ENERGY TRANSFER EQUITY, L.P. FILES (8-K) Disclosing Change in Directors or Principal Officers, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Financial Statements and Exhibits
(Edgar Glimpses Via Acquire Media NewsEdge) Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with Jamie Welch ("Welch") joining Energy Transfer Equity, L.P.
("ETE" or the "Partnership") as Group Chief Financial Officer and Head of
Corporate Development effective as of April 29, 2013 (the "Effective Date"),
Welch and the Partnership entered into a letter agreement (the "Original Offer
Letter") whereby ETE agreed to award Welch 750,000 common units of ETE, subject
to a period of restriction, under ETE's Long-Term Incentive Plan pursuant to a
Unit Award Under Long-Term Incentive Plan and the Time-Vested Restricted Unit
Award Agreement, each dated as of April 29, 2013 (the "Original Award
Agreements"). Subsequent to the Effective Date, ETE and Welch discovered that
the Original Offer Letter and Original Award Agreements did not accomplish what
ETE and Welch had mutually intended and agreed to, including the fact that,
notwithstanding the parties' mutual intent and understanding that the Original
Offer Letter and Original Award Agreements would make Welch a partner in ETE,
provisions in ETE's Long-Term Incentive Plan prevented this from occurring.
Accordingly, on December 23, 2013, ETE and Welch entered into (i) a Rescission
Agreement in order to rescind the Original Offer Letter to the extent it relates
to the award of 750,000 common units of ETE to Welch, the Original Award
Agreements, and the receipt of cash amounts by Welch with respect to such
awarded units and (ii) a new Class D Unit Agreement between ETE and Welch (the
"Class D Unit Agreement") providing for the issuance to Welch of an aggregate of
770,000 Class D Units of ETE, which number of Class D Units includes 20,000
Class D Units intended to compensate Welch for his agreement to forego the
reimbursement of certain expenses) and restore the parties to the same legal and
financial positions in all material respects that would have existed had the
Original Offer Letter not provided for an award of common units to Welch and the
Original Award Agreements had not been entered into. The terms of the Class D
Units are summarized below in Item 5.03 and incorporated by reference into this
Under the terms of the Class D Unit Agreement, 30% of the Class D Units granted
to Welch will convert to ETE common units on a one-for-one basis on March 31,
2015, and the remaining 70% will convert to ETE common units on a one-for-one
basis on March 31, 2018, subject in each case to Welch being in Good Standing
with ETE (as defined in the Class D Unit Agreement). Upon a Change of Control
(as defined in the Class D Unit Agreement), all of the Class D Units issued to
Welch will convert to ETE common units and the requirement of Good Standing will
cease to apply.
The above description of the Class D Unit Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of
the Class D Unit Agreement, which is attached as Exhibit 10.1 hereto. To the
extent required, the information provided in Section 5.03 below is incorporated
into this Item 5.02 by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
On December 23, 2013, the general partner of ETE adopted Amendment No. 4 (the
"LP Agreement Amendment") to the Third Amended and Restated Agreement of Limited
Partnership of ETE, dated as of February 8, 2006. The LP Agreement Amendment
sets forth the terms and provisions of the Class D Units representing limited
partner interests in ETE. The Class D Units shall have the right to share in
Partnership distributions on a pro rata basis with the ETE common units so that
the amount of any Partnership distribution to each Class D Unit will equal the
amount of such distribution to each common unit. The Class D Units generally
will not have any voting rights, except that the Class D Units shall be entitled
to vote as a separate class on any matter that adversely affects the rights or
preferences of the Class D Units in relation to other classes of Partnership
interests or as required by law. The Class D Units may not be transferred, sold,
assigned or pledged without the consent of ETE's general partner. Subject to a
requirement of Good Standing as set forth in the Class D Unit Agreement
(described above) between the Partnership and a holder of Class D Units, the
Class D Units shall convert into ETE common units upon a Class D Unit Conversion
Date (or, if applicable, an Accelerated Class D Unit Conversion Date) as defined
in the Class D Unit Agreement.
The above description of the LP Agreement Amendment and the Class D Units does
not purport to be complete and is subject to, and qualified in its entirety by,
the full text of the LP Agreement Amendment, which is attached as Exhibit 3.1
Item 9.01. Financial Statements and Exhibits.
Exhibit Number Description of the Exhibit
3.1 Amendment No. 4 to Third Amended and Restated Agreement of
Limited Partnership of Energy Transfer Equity, L.P., dated
December 23, 2013.
10.1 Class D Unit Agreement between Energy Transfer Equity, L.P.
and Jamie Welch, dated December 23, 2013
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