EXHIBIT 10.32
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”) is entered into between CPNO Services
L.P., a Texas limited partnership (“Employer”) and John
A. Raber (“Employee”) on this 1st day of
August 2005 (the “Commencement Date”).
WHEREAS, Employer recognizes the
value of the continued employment of Employee to the continued
success and profitable operation of Employer and its
Affiliates;
WHEREAS, Employer desires to employ
Employee to serve as President and Chief Operating Officer of
ScissorTail Energy, L.L.C. (“ScissorTail”), President
and Chief Operating Officer of Copano Energy/Rocky Mountains and
Mid-Continent, L.L.C. and in such other positions with Affiliates
of Employer as may be designated from time to time;
NOW, THEREFORE, for and in
consideration of the premises and the mutual agreements contained
herein and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, Employer
and Employee hereby agree as follows:
1.
Employment.
Employer hereby agrees to
employ Employee and Employee hereby accepts employment upon the
terms and conditions specified in this Agreement.
2.
Duties and
Responsibilities.
2.1
Duties . Employee shall be employed by Employer
to serve as President and Chief Operating Officer of ScissorTail,
President and Chief Operating Officer of Copano Energy/Rocky
Mountains and Mid-Continent, L.L.C. and in such other positions
with Affiliates of Employer as may be designated from time to time.
Employee agrees to perform diligently and to the best of his
abilities the duties and services required to effectively discharge
the functions assigned to such position by Employer, as well as
such additional or different duties and services that Employee from
time to time may be reasonably directed to perform by
Employer. Employee shall at all times comply with and be
subject to all policies and procedures of Employer.
2.2
Time and Effort
. Employee shall, during the
term of this Agreement, devote his full business time, energy, and
best reasonable efforts to the business and affairs of Employer and
its Affiliates. Employee may not engage, directly or indirectly, in
any other business, investment, or business activity that
interferes with Employee’s performance of his duties under
this Agreement, is contrary to the interests of Employer and its
Affiliates, or requires any significant portion of Employee’s
business time.
3.
Term of Agreement.
This Agreement shall be for a
two-year period commencing on the Commencement Date (the
“Primary Term”) and shall continue in effect
year-to-year thereafter (each year known as a “Renewal
Term”) until terminated by Employer or Employee providing
thirty (30) days’ written notice to the other prior to the
end of the Primary Term or any subsequent Renewal Term.
4.
Compensation and
Benefits
4.1
Salary. Employee shall be paid beginning on the
Commencement Date an annual base salary of $256,000 (Two Hundred
Fifty Six Thousand Dollars and No Cents) (the “Base
Salary”), subject to Employer’s standard payroll
practice and minus applicable taxes and withholdings.
Employee’s Base Salary shall be subject to annual review and
upward adjustment by the Compensation Committee (the
“Committee”) of the Board of Directors of Copano
Energy, L.L.C. (the “Company”), Employer’s parent
company. In no event shall the Base Salary ever be less than the
initial Base Salary set forth in the first sentence of this
Section 4.1.
4.2
Bonus. Effective January 1, 2006, Employee
shall be eligible to participate in Company’s Management
Incentive Compensation Plan (“MICP”) or any substitute
incentive compensation plan as may be in effect from time to time
for the benefit of executive officers of Company and its
Affiliates. Employer shall be eligible to earn an annual incentive
cash award with an initial target award of 50% of the Base Salary.
Employee’s bonus will be determined by the Committee based on
a combination of factors, including Employee’s achievement of
personal objectives, ScissorTail’s achievement of financial
and operational objectives and Company’s achievement of
financial objectives.
4.3
Long-Term Incentive
Plan. Employee will be
eligible to participate in Company’s Long-Term Incentive Plan
(“LTIP”). On the Commencement Date, Employee will
receive a grant of 40,000 options to purchase Company Common Units
and 10,000 restricted Common Units; provided however, the mix of
options and restricted Common Units to be awarded hereunder shall
be reallocated to reflect any appreciation in the Common Units from
June 20, 2005 through the Commencement Date based upon the
closing sales price of a Common Unit as reported on NASDAQ (the
“Closing Price”) on each of such dates (the
“Appreciation Amount”). If the Appreciation Amount is a
positive number, Employee shall be entitled to additional
restricted Common Units, the value of which (based on the Closing
Price on the Commencement Date”) is equal to 40,000 times the
Appreciation Amount. The number of options awarded hereunder will
be reduced by the number of additional restricted Common Units
awarded in connection with the reallocation. The options will have
an exercise price equal to the closing price of Company’s
Common Units on the Commencement Date, vest in equal one-fifth
increments on the grant anniversary date for the next five
(5) years, and have a ten (10) year exercise term.
The restricted Common Units will vest in equal one-fifth increments
on the grant anniversary date over the next five
(5) years.
4.4
Insurance, Vacation, and Other
Benefits. Employee
shall be eligible to participate in the Employer’s medical
and other insurance plans and all other programs, savings plans,
and other employment-related benefits of Employer in accordance
with the terms of those programs. Employer shall pay 100% of the
costs for coverage under the group health plans provided for
employees and their dependents. To the extent that the Employee
does not utilize this coverage for a spouse and/or dependents,
Employee shall receive monthly compensation equal to the cost the
Employer would have otherwise incurred.
5.
Termination of
Agreement.
5.1
Termination of Agreement by
Employer For Cause or Upon Employee Death or
Disability.
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(a) Employer shall have the
right to terminate Employee’s employment under this Agreement
prior to the expiration of the Primary Term or any Renewal Term for
any of the following reasons:
(i) for “Cause,”
which termination shall be without notice or payment in lieu of
notice. “Cause” shall mean (a) gross
negligence, gross incompetence, or willful misconduct in the
performance of the duties and services required of Employee
pursuant to this Agreement; (b) willful refusal without proper
reason to perform the duties and services required of Employee
pursuant to this Agreement; (c) the commission of any
fraudulent act or dishonesty in the course of Employee’s
employment by Employer; (d) conviction of a felony under a
criminal code of the United States of America or any state thereof,
whether or not committed in the course of employment by Employer;
(e) breach of any material provision of this Agreement or of
any material policy or procedure of Employer, which breach is not
remedied by Employee within thirty (30) days of Employee’s
receipt of written notice from Employer of such breach;
(ii) upon Employee’s
death;
(iii) upon Employee’s
becoming incapacitated by accident, sickness, or other
circumstances that in the reasonable opinion of a qualified doctor
approved by Employer renders Employee mentally or physically
incapable of performing the duties and services required of
Employee (with or without reasonable accommodation within the
meaning of the Americans with Disabilities Act).
(b) In the event of termination of
this Agreement pursuant to Section 5.1, Employee shall be
entitled to receive (a) any Base Salary earned through the
date of termination of the Agreement but not yet paid, (b) an
amount equal to any earned but unused vacation time and
(c) amounts (if any) to which Employee may be entitled
pursuant to the Company’s incentive compensation
plans.
5.2
Other Terminations of Agreement
by Employer. In
the event Employer terminates this Agreement for any reason other
than those set forth in Section 5.1 or does not offer Employee
a comparable position within the Denver, CO locale prior to the
expiration of the Primary Term, Employee shall be entitled to a
lump sum severance payment equal to two times the sum of
(a) Employee’s then Base Salary in effect at the time of
termination and (b) 50% of Employee’s maximum incentive
award under the bonus plan in which Employee is participating at
the time of termination. If Employee is terminated at any time
after the expiration of the Primary Term, Employee shall be
entitled to a lump sum severance payment equal to one year of
Employee’s then Base Salary in effect at the time of
termination of the Agreement and shall be eligible to receive a
pro-rata bonus pursuant to the terms of the MICP or any applicable
incentive compensation plan as may be in effect. In the event of
termination of Employee at any time during the term of this
Agreement pursuant to this Section 5.2, all outstanding awards
under the LITP shall automatically vest or become exercisable, as
the case may be. In addition, Employee shall also be entitled
to continuation of the insurance benefits in which he participated
on the date of termination of the Agreement, at Employer’s
cost, for the greater of (a) one year after the date of
termination of the Agreement or (b) the remainder of the
Primary Term, if applicable, not to exceed the maximum periods
provided for under the Consolidated Omnibus Budget Reconciliation
Act. Notwithstanding the foregoing provisions of this
Section 5.2, Employee shall
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be entitled to payment of the greater of
(1) any severance amount provided for in any Company sponsored
severance plan, if applicable, or (2) amounts payable
hereunder.
5.3.
Change of Control or
Liquidation. In
the event Employee is terminated on or within one year following a
Change of Control of ScissorTail or a Change of Control of Company,
Employee shall be entitled to severance payments as set forth in
Section 5.2. In
