Exhibit 10.1
COPANO ENERGY, L.L.C.
CHANGE IN CONTROL SEVERANCE PLAN
Effective as of December 12, 2007
1. Purpose. This
Copano Energy, L.L.C. Change in Control Severance Plan (the
“Plan”) is intended to assure Copano Energy, L.L.C.
(the “Company”) that it will have the continued
dedication of specified key employees and eliminate the
distractions of personal uncertainties associated with potential
transactions that the Company may undertake in the future by
providing for certain severance benefit payments to those key
employees on employment termination in connection with a Change in
Control, as defined below.
2. Definitions.
The terms set forth below have the following meanings:
“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 management, operations and administrative support services
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.
“Base Salary” means the Participant’s
annual base salary at the highest rate in effect during the
one-year period immediately preceding the date of the Change in
Control or, if greater, the highest rate in effect during the
one-year period immediately preceding the Participant’s
termination of employment.
“Binding CIC Agreement” means a definitive
written agreement to which the Company is a party and which, if
consummated, would constitute a Change in Control.
“Board” means the Board of Directors of the
Company.
“Cause” shall mean (a) gross negligence or
willful misconduct in the performance of the duties and services
required of the Participant by the Company; (b) the
Participant’s willful and continued failure to substantially
perform his duties and other obligations (for reasons other than
physical or mental incapacity) and such failure continues for a
period of 30 days after written notice by the Company of the
existence of such failure; provided, however, that only one
such notice by the Company need be sent and, if such failure
re-occurs thereafter, no further notice and opportunity to cure
such failure shall be required; (c) the commission of any
fraudulent act or dishonesty in the course of the
Participant’s employment or provision of services; or (d)
conviction of or a plea of guilty to a felony that requires an
intentional, knowing or reckless mental state (or any such
equivalent mental state) under a criminal code of the United States
of America or any state thereof, whether or not committed in the
course of employment by the Participant.
“Change in Control” of the Company means the
occurrence 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 (excluding for purposes hereof, Copano/Operations as
an Affiliate of the Company), 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 to an Affiliate of the Company
(excluding for purposes hereof, Copano/Operations as an Affiliate
of the Company); 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, 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, 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.
“Code” means the United States Internal Revenue
Code of 1986, as amended from time to time.
“Committee” means the Compensation Committee of
the Board or any person or persons appointed by the Board to
administer the Plan.
“Company” means Copano Energy, L.L.C., and any
successor thereto.
“Copano/Operations” means Copano/Operations,
Inc., a Texas corporation.
“Effective Date” means December 12,
2007.
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“Employee” means an individual employed by the
Company or an Affiliate of the Company.
“Employer” means the Company or any Affiliate
that employs a Participant.
“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended.
“Good Reason” means any of the following events
that occurs without the Participant’s prior written consent
and (i) upon a Change in Control or within 18 months
thereafter or (ii) after the entry into a Binding CIC
Agreement but prior to the consummation of such Change in Control
or the abandonment or termination of such Binding CIC
Agreement:
(i) a
material diminution in the Participant’s Base Salary
(provided, however, without limiting the interpretation of
“material,” a 5% or greater reduction in
Participant’s Base Salary shall be deemed
“material” in all circumstances); (ii) a material
diminution in the Participant’s authority, duties, or
responsibilities; (iii) a requirement that the Participant
report to a supervisor, whose authority, duties, or
responsibilities are materially diminished in comparison to the
authority, duties and responsibilities of the supervisor to whom
the Participant reported prior to the Change in Control, including
a requirement that a Participant report to a corporate officer or
employee instead of reporting directly to the Board (or the board
of directors or similar governing body of the surviving parent
entity following a Change in Control or other transaction);
(iv) a material diminution in the budget over which the
Participant retains authority; (v) reassignment of Participant to
any office located more than 25 miles from where the office to
which Participant is assigned is located as of the date the
Participant receives a Participant Notice (or, if the Participant
consents to a subsequent relocation, as of the date of the last
relocation to which Participant has consented); or (vi) any
other action or inaction that constitutes a material breach by the
Company or a subsidiary thereof of any employment agreement under
which the Participant provides services.
No act
or omission shall constitute “Good Reason” for purposes
of this Plan unless the Participant provides to the Company a
written notice clearly and fully describing the particular acts or
omissions which the Participant reasonably believes in good faith
constitutes “Good Reason” within 90 days of the
first date of such acts or omissions, and an opportunity, within
30 days following its receipt of such notice, to cure such
acts or omissions. If such acts or omissions are not cured within
the 30 day cure period, Participant shall provide a notice of
termination for Good Reason to the Company
“Participant” means an Employee who is
designated as eligible for a Plan benefit under Section 3(b).
“Participant Notice” means the written or
electronic agreement by which a benefit under this Plan shall be
evidenced.
“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.
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“Plan” means the Copano Energy, L.L.C. Change in
Control Severance Plan, as amended from time to time.
“Section 409A” means Code
Section 409A, and all regulations and guidelines applicable
thereto issued or promulgated by the appropriate government agency
or regulatory body.
“Target Bonus” means the Target Award
established for purposes of the Company’s Management
Incentive Compensation Plan or any similar annual target bonus
established pursuant to a successor annual bonus program of the
Company or an Affiliate for the year in which the
Participant’s employment is terminated or, if greater, for
the year in which the Change in Control occurs.
3. Administration and
Eligibility.
(a)
Administration . The Plan shall be administered by the
Committee, which shall have full and exclusive power to interpret
this Plan and to adopt rules, regulations and guidelines to carry
out this Plan as it deems necessary or appropriate. The Committee,
in its discretion, may retain the services of an outside
administrator to perform any of its Plan functions. Any Committee
decision in interpreting and administering this Plan shall lie
within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned.
(b)
Eligibility to Participate . From time to time the
Committee, in its sole discretion, shall designate in writing the
Employees who shall be eligible to receive Plan benefits, and may
designate additional Participants at any time prior to a Change in
Control.
(c)
Eligibility for Severance Benefits . If the employment of a
Participant who is employed by the Company or a subsidiary thereof
is terminated without Cause or by the Participant for Good Reason
or the services to the Company of a Participant who is employed by
Copano/Operations are directly or indirectly terminated by the
Company witho
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