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REGENCY GP LLC
SEVERANCE AGREEMENT
This
Severance Agreement (this “Agreement”) is entered
into as of April __, 2008 between Regency GP LLC, a Delaware
limited liability company (the “Company”), and Dan
A. Fleckman (“Officer”).
Recitals:
A.
The
Company is the general partner of Regency GP LP, a Delaware limited
partnership (“General Partner”), which is the general
partner of Regency Energy Partners LP (the
“Partnership”). In that capacity, the
Company manages the business and affairs of the General Partner
and, through the General Partner, the business and affairs of the
Partnership and its subsidiaries.
B.
As
of the date hereof, Officer has been employed by the Company as an
Executive Vice President and the Chief Legal Officer of the
Company.
C.
The
Company acknowledges that Officer is a significant employee of the
Company, possessing skills and knowledge instrumental to the
successful conduct of the business and affairs of the Company, the
General Partner, the Partnership and its subsidiaries (the
“Partnership Group”). The Company is willing
to enter into a severance arrangement with Officer in order to
better ensure itself of the continued services of Officer for
itself and the Partnership Group and, in part, to induce Officer to
continue to provide those services.
Now,
therefore, for and in consideration of the mutual covenants
and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby
agree as follows:
1.
Termination of Employment .
(a)
Right to Terminate . Officer’s employment
with the Company (including his position as an officer of the
Company) and those Affiliates of the Company of which he is an
officer shall be terminated upon the death or Disability (as
defined in subsection (e)(2) of this Section) of Officer and may be
terminated at any time and for any reason as a result of a
dismissal or other action by the Company or as a result of a
voluntary action by Officer. Any such termination of
employment with the Company and its Affiliates is referred to
herein as a “Termination of
Employment.” For purposes of this
Agreement, the term “Affiliate” shall mean any entity
required to be aggregated with the Company under Section 414 of the
Internal Revenue Code of 1986, as amended (the
“Code”).
(b)
Notice of Termination .
(1)
Any
Termination of Employment that is the result of Officer’s
Disability shall be communicated by the Company to Officer in a
written notice thereof. Such notice shall state that, in
the opinion of the Board (as defined
in subsection (e)(1) of this Section), Officer is suffering from a
Disability and such Disability is the reason for the Termination of
Employment.
(2)
Any
Termination of Employment that is the result of a dismissal or
other action by the Company (but is not the result of
Officer’s Disability) shall be communicated by the Company to
Officer by a written notice thereof. Such notice shall
state whether or not (in the Company’s opinion) the
Termination of Employment constitutes a Termination for Cause (as
defined in subsection (e)(3) of this Section) and, if so, shall set
forth in reasonable detail facts and circumstances constituting a
basis for such Termination for Cause.
(3)
Any
Termination of Employment that is the result of a voluntary action
by Officer shall be communicated by Officer to the Company by
written notice thereof. Such notice shall state whether
or not (in Officer’s opinion) the Termination of Employment
constitutes a Termination for Good Reason (as defined in subsection
(e)(4) of this Section) and, if so, shall set forth in reasonable
detail the facts and circumstances claimed as the basis for such
Termination for Good Reason. Such notice shall also
specify the date of such Termination of Employment, which (if the
Termination of Employment does not constitute a Termination for
Good Reason) shall be not less than 30 days following the date such
notice is received by the Company.
(c)
Date of Termination of Employment . For purposes
of this Agreement, the date of a Termination of Employment shall be
(1) if the Termination of Employment is the result of
Officer’s death, the date of such death, (2) if the
Termination of Employment is the result of Officer’s
Disability, the date on which the notice described in subsection
(b)(1) of this Section is received by Officer, (3) if the
Termination of Employment is the result of a dismissal or other
action by the Company (but is not the result of Officer’s
Disability), the date on which the notice described in subsection
(b)(2) of this Section is received by the Officer, and (4) if the
Termination of Employment is the result of a voluntary action by
Officer, the date specified in the notice described in subsection
(b)(3) of this Section.
(d)
Payments Due Upon Termination of Employment . The
Company shall make the following payments to Officer in the event
of any Termination of Employment prior to the third anniversary of
the date of this Agreement:
(1)
Death, Disability, Termination for Cause or Not for Good
Reason . If the Termination of Employment is the
result of (i) Officer’s death or Disability, (ii) a dismissal
or other action by the Company and constitutes a Termination for
Cause, or (iii) a voluntary action by Officer and does not
constitute a Termination for Good Reason, then the Company shall
pay to Officer (or his estate or personal representative) his
accrued and unpaid base salary through and including the date of
such Termination of Employment, which amount shall be paid in cash
on the first normal base salary payment date immediately succeeding
the date of such Termination of Employment.
(2)
Termination for Good Reason or Not for Cause . If
the Termination of Employment is the result of (i) a dismissal or
other action by the Company (but is not the result of
Officer’s Disability) and does not constitute a Termination
for Cause or (ii) a voluntary action by Officer and constitutes a
Termination for Good Reason, then the Company shall pay the
following amounts to Officer:
(A)
His
accrued and unpaid base salary through and including the date of
such Termination of Employment, which amount shall be paid in cash
on the date of such Termination of Employment; and
(B)
An
amount equal to (x) $900,000 minus the sum of all base salary
(measured before any deductions and withholdings) paid to Officer
by the Company on and after the date of this Agreement through and
including the Date of Termination (including amounts payable under
Section 1(d)(2)(A) of this Agreement), which amount shall be paid
in cash as set forth in the Release (as defined in subsection
(d)(3) of this Section) and (y) the bonus received by or due to
Officer with respect to the calendar year immediately preceding the
calendar year in which Officer’s employment is terminated or,
if no bonus for such calendar year was paid or is due to Officer
for such year, the bonus that would otherwise become due and
payable to Officer with respect to the calendar year in which
Officer’s employment is terminated, calculated as if 100% of
the target bonus as established for such calendar year would
otherwise have become payable. In addition, if Officer
timely elects COBRA coverage following his Termination of
Employment, the Company will pay a portion of the continuation
coverage premium equal to the employer premium paid for active
employees for similar coverage for a period of time following the
date of Termination of Employment equal to eighteen (18) months
less the time, if any, by which his employment by the Company
exceeded eighteen (18) months at the date of Termination of
Employment, but not longer than Officer’s COBRA continuation
coverage.
(3)
Release . Notwithstanding the foregoing, Officer
is entitled to receive the payments under Section 1(d)(2)(B) of
this Agreement only in exchange for his execution and
non-revocation (and lapse of time during which such revocation may
occur) of a release in substantially the form as attached hereto as
Exhibit A and acceptable to the Company (the
“Release”).
(e)
Certain Definitions . As used in the Section and
elsewhere in this Agreement, the following terms shall have the
respective meanings indicated:
(1)
“
Board ”
shall mean the Board of Directors or comparable managing body of
the Company.
(2)
“
Disability
” shall mean, subject to the immediately succeeding sentence,
Officer’s physical or mental impairment or incapacity of
sufficient severity that, in the opinion of the Board, either (A)
Officer is unable to continue to perform his duties and
responsibilities as chief legal officer of the Company or (B)
Officer’s condition entitles him to disability benefits under
any benefit plan of the Company providing for the payment
thereof. To the extent that Section 409A of the Code is
determined to apply to this Agreement and the term
“Disability” must be conformed to the definition of
disability under Section 409A of the Code in order to comply with
the requirements of that Code section, the definition of the term
“Disability” in the immediately preceding sentence
shall be inoperative and such term shall mean that Officer is
unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a
continuous period of not less than 12 months.
(3)
“
Termination for
Cause ” shall mean a Termination of Employment as a
result of a dismissal or other action by the Company following (i)
the misappropriation of funds or any act of common law fraud,
theft, or embezzlement, (ii) habitual insobriety or substance
abuse, (iii) the conviction or plea of nolo contendere, or any plea
other than not guilty, of a felony or any crime involving moral
turpitude, (iv) willful misconduct or gross negligence by Officer
in the performance of his duties, the willful failure of Officer to
perform a material function of Officer’s duties or material
failure to comply with any lawful directive of the Board, (v) a
material violation of the code of conduct of the Company and policy
on workplace harassment, and (vi) becoming subject to an order,
judicial or administrative, obtained or issued by the Securities
and Exchange Commission for any securities law violation involving
fraud.
(4)
“
Termination for Good
Reason ” shall mean a Termination of Employment as a
result of voluntary action by Officer after (A) the assignment to
Officer of any duties inconsistent in any material respect with
Officer’s position (including status or title), authority,
duties or responsibilities as the chief legal officer of the
Company reporting directly to the chief executive officer of the
Company, and excluding for this purpose (x) an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by Officer and (y) any diminution during any period
of Officer’s incapacity or Disability, (B) any reduction in,
or failure to timely pay, Officer’s annual base salary or (C)
any termination or material reduction of a material benefit under
any benefit plan of any member of the Partnership Group in which
Officer participates unless (i) there is substituted a comparable
benefit that is economically substantially equivalent to the
terminated or reduced benefit prior to or upon such termination or
reduction or (ii) benefits under such benefit plan are terminated
or commensurately reduced with respect to all similarly situated
members of management of the Company previously granted benefits
thereunder.
2.
Miscellaneous
Provisions.
(a)
Mitigation . Officer shall not be required to
mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise, and the amount of any
payment provided for in this Agreement shall not be reduced by any
compensation earned by Officer as the result of employment by
another employer after the date of any Termination of
Employment.
(b)
Notices . All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly received if so given)
by hand delivery, by mail (registered or certified mail, postage
prepaid, return receipt requested) or by any nationally recognized
courier service, such as Federal Express, providing proof of
delivery.
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