Document:

exv10w1

 

Exhibit 10.1

Execution Copy

 

 

OMNIBUS AGREEMENT

BETWEEN

REGENCY ACQUISITION LP

AND

REGENCY ENERGY PARTNERS LP

 

 

 

 

OMNIBUS AGREEMENT

     THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date
(as defined herein), and is by and between Regency Acquisition LP, a Delaware limited partnership
(“Acquisition”), and Regency Energy Partners LP, a Delaware limited partnership (the “MLP”). The
above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively
as the “Parties.”

R E C I T A L S:

     The Parties desire by their execution of this Agreement to evidence their understanding, as
more fully set forth in this Agreement, with respect to certain indemnification and reimbursement
obligations of the Parties.

     In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

Definitions

     1.1 Definitions. As used in this Agreement, the following terms shall have the respective
meanings set forth below:

     “Acquisition” has the meaning given such term in the introduction to this Agreement.

     “Agreement” means this Omnibus Agreement, as it may be amended, modified or
supplemented from time to time in accordance with the terms hereof.

     “Cap” has the meaning given such term in Section 2.3(a).

     “Closing Date” means February 3, 2006, the date of the closing of the initial public
offering of Common Units.

     “Common Unit” has the meaning given such term in the MLP Agreement.

     “Conflicts Committee” has the meaning given such term in the MLP Agreement.

     “Contribution Agreement” has the meaning given such term in the MLP Agreement.

     “Covered Environmental Losses” means all environmental Losses (including, without
limitation, costs and expenses of any Environmental Activity) of any and every kind or
character, by reason of or arising out of:

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     (i) any violation or correction of violation, including without limitation performance
of any Environmental Activity, of Environmental Laws; or

     (ii) any event, omission or condition associated with ownership or operation of the MLP
Assets (including, without limitation, the exposure to or presence of Hazardous Substances
on, under, about or migrating to or from the MLP Assets or the exposure to or Release of
Hazardous Substances arising out of operation of the MLP Assets at non-MLP Asset locations)
including, without limitation, (A) the cost and expense of any Environmental Activities and
(B) the cost and expense for any environmental or toxic tort pre-trial, trial or appellate
legal or litigation support work;

but only to the extent that such violation described in clause (i) or such events or
conditions described in clause (ii) occurred before the Closing Date.

Notwithstanding the foregoing, “Covered Environmental Losses” shall not include any costs or
expenses associated with the construction of an acid gas reinjection well at the MLP’s Waha
gas processing plant to the extent that such costs or expenses are reflected in the
maintenance or growth capital expenditures line item of the MLP’s forecasted Cash Available
for Distribution for the twelve months ending December 31, 2006 contained in the
Registration Statement.

     “Environmental Activities” shall mean any investigation, study, assessment, evaluation,
sampling, testing, monitoring, containment, removal, disposal, closure, corrective action,
remediation (regardless of whether active or passive), natural attenuation, restoration,
bioremediation, response, repair, corrective measure, cleanup or abatement that is required
or necessary under any applicable Environmental Law, including, without limitation,
institutional or engineering controls or participation in a governmental voluntary cleanup
program to conduct voluntary investigatory and remedial actions for the clean-up, removal or
remediation of Hazardous Substances that exceed actionable levels established pursuant to
Environmental Laws, or participation in a supplemental environmental project in partial or
whole mitigation of a fine or penalty; provided, however, that Environmental Activity shall
not include any project management or long-term groundwater monitoring performed at the
conclusion of or in lieu of active groundwater remediation.

     “Environmental Laws” means all federal, state, and local laws, statutes, rules,
regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental
Permits and other legally enforceable requirements and rules of common law relating to (a)
pollution or protection of the environment or natural resources including, without
limitation, the federal Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act, the Resource Conservation and
Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Oil Pollution Act of 1990, the Hazardous Materials
Transportation Act, the Marine Mammal Protection Act, the Endangered Species Act, the
National Environmental Policy Act and other environmental conservation and protection laws,
each as amended through the Closing Date, (b) any

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Release or threatened Release of, or any exposure of any Person or property to, any
Hazardous Substances and (c) the generation, manufacture, processing, distribution, use,
treatment, storage, transport or handling of any Hazardous Substances.

     “Environmental Permit” means any permit, approval, identification number, license,
registration, consent, exemption, variance or other authorization required under or issued
pursuant to any applicable Environmental Law.

     “General Partner” means Regency GP LP, a Delaware limited partnership and the general
partner of the MLP.

     “Hazardous Substance” means (a) any substance that is designated, defined or classified
under any Environmental Law as a hazardous waste, solid waste, hazardous material,
pollutant, contaminant or toxic or hazardous substance, or terms of similar meaning, or that
is otherwise regulated under any Environmental Law, including, without limitation, any
hazardous substance as defined under the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, (b) oil as defined in the Oil Pollution Act of 1990, as
amended, including oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel,
jet fuel and other refined petroleum hydrocarbons and petroleum products and (c) radioactive
materials, asbestos containing materials or polychlorinated biphenyls.

     “Losses” means any losses, damages, liabilities, claims, demands, causes of action,
judgments, settlements, fines, penalties, costs and expenses (including, without limitation,
court costs and reasonable attorney’s and experts’ fees) of any and every kind or character.

     “MLP” has the meaning given such term in the introduction to this Agreement.

     “MLP Agreement” means the Amended and Restated Agreement of Limited Partnership of the
MLP, dated as of the Closing Date, as such agreement is in effect on the Closing Date, to
which reference is hereby made for all purposes of this Agreement. An amendment or
modification to the MLP Agreement subsequent to the Closing Date shall be given effect for
the purposes of this Agreement only if it has received the approval of the Conflicts
Committee that would be required, if any, pursuant to Section 3.5 hereof if such amendment
or modification were an amendment or modification of this Agreement.

     “MLP Assets” means the pipelines, processing plants or related equipment or assets, or
portions thereof, owned or leased by any member of the Partnership Group as of the Closing
Date.

     “Partnership Group” means the MLP and any Subsidiary of the MLP.

     “Party” and “Parties” have the meanings given such terms in the introduction to this
Agreement.

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     “Person” means an individual, corporation, partnership, joint venture, trust, limited
liability company, unincorporated organization or any other entity (but shall not include
any governmental agency or authority).

     “Registration Statement” has the meaning given such term in the MLP Agreement.

     “Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching,
dumping or disposing into the environment.

     “Subsidiary” has the meaning given such term in the MLP Agreement.

ARTICLE II

Indemnification

     2.1 Environmental, Right-of-Way and Tax Indemnifications. Subject to the provisions of
Sections 2.2 and 2.3, Acquisition shall indemnify, defend and hold harmless the Partnership Group
from and against

          (a) any Covered Environmental Losses suffered or incurred by the Partnership Group relating to
the MLP Assets;

          (b) any Losses suffered or incurred by the Partnership Group by reason of or arising out of:

     (i) the failure of the Partnership Group to be the owner of valid and
indefeasible easement rights, leasehold and/or fee ownership interests in and to the
lands on which are located any MLP Assets, and such failure renders the Partnership
Group liable or unable to use or operate the MLP Assets in substantially the same
manner that the MLP Assets were used and operated by Acquisition and its
Subsidiaries (including any Person contributed to the MLP on or prior to the Closing
Date) immediately prior to the Closing Date as described in the Registration
Statement;

     (ii) the failure of the Partnership Group to have on the Closing Date any
consent or governmental permit necessary to allow any MLP Assets constituting
pipelines to cross the roads, waterways, railroads and other areas upon which any
such MLP Assets are located as of the Closing Date, and any such failure renders the
Partnership Group unable to use or operate such MLP Assets in substantially the same
manner that such MLP Assets were owned and operated by Acquisition and its
Subsidiaries (including any Person contributed to the MLP on or prior to the Closing
Date) immediately prior to the Closing Date as described in the Registration
Statement; and

          (c) any Losses suffered or incurred by the Partnership Group by reason of or arising
out of any federal, state and local income tax liabilities attributable to the

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ownership or operation of the MLP Assets prior to the Closing Date, including any
such income tax liabilities of MLP and its Subsidiaries that may result from the
consummation of the formation transactions for the Partnership Group occurring on or
prior to the Closing Date, but excluding any federal, state and local income taxes
reserved on the books of the Partnership Group as of the Closing Date.

     2.2 Limitations Regarding Indemnification.

          (a) The indemnification obligations of Acquisition set forth in Section 2.1 shall survive
until the third anniversary of the Closing Date in the case of subsection (a), until the second
anniversary of the Closing Date in the case of subsection (b) and until sixty (60) days after the
expiration of any applicable statute of limitations in the case of subsection (c); provided,
however, that any such indemnification obligation shall remain in full force and effect with
respect only to any bona fide claim made thereunder prior to any such expiration and then only for
such period as may be necessary for the resolution thereof.

          (b) The aggregate liability of Acquisition under Section 2.1(a) shall not exceed $8.6 million
(the “Cap”).

          (c) No claims may be made against Acquisition for indemnification pursuant to Section 2.1
unless the aggregate dollar amount of the Losses suffered or incurred by the Partnership Group
exceed $250,000, after such time Acquisition shall be liable for the full amount of such claims,
subject to the limitations of subsection (b) of this Section 2.2.

          (d) Notwithstanding anything herein to the contrary, in no event shall Acquisition have any
indemnification obligations under this Agreement for claims made as a result of additions to or
modifications of Environmental Laws promulgated after the Closing Date.

     2.3 Indemnification Procedures.

          (a) The MLP agrees that within a reasonable period of time after it shall become aware of
facts giving rise to a claim for indemnification pursuant to this Article II, it will provide
notice thereof in writing to Acquisition specifying the nature of and specific basis for such
claim; provided, however, that the MLP shall not submit claims more frequently than once a calendar
quarter (or twice in the case of the last calendar quarter prior to the expiration of the
applicable indemnity coverage under this Agreement).

          (b) Acquisition shall have the right to control all aspects of the defense of (and any
counterclaims with respect to) any claims brought against the MLP that are covered by the
indemnification set forth in this Article II, including, without limitation, the selection of
counsel (provided that if such claim involves Covered Environmental Losses, such counsel shall be
reasonably acceptable to the MLP), determination of whether to appeal any decision of any court and
the settling of any such matter or any issues relating thereto; provided, however, that no such
settlement shall be entered into without the consent (which consent shall not be

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unreasonably withheld, conditioned or delayed) of the MLP unless it includes a full release of
the Partnership Group from such matter or issues, as the case may be.

          (c) The MLP agrees to cooperate fully with Acquisition with respect to all aspects of the
defense of any claims covered by the indemnification set forth in Article II, including, without
limitation, the prompt furnishing to Acquisition of any correspondence or other notice relating
thereto that the Partnership Group may receive, permitting the names of the Partnership Group to be
utilized in connection with such defense, the making available to Acquisition of any files, records
or other information of the Partnership Group that Acquisition considers relevant to such defense
and the making available to Acquisition of any employees of the Partnership Group; provided,
however, that in connection therewith Acquisition agrees to use reasonable efforts to minimize the
impact thereof on the operations of the Partnership Group and further agrees to maintain the
confidentiality of all files, records and other information furnished by the MLP pursuant to this
Section 2.4. In no event shall the obligation of the MLP to cooperate with Acquisition as set forth
in the immediately preceding sentence be construed as imposing upon the MLP an obligation to hire
and pay for counsel in connection with the defense of any claims covered by the indemnification set
forth in this Article II; provided, however, that the MLP may, at its own option, cost and expense,
hire and pay for counsel in connection with any such defense. Acquisition agrees to keep any such
counsel hired by the MLP reasonably informed as to the status of any such defense, but Acquisition
shall have the right to retain sole control over such defense.

          (d) In determining the amount of any Loss for which the MLP is entitled to indemnification
under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance
proceeds realized by the Partnership Group, and such correlative insurance benefit shall be net of
any incremental insurance premium that becomes due and payable by the Partnership Group as a result
of such claim and (ii) all amounts recovered by the Partnership Group under contractual indemnities
from third Persons. The MLP hereby agrees to use commercially reasonable efforts to realize any
applicable insurance proceeds or amounts recoverable under such contractual indemnities. To the
extent that Acquisition has made an indemnification payment hereunder in respect of a claim for
which the MLP has asserted a related claim for insurance proceeds or under a contractual indemnity,
Acquisition shall be subrogated to the rights of the MLP to receive the proceeds of such insurance
or contractual indemnity.

ARTICLE III

Miscellaneous

     3.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed
by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might
refer the construction or interpretation of this Agreement to the laws of another state. Each Party
hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to
venue in Texas.

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     3.2 Notice. All notices, requests or consents provided for or permitted to be given pursuant
to this Agreement must be in writing and must be given by depositing same in the United States
mail, addressed to the Person to be notified, postpaid, and registered or certified with return
receipt requested or by delivering such notice in person or by telecopier or telegram to such
Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice
given by telegram or telecopier shall be effective upon actual receipt if received during the
recipient’s normal business hours, or at the beginning of the recipient’s next business day after
receipt if not received during the recipient’s normal business hours. All notices to be sent to a
Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such
other address as such Party may stipulate to the other Parties in the manner provided in this
Section 3.2.

	 	 	 
	 

	 	For notices to Acquisition:
	 
	 	 
	 

	 	c/o Hicks, Muse, Tate & Furst Incorporated
	 

	 	200 Crescent Court, Suite 1600
	 

	 	Dallas, Texas 75201
	 

	 	Phone: (214) 740-7235
	 

	 	Fax: (214) 720-7888
	 
	 	 
	 

	 	Attention: Jason H. Downie
	 
	 	 
	 

	 	For notices to the MLP:
	 

	 	1700 Pacific, Suite 2900
	 

	 	Dallas, Texas 75201
	 

	 	Phone: (214) 750-1771
	 

	 	Fax: (214) 750-1749
	 

	 	Attention: Chief Legal Officer

     3.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating
to the matters contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein.

     3.4 Effect of Waiver or Consent. No waiver or consent, express or implied, by any Party of or
to any breach or default by any Person in the performance by such Person of its obligations
hereunder shall be deemed or construed to be a consent or waiver of or to any other breach or
default in the performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a Party to complain of any act of any Person or to declare any
Person in default, irrespective of how long such failure continues, shall not constitute a waiver
by such Party of its rights hereunder until the applicable statute of limitations period has run.

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     3.5 Amendment or Modification. This Agreement may be amended or modified from time to time
only by the written agreement of the Parties; provided, however, that the MLP may not, without the
prior approval of the Conflicts Committee, agree to any amendment or modification of this Agreement
that, in the reasonable discretion of the General Partner, would have a material adverse effect on
the holders of Common Units. Each such instrument shall be reduced to writing and shall be
designated on its face an “Amendment” or an “Addendum” to this Agreement.

     3.6 Assignment; Third Party Beneficiaries. Neither Party shall have the right to assign its
rights or obligations under this Agreement without the prior written consent of the other Party.
The provisions of this Agreement are enforceable solely by the Parties (including any permitted
assignee), but no limited partner or member of Acquisition or the MLP or other Person shall have
the right, separate and apart from the Parties hereto, to enforce any provision of this Agreement
or to compel any Party to comply with the terms of this Agreement.

     3.7 Counterparts. This Agreement may be executed in any number of counterparts with the same
effect as if all signatory Parties had signed the same document. All counterparts shall be
construed together and shall constitute one and the same instrument.

     3.8 Severability. If any provision of this Agreement or the application thereof to any Person
or circumstance shall be held invalid or unenforceable to any extent, the remainder of this
Agreement and the application of such provision to other Persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.

     3.9 Further Assurances. In connection with this Agreement and all transactions contemplated by
this Agreement, each Party agrees to execute and deliver such additional documents and instruments
and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions and conditions of this Agreement and all such transactions.

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     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Closing Date.

	 	 	 	 	 	 	 
	 	 	REGENCY ACQUISITION LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Regency Holdings LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 
	 	By:	 	/s/ Jason H. Downie	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Jason H. Downie	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	REGENCY ENERGY PARTNERS LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	REGENCY GP LP, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	REGENCY GP LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ James W. Hunt	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Name: James W. Hunt	 	 
	 

	 	 	 	Title: President and Chief Executive Officer	 	 

[Signature Page to Omnibus Agreement]exv10w2

 

Exhibit 10.2

Execution Copy

REGENCY GP LLC

LONG-TERM INCENTIVE PLAN

     SECTION 1. Purpose of the Plan.

     The Regency GP LLC Long-Term Incentive Plan (the “Plan”) has been adopted by Regency GP LLC, a
Delaware limited liability company (the “Company”), the general partner of Regency GP LP, a
Delaware limited partnership (the “General Partner”), which is, in turn, the general partner of
Regency Energy Partners LP, a Delaware limited partnership (the “Partnership”). The Company
manages the affairs of the General Partner which, in turn, manages the affairs of the Partnership.
All the officers and employees who operate the business and affairs of the Partnership are
employees of the Company. The Plan is intended to promote the interests of the Partnership, the
General Partner and the Company by providing to Employees, Consultants and Directors incentive
compensation awards based on Units to encourage superior performance. 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, the
Partnership and their Affiliates and to encourage them to devote their best efforts to advancing
the business of the Company, the Partnership and their Affiliates.

     SECTION 2. Definitions.

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

     “Affiliate” means, 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. 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, Restricted Unit, Phantom Unit, or Substitute Award granted under the
Plan, and shall include any tandem DERs granted with respect to a Phantom Unit or Option.

     “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, and shall be deemed to have occurred upon one or more of the
following events:

          (i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and
14(d)(2) of the Exchange Act, other than HMTF Regency, LP or members of

 

 

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the HMTF Group, shall become the beneficial owner, by way of merger, consolidation,
recapitalization, reorganization or otherwise, of fifty percent (50%) or more of the voting power
of the voting securities of the Company, the General Partner or the Partnership;

          (ii) the equity owners of the Company or the limited partners of the General Partner or the
Partnership approve, in one or a series of transactions, a plan of complete liquidation of the
Company, the General Partner or the Partnership; or

          (iii) the sale or other disposition by the Company, the General Partner or the Partnership of
all or substantially all of its assets in one or more transactions to any Person other than a legal
entity wholly owned by one or more of the Company, the General Partner and the Partnership.

For purposes of this Plan, “HMTF Group” shall mean Hicks, Muse, Tate & Furst Incorporated, a Texas
corporation, Hicks, Muse, Tate & Furst Equity Fund V, L.P., a Delaware limited partnership, and
their respective Affiliates (other than the Company, the General Partner and the Partnership and
their subsidiaries), and their affiliates’ respective directors, officers, shareholders, members,
managers, representatives of management committees and employees (and members of their respective
families and trusts for the primary benefit of such family members).

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

     “Consultant” means an individual who renders consulting services to the Company or an
Affiliate of the Company, the General Partner or the Partnership, other than a member of the HMTF
Group.

     “DER” means a distribution equivalent right, being a contingent right, granted in tandem with
a specific Option or Phantom Unit, to receive with respect to each Unit subject to the Award an
amount in cash equal to the cash distributions made by the Partnership with respect to a Unit
during the period such Award is outstanding.

     “Director” means a member of the Board who is not an Employee or a Consultant (other than in
that individual’s capacity as a Director).

     “Employee” means an employee of the Company or an Affiliate of the Company, the General
Partner or the Partnership, other than a member of the HMTF Group.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Fair Market Value” means the closing sales price of a Unit on the principal national
securities exchange or other market in which trading in Units occurs 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
Committee). If Units are not traded on a national securities exchange or other market 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.

 

 

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

     “Participant” means an Employee, Consultant or Director granted an Award under the Plan.

     “Partnership Agreement” means the Agreement of Limited Partnership of the Partnership, as it
may be amended or amended and restated from time to time.

     “Person” means an individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, governmental 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.

“Substitute Award” means an award granted pursuant to Section 6(c)(viii) of the Plan.

“UDR” means a distribution made by the Partnership with respect to a Restricted Unit.

“Unit” means a Common Unit of the Partnership.

     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 following and applicable law, the Committee, in
its sole discretion, may delegate any or all of its powers and duties under the Plan, including the
power to grant Awards under the Plan, to the Chief Executive Officer of the Company, subject to
such limitations on such delegated powers and duties as the Committee may impose, if any. Upon any
such delegation all references in the Plan to the “Committee”, other than in Section 7, shall be
deemed to include the Chief Executive Officer; provided, however, that such delegation shall not
limit the Chief Executive Officer’s right to receive Awards under the Plan. Notwithstanding the
foregoing, the Chief Executive Officer may not grant Awards to, or take any action with respect to
any Award previously

 

 

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granted to, a person who is an officer subject to Rule 16b-3 or a member of the Board.
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, 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. The Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or an Award Agreement in such manner and to such extent as the Committee
deems necessary or appropriate. 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, the General Partner, the
Partnership, 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 shall be seven and
one-half percent (7.5%) of the aggregate number of common and subordinated Units authorized and
outstanding Units immediately following the initial public offering of Units by the Partnership.
Units withheld from an Award to satisfy the Company’s or an Affiliate’s minimum tax withholding
obligations with respect to the Award shall not be considered to be Units delivered under the Plan
for this purpose. If any Award is forfeited, cancelled, exercised, or otherwise terminates or
expires without the actual delivery of Units pursuant to such Award, the Units subject to such
Award shall again be available for Awards under the Plan. There shall not be any limitation on the
number of Awards that may be granted 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,
the Partnership or any other Person, or any combination of the foregoing, as determined by the
Committee in its discretion.

     (c) Adjustments. In the event of any distribution (whether in the form of Units,
other securities or property other than cash), recapitalization, split, reverse split,
reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of
Units or other securities of the Partnership, issuance of warrants or other rights to purchase
Units or other securities of the Partnership, or other similar transaction or event, the Committee
shall, in such manner as it may deem equitable, adjust the number and type of Units (or other
securities or property) with respect to which Awards may be granted.

     SECTION 5. Eligibility.

 

 

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

     SECTION 6. Awards.

     (a) Options. The Committee shall have the authority to determine the Employees,
Consultants 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 therefor and
the Restricted Period and other 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 exercise price per Unit purchasable under an Option shall be
determined by the Committee at the time the Option is granted but, except with respect to a
Substitute Award, may not be less than the Fair Market Value of a Unit as of the date of grant of
the Option.

(ii) Time and Method of Exercise. The Committee shall determine the exercise terms and the
Restricted Period with respect to an Option grant, which may include, without limitation, a
provision for accelerated vesting upon the achievement of specified performance goals or other
events, 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, or any
combination of methods, 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 Option grant, upon
termination of a Participant’s employment with or consulting services to the Company and its
Affiliates or membership on the Board, whichever is applicable, for any reason during the
applicable Restricted Period, all unvested 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) Option 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 Options Award, or be
subject to such other provisions or restrictions as determined by the Committee in its discretion.

     (b) Restricted Units and Phantom Units. The Committee shall have the authority to
determine the Employees, Consultants and Directors to whom Restricted Units or Phantom Units shall
be granted, the number of Restricted Units or Phantom Units to be granted to each such Participant,
the Restricted Period, the conditions under which the Restricted Units or Phantom Units may become
vested or forfeited and such other terms and conditions as the Committee may establish with respect
to such Awards.

 

 

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(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 Phantom Unit Award, or be
subject to such other provisions or restrictions as determined by the Committee in its discretion.

(ii) UDRs. To the extent provided by the Committee, in its discretion, a grant of
Restricted Units may provide that distributions made by the Partnership 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 grant agreement, UDRs shall be paid to the holder
of the Restricted Unit without restriction.

(iii) Forfeitures. Except as otherwise provided in the terms of the Restricted Units or
Phantom Units grant, upon termination of a Participant’s employment with or consulting services to
the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason
during the applicable Restricted Period, all outstanding, unvested Restricted Units and 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
Restricted Units and/or Phantom Units.

(iv) Lapse of Restrictions.

(A) Phantom Units. 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.

(B) Restricted Units. Upon or as soon as reasonably practical following the vesting of
each Restricted Unit, subject to satisfying the tax withholding obligations 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.

     (c) 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.

 

 

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(A) Except as provided in Paragraph (C) below, each Option shall be exercisable only by the
Participant during the Participant’s 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 Paragraph (C) below, 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, the Partnership or any Affiliate.

(C) To the extent specifically provided by the Committee with respect to an Option, an Option may
be transferred by a Participant without consideration to immediate family members or related family
trusts, limited partnerships or similar entities or 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.

(iv) Unit Certificates. All certificates for Units or other securities of the Partnership
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 inscribed 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 shall determine.

(vi) Delivery of Units or other Securities and Payment by Participant of Consideration.
Notwithstanding anything in the Plan or any grant 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 applicable law or the applicable rules or
regulations of any governmental agency or authority 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 grant 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 all outstanding Awards shall automatically vest and be payable at their
maximum target level or become exercisable in full, as the case may be.

(viii) Substitute Awards. Awards may be granted under the Plan in substitution for similar
awards held by individuals who become Employees, Consultants or Directors as a result of a merger,
consolidation or acquisition by the Company or an Affiliate of another entity or the assets of
another entity. Such Substitute Awards that are Options may have exercise prices less than the
Fair Market Value of a Unit on the date of such substitution.

 

 

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     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, including
increasing the number of Units available for Awards under the Plan, without the consent of any
partner, Participant, other holder or beneficiary of an Award, or any 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 to a
Participant without the consent of such Participant.

(c) Actions Upon the Occurrence of Certain Events. Upon the occurrence of any event
described in Section 4(c) of the Plan, any Change of Control, any change in applicable law or
regulation affecting the Plan or Awards thereunder, or any change in accounting principles
affecting the financial statements of the Partnership, the Committee, in its sole discretion and on
such terms and conditions as it deems appropriate, may take any one or more of the following
actions in order to prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan or an outstanding Award:

(A) provide for either (i) the termination of any Award in exchange for an amount of
cash, if any, equal to the amount that would have been attained upon the exercise of
such Award or realization of the Participant’s rights (and, for the avoidance of
doubt, if as of the date of the occurrence of such transaction or event the
Committee determines in good faith that no amount would have been attained upon the
exercise of such Award or realization of the Participant’s rights, then such Award
may be terminated by the Company without payment) or (ii) the replacement of such
Award with other rights or property selected by the Committee in its sole
discretion;

(B) provide that such Award be assumed by the successor or survivor entity, or a
parent or subsidiary thereof, or be exchanged for similar options, rights or awards
covering the equity of the successor or survivor, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of equity interests and
prices;

(C) make adjustments in the number and type of Units (or other securities or
property) subject to outstanding Awards, and in the number and kind of outstanding
Awards or in the terms and conditions of (including the exercise price), and the
vesting and performance criteria included in, outstanding Awards, or both;

(D) provide that such Award shall be exercisable or payable, notwithstanding
anything to the contrary in the Plan or the applicable Award Agreement; and

 

 

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(E) provide that the Award cannot be exercised or become payable after such event,
i.e., shall terminate upon such event.

     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. Unless other arrangements have been made that are acceptable to
the Company, 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, Units that would otherwise be issued pursuant to such Award
or other property) 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 or Services. 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,
continue consulting services or to remain on the Board, as applicable. Furthermore, the Company or
an Affiliate may at any time dismiss a Participant from employment or consulting free from any
liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award
agreement or other 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 without regard to its conflicts 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 law or,
if it cannot be construed or deemed amended without, in the determination of the 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
Partnership 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.

 

 

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     (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 manage properly 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 that the Committee may select, and the Company shall be relieved of
any further liability for payment of such amounts.

     (k) Participation by Affiliates. In making Awards to Employees employed by an entity
other than the Company, the Committee shall be acting on behalf of the Affiliate, and to the extent
the Partnership has an obligation to reimburse the Company for compensation paid for services
rendered for the benefit of the Partnership, such payments or reimbursement payments may be made by
the Partnership directly to the Affiliate, and, if made to the Company, shall be received by the
Company as agent for the Affiliate.

     (l) 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.

     (m) Compliance with Section 409A. Nothing in the Plan or any Award Agreement shall
operate or be construed to cause the Plan or an Award to fail to comply with the requirements of
Section 409A of the Internal Revenue Code. The applicable provisions of Section 409A and the
regulations thereunder are hereby incorporated by reference and shall control over any Plan or
Award Agreement provision in conflict therewith.

     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 earliest of (i) the date terminated by the Board, (ii) all Units available under the Plan have
been paid to Participants, or (iii) the 10th anniversary of the date the Plan is approved by the
unitholders of the Company. Unless otherwise expressly provided in the Plan or in an applicable
Award Agreement, however, 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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Long-Term Incentive Plan

Without DERS

Grant of Phantom Units

Grantee:                                                                                                    

Grant Date:                                                            , 200                    

	 	1.	 	Grant of Phantom Units. Regency GP LLC (the “Company”) hereby grants to you
___Phantom Units under the Regency GP LLC 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. This grant of Phantom Units does not include
tandem DERs. 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 in the Plan, unless the context
requires otherwise.
	 
	 	2.	 	Vesting. Except as otherwise provided in Paragraph 3 below, the
Phantom Units granted hereunder shall vest on the anniversary of the Grant Date as
follows:

	 	 	 
	Anniversary of
	 	Cumulative
	Grant Date
	 	Vested Percentage

[Vesting Schedule]

	 	3.	 	Events Occurring Prior to Full Vesting.
	 
	 	(a)	 	Death or Disability. If your employment with the Company terminates as
a result of your death or a disability that entitles you to benefits under the
Company’s long-term disability plan, the Phantom Units then held by you automatically
will become fully vested upon such termination.
	 
	 	(b)	 	Other Terminations. If your employment with the Company terminates for
any reason other than as provided in Paragraph 3(a) above, all unvested Phantom Units
then held by you automatically shall be forfeited without payment upon such
termination.
	 
	 	(c)	 	Change of Control. All outstanding Phantom Units held by you
automatically shall become fully vested upon a Change of Control.

 

 

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For purposes of this Paragraph 3, “employment with the Company” shall include being an
employee or a Director of, or a Consultant to, the Company or an Affiliate.

	 	4.	 	Payment. As soon as administratively practicable after the vesting of
a Phantom Unit, you shall be entitled to receive from the Company one Unit; provided,
however, the Committee may, in its sole discretion, direct that a cash payment be made
to you in lieu of the delivery of such Unit. Any such cash payment shall be equal to
the Fair Market Value of the Unit on the payment date. If more than one Phantom Unit
vests at the same time, the Committee may elect to pay such vested Award in Units, cash
or any combination thereof, in its discretion.
	 
	 	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 that
you may acquire upon payment of this award will not be sold or otherwise disposed of in
any manner that 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 to be acquired under this
award on the transfer records of the Partnership if such proposed transfer would in the
opinion of counsel satisfactory to the Partnership constitute a violation of any
applicable securities law, and (iii) the Partnership 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 Taxes. To the extent that the grant, vesting or
payment of a Phantom 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 payment of a vested Phantom Unit shall be
made pursuant to 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 with respect to such event.
	 
	 	8.	 	Rights as Unitholder. You, or your executor, administrator, heirs, or
legatees shall have the right to vote and receive distributions on Units and all the
other

 

 

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	 	 	 	privileges of a unitholder of the Partnership only from the date of issuance of a
Unit certificate in your name representing payment of a vested Phantom Unit.
	 
	 	9.	 	Insider Trading Policy. The terms of the Company’s Insider Trading
Policy with respect to Units are incorporated herein by reference. The timing of the
delivery of any Units pursuant to a vested Phantom Unit 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 successor or successors of the Company and upon any person 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 Phantom 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.
	 
	 	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.
	 
	 	13.	 	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.

	 	 	 	 	 	 	 
	 	 	REGENCY GP LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 

 

 

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Regency GP LLC

Long-Term Incentive Plan

Grant of Restricted Units

Grantee:                                                                                

Grant Date:                                        , 200                    

	 	14.	 	Grant of Restricted Units. Regency GP LLC (the “Company”) hereby grants to
you ___Restricted Units under the Regency GP LLC 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 in the Plan, unless the context requires otherwise.
	 
	 	15.	 	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 Grant Date as
follows:

	 	 	 
	 
	 	Cumulative
	Grant Date
	 	Vested Percentage

[Vesting Schedule]

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. Upon vesting any distributions being held with respect to such vested Restricted
Unit shall be paid to you; similarly, upon forfeiture of the Restricted Unit any
distributions being held with respect to such forfeited Restricted Unit shall be forfeited.

	 	16.	 	Events Occurring Prior to Full Vesting.
	 
	 	(a)	 	Death or Disability. If your employment with the Company terminates as
a result of your death or a disability that entitles you to benefits under the
Company’s long-term disability plan, the Restricted Units then held by you
automatically will become fully vested upon such termination.

 

 

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	 	(b)	 	Other Terminations. If your employment with the Company terminates for
any reason other than as provided in Paragraph 3(a) above, all unvested Restricted
Units then held by you automatically shall be forfeited without payment upon such
termination.
	 
	 	(c)	 	Change of Control. All outstanding Restricted Units held by you
automatically shall become fully vested upon a Change of Control.

For purposes of this Paragraph 3, “employment with the Company” shall include being an
employee or a Director of, or a Consultant to, the Company or an Affiliate.

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

     The Units evidenced by this certificate have been issued pursuant to an
agreement made as of ______, 200___, a copy of which is attached
hereto and incorporated herein, between the Company and the registered
holder of the Units, and are subject to forfeiture to the Company under
certain circumstances described in such agreement. 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 agreement.

          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.

	 	18.	 	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.
	 
	 	19.	 	Restrictions. By accepting this grant, you agree that any Units that
you may acquire upon vesting of this award will not be sold or otherwise disposed of in
any manner that would constitute a violation of any applicable federal or state
securities laws. You also agree that (i) the certificates representing the Units

 

 

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	 	 	 	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 Partnership if such proposed transfer would in the
opinion of counsel satisfactory to the Partnership constitute a violation of any
applicable securities law, and (iii) the Partnership 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.
	 
	 	20.	 	Withholding of Taxes. 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 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 with respect to such event.
	 
	 	21.	 	Insider Trading Policy. The terms of the Company’s Insider Trading
Policy with respect to Units are incorporated herein by reference.
	 
	 	22.	 	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.
	 
	 	23.	 	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.
	 
	 	24.	 	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.
	 
	 	25.	 	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.

 

 

	 	 	 	 	 	 	 
	 	 	REGENCY GP LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 

 

 

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Regency GP LLC

Long-Term Incentive Plan

Grant of Options

Grantee:                                                                                                    

Grant Date:                                                            , 200                    

	 	1	 	Grant of Options. Regency GP LLC (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 Regency Energy Partners LP on the terms and conditions set forth herein and in
the Regency GP LLC 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
	 	Cumulative
	Grant Date
	 	Vested Percentage

[Vesting Schedule]

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:

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

 

 

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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).

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.

Other Terminations. If your employment with the Company and its Affiliates is
terminated for any reason other than as provided in paragraphs 3(a) and (b) 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.

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

For purposes of this Agreement, “employment with the Company” shall include being a Director
or an employee of, or a Consultant to, 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 with the Company as
provided above shall be automatically cancelled without payment upon such 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, 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

 

 

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	 	 	 	privileges of a unitholder of the Company with respect to Units acquirable upon an exercise
of the Options.
	 
	 	5	 	Withholding of Taxes. 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 that you may acquire
by exercising the Options will not be sold or otherwise disposed of in any manner that 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 with respect to
Units 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.
	 
	 	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 all effective as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	REGENCY GP LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 

 

 

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Regency GP LLC

Long-Term Incentive Plan

Grant of Phantom Units

With DERS

Grantee:                                                                                                    

Grant Date:                                                            , 200                    

	 	26.	 	Grant of Phantom Units with DERs. Regency GP LLC (the “Company”) hereby
grants to you ___Phantom Units under the Regency GP LLC 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. This grant of Phantom
Units includes a tandem grant of DERs with respect to each Phantom Unit. The Company
shall establish a DER bookkeeping account for you with respect to each Phantom Unit
granted that shall be credited with an amount equal to any cash distributions made by
the Partnership on a Common Unit during the period such Phantom Unit is outstanding.
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 in the Plan, unless the context requires
otherwise.
	 
	 	27.	 	Vesting. Except as otherwise provided in Paragraph 3 below, the
Phantom Units and DERs granted hereunder shall vest on the anniversary of the Grant
Date as follows:

	 	 	 
	Anniversary of
	 	Cumulative
	Grant Date
	 	Vested Percentage

[Vesting Schedule]

Upon vesting of a Phantom Unit, the amount credited to your tandem DER account shall be paid to you
in cash without interest. If the Phantom Unit is forfeited, the amount credited to your tandem DER
account with respect to such Phantom Unit shall be similarly forfeited.

	 	28.	 	Events Occurring Prior to Full Vesting.
	 
	 	(a)	 	Death or Disability. If your employment with the Company terminates as
a result of your death or a disability that entitles you to benefits under the

 

 

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	 	 	 	Company’s long-term disability plan, the Phantom Units then held by you
automatically will become fully vested upon such termination.
	 
	 	(b)	 	Other Terminations. If your employment with the Company terminates for
any reason other than as provided in Paragraph 3(a) above, all unvested Phantom Units
then held by you automatically shall be forfeited without payment upon such
termination.
	 
	 	(c)	 	Change of Control. All outstanding Phantom Units held by you
automatically shall become fully vested upon a Change of Control.

For purposes of this Paragraph 3, “employment with the Company” shall include being an
employee or a Director of, or a Consultant to, the Company or an Affiliate.

	 	29.	 	Payment. As soon as administratively practicable after the vesting of
a Phantom Unit, you shall be entitled to receive from the Company one Unit; provided,
however, the Committee may, in its sole discretion, direct that a cash payment be made
to you in lieu of the delivery of such Unit. Any such cash payment shall be equal to
the Fair Market Value of the Unit on the payment date. If more than one Phantom Unit
vests at the same time, the Committee may elect to pay such vested Award in Units, cash
or any combination thereof, in its discretion.
	 
	 	30.	 	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.
	 
	 	31.	 	Restrictions. By accepting this grant, you agree that any Units that
you may acquire upon payment of this award will not be sold or otherwise disposed of in
any manner that 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 to be acquired under this
award on the transfer records of the Partnership if such proposed transfer would in the
opinion of counsel satisfactory to the Partnership constitute a violation of any
applicable securities law, and (iii) the Partnership 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.
	 
	 	32.	 	Withholding of Taxes. To the extent that the grant, vesting or
payment of a Phantom 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

 

 

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	 	 	 	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 payment of a vested Phantom
Unit shall be made pursuant to 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 with respect to
such event.
	 
	 	33.	 	Rights as Unitholder. You, or your executor, administrator, heirs, or
legatees shall have the right to vote and receive distributions on Units and all the
other privileges of a unitholder of the Partnership only from the date of issuance of a
Unit certificate in your name representing payment of a vested Phantom Unit.
	 
	 	34.	 	Insider Trading Policy. The terms of the Company’s Insider Trading
Policy with respect to Units are incorporated herein by reference. The timing of the
delivery of any Units pursuant to a vested Phantom Unit shall be subject to and comply
with such Policy.
	 
	 	35.	 	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.
	 
	 	36.	 	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 Phantom 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.
	 
	 	37.	 	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.
	 
	 	38.	 	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.

	 	 	 	 	 	 	 
	 	 	REGENCY GP LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:

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