form8k.htm
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of
1934
Date of
report (Date of earliest event reported): March 17, 2008
REGENCY
ENERGY PARTNERS LP
(Exact name of registrant as
specified in its charter)
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Delaware
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000-51757
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16-1731691
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(State
or other jurisdiction of
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(Commission
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(IRS
Employer
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incorporation)
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File
Number)
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Identification
No.)
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1700
Pacific, Suite 2900
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Dallas,
Texas
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75201
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(Address
of principal
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(Zip
Code)
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executive
offices)
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Registrant’s
telephone number, including area code: (214) 750-1771
(Former
name or former address, if changed since last report): Not applicable
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Retirement
and Resignation of Director and Principal Executive Officer
On March 17, 2008, Mr. James
W. Hunt retired and resigned, effective April 1, 2008, from his positions as a
member of the board of directors (the “Board”), each committee of the Board of
which he was a member and as President, Chief Executive Officer, and Chairman of
the Board of Regency GP LLC (the “Company”), which is the general partner of
Regency GP LP. Regency GP LP is the general partner of Regency Energy
Partners LP (“Regency”). The Company expects to enter into a
consulting agreement with Mr. Hunt pursuant to which it will pay a consulting
fee for the remainder of fiscal 2008 at the rate of his current base salary
($400,000 per annum). Mr. Hunt owns 60 Class C Units (being 7.58% of
the outstanding Class C Units) of Regency GP Acquirer LP (“GP Acquirer”), all of
which he will retain. See the description of the Class C Units under
“Compensation Arrangements:
Employment Agreement.”
Appointment
of Director and Principal Executive Officer
On March
14, 2008, the Board of Directors of the Company appointed, effective April 1,
2008 and subject to execution and delivery of an employment agreement with him,
Byron R. Kelley, age 60, as a member of the Board and as the Company’s
President, Chief Executive Officer and Chairman of the Board to fill the
vacancies in those positions to be created by Mr. Hunt’s
retirement. Mr. Kelley will hold such positions until his successor
is duly elected and qualified. Since 2003, Mr. Kelley has served as
senior vice president of Centerpoint Energy Inc. (“Centerpoint”) and president
of its Pipelines & Field Services Group. Centerpoint is a
domestic energy delivery company that includes electric transmission and
distribution, natural gas distribution, competitive natural gas sales and
services, interstate pipelines and field services operations. While
at Centerpoint, Mr. Kelley was responsible for commercial, operational,
strategic, regulatory and development matters for a business group consisting of
two interstate pipeline companies (8,700 miles of pipe), a gathering and
processing company (3,800 miles of pipe) and a remote monitoring, data gathering
and communications company. From 1996 to 2002, Mr. Kelley served as
executive vice president and then president of El Paso Energy International, a
developer, owner and operator of international energy infrastructure
projects. During this time, he was responsible for decisions related
to staffing the key positions necessary to build a complete organization to
conduct natural gas pipeline and independent power generation activities on a
global basis. Neither Centerpoint nor El Paso Energy International is
affiliated with the Company or Regency. In 2002, Mr. Kelley retired
in order to devote time to his family. Mr. Kelley is a graduate of
Auburn University with a bachelor’s degree in civil
engineering. There is no family relationship between Mr. Kelley and
any other officer or any director of the Company.
The
Company expects that the Board will appoint Mr. Kelley, effective as of April 1,
2008, as a member of the committees of the Board from which Mr. Hunt has
resigned, being the Executive Committee, the Nominating Committee and the
Compensation Committee. There are no other arrangements or
understandings between Mr. Kelley and any other persons pursuant to which Mr.
Kelley was appointed a director of the Company. Mr. Kelley has not
had a direct or indirect material interest in any transaction since the
beginning of the Company’s last fiscal year, or in any currently proposed
transaction, involving an amount in excess of $120,000 in which the Company was
or is to be a participant.
Compensation
Arrangements; Employment Agreement
On March 17, 2008, Mr. Kelley
and the Company entered into an Executive Employment Agreement, to be effective
April 1, 2008. The agreement provides for an initial term of two
years, which automatically will be extended for additional one year terms until
the Company or Mr. Kelley gives at least one year prior notice of non-renewal; a
base salary $475,000, subject to adjustment (but may not be decreased below
$475,000) at the discretion of the Board; participation by Mr. Kelley in all
incentive, savings, retirement and welfare plans generally available to other
executive officers of the Company; 27 paid vacation days each calendar year; the
award of 56,300 restricted common units of Regency under the
Company’s Long Term Incentive Plan, 23,150 of which will vest on
April 1, 2010, and 23,150 of which will vest on April 1, 2012; and the award of
50,000 restricted common units of Regency under the Company’s Long Term
Incentive Plan, 12,500 of which will vest on each of the first four
anniversaries of the April 1, 2008, date of grant. Mr. Kelley also
will receive an additional grant of up to 7,500 restricted common units under
the Company’s Long Term Incentive Plan based on the value of certain benefits
forfeited as a result of his resignation of his employment with Centerpoint,
one-half of which units will vest on April 1, 2010, and one half of which will
vest on April 1, 2012.
The award
agreements pursuant to which the restricted units are granted generally provide
that if Mr. Kelley’s employment with the Company is terminated by the Company
for any reason (with respect to the 50,000 restricted common units grant,
excluding a termination by the Company for cause), upon the death or disability
of Mr. Kelley, or by Mr. Kelley for good reason (as defined in the employment
agreement), and upon a change of control, all unvested restricted units will
become fully vested. Upon termination by Mr. Kelley of his employment
without good reason (as defined), all unvested restricted units will be
forfeited. Mr. Kelley will be entitled to exercise all
voting rights with respect to the restricted units and to all distributions on
unvested restricted units (unless and until such units are
forfeited).
Under the
employment agreement, Mr. Kelley also is eligible to participate in the annual
bonus plan of the Company for executives, and will have a target bonus equal to
his annual base salary; provided that Mr. Kelley will receive a minimum bonus
for 2008 of $400,000 and for 2009 of $200,000 regardless of any performance
criteria achieved. The Company’s annual bonus plan is described in
Item 11 of Regency’s Annual Report on Form 10-K for the year ended December 31,
2007, as filed with the Securities and Exchange Commission on February 29,
2008.
The
employment agreement provides that Mr. Kelley’s employment will terminate on his
death and may terminate on his disability. In addition, the Company
may terminate Mr. Kelley’s employment at any time for “cause” (as defined in the
employment agreement) or without cause. Mr. Kelley may terminate his
employment at any time for “good reason” (as defined in the employment
agreement) or without good reason. If Mr. Kelley’s employment is terminated for
any reason, Mr. Kelley is entitled to his base salary through the date of
termination, any unpaid bonus for the calendar year preceding the year in which
the termination occurs, any unreimbursed covered business expenses, and the
value of any unused accrued vacation for the calendar year in which the
termination occurs (the “Accrued Obligations”). If Mr. Kelley’s
employment is terminated by the Company other than for cause or disability or by
Mr. Kelley for good reason, the Company also will pay Mr. Kelley, in addition to
the Accrued Obligations, a lump sum amount equal to four times his then current
annual base salary (or, if the Company elects to waive the non-competition
restrictions in the employment agreement described below, two times Mr. Kelley’s
then current annual base salary; provided, however, if such termination is
within three months preceding or two years after a change of control, the lump
sum amount will be four times his annual base salary regardless of whether the
non-competition restrictions are waived) and the Company will provide COBRA
continuation coverage for Mr. Kelley and his eligible family members for 12
months based on the monthly premium charged to active employees. If
Mr. Kelley’s employment is terminated by the Company by reason of his
“disability” (as defined in the employment agreement), the Company will pay to
Mr. Kelley or his legal representative, in addition to the Accrued Obligations,
until Mr. Kelley reaches age 65 or dies, a monthly payment of an amount equal to
the difference between the disability payments paid under the Company’s long
term disability plan and 60% of Mr. Kelley’s annual base salary at the time of
termination. Mr. Kelley has agreed, for a period of two years following the date
of termination of his employment, not to compete with the Company and not to
solicit the Company’s customers, suppliers, employees or other of the Company’s
business relations.
Mr.
Kelley will be awarded 85 Class C Units of GP Acquirer, an indirect subsidiary
of General Electric Capital Corporation and the owner of both the Company and
Regency GP LP. The Class C Units are a separate class of securities
of GP Acquirer and the award to Mr. Kelley represents 10.73% of the Class C
Units then outstanding. These Class C Units are structured as
management incentive equity and the vesting of these units will entitle the
holders to participate in quarterly distributions or incentive distributions by
the Partnership received by GP Acquirer attributable to the interests in Regency
GP LP, our general partner, owned by GP Acquirer. The Class C Units,
as a whole, will participate in those distributions received by GP Acquirer
based on the level of distributable cash per unit produced by the Partnership
(without regard to incentive distribution rights) as follows: at the
annual level of less than $2.50 per unit, no participation; $2.50 - $2.74, two
percent of the distributions received; $2.75 - $2.99, five percent of the
distributions received; and $3.00 or more, ten percent of the distributions
received. The Class C Units vest at the time a level of participation
is achieved and vest at that level (until another level is
achieved). If Mr. Kelley’s employment with the Company is terminated
for any reason, including death or disability, any unvested Class C Units will
be forfeited to GP Acquirer and will be available for reissuance. The
Class C Units are not yet entitled to any distributions.
Item 8.01
Other Events.
On March
19, 2008, Regency issued a press release relating announcing the appointment of
Mr. Kelley as President, Chief Executive Officer and Chairman of the Company,
and the resignation and retirement of James W. Hunt from those positions,
effective April 1, 2008. A copy of such press release is filed as
Exhibit 99.1 hereto and incorporated by reference herein.
The
information in this Item 8.01 of this Form 8-K and Exhibit 99.1 attached hereto
shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, nor shall they be deemed incorporated by reference in any
filing under the Securities Act of 1933, except as shall be expressly set forth
by specific reference in such filing.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit
Number
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Description
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99.1
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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REGENCY
ENERGY PARTNERS LP
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By:
Regency GP LP, its general partner
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By:
Regency GP LLC, its general partner
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By:/s/ William E. Joor III
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William
E. Joor III
Executive
Vice President, Chief Legal and Administrative Officer and
Secretary
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Date:
March 19, 2008
EXHIBIT
INDEX
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Exhibit
Number
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Description
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99.1
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