This Agreement shall be construed, interpreted and the rights of the parties determined in accordance
with the laws (excluding conflicts of laws provisions) of the State of Texas. The Company and the Employee consent to the personal jurisdiction of all state and federal courts in Harris County, Texas,
and agree that the proper, exclusive, and convenient venues for any mediation, arbitration, or litigation relating to this Agreement or any amendment or modification are Harris County, Texas, and each
party waives any defense, whether asserted by motion or pleading, that Harris County, Texas, is an improper or inconvenient venue. 

        11.9 Severability. If any provision of this Agreement is declared unenforceable, such declaration shall not affect the
validity of any other provision of this Agreement. 

        11.10 Construction. The headings contained in this Agreement are for reference purposes only and shall not affect this
Agreement in any manner whatsoever. Wherever required by the context, any gender shall include any other gender, the singular shall include the plural, and the plural shall include the singular. 

        11.11 Execution. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all
of which shall be deemed one instrument. The Employee acknowledges that he has read this Agreement and has been represented by separate legal counsel and he understands that executing this Agreement
is a condition of his employment by the Company. 

9

 

        INTENDING
TO BE LEGALLY BOUND, the parties hereto have executed this Agreement as of the day and year first written above. 

	 	 	COMPANY:
	

 	
 	

COPANO/OPERATIONS, INC.
	

 	

 	

By:	

    
 John R. Eckel, Jr., Chairman of the Board and Chief Executive Officer
	

 	

 	

 EMPLOYEE:
	

 	

 	

    
 James J. Gibson, III

10

QuickLinks

Exhibit 10.10

EMPLOYMENT AGREEMENT

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