REGENCY GP LLC SEVERANCE AGREEMENT
REGENCY
GP LLC
This
Severance Agreement (this “Agreement”) is entered into as of April __, 2008
between Regency GP LLC, a Delaware limited liability company (the “Company”),
and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (“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. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to
Officer: ▇▇▇
▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
If to the
Company: Regency
GP LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive
Officer
or to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) Assignment.
(1) The
rights and obligations of the Company pursuant to this Agreement may be assigned
by the Company to any other person or entity without the express written consent
of Officer, but if assigned to a person who is not an Affiliate, such assignment
may only be in connection with a merger or consolidation of the Company or a
sale of all or substantially all of its assets.
(2) The
rights and obligations of Officer pursuant to this Agreement may not be
assigned, in whole or in part, by Officer to any other person or entity without
the express written consent of the Board.
(d) Successors. This
Agreement shall be binding on, and shall inure to the benefit of, the Company,
Officer and their respective successors, permitted assigns, personal and legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees, as applicable.
(e) Amendment and
Waivers. Except as hereinafter provided, no provision of this
Agreement may be amended or otherwise modified, and no right of any
party to
this Agreement may be waived, unless such amendment, modification or waiver is
agreed to in a written instrument signed by Officer and the
Company.
(f) Complete
Agreement. The provisions of this Agreement constitute the
complete understanding and agreement among the parties with respect to the
subject matter hereof, and no agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this Agreement; provided,
however, that this subsection (f) shall not apply to any award made to Officer
under or pursuant to the Company’s Long-Term Incentive Plan
(“LTIP”).
(g) Governing
Law. THIS AGREEMENT IS BEING MADE AND EXECUTED IN, AND IS
INTENDED TO BE PERFORMED IN, THE STATE OF TEXAS AND SHALL BE GOVERNED,
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF
THE STATE OF TEXAS.
(h) Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original, but all of which together will constitute one and the same
agreement.
(i) Construction. The
captions of the Sections, subsections and paragraphs of this Agreement have been
inserted as a matter of convenience of reference only and shall not affect the
meaning or construction of any of the terms or provisions of this
Agreement. Unless otherwise specified, references in this Agreement
to a “Section,” “subsection,” “paragraph,” “subparagraph” or “Exhibit” shall be
considered to be references to the appropriate Section, subsection, paragraph,
subparagraph or Exhibit, respectively, of this Agreement. Unless the
context otherwise requires, all words used in this Agreement in any gender shall
include the masculine, feminine and neuter gender, all singular words shall
include the plural and all plural words shall include the
singular. As used in this Agreement, the term “including” shall mean
“including without limitation.”
(j) Validity and
Severability. If any term or provision of this Agreement is
held to be illegal, invalid or unenforceable under the present or future laws
effective during the term of this Agreement (1) such term or provision shall be
fully severable, (2) this Agreement shall be construed and enforced as if such
term or provision had never constituted a part of this Agreement and (3) the
remaining terms and provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable term
or provision or by its severance from this Agreement. Furthermore, in
lieu of such illegal, invalid or unenforceable term or provision, there shall be
added automatically as a part of this Agreement a term or provision as similar
to such illegal, invalid or unenforceable term or provision as may be possible
and be legal, valid and enforceable.
(k) Withholding. The
Company may withhold from any amounts payable under this Agreement such federal,
state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(l) Effect of Agreement on Other
Benefits. The existence of this Agreement shall not prohibit
or restrict Officer’s entitlement to full participation in all benefits under
any compensation, equity (including the LTIP), indemnification, insurance,
bonus, benefit, or welfare plan or program (collectively, the “Plans”) in which
executives of the Company are entitled to participate in general, subject to
discretion of the Board, the Compensation Committee or the chief executive
officer in making grants of rights or benefits under such Plans where the Plans
do not provide for automatic participation of Officer.
(m) Arbitration. The
Company and Officer agree to the resolution by binding arbitration of all
claims, demands, causes of action, disputes, controversies or other matters in
question (“claims”) arising out of this Agreement or Officer’s employment (or
its termination), whether sounding in contract, tort or otherwise and whether
provided by statute or common law, that the Company may have against Officer or
that Officer may have against the Company or its parents, subsidiaries and
affiliates, and each of the foregoing entities’ respective officers, directors,
employees or agents in their capacity as such or otherwise; except that this
agreement to arbitrate shall not limit the right of the Company or Officer to
seek equitable relief, including injunctive relief and specific
performance. Claims covered by this agreement to arbitrate also
include claims by Officer for breach of this Agreement, wrongful termination,
discrimination (based on age, race, sex, disability, national origin, religion
or any other factor) and retaliation. In the event of any breach of
this Agreement by the Company or Officer, it is expressly agreed that
notwithstanding any other provision of this Agreement, neither party shall be
entitled to an award of special or consequential damages. The Company
and Officer agree that any arbitration shall be in accordance with the Federal
Arbitration Act (“FAA”) and, to the extent an issue is not addressed by the FAA,
with the then-current National Rules for the Resolution of Employment Disputes
of the American Arbitration Association (“AAA”) or such other rules of the AAA
as applicable to the claims being arbitrated. If a party refuses to
honor its obligations under this agreement to arbitrate, the other party may
compel arbitration in either federal or state court. The arbitrator
shall apply the substantive law of the State of Texas (excluding Texas
choice-of-law principles that might call for the application of some other
state’s law), or federal law, or both as applicable to the claims
asserted. The arbitrator shall have exclusive authority to resolve
any dispute relating to the interpretation, applicability, enforceability or
formation of this agreement to arbitrate, including any claim that all or part
of this Agreement is void or voidable and any claim that an issue is not subject
to arbitration. The parties agree that the exclusive venue for
arbitration will be in Dallas County, Texas, and that any arbitration commenced
in any other venue will be transferred to Dallas County, Texas, upon the written
request of any party to this Agreement. If an arbitration is actually
conducted pursuant to this Section 2(m) and if permitted by law, the party in
whose favor the arbitrator renders the award may, in the discretion of the
arbitrator, also be awarded all costs and expenses actually incurred, including
reasonable attorneys’ fees, expert witness fees, and costs. Any and
all of the arbitrator’s orders, decisions and
awards
may be enforceable in, and judgment upon any award rendered by the arbitrator
may be confirmed and entered by, any federal or state court having
jurisdiction. All proceedings conducted pursuant to this agreement to
arbitrate, including any order, decision or award of the arbitrator, shall be
kept confidential by all parties except to the extent such disclosure is
required by law, or in a proceeding to enforce the rights
hereunder. THE PARTIES ACKNOWLEDGE THAT, BY SIGNING THIS AGREEMENT,
THEY ARE WAIVING ANY RIGHT THAT THEY MAY HAVE TO A JURY TRIAL OR A COURT TRIAL
OF ANY EMPLOYMENT-RELATED CLAIM.
(n) Additional
Parties. The General Partner and the Partnership join in the
execution of this Agreement in order to acknowledge the recitations in paragraph
(C) of the Recitals and to guarantee payment of all amounts due to Officer upon
a Termination of Employment as provided in this Agreement.
(SIGNATURE
PAGE ATTACHED)
In
witness whereof, the parties have executed this Agreement effective as of the
date first written above.
REGENCY GP LLC, for itself and for
each of the
General Partner and the
Partnership
By:
▇▇▇▇▇ ▇. ▇▇▇▇▇,
Chairman of the Board,
Chief Executive Officer and
President
OFFICER:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
ATTACHMENT
A
RELEASE
AND WAIVER AGREEMENT
This
Release and Waiver Agreement (the “Release”) is entered into between ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ (“Executive”) and Regency GP LLC, a Delaware limited liability company
(the “Company”), and relates to that certain Severance Agreement dated April
___, 2008 (the “Severance Agreement”).
Definitions.
“Released
Parties” means the Company and its past, present and future parents,
subsidiaries, divisions, successors, predecessors, employee benefit plans and
affiliated or related companies, including Regency Energy Partners LP, a
Delaware limited partnership (“Partnership”) and also each of the foregoing
entities’ past, present and future owners, officers, directors, stockholders,
investors, partners, managers, principals, members, committees, administrators,
sponsors, executors, trustees, fiduciaries, employees, agents, assigns,
representatives and attorneys, in their personal and representative capacities.
Each of the Released Parties is an intended third-party beneficiary of this
Release.
“Claims”
means all theories of recovery of whatever nature, whether known or unknown, and
now recognized by the law or equity of any jurisdiction. This term includes, but
is not limited to, causes of action, charges, indebtedness, losses, claims,
liabilities, and demands, whether arising in equity or under the common law or
under any contract or statute. This term includes, but is not limited to, any
claims of discrimination, harassment, retaliation, retaliatory discharge, or
wrongful discharge, and any other claim which is alleged or which could be
alleged by Executive, or on Executive’s behalf, in any lawsuit or other
proceeding. This term includes, but is not limited to, any claims and rights
arising under the Age Discrimination in Employment Act of 1967, 29 U.S.C.
Section 621, et seq.; Title VII of the Civil Rights Act of 1964, 42 U.S.C.
Section 2000e, et seq.; the Employee Retirement Income Security Act of 1974, 29
U.S.C. Section 1001, et seq.; the Americans with Disabilities Act, 42 U.S.C.
Section 12101, et seq.; the Family and Medical Leave Act, 29 U.S.C. Section
2601, et seq.; and any other federal, state or local law or regulation regarding
employment or the termination of employment. This term also includes, but is not
limited to, any and all rights, benefits or claims Executive may have under the
Severance Agreement or under any severance, bonus, incentive compensation plan,
program or agreement, other than any unit option agreement.
Consideration. Executive
agrees and acknowledges that Executive would not be entitled to the severance
amount and benefits provided under the Severance Agreement if Executive did not
agree and enter into this Release.
Release of
Claims.
Executive,
on behalf of himself and his heirs, executors, administrators, legal
representatives, successors, beneficiaries, and assigns, unconditionally
releases and
forever
discharges the Released Parties from, and waives, any and all Claims that
Executive has or may have against any of the Released Parties arising from
Executives’ employment with the Company or any Released Party, the termination
thereof, and any other acts or omissions occurring on or before the date
Executive signs this Release.
The
release set forth in Paragraph 3(a) includes, but is not limited to, any and all
Claims under (i) the common law (tort, contract or other) of any jurisdiction;
(ii) the Rehabilitation Act of 1973, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1866, and any other federal, state and local statutes,
ordinances, executive orders and regulations prohibiting discrimination or
retaliation upon the basis of age, race, sex, national original, religion,
disability, or other unlawful factor; (iii) the National Labor Relations Act;
(iv) the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
(other than vested benefits under any employee benefit plan subject to ERISA);
(v) the Family and Medical Leave Act; (vi) the Fair Labor Standards Act; (vii)
the Equal Pay Act; and (viii) any other federal, state or local
law.
Executive
further understands and expressly agrees that the release in Section 3(a)
includes the waiver of any and all Claims and rights Executive may have against
any of the Released Parties under the Age Discrimination in Employment Act, the
Older Workers Benefit Protection Act, or under any other law prohibiting age
discrimination, arising prior to and including the date of
Executive’s execution of this Release.
In
furtherance of this Release, Executive promises not to bring any Claims against
any of the Released Parties in or before any court or arbitral authority or
governmental agency.
Acknowledgment.
Executive acknowledges that, by entering into this Release, the Company and the
Released Parties do not admit to any wrongdoing in connection with Executive’s
employment or termination, and that this Release is intended as a compromise of
any Claims Executive has or may have against the Released Parties as of the date
Executive signs this Release. Executive further acknowledges that Executive has
carefully read this Release and understands its final and binding effect, he has
had at least 45 days to consider it, he has had (and will continue to have) the
opportunity to seek the advice of legal counsel of Executive’s choosing through
the seven-day period following its execution, and he is entering this Release
voluntarily.
Applicable Law. This
Release shall be construed and interpreted pursuant to the laws of Texas without
regard to any choice of law provisions thereof.
Severability. Each
part, term, or provision of this Release is severable from the others. In the
event that any provision of this Release, or the application thereof to any
circumstance, is held by a court of competent jurisdiction to be invalid,
illegal or unenforceable in any respect under present or future laws effective
during the effective term of any such provision, such invalid, illegal or
unenforceable provision shall be fully severable; and this Release shall then be
construed and enforced as if such invalid, illegal or unenforceable provision
had not been contained in this Release; and the remaining provisions of this
Release shall remain in full force
and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Release. Furthermore, in lieu of each
such illegal, invalid, or unenforceable provision, there shall be added
automatically as part of this Release, a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.
Timing. Executive may
revoke this Release during the period ending seven days after Executive executes
it; such revocation must be in writing and received by the Company’s Chief
Executive Officer no later than the seventh day after Executive signs this
Release; this Release will not become effective or enforceable, and that portion
of the consideration set forth in Section 2 of this Release will not be paid,
until the expiration of this seven-day period without Executive’s revocation,
and Executive returns this Release to the Company’s President and Chief
Executive Officer; and Executive’s acceptance of any of that portion of the
consideration set forth in Section 2 of this Release after expiration of the
seven-day period shall constitute Executive’s acknowledgment that Executive did
not revoke this Release during the seven-day period.
Advice to Consult
Counsel. The Company hereby advises Executive to consult with an attorney
prior to executing this Release.
REGENCY GP LLC
By:
[___________________]
Dated: , 200[__]
EXECUTIVE
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Dated: , 200[__]